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Climate policy and SDGs inseparable: expert Takeuchi
ESG Talk
TOMOKO KAICHICONTRIBUTING WRITER

Japan has pledged to achieve carbon neutrality, which obliges the country to reduce
emissions of greenhouse gases to net zero, by2050. Sumiko Takeuchi, an expert on energy
and environmental issues, welcomes themove but points out that energy reforms
will bring drastic changes to society that will
include pain and burdens. For this reason,she argues, the government needs to work to
make the public understand the full significance of its vision and persistently commit
to fleshing out a road map for the long roadto a decarbonized society.
What will it take to realize a decarbonized society? Actually, the bulk of what are
called greenhouse gases is the carbon dioxide
discharged into the atmosphere when fossil fuels are burned. Therefore, “The climatechange problem is not an environmentalproblem — it’s an energy issue, and it’s aneconomic problem,” Takeuchi said. About
one-fourth of the amount of energy consumed in Japan takes the form of electricity,
but the remainder is obtained directly fromthe burning of fossil fuels such as gasoline
and heavy oil. As electricity can be generated without discharging carbon dioxide if it
is made from nuclear or renewable energy
sources such as sunlight and wind, the promotion of electrification is widely believed tobe the path to decarbonization. For this, thegreater use of renewable energy is key.

Japan has sometimes been described as a“developing country” in terms of introducing renewable energy, but Takeuchi disputes
this view. Japan ranks first in the world interms of solar power introduced per unit ofland area, and third in terms of the absoluteamount of solar power introduced, after
China and the United States, whose land
areas are larger than Japan’s.
However, subsidies to promote renewableenergy have snowballed to ¥2.7 trillion ($24.8billion) annually because of a “sloppy” subsidy policy focused on prioritizing a greateruse of renewable energy, according to Takeuchi. If the government is to continue to promote renewable energy, it “needs to proceed
prudently (on promoting) the installing ofsolar panels on building roofs, for example,”she said.
In the field of offshore wind power, which
is fast being introduced in Europe, the Japanese government must also work to promote research and development on floating
wind turbines and install them, keeping
in mind Japan’s wind conditions and submarine topography. “Renewable energy isrestricted by natural conditions (at each location), and so if you just try to repeat what
is done overseas, it doesn’t always work,”
Takeuchi said. “But Japan aims to promotetechnological development and creationof industries so that it can contribute to thedecarbonization of Asia and other parts ofthe world.”
Electricity is unique among the forms ofenergy. “Energy infrastructure is a lifeline,
and power infrastructure, in particular, is theTakeuchi has conducted research,
provided advice and,as a member of agovernment council,
made policy recommendations in thefields of the environment and energy.
HIROMICHI MATONO

Sumiko Takeuchi, Senior fellow and member of the board of directors, International Environment and Economy Institute HIROMICHI MATONO

infrastructure of infrastructures,” Takeuchi
said. “That’s because it supports other infrastructures, such as transportation and communication infrastructures.”
Electricity cannot now be stored in sufficiently large quantities, so for a renewable
power source to be viable, it must have theability to generate enough power at themoment it is needed. The right balance
between demand and supply has to be maintained. Renewable power sources require theuse of thermal power and storage batteries tocompensate for any shortfall in supply.
“Japan is not small in terms of scale forthe entire nation, but it has multiple bottlenecks in regions due to the weakness incross-regional transmission grids as well as

the difference in frequencies,” Takeuchi said.
“There’s a high hurdle of having to increase
renewable energy’s share while maintaining
stable supply.” The European Union countries have an overwhelming advantage interms of flexibility in mutually supplying surplus power because neighboring countries
are connected with each other by land.
It is natural that energy policies shouldreflect their respective regional features,and for this reason the 17 U.N. sustainable
development goals (SDGs) are differently
prioritized for different regions, according to Takeuchi. Climate change is not the
only issue for Japan’s energy industry. Thecountry faces the need to take measures
to address the fast-progressing problems ofTimes Gallery

Lithuanian Ambassador Gediminas Varvuolis and the chairman of theJapan-Lithuania Parliamentary Friendship League, Hirofumi Nakasone, mark the 31st anniversary of Lithuania’s restoration of independence with a concert on March 12. EMBASSY OF LITHUANIAThe deputy head ofmission of theEmbassy of Latvia,Egija Eglite, wears
the national costumeat the event “100Days Until the Tokyo
2020 Olympic andParalympic Games”
in the Shizuoka cityof Fuji on May 9.
EMBASSY OF LATVIAAt the Serbian Night event, organized by the Research Institute ofNational Flags and Anthems of the World, in Tokyo’s Meguro Ward onApril 17. From left are soprano Masako Shindo, Charge d’Affaires Ivana
Golubovic-Duboka and institute representative Tadamasa Fukiura.

French Ambassador Philippe Setton with designer Junko Koshino andformer Prime Minister Shinzo Abe. Koshino was awarded the Legion ofHonor, France’s highest distinction, for her lasting contribution toFrench-Japan cultural exchanges on May 19. EMBASSY OF FRANCE

Argentine ambassador Guillermo
Hunt (right) and OkCorp. president
Ryotar Ninomiya at
one of OK supermarkets where the“Argentine Fair” wascelebrated to promote Argentine
products EMBASSY
OF ARGENTINAEMBASSY OF SERBIA

The ambassador of Peru, Harold W. Forsyth, and his spouse receive acommemorative silver plate from members of the Group of Latin
America and Caribbean Countries (GRULAC) at a farewell reception inhis honor, alongside the hosts, ambassador of Uruguay, Cesar Ferrer,
and his spouse. EMBASSY OF URUGUAYThe South African Chamber of Commerce in Japan held its 2021 general
assembly on May 12, attended by the ambassadors of South Africa andZimbabwe, directors, trustees, members and staff. SACCJ

Jordanian Ambassador Lina Annab presents Jordan’s history andculture to students of the Tokyo University of Foreign Studies during awebinar on May 10. EMBASSY OF JORDAN

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declining population and regional depopulation. It must also promote conversion torenewable energy sources while acceleratingdigitalization. That calls for major innovation.
The Japanese government thus has steppedup efforts to stimulate innovation. It has, forexample, established a ¥2 trillion fund to
stimulate research and development spending by private-sector businesses.
Since the oil crises of the 1970s, Japan has
spent taxpayer money on research anddevelopment for renewable energy. As aresult, Japanese manufacturers came tohave the largest share of the global market
for solar power products in the early 2000s.
However, their technologies saw a rapid
uptake and they quickly lost out to newly
emerged Chinese and Taiwanese rivals,
which were capable of manufacturing inlarge quantities at low cost. Thereafter, Japanese makers were no match for these rivals,
which were capable of manufacturing inlarge quantities at low cost. In order for Japanese manufacturers to avoid a similar fate
now, they “must thoroughly reduce costs sothat they can stay competitive in the phase
where their technologies become imitated,
not just in their technology level,” Takeuchi
said. “They must establish a position where
they lead in the moves to promote newtechnologies.”“I’m hoping technological development
will be carried out in a strategic way to help
protect employment in Japan,” she said.
At April’s Leaders Summit on Climate,
the Japanese government announced thatit aims to reduce its 2030 emissions by 46%
from the levels in fiscal 2013, which ended in
March 2014. Takeuchi said halving emissions
over nine years is a tall order, and will very
likely lead Japan to turn to nuclear power.
If the government ends up deciding to use
nuclear power after weighing its risks against
those presented by global warming, it thenmust try to convince the public on that decision, Takeuchi said.
She also said the government must
address falling employment in the automo-Takeuchi established U3Innovations LLC, to use
the startup’s power to realize “Utility3.0” as a
new social system. HIROMICHI MATONO

tive and oil-related industries, plus potential
rises in energy prices and their impact on
low-income households — issues likely tocrop up in the transition phase to renewableenergy. “Unless pains and negative aspects
are openly discussed, it wouldn’t be fair andpolicies would not last long,” she said.
The problems the world now faces are
wide-ranging. Some people argue that climate change measures should have utmost
priority, as advocated by the European
countries and the U.S., but Takeuchi said
this view does not sit comfortably with her.
That is because it can fail to take national andregional characteristics into consideration,
leading discussions to deviate from reality.
Such a way of thinking undeniably demonstrates a lack of tolerance for giving breathing
room to countries that have more difficult
conditions, such as developing countries thatare experiencing difficulty in satisfying theirdemand for energy. “I think it’s important
to discuss the climate change issue as one of
the SDGs and seek solutions while trying tostrike the right balance” among the 17 goals,
Takeuchi said. “If a policy or initiative deviates from reality, you can’t call it sustainable.”
The ESG Talk series are interviews with business leaders
who are active proponents of
ESG investing and practicesin Japan.