INSIGHTS INTO THE WORLD / Hatoyama climate pledge flawed

Yoshiyuki Kasai / Special to The Yomiuri Shimbun

While attending the U.N. climate conference last month, Prime Minister Yukio Hatoyama declared that his government would reduce Japan's greenhouse gas emissions by 25 percent from 1990 levels by the year 2020. The plan is nearly impossible in the first place, and it could even push Japan's economy over the cliff.

A pledge, particularly when offered by a nation's leader to the international community, must first be backed by attainable policy actions. Some latitude must also be given to its implementation. Only with such a credible pledge can the leader stand confident in the international arena and carry it through with certainty. Far from that, Hatoyama's "pledge" is little more than a numerical target, itself a mere repetition of the Kyoto Protocol.

Perhaps doubtful whether the pledge is achievable, even with unbearable burden put on the nation's steel, chemical, and other manufacturing sectors, the prime minister anticipates large-scale overseas purchases of emission quotas. He also expects that the Japanese voters would somehow tolerate a new "green tax" supposedly funding the emission shopping. Hatoyama's pledge will result in a disastrous vicious cycle.

In fact, this heavy burden could cause a substantial part of the manufacturing industry to disappear from Japan. In its place, far less energy-efficient companies from countries abroad will provide for the consumer needs of the market of those Japanese companies, which will result in an increase of the world's total greenhouse gases. Meanwhile, the people of Japan will lose jobs and see their standard of living drop, culminating in the collapse of both its economy and finances. A nightmarish cycle could begin.

"Industrial Japan" has weathered a number of deep slumps, from the oil crises to the bursting of the bubble. The resilience of Japanese big business has led some to believe that it is an "unsinkable battleship." However, Japan's large corporations have thus far survived only by ceaseless efforts to make them more efficient. They have already come quite a long way, with little left to become even more energy efficient. With this heavier burden placed on their shoulders, how can they survive? Many of them might simply disappear. When they go, so will the small and medium-sized companies, as the two are inseparably linked.

New framework essential

I have no intention of unduly calling on the prime minister to assert only Japan's national interests, but instead wish him to seek lower greenhouse gas emissions with realistic methods. Obviously, no framework can be effective unless China and the United States have signed up, as their combined emissions account for 40 percent of the world's total.

All major emitters should agree on a goal that is rational, equitable and sustained by hard scientific evidence. The framework thus envisioned should differ substantially from the old one under the Kyoto Protocol consisting of a numerical target and baseline year.

Japanese industries, in any sector, are among the world's top achievers in carbon efficiency. To replace them with industries from carbon-inefficient countries will only increase greenhouse gases. What is best for Japan is therefore environmentally best for the entire world: Japan should continue to run its efficient factories and further develop "green" technologies, which should then be transferred to other countries. Spreading energy-efficient technologies this way will better serve the environment.

That is the reality the Hatoyama administration must face up to, pay serious heed to, and humbly learn from. For their part, heads of industries, academics and other pundits must speak out. They should not be simply carried away by the wave of popular opinion.

Come December, leaders from all corners of the world will gather in Copenhagen to discuss at COP15 the post-Kyoto Framework after it expires in 2012. Japan should seize this opportunity to accurately review the results of the Kyoto Protocol and propose a framework that is both rational and effective.

Looking back, the Kyoto Protocol was agreed on in December 1997. It called for participating nations to first base their reduction targets on 1990 figures. In setting the targets, each nation was made responsible for binding itself to a numerical target, again with 1990 being the point of reference. It also required that nonachieving nations offset their deficits by purchasing emission quotas from the surplus countries.

Why the baseline was not set in 1995, but further back in 1990 is still unexplainable. Even today, nobody knows how that decision was reached. Furthermore, this places the efforts or lack thereof by each country to reduce emissions beyond judgment or appraisal, since the protocol only covers a numerical target.

Take Britain for example. The 1990s saw British deindustrialization on a massive scale, with its manufacturing industries disappearing. By contrast, the City of London gained even more salience as a center of international finance and as the country's growth generator. The 1990s flight from manufacturing to finance had already reduced Britain's carbon footprint to such an extent that the Kyoto target should have been easy to accomplish. In addition, it would enable the country to earn sizable profits by selling its excess quotas abroad. Carbon trading businesses would add still more grease to the burgeoning financial wheel.

The decision to base the target on 1990, rather than on 1995 also made a significant difference for the then 15 EU member countries. Between 1990 and 2005, they reduced emissions by 2 percent.

However, if 1995 had been used as the base year, instead of a decrease, their emissions would have gone up 1 percent. Setting aside the addition of the 12 nations from the former Soviet bloc to the EU, which has facilitated EU target achievement, the fact remains that by making 1990 the base year, Britain and the rest of Europe have made their targets far less difficult to begin with.

Numerical emission reduction targets can hardly be effective in combating global warming, as results tend to vary depending on the base year used. What we now have under the Kyoto Protocol is merely the outcome of international negotiations focused on defending national interests. In such bargaining sessions, negotiators agreed on a mechanism where countries that had already had surpluses in possible emissions quotas could sell their surplus rights. Financial incentives influenced these countries to press ahead with self-serving proposals aimed at setting easy targets, with little consideration of the original purpose of genuinely curbing emissions.

The Kyoto Protocol, centered on country-by-country numerical targets, is a fundamentally flawed scheme. Suffice to say, the accomplishments of Britain will only result in a net loss for the world environment, for consumer goods produced in developing nations will leave a greater carbon footprint.

Japan's new approach

The next framework must include major emitters such as China and the United States from the very beginning. It must walk away from the Kyoto Protocol and its target scheme. To create a new, effective framework, Japan should consider afresh the following proposal.

First, it must look at the industrial sectors for each country. If a certain sector in a specific country has been proven to emit the least amount of greenhouse gases, the record of that sector for that country will automatically become the global target for that same industrial sector. As the target has been proven to be achievable, it must be fulfilled within a set amount of time.

Call it the benchmarking system; it will only work when the country whose sector(s) has set the benchmark is obliged to provide the technologies, thereby helping other countries to lower emissions in that specific sector. It is also a dynamic process, in that the sector target continues to be upgraded to further motivate technological innovation and thus, emissions reduction. The benchmark should be updated regularly to reflect these improvements, to be reinstated for sectors worldwide.

The only way to prevent further global warming is to abolish the ineffective numerical target scheme based on 1990 figures, and to benchmark the best sector records to be achieved. This would also help spread the best available technology beyond national boundaries, and continuously advance these mutually shared targets. I doubt there is any better way than that, as I can think of none myself.

The government should learn from the harsh realities that industries face instead of acting on self-assertive convictions. As Confucius says, "Thought without learning [though from actual facts, as opposed to old letters] is perilous."

Kasai is chairman of Central Japan Railway Co.