IEEJ：June 2019○ｃIEEJ 2019
Special Bulletin
A Japanese Perspective on the International Energy Landscape (431)June 7, 2019

Participation in 38th International Energy Workshop
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn June 5, I had an opportunity to participate in the third-day plenary session of the 38th
International Energy Workshop (IEW 2019) in Paris. The conference is a forum for the global energy
modeling community to discuss modeling analyses and tools that play an even more important rolein analyzing long-term energy challenges in the world and considering and recommending solutionsto them. The annual conference has been hosted alternately by relevant countries. This year’sworkshop was sponsored by the International Energy Agency in Paris. I was invited by the IEA toprovide the views of the Institute of Energy Economics, Japan, on global energy and environmental
challenges based on the IEEJ Outlook 2019 at the workshop.
The IEW 2019 was held over three days from June 3 to June 5. Famed experts participatedin each day’s first plenary session as panelists, including IEA Executive Director Fatih Birol andProf. William Nordhaus, 2018 Nobel Laureate in Economics, in the first-day plenary session. I took
part only in the third-day session due to scheduling conflicts, regretting my failure to hearpresentations by Professor Nordhaus and others. In the following, I would like to summarize key
impressive points of the discussions at the third-day keynote panel and my later meetings with otherparticipants.
I felt that our analysis and recommendations regarding global energy and environmental
issues in the IEEJ Outlook 2019 generally attracted high interest and intellectually curious questions
and opinions from IEW 2019 participants, and received due appreciation from the global energy
modeling community. Particularly, the first key point of the discussions was that the mostattention-attracting component of the annual outlook was our approach of minimizing total costs
regarding climate change that we have continued to analyze and communicate since our outlook in
2015. Climate change costs are divided into three categories – cost of greenhouse gas emission
mitigation, cost of adaptation to climate change damage and cost of actual damage from climatechange. While mitigation is the most highlighted in major discussions in the world, we haveanalyzed the approach of minimizing the mitigation, adaptation and damage costs in consideration ofa very long-term aspect of climate change. We have also examined how to minimize the total costs
while limiting a global average temperature rise to 2℃ over a long term.
In the discussions, participants indicated their great interest in the approach of minimizing
the total costs as an economic analysis and expressed numerous opinions and questions about how toview damage among the costs. A representative question is how to analyze damage to human livesand values that are difficult to measure or quantify. Acknowledging the fact that any analysis in
general is imperfect and contains shortfalls, I argued that the IEEJ tried to improve the damage
1

IEEJ：June 2019○ｃIEEJ 2019analysis as much possible while recognizing that damage tends to be viewed as underestimated andthat the presence of a tipping point (an irreversible threshold for remarkable climate change) and theimpact of catastrophic events have been viewed as failing to be processed well. I explained that theIEEJ has attempted to provide a new viewpoint for international discussions on climate change andadopted the pragmatic approach of minimizing the total costs based on basic, simple ideas ineconomics in a bid to highlight the importance of innovative technologies. In fact, the approach ofminimizing the total costs contains controversial points. Significantly, however, I demonstrated
through the discussions that the IEEJ would like to try to make original contribution to knowledge
about climate change in the world.
The second key point of the discussions was that the IEEJ outlook was generally viewed as
too optimistic about the future of coal. This may be partly because the workshop took place inEurope where arguments are particularly critical of coal. I pointed out that the IEEJ outlook has
adopted a bottom-up approach of accumulating technologies in its Advanced Technologies Scenario,
instead of a top-down or disciplinary approach for the IEA’s Sustainable Development Scenario. I
also noted that the IEEJ has annually and objectively analyzed realities and plans of countries
including Asian nations for the bottom-up approach and is confident of describing the outlook basedon pragmatic judgments. I explained that the IEEJ’s efforts to develop the annual outlook based on
the actual situation led to the 2018 outlook that took up a peak global oil demand case for the firsttime in its Advanced Technologies Scenario due to cumulative downward revisions to oil demand
projections
In this respect, I built on Asian experiences to argue that significant factors behind energy
choices include not only environmental conservation including climate change and air pollution
countermeasures but also energy security and the affordability of energy prices. I also argued that weshould understand that the best energy mix differs by country as energy choices and relevant
economic and energy conditions vary by country.
The third key point of the discussions was that questions were made about the IEEJ’s view
about hydrogen utilization among innovative technologies. The panel discussions led me torecognize anew that there are high hopes and interest concerning hydrogen utilization among
innovative technologies required to substantially reduce GHG emissions. The fact that Japan isrecognized as the world’s top runner in hydrogen utilization might have been behind the high interest
in and active discussions on hydrogen. I was asked how I view green hydrogen originating in
renewable energy and blue hydrogen that is made with fossil fuels through the use of carbon captureand storage technology. Clarifying my understanding that how hydrogen should be manufactured
differs by country or company, I argued that as far as carbon dioxide-free hydrogen is provided in acompetitive, socially acceptable manner, both green and blue hydrogen should be viewed as playing
a key role. Countries or companies are making efforts to develop hydrogen utilization technologies
and cut hydrogen utilization costs according to their respective conditions. We are now waiting forachievements to be made through such efforts. It was significant for us to argue that while hydrogenutilization is a long-term strategic option, efforts should be made from now on to realize theutilization.

2

IEEJ：June 2019○ｃIEEJ 2019
Contact: report@tky.ieej.or.jp
The back issues are available at the following URL
http://eneken.ieej.or.jp/en/special_bulletin.html

3