Japan Subsidies

Japan—US$376 million

With scarce and rapidly dwindling fossil fuel resources of its own, Japan engages in only a small amount of domestic oil and gas exploration. It relies heavily on fossil fuel imports to meet its energy needs, particularly since the accelerated phase-out of nuclear power following the Fukushima disaster in March 2011. So while Japan does not invest in domestic fossil fuel subsidies, it makes large investments in the development of oil and gas resources abroad (another form of fossil fuel subsidies).

The Japanese government is actively involved in promoting oil, gas, and coal exploration and extraction overseas to secure energy resources. In 2014, Japan was the third largest net importer of oil, and is the world’s top importer of liquid natural gas. Japan provides major national subsidies to promote oil and gas production by Japanese companies overseas and, to a smaller extent, domestically. These subsidies currently total $736 million.

Much of Japan’s subsidies focus on exploration for new fossil fuel reserves. Japan’s largest single subsidy to fossil fuel production is the supply of risk capital to JOGMEC, which supports the acquisition of natural gas rights, with the aim of diversifying Japan’s supplies of natural gas. This subsidy is valued at $458 million per year, but is not included in the national subsidies total, to avoid double-counting.
Due to Japan’s limited fossil fuel resource base, much of the remaining national subsidies for fossil fuel production are targeted towards oil refining. These include the subsidy for oil refining technology programs ($118 million annually) and the oil refining rationalization subsidy ($148 million annually), both of which provided support for research and development of advanced oil refining technologies (OECD, 2015).

The Japanese government provides additional support for oil refining and marketing in the form of the subsidy for structural reform measures ($104 million annually), which provides assistance to oil distributors for business diversification, as well as the oil product quality assurance subsidy ($16 million annually) (OECD, 2015).

The Japanese government funds the large-scale oil disaster prevention subsidy ($8 million annually), which provides upstream producers with oil fences to contain potential oil spills (OECD, 2015).

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Japan Survey

66% of people surveyed did not know that Japan was one of the highest GHG emitting countries in the world.

This report is a summary of three polls conducted in 2016 with findings on the attitudes to climate change amongst the Japanese population.

The first poll is the “Poll on Environmental Awareness 2016” (this source will be denoted as *1 hereafter) conducted by the National Institute for Environmental Studies. Out of 3,000 randomly chosen citizens over the age of 18 living across all 47 prefectures in Japan, 1,640 participated in the survey. Participants were interviewed during the period June 10th 2016 to July 4th 2016. 52.2% of the contestants were female and the age mostly reflects the population of Japan with many senior citizens over the age of 60.

The second poll is the “Poll Regarding Countermeasures for Global Warming” (this source will be denoted as *2 hereafter) conducted by the Cabinet Office. Out of 3,000 randomly chosen Japanese nationals over the age of 18, 1,816 were valid responses. Participants were interviewed during the period July 28th 2016 to August 7th 2016.

The third poll is the “Attitude survey Regarding Global Warming” (this source will be denoted as *3 hereafter) conducted by Trend Lab via an internet survey. Contestants were 500 male and female in their 20s to 50s. Equal numbers of male/female and equal numbers of 20s/30s/40s/50s age range participated during the period December 12th 2016 to December 13th 2016.

In *2, participants were asked whether they were interested in global environmental problems including global warming, ozone destruction, etc. The same question was asked in the 2007 survey and while 92.3% answered “interested” or “interested to a certain extent” in 2007, in *2, the number dropped to 87.2%. This may show that perhaps less Japanese are interested in global environmental problems than before.

Focusing on climate change/global warming, 90.9% of participants in *1 were “worried” or “slightly worried” about its impacts, and 76.7% thought that they already felt the effects of climate change. When asked about the causes of climate change in *1, 36.7% replied “mostly anthropogenic” and 41.2% chose “partly natural and partly anthropogenic.” Over half the participants felt that there are more negative impacts than positive impacts from climate change.

Consequently, 72.6% thought that they need to change their lifestyles to reduce impacts on climate change/global warming in *1. It seems like most Japanese are aware of climate change and believe that it is an important issue. On the other hand, according to *1, only 22.6% answered that many people around them who think that we need to take action for climate change/global warming, and only 17.2% replied that they have people around them who are already taking action for climate change/global warming.

Regarding the Paris Agreement, 59.7% knew the Paris Agreement but 52.6% of these have only heard of its name. Similarly, *3 revealed that while 56% of people were interested in international actions for global warming, only 9% knew COP22, and less than 10% knew details of the Paris Agreement. Also, 66% of people did not know that Japan was one of the highest GHG emitting countries in the world.

In conclusion, it seems like many citizens in Japan are interested and concerned about climate change, yet few take action and many lack knowledge on international climate negotiations.

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*1: https://www.nies.go.jp/whatsnew/2016/jqjm10000008nl7t-att/jqjm10000008noea.pdf
*2: http://survey.gov-online.go.jp/h28/h28-ondanka/gairyaku.pdf
*3: https://prw.kyodonews.jp/opn/release/201701137868/

Japan Strategies

Japan: (1)Strengthen country pledge to the Paris Agreement; (2) Reduce the amount of coal in the country’s energy mix; (3) Set new standards for the thermal insulation of houses and buildings.

Japan should strengthen its NDC in 2 ways. First, Japan should reduce the amount of coal in its projected energy mix for 2030. According to its current objective, coal is supposed to occupy 26% of electricity generation in 2030. This percentage is almost equal to that of 2010. Thus, Japan is moving against the global trend of many countries that are phasing out coal. Second, Japan should have more ambitious energy saving goals for the year 2030. Current goals are that the consumption of electricity will increase in 2030 compared to 2014 even with great effort. However, many other countries which are as technologically advanced as Japan have goals to reduce energy consumption.

We suggest the following actions. First, Japan should stop building new coal power plants. These days, over 40 new coal power plants are being built or have already started construction. If all these plans were completed, Japan’s GHG emissions would increase by 10 %. Second, Japan should focus on the issue of heating buildings as heating occupies much of Japan’s energy consumption. The national energy plans created in 2014 do not mention absolute targets or plans related to heating. We suggest that Japan set new standards for the thermal insulation of houses and buildings. Last but not least, the government should establish GHG reduction standards for the industrial sector.

Japan Renewable Energy

Japan—No 2050 100% commitment
Benchmark: 22-24% renewable energy in electricity generation by 2030

Japan plans to achieve 22-24% renewable energy of its electricity generation by 2030. However, it doesn’t have any long-term renewable energy goals. For 5 years, it has used Feed-in Tariff policies to support the use of renewable energy.

The government introduced a plan to auction contracts for the construction of large-scale solar power plants in 2016. In addition, the government is considering introducing a zoning process to support the use of renewable energy in the future.

General Electric (GE) is planning to build 22 onshore wind power plants in Akita prefecture. Their capacity is expected to be 66MW, which can provide energy to about 40 thousand houses. They will start generating electricity in 2020.

Japan Success Project

Japan—Tokyo Metropolitan Cap and Trade System

In Tokyo, there is a successful cap and trade system that will help meet Japan’s INDC pledge to the Paris Agreement, which is to achieve a 26% reduction in GHG emissions by 2030 compared to emission levels in 2013. This is the first urban-type emission trading system in the world. It was enacted in 2010 and now targets over 1,300 companies that consume more than 1,500 kiloliters of energy (converting into crude oil). Each company is required to reduce CO2 emission up to a certain amount. To achieve each CO2 reduction target, companies participate in an energy saving trading system and trade their emission credits.

This system was made because metropolitan Tokyo seeks to be an environmentally friendly city with the smallest environmental pollution level in the world. To be such a city, it was necessary to raise the minimum level of GHG reductions from big companies and to reduce the total CO2 emission in the Tokyo metropolitan area.

Statistics show that the cap and trade system in Tokyo is successful. In five years (2010-2014), all participating companies achieved their given CO2 reduction targets, and about 1.4 million tons of CO2 was reduced as a whole. This represented a reduction of CO2 emissions by 25% compared with CO2 emission of companies in 2009.

The Tokyo Metropolitan cap and trade system is replicable and scalable because it is not a very complicated system and does not require any special technologies. If the system can be expanded to cover all of Japan, it could significantly increase the government’s ability to comply with its INDC pledge to the Paris Agreement.

Japan Checkup

Japan—Falling Behind

The Japanese Government submitted their INDC (Intended Nationally Determined Contributions) to the United Nations Framework Convention on Climate Change. Japan pledged to reduce greenhouse gases by 26 % below 2013 levels, by 2030. In order to achieve this promise, the Japanese Cabinet approved the Global Warming Countermeasure Plan on May 2016. However, Japan’s target level is much lower than that of the EU in terms of the reduction rate to its 1990 level. In the assessment by Climate Action Tracker, the Japanese reduction target was regarded as “Inadequate” and is not consistent with the Paris Agreement goal to keep global warming below 1.5 degree Celsius.

The most dominant factor influencing Japanese greenhouse gas emissions is electricity powered by fossil fuel. After the Fukushima nuclear disaster, Japan shut down all nuclear plants, which resulted in an increased use of fossil fuels for electricity generation. After Fukushima, the government’s focus on climate change has diminished, while there has been an increased policy focus on energy security and economic growth.

Ken Sofer, Senior Policy Advisor, Center for American Progress, observes that Japan’s national policy for climate change is prone to prioritize energy security and economic growth rather than climate change itself. What is important in climate change policy in Japan is to raise its priority in the political context. Recently, the Japanese Government has focused on raising salaries of working people and improving the standard of living. Climate change has been minimized as a policy priority. The government has yet to make the connection between investing in climate change mitigation and economic prosperity.

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Takashi Morimoto, 2016:  Global Agenda, No.128

Ken Sofer, 2016: Climate Politics in Japan, Sasakawa USA Forum Issue No. 1

Japan Emission Reduction Policy

Building Insulation Law

The government recently passed a new law to make all buildings more energy efficient by 2020. The thermal insulation regulation standard of Japan has been criticized as inferior to that of other developed countries. For example, it is often pointed out that the regulation standard for insulating windows is inadequate. The new law is intended to bring Japanese thermal insulation building standards in line with global standards. It will be implemented by a variety of regulatory agencies, including the Ministry of Land, Infrastructure and Transport, Ministry of Economy, Trade and industry, and the Ministry of Environment.

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Japan Extreme Weather Event

Typhoon # 10

The biggest natural disaster in Japan over the last three years was Typhoon No.10 in August 2016. It is known as Lionrock and is classified as a Category 4 typhoon. It severely damaged the Tohoku and Hokkaido regions in the northern part of Japan. According to AR5 produced by the IPCC, rising temperatures increase the risk of stronger typhoons. In the case of Typhoon No.10, 22 people were killed, 5 were missing, and 447 houses were completely destroyed. In addition, some levees were breached and cities were flooded. As a result, many potato farms in Hokkaido were damaged and companies producing chips decreased the amount of production.

The government announced the effects of this massive destruction and ministries have taken action. Japan is now making efforts to prevent a recurrence of typhoon-related damage by creating guidelines for its citizens on how to react to floods.

Japan Subnational Best Practices


Kyoto Prefecture—Kyoto Prefecture is where the Kyoto Protocol climate treaty was developed at The 3rd Session of the Conference of the Parties (COP3), serving as an effective means to promote global warming countermeasures. The treaty introduced trade emission allowances among advanced nations and emissions trading between advanced countries and developing countries. In October 2011, the Kyoto Prefecture Global Warming Countermeasures Ordinance was enacted, and it started the “Kyoto CO2 Emissions Trading System” in cooperation with the government, economic groups, environmental NPOs.

The system aims to create credits, called “credits unique to Kyoto: Kyo-VER” from energy-saving countermeasures at small and midsize corporations, forest maintenance work conducted by companies and NPOs, eco-activities by Kyoto residents, and local communities. It also promotes the reduction in total GHG emissions in the Kyoto Prefecture. Meanwhile, it minimizes the total cost to society by establishing a mechanism to enable businesses with large volumes of emissions to utilize credits to achieve targets of GHG gas emissions reduction plans based on Kyoto Prefecture and Kyoto City Global Warming Countermeasure Ordinances and to take advantage of them for carbon offsets, CSR activities, etc.

The system is also a platform that creates and utilizes diverse credits adapted to industrial structures and local characteristics of Kyoto including “credits unique to Kyoto”, supplementing the J-Credit Scheme and other emissions trading systems by different entities. A total of 145 cases or 5584.5t-CO2 credits have been created thus far, and they have been utilized to achieve corporate GHG emissions reduction targets and offsetting GHG gases emitted from the printing of printed matter. In 2014, it helped decrease its amount of CO2 by 15% from the reference year 1990.

Department of the Environment, Global warming Countermeasures Division
Telephone: 81 – 75 – 414 – 4830
Email: tikyu@pref.kyoto.lg.jp


Toyota City—Toyota City (Aichi Prefecture) is aiming to transform from an automotive city to one of the world’s leading eco-conscious cities. This is where everyone can live a comfortable life at his or her own pace in a low-carbon society while taking into account a reduction of wasteful consumption. To this end, the city has strived to encourage the spread of Smart Houses as a part of its initiatives.
Toyota City is the first city in Japan that introduced the Smart House Tax Break system. A discount of one-half of the municipal real-estate tax on buildings will be given to residents who build new Smart Houses which are fully equipped with solar power generation panels, home energy management systems (HEMS), and storage batteries, or who install these systems and devices in their current dwellings. In addition, the city provides special subsidies through the “Eco-Family Support Subsidy Program” to assist households with installing home solar power generation systems, home fuel battery systems, HEMS and home lithium-ion storage battery systems.

It also established “the Center for Renewable Energy in Toyota City”, which has encouraged citizens and companies to install facilities run by renewable energy. In addition, it held a “High Level Symposium regarding Sustainable Cities” associated with the United Nations in 2014 and is constructing a global network of innovative environmental cities.

Model Environment City Promotion Division, Planning Department
Telephone: +81 – 565 – 34 – 6982
Email: hybrid-city@city.toyota.aichi.jp

Yokohama—In 2010, Yokohama City was nominated as one of the ‘Next-generation Energy and Social Systems Demonstration Areas’ by the Ministry of Economy, Trade and Industry. Since then, the city has been promoting the Yokohama Smart City Project (YSCP) demonstration projects. In cooperation with Japan’s 34 leading companies in the fields of energy, electronics, and construction businesses, Yokohama City has introduced a system to optimize the energy supply-demand balance in existing city areas with houses and commercial buildings. Through this project, the city had set target numbers for HEMS adoption, solar panels, and electric vehicles and achieved these targets by FY2013. From now on, the YSCP will be updated from the demonstration stage to the implementation stage. It was able to help decrease the amount of greenhouse gas by 2.8% from previous year, and by 5.9% from the reference year 2005.

Climate Change Policy Headquarters, Coordination Division
Telephone: +81 – 45 – 671 – 2661
Email: on-chosei@city.yokohama.jp

Japan Leaders and Opponents

Government Official
Koichi Yamamoto
Minister of the Environment

Mr Yamamoto’s Ministry is responsible for Japan’s environmental policies, including setting its emission targets.

Contact: https://www.env.go.jp/en/moemail/

Government Official
Hiroshige Seko
Minister of Economy Trade and Industry

Mr Skeo’s Ministry plays a key role in setting economic policy in Japan and plays a role in setting energy policy.

Contact: https://wwws.meti.go.jp/honsho/comment_form/contact_us.html

Climate Program Advocate
Takejiro Sueyosi
Special Advisor to United Nations Environmental Program

Mr Sueyosi plays a lead role in advising on international finance policy related to climate change.

Contact information available upon request.

Climate Program Opponent
Chairman of Keidanren (Japan Business Federation)

Keidanren is the largest business industry association in Japan and often takes positions in support of non-renewable energy.

Contact: webmaster@keidanren.or.jp