IEEJ：April 2021©IEEJ 2021
Special Bulletin
A Japanese Perspective on the International Energy Landscape (530)

April 30, 2021

Key Points of 6th IEEJ/APERC International Energy Symposium
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn April 23, the Institute of Energy Economics, Japan, and the Asia Pacific Energy
Research Center held their sixth international energy symposium titled “Carbon Neutral: What DoesThis Mean for the World?” The annual symposium has been held since the first one marking the 50thanniversary of the IEEJ and the 20th anniversary of APERC in 2016, becoming a flagship
IEEJ/APERC event. Like the fifth one last year, the sixth took the form of an online meeting amid
the COVID-19 disaster. As consideration was given to the time difference problem regarding
speakers from Europe and the United States, Session I ended at shortly past 10:30 a.m. and was
followed by the next session that started at 3 p.m. The symposium featured panel discussions in three
sessions and a special address by Shin Hosaka, Commissioner of the Japanese Agency for Natural
Resources and Energy. Panelists also held vigorous discussions with other participants. Thesymposium titled “Carbon Neutral: What Does This Mean for the World?” was extremely timely
because U.S. President Joe Biden hosted an epoch-making online climate summit from April 22, in
which top leaders discussed carbon neutral targets for 2050 or later. In the online summit, the UnitedStates announced a target of cutting greenhouse gas emissions in 2030 by 50-52% from 2005. Japanfor its part came up with a target of reducing GHG emissions in 2030 by 46% from 2013. In thefollowing, I would like to give my personal comments on key points of each session of thesymposium.
The panelists for Session I titled “Can the world achieve carbon neutral?” were Dr.
Kenneth Medlock III, Senior Director, Center for Energy Studies, Rice University's Baker Institute;
Mr. Allan Fogwill, President & CEO, Canadian Energy Research Institute; and Dr. Fuqiang Yang,
Senior Adviser, Climate Change and Energy Transition Program, Institute of Energy, Beijing
University. IEEJ Board Member Hiroki Kudo served as moderator.
I felt that the three panelists did not answer “yes or no” directly to the question of whether
the world can achieve carbon neutral in the title of this session. I think that there were two key points
in answering the question. First, the question asked if the entire world, rather than the United States,
the European Union, Japan or any other specific economy, can achieve carbon neutral. Second, thequestion specified no deadline for achieving carbon neutral. It is significant whether the deadline is2050, 2060, 2070 or the end of this century. An apparent consensus view given in the session may
have been that it may not be easy for “the entire world” to realize carbon neutral in the middle of thiscentury even if advanced economies and China that have announced carbon neutral targets makemaximum serious efforts. As a matter of course, those efforts will promote GHG emission reductions
substantially. However, a key point given in the session was that achieving carbon neutral would
require a revolutionary transition from the current energy system and it would be difficult because
energy equipment and infrastructure are set to remain legacy infrastructure over the long term.
Another key point was that even if advanced economies make progress in decarbonization,
developing and emerging market economies that have dominant populations and require affordable
energy sources for future economic development would have difficulties in going ahead with1IEEJ：April 2021©IEEJ 2021
complete decarbonization. Serious efforts mainly in advanced economies and the development anddiffusion of innovative technologies may allow the world to go ahead with decarbonization andgradually come closer to carbon neutral. Achieving global carbon neutral may be a very long-term
challenge.
Session II was titled “Can developing countries pursue the dual goal of carbon neutral andeconomic growth?” The panelists for the session were Mr. Wim Thomas, Former Chief EnergyAdviser, Shell Strategy Business Environment, Shell International BV; Dr. Siri Jirapongphan,Former Minister of Energy, Thailand; and Dr. Leena Srivastava, Deputy Director General for
Science, International Institute for Applied Systems Analysis. IEEJ Managing Director Yukari
Yamashita served as moderator.
A view given in this session was that developing economies could achieve economicgrowth while trying to realize carbon neutral if the world forms a virtuous cycle for various policies,
technology development and diffusion and international cooperation to support initiatives for carbon
neutral that is technically potential. Many advanced economies that have announced their respective
carbon neutral targets emphasize that green investment to realize the targets would create jobs andcontribute to long-term economic growth, placing great hopes on an ideal virtuous cycle. However,whether the targets would really be realized is apparently uncertain. Whether a gap would emerge
between hopes and realities amid such a great social experiment would attract global attention.
Carbon neutral targets may be more ambitious and challenging in developing economies. This isbecause these economies are required to provide affordable energy for people who do not haveaccess to such energy. In the session, it was pointed out that whether economic growth can beachieved is a major challenge for developing economies. This means that an important viewpoint iswhether economic growth meets basic needs including the correction of inequalities or gaps and theimprovement of sanitation. GDP growth would be meaningless if gaps widen and most citizens areleft behind. Whether achieving carbon neutral would lead to real social development andimprovement, rather than economic growth, should be called into question in developing economies.
The panelists for Session III titled “How will the Middle East respond to the global carbon
neutral movement?” were Prof. Paul Stevens, Distinguished Fellow, Energy, Environment andResources, Chatham House, United Kingdom; Dr. Raja Almarzoqi, Former Adviser, Middle East andCentral Asia Department, International Monetary Fund; and Dr. Adnan Shihab-Eldin, Former
Director General, Kuwait Foundation for the Advancement of Sciences, Kuwait. I served asmoderator.
In this session, the three panelists indicated that the Middle East would face a grave
challenge as the world goes in the direction of carbon neutral. If the world promotes decarbonization,
traditional fossil fuel consumption will decline globally, as symbolized by an oil demand peak. Then,downside pressure will be exerted on oil prices, seriously affecting oil-producing Middle Easterncountries that depend heavily on oil revenue. As non-oil-producing Middle Eastern countries depend
economically on oil-producing countries, the entire Middle East will be economically, socially andpolitically affected. This is basically because oil-producing economies are dependent on huge rent
from super normal profits gained from oil sector. If the rent declines, there emerges a serious riskthat the Middle East may be destabilized. In response, the Middle East will have to develop and use
blue hydrogen and ammonia from fossil fuel resources to adapt itself to a carbon neutral world anddiversify and upgrade the economy. Hopes on blue hydrogen and ammonia are high, but the rent
would inevitably decline, making economic diversification imperative, as pointed out in the session.
Middle Eastern countries’ serious self-help efforts and international cooperation will be essential.
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Investment in technology and human resources development and education will be indispensable. It
was impressive for me to see discussions in this session indicating high hopes placed on Japan’scooperation in these fields.
Contact: report@tky.ieej.or.jp
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