EARTH System governance Project

Towards Decentralized
Governance Structures
A Message from Fukushima to Rio+20
Norichika Kanie
Department of Value and Decision Science, Graduate School of Decision Science and Technology, Tokyo
Institute of Technology

This paper can be cited as: Kanie, Norichika. 2011. Towards Decentralized Governance Structures: A Message fromFukushima to Rio+20. Publsihed at www.ieg.earthsystemgovernance.org. Lund and Tokyo: Earth System Governance
Project.

All rights remain with the author.
The original of this paper is written in Japanese, entitled “Chuoushuken teki kouzou kara Bunsan teki governance he:
Fukushima no kyoukun kara Rio+20 heno hasshin he mukete”, to be published in Kankyou Keizai Seisaku. The author
is grateful to Mr. Randel Helten for helping translation of the manuscript into English.

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1. Fukushima raises questions about Japan’senvironmental and energy diplomacy
The devastating earthquake that struck Japan on March 11, 2011 and the ensuing
nuclear accident have inflicted enormous damage to Japan’s society and economy. Butin life, fortunes can sometimes turn. Something positive can emerge even fromdisaster. As “Fukushima” quickly joins “Chernobyl” as a word synonymous for “nuclearaccident,” for the next while, Japan’s commentary on energy and environmental
matters seems poised to attract the world’s attention. A speech by Japan’s Prime
Minister Naoto Kan in May 2011 at the opening of the G8 Summit in France is a signof this tendency. And in 2012, the world will witness the once-per-decade United
Nations Conference on Sustainable Development (also referred to as Rio+20, being
held twenty years after the Earth Summit in Rio de Janeiro). This time, though, thetone of the meeting will not likely be as deferential to the United States as in the past.
The world needs a major change of course. In another sense, the world is watching tosee if Japan can make a major change of course. The Conservatives in Japan, after
being so quiet immediately after the nuclear accident this year, are beginning to maketheir voices be heard again. In the midst of all this, can Japan set a course for new
environmental and energy policies, articulate them, and act as a leader? Japan’s own
competence is suddenly in the spotlight.

2. The shift from centralized control tosystems that are independent,decentralized, and coordinatedIn the process of dealing with issues like radioactive waste, the Japanese have now
debated whether or not nuclear power is a form of sustainable energy, but themainstream view was that nuclear power is an important pillar of strategies against
climate change, equivalent to renewable sources of energy like solar and wind power.
There is a decisive difference, however, between nuclear and renewable energy. One
depends on large-scale, centralized systems, while the other is based on small-scale,decentralized energy systems. It was relatively easy for Japan to adopt nuclear in thepast, because modern energy supply systems based on fossil fuels belong to the former
category.
In the face of the recent disaster, however, people are again noticing the benefits ofdecentralized systems. Generally speaking, a decentralized system is inherently morerobust. This is because the overall system can continue to function even if part of thesystem is damaged: other parts of the system compensate for the damaged part. TheInternet is often given as a typical example of this characteristic (Brafman andBeckstrom 2006, Aggarwal 1998).

EARTH System governance | 3
These same approaches can be applied to the energy sector. Had a decentralized
system been established and individual households functioning as small-scale power
generators, one could say that, at the very least, the large power outages experienced inthis disaster would not have occurred. For example, a combination of renewableenergy sources such as photovoltaic, together with fuel cells and a “smart” electrical
grid — with each dwelling acting as a small power generator — would be very robustand flexible. In a society that will be facing major carbon constraints in the future, if
the aim is for low-risk, robust and flexible systems, there may be no other path than tocreate systems of this nature.
In fact, these kinds of systems are already appearing. With further technicaldevelopment, the technology will spread and costs gradually decline, promoting theirgreater popularity. An important factor in all of this is the need for the enabling
function of policy. “Energy farms” that are beginning to appear in Japan consist of fuelcells that can generate electricity at each household, and technically, can operate evenduring major power outages. We heard, however, that these could not be used during
the recent power outages. One cannot but feel disconnected when a fully usable
technology cannot be used simply because of human factors. Besides subsidies andgrants, many ways are available for policy to support the technology.

3. From Japanese domestic policy toenvironmental and energy diplomacy
Decentralized power generation systems based on a combination of renewable energy,fuel cells, and smart grids could also be a driving force for Japan to promote a lowcarbon revolution in Asia and the world. Many developing (or less developed)
countries are politically unstable and even more vulnerable than developed countries
to a multitude of threats, including terrorism and climate change. What these regions
need is not high-risk nuclear power generation, but rather, decentralized systems thatcome with lower risks, are more robust, and can help them move along the path
toward a low carbon society. A developing country could leapfrog over the highcarbon path taken by developed countries and still achieve its development targets. Asa side effect, civil society could also be empowered by having “ownership” of energy.
Meanwhile, Japan could support the standardization of its competitive technologies
and promote expansion of its markets.
If Japan were to promote a bundle of strategic policies by linking policy relating todomestic affairs, foreign affairs, international cooperation, and development
assistance, the recovery from the country’s recent disaster could also provide theimpetus for development of an emerging norm. For a developed country that haspromoted environmental diplomacy, this kind of approach is especially necessary now,in the face of limited available resources (Kanie 2001).

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Another important point in the creation of an international model is that energy
should not be seen as an isolated issue; a broader view is needed that considers
environmental constraints, and even more specifically, carbon constraints. The world
cannot mitigate climate change without addressing the issue of energy. It seems quite
obvious that to usher in a low-carbon era, both issues must be addressed in an
integrated way. Already some countries and regions are establishing institutionalarrangements in which environmental authorities are responsible for energy issues.
There is already much evidence that authorities responsible for the environment are
typically much weaker in government power structures, and even in cases whereinternational consensus has been reached on a environmental topic, when officials
return to their home country, implementation is often inadequate due to the lack offinancial and human resources (Biermann 2001, Dodds 2000, Downie and Levy
2000). In addition, because environmental issues permeate all sectors of society,multiple government ministries and agencies end up dealing with them, and from avariety of angles. Meanwhile, although government authorities responsible for theenvironment are expected to coordinate matters relating to environmental policy, they
are not able to coordinate adequately, due to their lack of influence. This is thesituation in many countries. To overcome these shortcomings, one authority could begiven the power to deal with both environmental and energy issues. This structure
could then ensure that the handling of energy issues is based upon recognition ofenvironmental constraints, and meanwhile, also give greater influence toenvironmental authorities.

4. Rio+20 agenda “institutionalframeworks for sustainable development”
as an opportunity
The limitations of bureaucratic structures responsible for the environment describedabove were already identified some time ago in debates about environmental
governance at the international level (Charnovitz 2002, Ansell and Weber 1999,
Haas, Kanie and Murphy 2004). Since 1972, the international environmental regime
has tried to treat the symptoms each time a problem arose, but with the finances,staffing, and authority attributed to it, the United Nations Environment Programme(UNEP) — though charged with a coordination function within the UN system — hasbeen unable to coordinate affairs with the comprehensiveness needed forenvironmental policies, compared to international economic and social organizations.
Currently, coordination is not being done adequately even within the environmental
category. Coordination among the more than 200 multilateral environmental
agreements (MEAs) is inadequate.
To deal with these issues, two major topics are being proposed for the Rio+20
conference in 2012: institutional framework for sustainable development, and thegreen economy. Discussions in the UN context about sustainable development are
generally based on three pillars: the environment, sustainable social development, andEARTH System governance | 5sustainable economic development. In the author’s view, there are actually only two,
not three pillars. The environment provides the foundations (constraints) for the twopillars, and if the foundation is not sound, the pillars will not stand solidly. At any rate,
the environment is another crucial factor in the structure of sustainable development,
and institutional frameworks relating to the environment are one of the important
topics at the Rio+20 conference. The timing of this international conference presents
an opportunity for Japan to let the world know about changes occurring in Japan, andan opportunity to help lead the world in a new direction.
Discussions about institutional frameworks could be described as having two levels.
One level is a discussion about institutional design within the United Nations. Here,the issue is how to strengthen the environmental “pillar” within the United Nations’bureaucratic structure. Five reform proposals are currently being discussed in theRio+20 preparatory processes:1
Strengthen the United Nations Environment Programme (UNEP)

Create a new organization for sustainable development

Establish a specialized institution (e.g., a World Environment Organization)

Reform the UN Economic and Social Council and the UN Commission onSustainable Development



Rationalize and enhance institutional reforms in the current structure

Even though Rio+20 will be held in less than a year (June 2012), there has been no risein political interest in discussions about types of structural reforms, and unfortunately,
no clear direction has yet emerged. In fact, the May 2011 meeting of the CSD ended
without reaching consensus. Differences among countries are wide, and it is still
difficult to see if any of the above reforms will prevail within the next year. In fact,
there appears to be greater interest in discussions about the green economy than about
institutional reforms.
To be on the leading edge of modern international institutional reforms, as is alreadyhappening in some countries, Japan could promote appropriate debate about
institutional reforms in the context of contemporary issues. One proposal to create abreakthrough from the current situation would be to promote the institutional
integration of environment and energy. The bias created by monopolistic control ofJapan’s energy policy being given to the Ministry of Economy, Trade and Industry(METI) — which became clearer for all to see during the Fukushima accident — hasalready been a target of criticism from international institutions like the International
Atomic Energy Agency (IAEA). Institutional reforms are needed. Japan may now havea good opportunity to carry out institutional reforms toward the strengthening
environmental management in Japan. If it can do this, Japan could also bring this kindof debate up to the world stage. Perhaps Japan can also organically link the two Rio+20
topics of green economy and institutional reforms, which until now have been
considered separately, and promote international debate. By doing so, if the issues ofenvironment and energy can be integrated, it may be possible to expand the discussion

1UNEP/GCIEG.2/2/3

6 | EARTH System governance Projectusing the levers of social norms and institutional reforms. Promoting norms is an
important function of international institutions.

5. International institutional reforms andJapan: Reforms need to be compatible
Another level in the debate about institutional frameworks is the issue of how to deal
with overarching governance for sustainable development, over and above theframework of UN institutional reforms. Indeed, one could say that this issue is reallythe essence of the debate about institutional frameworks. If the whole debate focuses
simply on the forms of structures we can already see, there is a risk of losing sight ofthe essential issues of governance at the core of contemporary society. The result may
be to fall into superficial discussions about the technical aspects of institutional theory.
Instead, what is really needed is a dynamic analysis of modern society, and thedevelopment of suitable next-generation structures based on that analysis. The world
now needs institutional frameworks for a low carbon society in the twenty-firstcentury. Can we get by based on institutional designs actually created more than 50years ago? Or do we really need more fundamental change?
In discussions about Rio+20, one flow of debate focuses on these functional aspects ofgovernance. But because political outcomes are difficult to see, discussions focussing
on functions have attracted scant attention. The issue of globalization is one importantcharacteristic of modern international politics. Whether perceived as good or bad,globalization is accelerating the international movement of people, goods, and money.
A feature of international politics is the rise of influence of a diverse group of actors,and the power diffusion. Besides national governments, these days, international
institutions, businesses, industries, NGOs, and scientists are networking
internationally, and their political presence is growing. Not only is power at thenational level being redistributed from superpowers to middle powers, smaller states,and emerging economies, but also the elements of the structure of power aretransforming now in various ways, including a shift from “hard” power to “soft” power.
As a result, as one could see with the Copenhagen COP15 conference on climatechange and CSD 19, international structures are in the process of changing
dramatically—so much so that conventional consensus-building systems have stopped
functioning adequately. In contrast to this, we are witnessing an increase in policy
formulation and implementation being conducted in partnership with non-stateactors.
In other words, what is needed today in international governance for sustainable
development is the creation of independent, decentralized systems. It is important torecognize the large difference between the meaning of “decentralized” and“fragmented.” Decentralization without the proper institutional design will lead tofragmentation, but if conducted properly, it will result in healthy competition between
systems, and will facilitate institutional innovation. If decentralization is done right,
transparency is enhanced and more channels of participation are available for aEARTH System governance | 7
diversity of actors (Aggarwal 1998, Ostrom 2001, Ansell and Weber 1999, Haas,
Kanie and Murphy 2004). To make these kinds of institutional designs succeed,
there is a need to create the proper networks among the various decentralized actors,
and it is also important to ensure that frameworks are flexible.
Japan’s recent devastating earthquake and the Fukushima disaster shone a new lighton the robustness and flexibility of decentralized systems. These lessons are helpful toilluminate the path toward a low carbon society. That path is a common one for many
countries. This is a direction that includes the characteristics and trends of a
globalizing world. Japan has suffered enormous damage. But just as with its
reconstruction after the Second World War, Japan’s recovery from this damage has
now captured the world’s attention, and this gives the country another chance to lead.
A public opinion poll by the Japan Association for Public Opinion Research (June 11and 12, 2011) asked people which forms of energy deserve attention now. Amongrespondents, 83.6 percent selected renewable energy, 7.2 percent nuclear power, andonly 3.9 percent coal and petroleum. The contrast is striking. Decentralized but
coordinated system designs are now supported by public opinion, offering the key totransform opportunity into reality.

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