New Diplomacy Compass
Crossing Borders, Demystifying Japan
January 2022

Why are Japan’s Energy Policies Falling Behind?
Tetsunari Iida
Chairperson of Institute for Sustainable Energy Policies (ISEP)

1. Overview
In addition to the planned recovery from the economic crisis caused by the 2020 COVID-19 pandemic, countries inthe EU and the U.S. have implemented drastic measures for a “green recovery” to address the climate crisis.
However, Japan has been falling behind in addressing these issues, whether it be in the responses to the climatecrisis, the transition to renewable energy, or the transition to Electric Vehicles (EV).
This article will discuss the following topics in regard to this issue: the historical background, conflicting opinions,the identification of the problem, any similarities to Japan’s response to COVID-19, and the country’s future goals.

2. Historical Background
The history of Japan’s energy policies can be divided into four major periods.
・High economic growth period (1950s - 1960s)
Japan’s economy, after collapsing during World War II, made a recovery in the early 1950s. This was owing tothe special procurements from the Korean War as well as the priority production system for coal and steelproduction. It led to rapid economic growth during the 1960s. In 1951, the electricity industry reorganized intonine electric power companies, which established the nine electric power system.
・Pollution, the oil crisis, and the development of nuclear power (1970s - 1980s)
The environmental pollution in the 1960s and the oil crisis in 1973 had a significant impact on the economic andenergy sector in Japan. As a result, Japan strengthened its energy conservation, began renewable energy researchand development, and rapidly developed nuclear power.
・Kyoto Conference and electricity system reform (1990 - 2010)
In 1997, the Climate Change Conference in Kyoto (COP3) was held and the discussion regarding energy
deregulation began. This has been important during the discussion of subsequent energy policies.
・Fukushima nuclear power plant disaster and its aftermath (2011 - present)
The Fukushima Daiichi Nuclear Disaster (during the Great East Japan Earthquake on March 11, 2011) was a-1-

New Diplomacy Compass
Crossing Borders, Demystifying Japan

major turning point in Japan’s attitude towards energy. It resulted in the bankruptcy of the Tokyo Electric PowerCompany (TEPCO), a drastic change in public opinion, the revision of the electric power monopoly system, andthe implementation of the feed-in tariff system for renewable energy.

3. Conflicting Opinions
There is major debate regarding current energy policies in Japan. This debate can be split into four topics: 1)
nuclear power, 2) renewable energy, 3) the climate crisis, and 4) reforms of the energy power market.
Due to the Fukushima Daiichi Nuclear Disaster in 2011, popular opinion about nuclear power has become much
more negative. Yet, two years after the disaster occurred, the second Shinzo Abe cabinet began implementing
policies that actively promoted nuclear power.1 As a result, there continues to be significant citizen disillusionment
from the government on this issue.
Although the expansion of renewable energy is supported by many stakeholders, there are various disagreements
within each point of view. In addition to the concerns in the regional communities regarding the impact of solar andwind power generation on the environment and landscapes, there is also conflict over the rapid expansion ofrenewable energy sources. A particular focus is on including its impact on the stable supply of electricity and on theelectricity bill.
While there is a consensus on achieving carbon neutrality by 2050 within climate policy, there is a disagreement
over how this will be achieved. Environmental organizations, corporations, local governments and the Ministry of
the Environment (all of whom support the SDGs) aim to actively implement renewable energy and energy
efficiency measures to achieve carbon neutrality. However, their views are in conflict with the energy industry, theJapan Business Federation and Ministry of Economy, Trade, and Industry (METI). These groups promote nuclear
power, hydrogen power, thermal power, and Carbon Capture, Usage and Storage (CCUS).
The conflicting viewpoints regarding the energy market reforms are between maintaining the current market thatthe nine major electric power companies have monopolized control over, or the further reform or gradualimprovement of the energy market. The latter is advocated by the renewable energy companies and new electric
power companies. This group has expanded to include over 700 companies since the Fukushima Daiichi Nuclear
Disaster.

4. Identifying the Problem
Japan has had a passive attitude towards the climate crisis and is the only country among the G7 to insist on
maintaining coal-fired power stations. In recent years, Japan has fallen behind in the rapid expansion of renewableenergy and EVs, and its presence and industrial competitiveness in the clean-tech market is inferior to that of Chinaand Europe.
The first reason for this issue is the political structures for the energy and electricity policies. A strong politicalstructure has been built around the monopolized electric power companies. This includes the Japan BusinessFederation and the METI, as well as the Liberal Democratic Party (LDP). The latter was formed during the period-2-New Diplomacy Compass
Crossing Borders, Demystifying Japanof high economic growth and nuclear power expansion. There was an “Electric Power Pentagon” that included progovernment media and scholars. This gained power from the second Shinzo Abe cabinet towards the end of 2012.
Under this political structure, the METI has supported the ruling LDP as a secretary-general through themanagement of bills, policies, and budgets. At the same time, the METI utilised its power of regulation over theenergy industry. This was particularly true of the electricity energy industry. The METI maintained its power at thesame level of the Ministry of Finance, in the vertical administrative structure of the Kasumigaseki.
This Electric Power Pentagon is a common interest in the existing system. It shares the same “dogma” (myth)
which emphasizes nuclear power and coal. This makes them reluctant to adopt new technology and knowledge,
such as renewable energy and open electric power markets.

5. Similarities to the response to the COVID-19 pandemic
The issue of Japan’s reluctance towards “new knowledge” has become apparent since last year in its response to theglobal COVID-19 pandemic. There were countries, such as Taiwan and New Zealand, that succeeded in containing
the virus while other countries did not. Among the latter countries that did not succeed, only Japan had national
experts claiming that “PCR testing will cause the healthcare system to collapse,” which was clearly false, from apublic health prevention viewpoint. Japan is still not conducting enough PCR tests for the population.2
This issue is rooted in the organizational and political culture of Japan. In Japan’s political culture, there is a strong
myth of infallibility for policies and opinions that have become official. Therefore, it is difficult to freely respondand revise policies with new facts and in situations that are constantly changing, such as during the pandemic andwith regard to renewable energy. Additionally, with the “system of irresponsibility”3 at the center of thegovernment, failures are overlooked and policies that are clearly irrational are officialized due to the “air(pressuring atmosphere)”4 and a “fake reality”5 dominating the political space. A typical example is the failure ofthe nuclear fuel cycle.

6. Future Goals
This is another example of the nuclear fuel cycle. In the 2021 LDP presidential election to replace Prime Minister
Yoshihide Suga, Taro Kono (who was popular among the citizens) was defeated by Fumio Kishida. Japan missed
another opportunity for a reform. One of the reasons for Kono’s defeat was because the Electric Power Pentagon(which includes former Prime Minister Shinzo Abe and the Japan Business Federation) took actions to prevent
Kono’s proposal of reviewing the nuclear fuel cycle.
What Japan should aim towards is clear. In addition to addressing the climate crisis, a drastic “green recovery” isneeded to fix the social disparities that were made apparent during the COVID-19 pandemic.
Solar power and wind power generation (which have great potential) can be expected to expand rapidly. This isbecause they are the most low-cost and clean purely domestic energy sources. Along with the rapid expansion ofEVs, the cost of storage batteries is also rapidly decreasing. These factors are revolutionizing the foundation ofmobility and electric power energy sectors. In this historical reality, it is important to design a policy that organizes-3-New Diplomacy Compass
Crossing Borders, Demystifying Japana fair and transparent market based around the three pillars: renewable energy, energy efficiency, and motorizing
mobility. Furthermore, measures can be taken to address the climate crisis whilst creating green jobs. For example,
insulation existing low-income houses could be improved and energy independence (to address energy poverty)
could be developed.
It is necessary to move away from energy policies from the Electric Power Pentagon. This includes moving awayfrom the influence of the electric power and energy industries established since the end of World War II and a movetowards energy policies that focus on individual lives and future generations.

1 Miharu, Mitsuki (Haru). Mirai (Future) Election Project. “10 Years After the Disaster: Public Opinion on NuclearPower.” March 10, 2021. https://note.com/miraisyakai/n/nf87574afcea3
2 Japan ranks 150th in the world for PCR testing per population. (As of September 30, 2021; According to Our World inData)
3 Maruyama, Masao (1964). “System of Irresponsibility.” Thoughts and Behavior in Modern Japanese Politics. Saitama:Miraisha
4 Yamamoto, Shichihei (1983). Study of Air. Tokyo: Bungei Shunjū.
5 Van Wolferen, Karel (1994). The Enigma of Power. Tokyo: Hayakawa Shobō.

Tetsunari Iida
Chairperson of Institute for Sustainable Energy Policies (ISEP), a non-profit and independent institute in 2000 topursue “energy democracy”. Studied nuclear engineering master school at Kyoto University, then worked in the
nuclear industry. Stopped the nuclear career, studied the history and politics of energy transition as well as thesustainable energy policies at Lund University with a lot of field studies prior to his current position. He is a leading
authority and opinion leader in Japan in the energy policy field, including nuclear and especially renewableenergy policy, and known as a “Social Innovator”.

-4-