The Asia-Pacific Journal | Japan Focus Volume 13 | Issue 40 | Number 2 | Article ID 4385 | Oct 05, 2015

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Japan’s Bid to Become a World Leader in Renewable Energy

Andrew DeWit

For nearly three years, global attention hasfocused on the three arrows of Japanese PrimeMinister Abe Shinzo’s “Abenomics” as well ashis aggressive new security policies. Yetbeneath the radar, his government has begunto vigorously promote renewable energy andefficiency. Its initiatives accelerated over thesummer of 2015, and the momentum continuesto increase. The measures include not justample fiscal, regulatory and other policysupport for renewable generation and energy-harvesting technology. The Abe regime is alsoinvesting heavily to build a renewable-basedhydrogen economy as well as expand the smart-grid and district heating systems that are corenetwork infrastructures for a low-carboneconomy. Moreover, the Abe regime isadopting new governance mechanisms,including inter-ministerial task forces andwidening the ambit of local public corporations,to accelerate the deployment of renewables. Inaddition, de facto energy policymaking isbecoming more inclusive, eroding the Ministryof Economy Trade and Industry’s (METI)dominance while simultaneously advantagingpro-renewable factions in other ministries aswell as within METI itself.

PM Abe at the Fukushima Renewable EnergyR e s e a r c h I n s t i t u t e , M a y 3 1 , 2 0 1 5(http://www.sankei.com/politics/news/150531/plt1505310010-n1.html)

These claims will surely seem dubious, if notabsurd, in light of Abe’s support for nuclearenergy and the recent restart of the Sendainuclear reactor in the face of majority publicopposition.1 Indeed, most Japanese left-liberalcommentary on the Abe regime’s energystrategy – especially as codified in the 2014Energy Basic Plan and its targets for 2030 –derides it as reliant on nuclear and coal,2

inadequately supportive of efficiency, and “lessaccommodating to renewables” than theprevious Democratic Party of Japan (DPJ)administration.3 Some overseas analysts alsodismiss Japan’s hydrogen strategy as a “fraud”based on “low-grade coal” in Australia.4

The present article argues that the dismissiveapproach overlooks important f iscal,organizational and other evidence, which weshall explore below. The LDP’s green-energyproponents aim at revitalizing local economies

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through renewable energy, growing strategicsectors of the economy, bolstering nationalsecurity (especially energy security), enhancingresilience in the face of natural and otherdisasters, as well as dealing with the threat ofclimate change. Their ranks include such LDPheavyweights as Ishiba Shigeru, currentMinister for Local Revitalization and possiblythe next LDP Pres ident . Given theirconservative politics, they are elaborating anational-security, “local revitalization”-focusedparadigm of green power, quite distinct fromthe idealistic, small-is-beautiful emphasiscommon among Japan’s left-liberal proponentsof renewable energy. Yet the LDP’s approach todiffusing renewables also centres on local-government agency, which could not onlyaccelerate the diffusion of renewable energybut also bolster Japanese democracy in thebargain. In light of the alarming state of globalclimate change, energy markets, and economicinequality, this article asserts that what theLDP are doing is far too important to ignore.

The Evidence: Budgets

Opposition to the Sendai nuclear restart, August 10,2 0 1 5(http://www.huffingtonpost.jp/2015/08/10/sendai-nuclear-power-plant_n_7964336.html)

Some of the most persuasive evidence of theLDP’s expanding commitment to renewableenergy and efficiency is found in the centralgovernment’s budget, particularly the centralagencies’ requests for the coming fiscal year(April 1, 2016 to March 31, 2017). During thesummer of 2015, Japan’s fiscal process was

notable for energy-related requests thatmushroomed over the previous year. Onestandout example i s the Minis try o fEnvironment’s (MoE) submission for renewableenergy and efficiency projects, which is fully62% higher than its fiscal year 2015 spending.5

We shall explore these and related requests ingreater detail presently, comparing them withbudgets under the DPJ. But first, it is importantto point out that these budget outlines arepreliminary. In Japan’s fiscal process, centralagencies submit their initial budget requests tothe Ministry of Finance (MOF) by the end ofAugust, which is followed by negotiationsamong MOF’s budget examiners and thevarious ministries and agencies. Thesenegotiations generally last until aboutDecember, and result in a draft budget. It islikely that about YEN 5 trillion will be trimmedfrom the YEN 102 trillion budget request. Butaccording to an analysis in the September 5,2015 Asahi Shimbun these cuts are likely to becentred on social security.6 It is highly unlikelythat the Abe cabinet did not approve thedramatic increases in proposed spending onrenewable energy and efficiency, and thus theyare probably not going to be sacrificed.

In addition, the expanded energy-relatedproject requests are in part to be funded byextra revenues gleaned by increased “green”taxation of fossil fuels. This gives the spendingprogrammes additional protection, because onerationale for the taxes is to increase incentivesfor the development and deployment ofalternative energy. In spite of continuing steel-industry pressure to have such taxes axed,7 theLDP did not roll back the carbon taxes thatwere introduced in October of 2012, and havesince been raised in stages. The taxes are set toreach YEN 289/ton of CO2 with the scheduledApril 1, 2016 increase.8

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Local Revitalization Minister Ishiba Shigeruinspecting a biomass plant in Okayama Prefecture,J u n e 1 3 , 2 0 1 5(http://www.asahi.com/articles/ASH6F35FQH6FPPZB004.html)

As described above, the MoE’s energy-relatedfiscal request for 2016 was 62% higher than itsfiscal 2015 initial budget. The MoE’s totalrequest for 2016 was YEN 1.68 trillion, a 33%increase over the fiscal 2015 appropriation.One of the factors driving this overall increaseis the Japanese government's commitment toreducing its carbon emissions by 26% by 2030versus 2013 levels. As a major part of thisoverall aim, the MoE’s renewable andefficiency-related spending requests for 2016amount to just under YEN 176 billion.

The MoE is, of course, not the only centralagency with a prominent role in directingpublic finance at renewable energy andefficiency projects undertaken by Japan’s localgovernments, private firms, NPOs and otheractors. The METI is another major supplier ofsubsidies for such projects. In the energy field,the METI’s requests for 2016 total just underYEN 976 billion. This figure is a significantincrease on the YEN 796.5 billion in the fiscal2015 initial budget, and efficiency andrenewables receive striking increases. To besure, one of Japan’s leading journalists onenergy-related matters, Ishida Masaya,

criticizes the METI’s fiscal 2016 request forincluding about YEN 200 billion in spending onnuclear (including YEN 133 billion in support tolocal sites of nuclear reactors). This figure isroughly the same as the nuclear spending infiscal 2015, which totals YEN 185 billion. Ishidaregards maintaining this level of support fornuclear as being inconsistent with the new(from 2014) energy basic plan’s explicitcommitment to maximize renewables andminimize nuclear.

But Ishida devotes considerably more attentionto the METI’s aim to nearly double its supportof efficiency and conservation, raising its fiscal2015 YEN 127.7 billion spending in thiscategory to YEN 242.9 billion. He adds that thisspending to cut greenhouse gas emissions andreduce power consumption is largely targetedat factories, which are the most costly venuesfor achieving gains in energy efficiency andconservation. The METI’s spending on thiscategory will thus nearly triple, from YEN 50billion in 2015 to YEN 135.6 billion in 2016.Ishida rightly focuses on this initiative, as theMETI itself describes the current need forefficiency and conservation as comparable tothe period in the immediate wake of the 1970soil shocks.9

METI is generally seen as powerfullyinfluenced by vested energy interests, includingthe nuclear village and those focused on fossilfuels. So it is also telling that METI plans tomore than double its spending in support ofrenewable-energy projects, from YEN 35.8billion in 2015 to YEN 81.8 billion in 2016.METI will also raise its R&D on efficiency fromYEN 50.7 to YEN 63.2 billion and its R&D onrenewables from YEN 49.3 to YEN 53.7. METIis also asking for a tripling in its funding onhydrogen-related deployment (fuel cells andhydrogen stations) and research (includingrenewable power to gas10), from fiscal 2015’sYEN 11.9 billion to YEN 37.1 billion.11

Another central agency with a strong role in

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fostering the diffusion of renewables andefficiency is the Ministry of Infrastructure,Land, Transport and Tourism (MLIT). Since2011, it has been undertaking one of the mostinteresting of Japan’s waste-heat relatedi n i t i a t i v e s , t h r o u g h i t s “ B - D A S H ”(Breakthrough by Dynamic Approach inSewage High Technology) Project.12 Japan’spotential for waste-heat capture in its seweragesystems has been assessed at 15 millionhouseholds’ worth of heat-energy use.13 Thefiscal 2016 request for the B-DASH projectaimed at exploiting this energy potential is YEN3.6 billion, and via the initial fiscal 2015 budgetthe MLIT already has a YEN 901.2 billion fundfor waste-heat recovery and other renewable-energy (e.g. methane) from Japan’s 460,000kilometres of sewers, via the MLIT socialinfrastructure development disbursements.14

This project has already led to such initiativesas Toyota City’s “Future Challenge City”partnership, announced on August 26, 2015,with Sekisui Chemical on heat-recovery in thecity’s sewers.15

August 26, 2015: Toyota City teams up with SekisuiChemical to recover waste heat from its sewers(http://www.city.toyota.aichi.jp/topics/1010186/1010557.html)

Moreover, one of the increased efficiency-related fiscal requests by the MLIT is forhousing and building stock. The MLIT fiscal

2015 budget for this category totals YEN 116million, but the request for 2016 is YEN 32.2billion, or well over 300 times more. Thisprodigious increase apparently reflects apowerful commitment to raise efficiency in thecountry’s building stock after new, but non-obligatory, efficiency standards introduced in2013 had little effect.16

Other central agencies with a direct interest inthe diffusion of renewable energy andefficiency include the Ministry of InternalAffairs and Communications (MIC) as well asthe Ministry of Agriculture, Farms and Forestry(MAFF). Their roles in foster ing thedeployment of renewable energy focus less onthe technology per se than on the coordinationof local governments (MIC) as well as primary-sector producers, such as forestry firms inbiomass (MAFF). Their proposed spending onenergy projects generally did not leap asnoticeably as the cases surveyed above, savefor the MIC’s special programme of fosteringthe deployment of largely biomass-fired districtheating and cooling systems in local areas. Thisprogramme is the “Distributed energyinfrastructure project.” It received YEN 240million in fiscal 2015, but is slated to more thantriple to YEN 700 million in fiscal 2016. Thebulk of MIC’s large-scale spending increasesare centred on the ICT infrastructure that isone of the core network technologies in Japan’snationwide rollout of the smart community,internet of things, and related projects thatcross multiple agency jurisdictions.17 The MICspending on ICT in the fiscal 2015 initialbudget is YEN 115.3 billion but is slated toincrease to YEN 137.8 in fiscal 2016.18

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Screen Shot from Takaichi Sanae’s October 18, 2011well-informed talk (in Japanese) on “The Potentialf o r R e n e w a b l e E n e r g y a n d E f f i c i e n c y ”(https: / /www.j imin. jp/eco/)

The above projects are in themselves goodreasons to pay close attention to the MIC. Butin addition, the current MIC Minister, TakaichiSanae, has been a very strong proponent ofrenewable energy for several years. Under herleadership, the MIC bureaucracy havecontinued with their significant organizationalinitiatives to put local governments in charge ofenergy. We shall examine these initiatives inthe subsequent section on institutional changesthe LDP has made to foster the accelerateddiffusion of renewables and efficiency. But forthe present, note that the MIC collated thedistributed and renewable-energy projectspending - by the MIC itself as well as METI,MoE, and MAFF - relevant to local government.Takaichi presented the results of the MICsurvey on these matters at a September 4,2015 press conference. She pointed out thatthere are 31 subsidy programs, worth a total ofYEN 102.7 billion in fiscal 2015 as well as anadditional YEN 126 billion via the 2014 fiscalyear’s supplementary budget.19

Was the DPJ More Renewable-Friendly than theAbe Regime?

The recent budget requests, described above,are not the entirety of the Abe regime’splanned investments in renewables, efficiencyand related projects. There are several other

central agencies – such as the Ministry ofEducation, Culture, Sports, Science &Technology (MEXT) – whose programmes areimportant. Even so, these preliminary budgetnumbers for 2016 offer an instructive contrastwith Japan’s central-government fiscalexpenditures on renewable energy between2009, the first year of the DPJ government, and2013, the first year of the Abe government.Those expenditures were analyzed in anOctober, 2014 report by the Board of Audit ofJapan, which surveyed renewable energysubsidies by Japan’s 7 main central agencies(METI, MoE, MAFF, MLIT, MEXT, the CabinetOffice, and NEDO). Some of its findings arepresented in table 1, which displays the 7-agency totals for each year between 2009 and2013, in addition to the total over the fiveyears. The survey found that total spending onrenewable energy deployment by the 7 maincentral agencies for the entire 5 year periodwas YEN 468 billion, with 56.7% of thespending, or YEN 265.6 billion, represented byMETI, followed by MoE at 16.6%, or just underYEN 78 billion.

Table 1: Japanese Central Agency Subsidies for Renewable Energy Projects,2009 to 2013 (units: billion YEN)

2009 2010 2011 2012 2013 Total:2009-2013

70.8 134.8 92.0 78.1 82.3 468.0Source: “Concerning the Development of Projects in Renewable Energy,” Board ofAudit of Japan, October 2014: figure 1-1-1, p. 22

As we also see in table 1, the peak year forrenewable spending under the DPJ was 2010,when a total of YEN 134.8 billion was devotedto renewable-energy projects by the 7 centralagencies. This figure was nearly double theprevious fiscal 2009 total of YEN 70.7 billion.The gap between the two figures suggests thatthere was a strong contrast between the LDP,under whose government the 2009 budget wasdrafted, and the DPJ. The DPJ was committedto nuclear prior to 3-11, but it also includedstrong advocates of renewable energy.20 Hence,we should not be surprised at the increase.

Yet note that under the current Abe regime, thefiscal 2016 request for renewables by the METIalone totals YEN 81.8 billion. The figure would

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be considerably greater were we able to takethe Board of Audit of Japan’s approach and addthe MoE and other agencies’ and ministries’slated spending to that of the METI. Thatcalculation will have to await the passage of the2016 budget, early next year. But the numbersat present strongly suggest that the LDP in2015 has changed quite strikingly in itsapproach to renewable energy, compared to2009 as well as 2013 (when the LDP intervenedlate in the budget cycle to reshape fiscalpriorities by increasing public works).21 At leaston some measures, the LDP of 2015 may evenbe more pro-renewable than the DPJ was.

The Evidence: Institutional Changes

As we shall see below, institutional changesundertaken by the Abe regime are alsoincreasingly important in promoting renewableenergy and efficiency. Virtually none of thesechanges have caught the attention of theregime’s many critics or even the manybusiness analysts hoping to divine Japanesepolicymakers’ intentions on energy policy.

Admittedly, recent off ic ial Japanesegovernment policy decisions concerning mid-term targets for nuclear, renewables, and otherpower generation would seem to indicate anLDP coolness towards renewables. That is, onJune 1, 2015, the METI released its targets forJapan’s “best mix” of power generation for2030. This report supplements the April 2014Basic Energy Plan, which lacked specifictargets. As seen in figure 1, the new targets for2030 include securing between 20-22 percentof total power by nuclear generation. Otherelements of the projected 2030 power mixinclude a 27 percent share for liquid naturalgas (LNG), 26 percent for coal, and 3 percentfor oil.

Figure 1: Japan’s 2030 “Best Mix” Targets

S o u r c e : M o v e l l o n J u n k o , 2 0 1 5(http://www.renewableenergyworld.com/articles/2015/07/japans-long-term-energy-plan-shoots-for-ultimate-balance-in-economics-environment-and-safety.html)

As for renewables in the 2030 power mix, theirtotal share is set at 22-24 percent of power.The smaller sphere in figure 1 shows that muchof this renewable energy is to be conventionalhydro (meaning large dams), which is forecastto supply between 8.8 percent and 9.2 percentof power. Solar, wind and other renewablesources are limited to between 13.4 percentand 14.4 percent of the power mix, with solarbeing 7 percent, wind 2 percent, biomass under4 percent and geothermal less than 1 percent.Thus, the previous 2010 Basic Energy Plan’saim of securing roughly 20 percent of powerfrom renewables (including hydro) by 2030 wasonly marginally increased under the new plan,to a maximum of 24 percent. The new plan alsoforesees intermittent solar and windcomprising just 9 percent of the 2030 powermix whereas conventional hydro, small hydro,geothermal , b iomass and other non-intermittent renewables are slated to be asmuch as 15 percent of the mix.22 The newenergy plan’s proposal to increase therenewable share roughly 4 percent, comparedto the 2010 plan, certainly does not suggest theLDP is going green with gusto. Indeed, manyJapanese renewable-power supporterslamented that the revised policy represented “a

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total defeat of the sustainable energy camp.”23

The Politics of the 2030 “Best Mix”

Yet the 2030 “best mix” targets reflecteddesperate lobbying by vested energy interests.They remain influential in key committees inMETI, and were able to shape the outcomeduring several months (from January to June of2015) of vigorous debate over the power mix,resulting in these numbers for the 2030 power-mix. Yet their victory, so to speak, may havebeen pyrrhic. For one thing, few observers -even within METI - expect nuclear power’sshare to reach the 20% target let alone get pastit. And even were the target to be achieved, the20-22 percent nuclear share in the 2030 powermix represents a significant reduction innuclear power. This reduction is both relativeto the actual 28.6 percent share that nuclearhad just before 3-11 (as shown in figure 2) aswell as to the over 50 percent share nuclearwas to achieve by 2030 under the 2010 BasicEnergy Plan. It is very likely that, at best, only20 reactors (of Japan’s 43 viable reactors) willbe restarted between 2015 and 2024. Thiswould leave nuclear power providing perhaps10 percent of total power generation by 2030.24

Indeed, the August 11, 2015 Wall StreetJournal, warned that more stringent nuclearsafety measures and an independent regulatorhad resulted in only 5 of Japan’s 43 potentiallyviable reactors being approved for restart as ofAugust 2015.25 As Temple University ProfessorStephan Lippert suggests in a July 15, 2015analysis of the new energy plan and itspredecessor, the new version needs to be readin light of its very different political context.Lippert argues that Abe’s LDP is trying to finda politically viable path between aggressive re-nuclearization and a German-style exit fromnuclear: public opposition prevents a return tothe ambitious nuclear targets that preceded3-11, but at the same time Japan lacks anorganized and influential political force (likethe German Greens) that could compel acomplete exit from nuclear. By choosing a

compromise path, one of “small-scale re-nuclearization,” the Abe regime avoids, on theone hand, unduly alienating public opinion aswell as, on the other hand, losing the support ofthe utilities and other business interests thatwant restarts.26

Political calculations are often like that, whichis one reason America’s Obama administrationhas professed an “all of the above” energystrategy27 while making incremental moves tomarginalize coal and maximize renewables. ButJapan has minimal conventional energyresource endowments and a deep lydelegitimated nuclear fleet. In order to “keepthe lights on,” while limiting costs and risks, ithas to grapple with tough choices that restrictits ability to finesse for long in day-to-daypower policy as opposed to targets 15 yearsaway. And unlike the Obama White House,which is part of a fragmented federal systemwith no clear locus of effective authority onenergy, the buck stops at Japan’s centralgovernment. The cabinet is thus compelled tomake fiscal and institutional choices in the hereand now. So it is no surprise that the Aberegime’s political compromise on the powermix is belied by the fiscal and institutionalinitiatives we examine in this article.

This trail of facts leads to another reason the“victory” of Japan’s vested energy interestsmay have been pyrrhic: policymakers andanalysts learned a great deal during themonths of debate over the power mix. Theircynicism about the feasibility of the nuclearnumbers is now a corrosive element at work onthe fiscal and regulatory institutions that shapeJapan’s power economy, still the world’s fifthlargest. Expectation for renewables andefficiency provide a strong contrast to thedubious attitudes towards the nuclear role.Most energy analysts believe the renewableshare of the power mix could easily exceed thenew Basic Energy Plan’s 22-24%, and reachwell over 30%. The MoE itself released a study(done by the Mitsubishi Research Institute) that

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projected renewables could reach between33-35 percent of the power mix by 2030.28 OnMay 5, 2015, the Governor of KanagawaPrefecture, Kuroiwa Yuuji, wrote directly to theAbe government’s Chief Cabinet Secretary,Suga Yoshihide, arguing that 35 percentrenewables by 2030 should be made thetarget.29 The respected Institute for SustainableEnergy Policies even argued that Japan couldachieve 50% renewable energy by 2030.30 Andone of Japan’s formerly quite pro-nuclearenergy experts, Kikkawa Takeo, a member ofthe METI power-mix committee, has quitepublicly and repeatedly insisted thatrenewables could achieve at least a 30 percentshare and that the new Energy Plan’s numbersderive from furious lobbying by the nuclearvillage rather than an objective assessment ofJapan’s best options on energy.31

The Geopolitical Context of the 2030 “BestMix”

So consider where Japan is. The country hasjust adopted mid-term energy targets that fewfind credible. It has also done this in the midstof enormous uncertainty on conventionalenergy supplies, prices, geopolitics and otherfactors. It bears keeping in mind that Japan isnot just the world’s fifth-largest power market,but also the world’s largest importer of LNG,the second largest importer of coal, and thethird-largest net importer of oil and oilproducts.32 Figure 2 on “Changes in Japan’sPower Mix” shows that the country’s importdependence on conventional fuels to producepower greatly increased between 2010 to 2013,when nuclear’s share shrank and LNG’s roleballooned from 29.3 percent of power to 43.2percent, coal increased from 25 percent to 30.3percent, and oil and liquid petroleum gas (LPG)more than doubled from 6.6 to 13.7 percent.Virtually all of these fuels are imported, soJapan’s import dependence increaseddramatically, from 62 percent in 2010 to 88percent in 2013. The comparison with theaverage EU power mix in 2011 is striking, as

the EU’s overall dependence on imports is 49percent.

Figure 2 shows that Japan in 2013 was evenmore import dependent than it was in 1973.That was the year of the first oil shock, which isstill such a benchmark for vulnerability amongJapanese policymakers that – as noted earlier –the METI emphasizes it in its fiscal andregulatory planning for efficiency andconservation and indeed uses when it producesfigures (figure 2 is a direct translation ofMETI’s work). Admittedly Japan’s power mix in2013 was less dependent on a single energysource, in contrast to the over 70 percentdependence on oil and LPG in 1973. At thesame time, the geopolitical, climate and otherrisks of using fossil fuels in the present farexceed those of 1973.

Indeed, it is hard to exaggerate the scale ofcontemporary risks. For example, theSeptember 21, 2015 Financial Times warnsthat current low prices for oil have put as muchas USD 1.5 trillion of investment in energyprojects in question. This constriction in theinfrastructure of supply brings profound risksof dramatic price escalations as early as 2017.33

And in spite of continuing optimism concerningunconventional oil and gas reserves, especially

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the US “shale revolution,” a growing number ofobjective and rigorously empirical studies ofthe actual resource base and costs ofproduction suggest that shale’s importantaddition to the global supply portfolio is bettermeasured in years than decades.34 Indeed, theshale boom was in large measure driven by adoubling of US high-yield “junk bond” debt toUSD 2 trillion, a bubble that appears to beimploding.35 Meanwhile, demand for energycont inues to grow: China’s gasol ineconsumption in July of 2015 was up 17 percentover the previous year.36 One respectedexpert’s extrapolation of present trends in oilwarns that just China and India alone will be“theoretically consuming 100% of global netexports around the year 2032.”37

In short, 3-11 and all that has happened sincehas reduced nuclear to at best a minor role inJapan’s power mix. Certainly nuclear appearsincapable of displacing much of Japan’senvironmentally damaging, expensive andgeopolitically risky reliance on fossil fuels inthe power mix. So the real question for LDPpolicymakers is whether they will allow vestedenergy interests to dominate investmentdecisions and income streams in the country’spower economy, its most critical infrastructure.The energy vested interests’ performanceduring the 2030 “best mix” debate showed thatunchecked, their self-interest would turn Japaninto an energy- and climate-technologyGalapagos while the rest of the world embracesrenewable energy and efficiency. Thisargument is not wishful thinking: on October 2,2015, the International Energy Agency (IEA)announced that “[r]enewable energy willrepresent the largest single source ofelectricity growth over the next five years,driven by falling costs and aggressiveexpansion in emerging economies.” The IEAbelieves the coming five years will seerenewables provide two-thirds of net additionsto global power systems, representing over 700gigawatts or over twice Japan’s installed powercapacity. This forecast suggests that by 2020

renewable power generation will be supplyinga volume of electricity “higher than today’scombined electricity demand of China, Indiaand Brazil.”38

The budget numbers reviewed above suggestthat the LDP’s renewable-energy supportersare determined not to allow vested interestsand incrementalism to ruin the country’sfortunes. They are using the Abe regime’sexplicit commitment to maximize the share ofrenewables as an opportunity to use statefinance to accelerate the diffusion of renewableenergy and efficiency. But they are not doingthis willy-nilly. It would seem that the Aberegime and Japan’s energy bureaucracy havealso learned important lessons from variousexperiences, including the Board of Audit ofJapan survey noted above. The survey assessedthe return on directly subsidized renewableproject spending. It found that 63.7% of totalspending was devoted to solar, producing only38.6% of total installed capacity. By contrast, amere 0.8% of total subsidies spent ongeothermal has resulted in projects that (oncein operation) will represent 19.5% of installedcapacity. For biomass, the return was not aspowerful as geothermal. But even then, 25.3%of subsidy spending resulted in 17.6% of totalinstalled capacity. And with both geothermaland biomass, the power output does not dependon the time of day or the weather.39

Balancing the Blend of Renewables

Hence, the LDP renewable energy initiativesalso seek to balance the country’s portfolio ofrenewables. For example, one of the especiallynoteworthy items in the MoE’s programmerequest is a new initiative, in tandem with theMETI, for a YEN 7 billion “Renewable EnergyElectricity and Heat Autonomous DiffusionPromotion Works.” This collaborative item notonly ref lects increased inter-agencycollaboration (on which, more below), but isalso a very innovative programme forsupporting the non-standard deployment of

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renewable-energy projects as well asincentivizing the exploration of local biomass,geothermal, ground-source heat and otherheat-energy initiatives. It is aimed at fosteringthe diffusion of renewable power generationand heat-related projects that do not rely onthe feed in tariff (FIT)40 system of incentivizingrenewable deployments and do not requireconnection to the traditional power grid. Thepolicy rationale is to use subsidies to encouragegreen-energy projects whose potential issignificant, in terms of resource endowments,but have not yet developed to any significantextent for lack of the catalyzing intervention offiscal incentives to encourage cooperationamong local government, business and otheractors.41

These projects will help relieve pressure on theFIT, whose costs are already up to about YEN 1trillion in 2015, or roughly YEN 350/month perhousehold, based on an average householdpower charge of YEN 7000. This burden is notenormous, but it is a significant increase overthe 2012 cost of YEN 190 bill ion (YEN87/month per household).42Measures thatexpand non-intermittent renewables while alsonot further burdening the FIT and extanttransmission infrastructure make eminentsense at any time. But they are especiallyvaluable when vested-energy interests are stillkeen to suppress the diffusion of distributed,renewable energy.

Another aim of such projects is to expand thelocal-government role in power and heatbusinesses. As the MoE’s Environmental WhitePaper of 2015 pointed out, in a detailed surveyof the city of Minamata, local energy demand isroughly 8% of the local economy. The MoEunderscores the fact that most of the local-areamoney spent on energy (power as well as fuels)flows to the regional power monopoly and otherexternal suppliers, including overseas sourcesof fossil fuels.43 The MIC and other agencieshave been collaborating to remedy this, takingadvantage of the upcoming (April 2016)

deregulation of Japan’s retail power markets asan opportunity to expand the local publiccorporations’ role in energy as well asotherwise maximize local returns from energy.They are well aware that the more local publiccorporations enter the power economy, thegreater the access to finance for infrastructure,the more effective is lobbying pressure in theface of the power monopolies, and the moreequitable the energy shift (since local publiccorporations represent the local community).The policy streams involved in this overallinitiative are quite numerous, and come undersuch rubrics as “disaster-resilient communitybuilding,” “local revitalization,” “nationalresilience,” “distributed energy,” and severalothers.

Local Revitalization Via Energy

Indeed, while following Japan’s 2015 fiscalprocess as it related to energy projects, itproved useful to read an August 7, 2015research report, titled (in Japanese) "LocalEconomic Revitalization Via the ComprehensiveUse of Renewable Energy." The report, byFujitsu senior research analyst Watanabe Yuko,argues that Japan i s in the midst o frestructuring its policy support for renewableenergy. Watanabe detailed the problemsensuing from the fact that, in the four yearssince 3-11, Japan’s deployment of renewableenergy has focused almost entirely on solarpower. The FIT incentive system that wasadopted in the wake of 3-11 and came intoeffect from July 1 of 2012 has – as of the end ofMarch 2015 – subsidized the deployment of8263 kW of solar power generating capacity.This is about 95% of total renewable powergeneration capacity supported by the FIT.Wind, geothermal, biomass and other forms ofrenewable power generation are supported bythe FIT, but the highest level of support isgiven to solar power. In addition, solar power isrelatively quick to install. The result is thatsolar projects have received the bulk of private-sector investor attention.

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However, from 2015, policy changes saw theFIT’s special tax measures eliminated, togetherwith deep cuts in the support for solar power.Subsidization rates for solar power projectsabove 10 kW dropped from YEN 40 per kilowattin July 2012 to YEN 27 per kilowatt in July2015. In addition, from mid-2014 the powermonopolies argued that they were facing gridstability problems, and began en masse toreject applications to the power grid.44 Inconsequence, the FIT power purchaseguarantee was amended to allow extendedperiods during which the utilities may, pleadingcapacity limits, refuse the purchase of FIT-sponsored renewable energy. Watanabe’sanalysis suggests that the increased businessrisk is likely to strongly undermine theincentives for installing large-scale solarpower.

Watanabe’s report also points out thatsignificant endowments of renewable energyresources are distributed among local areas.Solar and wind are very attractive to private-sector businesses because installation timesare short and thus it is possible to earnrevenues from the FIT quickly. At the sametime, the initial investment costs of theseinstallations are high and it is not easy toarrange the financing. Therefore, the projectstend to be initiated by large businesses. As aresult, local areas have limited capacity toparticipate in planning projects and to derivereturns from them. Local governments extendvarious tax exemptions and other specialmeasures to attract private-sector renewableprojects, but the local area’s direct economicbenefit is in fact rather small.

B y c o n t r a s t , b i o m a s s h a s a v e r ystrongeconomic impact on the local area. Localsourcing of the raw materials, such as woodthinnings, delivers a stimulus to the localfarming and forestry industries. Watanabepoints out that Japan’s potential for biomass isvery high. The country has roughly 6 billioncubic metres of forestry resources, among the

highest in the world. It also has ample suppliesof biogas throughout the country, via wasteproducts from livestock as well as leftover foodresources and the like. In addition, biomassprojects are more efficient and make better useof otherwise wasted heat (from combustion) themore localized they are.

Admittedly, developing biomass projects takestime as well as significant investment. On theother hand, because they are based on localresources and the demand for the energygenerated is permanent, returns are notsubject to the vagaries of the economic cycleand prices of imported energy. In addition, andprobably most important, the local area itselfcan be the central player in planning.

Watanabe echoes many of Japan’s energytechnocrats in arguing that key to the localarea’s success is selecting renewable energypro jects most appropr iate for loca ldevelopment and undertaking them throughpublic agency.45 She argues that those that canbe undertaken quickly should be. On the basisof such projects, a portion of the revenuesderived by the FIT can be used as a fund tofinance future energy investments, thusstimulating local industrial development.Conceding that these projects are small-scale,she adds that they are also potentiallynumerous and therefore in the aggregate candeliver a strong benefit to local economicdevelopment. Watanabe stresses that it is mostimportant to look beyond the immediateeconomic return from the FIT and emphasizethe long-term benefits to the local community’seconomic revitalization. As the focus broadensbeyond solar to the full range of renewableenergy options, comprehensive deployment ofrenewable energy projects can be used tofoster the sustainable development of localareas.46

As of August 26, 2015, the LDP Policy AffairsResearch Council (PARC) made this policyapproach official. The LDP “Committee on

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Expanding the Diffusion of Renewable Energy”drafted a proposal for “A Strategy of LocalRevitalization Via Renewable Energy: LocalAbenomics.” The Committee is chaired by theLDP Dietmember (and former MIC Vice-Minister) Shibayama Masahiko. Its proposal isquite detailed and emphasizes the value of thebroad portfolio of renewable options (includingthe gamut o f heat sources ) to l oca lrevitalization at a time when Japan’s YEN 18trillion power market (in 2013) is beingderegulated. The submission emphasizes thateven the official 2030 power-mix figure of 24percent renewables equates to a YEN 4.3trillion business, while 30 percent is YEN 5.4trillion. The PARC approved the submission onAugust the 25th and then submitted it to ChiefCabinet Secretary Suga as well as the centralagencies of government.

Building Local Power

Moreover, Japan is already making headway onsetting up local energy businesses. In 2013, theabove-noted MIC program for district heatingsystems and other decentralized energyinfrastructure selected 31 local communitiesfor a survey of their energy potential. In 2014,14 of these communities that had been deemedto have a high potential for decentralizedenergy development were selected. In bothcases, the emphasis was on developing energybusinesses thatfocus on the community’sinternal demand for power and heat as thefocus of local renewable energy projects.Another aim is to develop highly autonomousenergy systems that are robust in the face ofdisasters and other potential disruptions to theconventional grid. Figure 3 on the “Overview ofCommunity Heat and Power Infrastructure”illustrates the generalized model that MICseeks to deploy in Japan’s local communities.As the figure shows, the systems include smartpower and heat grids linking local communitygovernment facilities, businesses, andresidences.

Figure 4 displays an “Example of a DistributedEnergy Project,” showing the supply anddemand parameters that the MIC-ledcommittee aims at for local areas. Theitemization of supply factors shows that energyinputs are diverse as well as geographicallydispersed, spreading the economic opportunityacross the community and out into the ruralareas. As envisioned by the MIC, the localenergy projects have their head offices situatedin the local community and focus on developinglocal energy resources as well as local humanresources. They also pull the investment fromwithin the community as well as outside, andtherefore make a significant economiccontribution to the local area.

Quantifying the Benefits

In April of 2015, the Japan Research Institute’sTakiguchi Shinichiro reported in detail on theMIC’s initiatives. He noted that assessments ofthe benefits from this kind of energydevelopment were based on Japan’s roughly200,000-person population centers in allregions of the country (there are about 200local areas nationwide with populationsbetween 100,000 and 300,000 residents). Onethat is undertaking this kind of energy programis the city of Tottori in TottoriPrefecture.Takiguchi’s paper analyzed in detail the extentto which the benefits from this project extendbeyond the city and throughout the prefecture.

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The calculation in Takiguchi’s paper assume(based on the German model of “stadtwerke”local public corporations) the local energybusinesses to have a 20% share of electricitysales, with 40,000 residents (about 20% of allresidents) serviced by the energy firm in 2030.In addition, public facilities and participatingbusinesses are assumed to represent about10,000 kW of demand. The result is that by2030 power sales reach YEN 2 billion, and overthe 15-year period 2016 to 2030 represent anaverage of YEN 1 billion per year. Moreover,assuming that 80% of the power is producedthrough cogeneration with a 50% efficiency ofheat to power, heat sales over the 15-yearperiod from 2016 to 2030 are an annual YEN370 million.

In other words, even under conservativeestimates, a locally established energy businessin a community of roughly 200,000 residents,one that installs both heat and powerinfrastructure, could provide an annual directeconomic benefit of YEN 1.4 billion to thecommunity. Infrastructure investment -spend ing on b iomass , sma l l hydro ,cogeneration and other infrastructure - bothwithin the city as well as in the surroundingarea would amount to about YEN 500 million.In addition to the cogeneration of heat andpower, investment in energy efficiencyequipment to encourage the efficient use ofenergy is estimated to be roughly YEN 100million. The above assumptions lead to a total

direct economic benefit of about YEN 1.9billion.

This direct economic benefit leads to a YEN600 million result in primary stimulus effect(the inducement of production internal to theprefecture). For example, substitution of locallysourced forest biomass for imported fossil fuelis a positive effect for the forestry industry.(This effect has been calculated on the basis ofusing biomass for 12% of fuel, which is aconservative assumption.) In addition, the localenergy firm’s investments in power facilitiesand other construction also produce a stimuluseffect. This economic stimulus is assumed toprovide a YEN 400 million secondary stimuluseffect to service industries (a productionstimulus effect within the prefecture). Addedtogether, the direct effect as well as theprimary and secondary ripple effects areexpected to amount toYEN 3 billion per year, orYEN 43 billion over 15 years, for Tottori Cityand its neighboring local communities.

In terms of employment effects, the localenergy firm directly employs about 80 people,with roughly 50 people employed throughprimary ripple effects and a further 30employed through secondary ripple effects inthe service sector. This leads to a total of 160persons employed, and over 15 years ofemployment for just under 2500 people, aconsiderable employment benefit for thelocality.

A further special feature of the local energybusiness is that these effects extend over thelong term. This is quite different from theshort-term economic stimulus effects of publicworks, and is yet another reason local energy isof great interest to the LDP and bureaucracy.Energy infrastructure delivers a continuingbenefit to the local community. In addition, ifforest biomass is used as fuel, the income isrecycled through the forest industry and leadsto a revival of the forestry sector. Since Japanis roughly two-thirds forested, many local areas

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can reasonably expect benefits from this kindof program.47

And as already noted, the potential portfolio ofrenewables is much larger than biomass fromforestry or farming. The diversity of Japan’srenewable-energy endowments exceeds that ofmost countries, as Amory Lovins and otherexperts highlight. Lovins and his researchers atthe Rocky Mountain Institute combinedassessments of all renewable resources,including the intensity of sunlight, averagewind speeds, geothermal potential, availablebiomass, and other pertinent elements. Theyconverted the totals into one commoncomparison of the annual number of gigajoulesof renewable energy potential per square meter(GJ/y/m2). The result shows that Japan is aglobal leader: Japan’s endowment of 63.1GJ/y/m2 is far more plentiful than the18.8 inChina, India’s 45.5, the EU’s 20.4, NorthAmerica’s 30.4, and South America’s 28.1.48

What has been lacking is robust agency toexploit these resources. Alienated from thestate, and with no serious party vehicle, theJapanese liberal-left idealizes people-powerinitiatives that lack the deep pockets andorganizational discipline to build and maintainlarge-scale energy infrastructure. And privatebusiness evidently finds it difficult to overcomethe regulatory and other strategies deployed bythe power monopolies, which exacerbatebusiness risk. Moreover, private businesses arenot incentivized to act on behalf of the publicinterest. It is telling in this respect thatSoftbank, once seen as the spearhead agent foreviscerating the bloated monopolies of Tepcoand the rest, is in fact now collaborating withTepco.49

Certainly there are new energy firms springingup. But they are overwhelmingly devoted tosolar and too small to play a powerful role ininvestment as well as push back against thevarious stratagems of vested energy interests.An August 27, 2015 news release from Tokyo

Shoko Research (TSR) indicates that betweenJanuary and December 2014 there were 3,283new firms created in the electric powerindustry. This represented an increase of 180percent over the previous year, and nearly 50times the 66 new firms in 2011. Yet the TSRsurvey also shows that 2536 (77.2 percent) ofthese new firms were in solar. Much smallernumbers were involved in other areas ofrenewable energy. Wind energy saw only 251(7.6 percent) new firms. Small hydro attractedonly 122 (3.7 percent) new business starts. Andonly 84 new firms (2.5 percent) were inbiomass and other bio-related renewableenergy business areas.

And most were far too small to be effective.There were 1,805 firms capitalized at less thanYEN 1 million, or 54.9% of the total number ofnew starts. Only 232 firms (7 percent) werecapitalized at over YEN 10 million, and just 65(1.9 percent) with over YEN 100 million. Thereport points out that this predominance ofvery small, scantily capitalized firms reflectsthe low barriers to entry.50

There will clearly be a lot of destruction ofpower businesses in Japan, in the wake ofderegu la t i on . Whe ther i t w i l l be aSchumpeterian, creative destruction is an openquestion. So the LDP’s effort to make thecommunity the engine of deploying renewableenergy, by putting fiscal and institutionalresources into the hands of local governmentsand their public corporations, is very promisingindeed.

The MIC and the Energy Task Force

The inst i tut ional changes, and theirimplications, do not stop there. In herSeptember 4, 2015 policy statement, notedearlier, MIC Minister Takaichi pointed out thatthe ministry is assisting local governments indeveloping master plans. She described themas templates through which communities cannot only make use of their respective energyresource endowments, but also take a

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leadership role in working with regionalfinancial institutions and other actors indeveloping distributed energy infrastructure.As pointed out above, Takaichi also detailedthat her ministry’s survey of its and othercentral agencies' (METI, MAFF, and MoE)subsidy programs for the diffusion of renewableenergy found that there are 31 separateprogrammes that totaled YEN 102.7 billion infiscal 2015 on top of YEN 126 billion in thefiscal 2014 supplementary budget.

What is particularly important for this sectionon institutional changes is that Takaichi alsoannounced new collaborative measures: inorder to further the efficient deployment ofenergy across the regions, the relevant centralagencies have set up a task force and haveagreed to pool their resources in order to focusmost effectively on achieving the desired resultof energy deployment. The task force iscomposed of the METI’s natural resources andenergy agency, the Forestry Agency, the MoE,and the MIC. She also stressed that efforts willbe made in conjunction with local financialinstitutions and business groups to set up localenergy business platforms at the prefecturallevel. She describes this coordination amongcentral agencies as maximizing the prospectsfor local areas. The aim is to help localcommunities seize the opportunity afforded bythe April, 2016 liberalization of power markets,revitalizing local economies as quickly and asmaximally as possible. Takaichi refers to thisMIC-centred initiative as a new element of"local Abenomics, echoing the LDP Committeeon Expanding the Diffusion of RenewableEnergy’s “Strategy of Local Revitalization ViaRenewable Energy: Local Abenomics.”51

National Resilience and Distributed Energy

As noted earlier, the Abe government hasinitiated a variety of policy streams, including“disaster-resilient community building,” “localrevitalization,” “national resilience,”“distributed energy,” and several others. These

programmes have received virtually noattention from enthusiasts of Abenomics, fromJapanese liberal-left critics of the Abe, orvirtually all other actors. Outside of specialistanalyses that do understand the significance ofthese projects, and how they are coalescing onbuilding robust smart communities, thereigning assumption appears to be that theyare simply wasteful porkbarrel spending.

Yet the Abe regime is quite serious about“national resilience.” From 2012, it engineeredseveral reversals of DPJ-era decentralization ofintergovernmental finance, in order to putsubsidies back into the hands of MLIT andother agencies. The rational was the need tobolster the nation in the face of climate andother threats. The LDP has since evolved awell-funded national resilience strategy thatincorporates renewable energy and smart gridsas a means of ensuring power is available indisasters.52

The Japanese Cabinet office published thebudget requests for national resilience-relatedexpenditures for fiscal 2016 during the monthof August. The total fiscal request for 2016 isalittle over YEN 4.53 trillion, which represents asubstantial increase over the previous year'sexpenditure of slightly more than YEN 3.8trillion. The amount devoted to public works inthe fiscal 2016 requests is just under YEN 3.77trillion, again a substantial increase over theprevious year's YEN 3.15 trillion expenditure inpublic works.

The MLIT is the single largest recipientagencyin the budget allocation, as itsappropriation is slated to total just under YEN3.36 trillion, a 120% increase over the previousyear's figure of just under YEN 2.8 trillion. Theavailable documents do not yet break down theMLIT expenditures into specific categoriescomplete with numbers, the description ofwhere the spending is directed highlights firstand foremost measures to deal with theincreasing threat of floods and landslides due

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to climate change and other factors. Thesemeasures to be taken in the face of flood andlandslide threats from climate change areitemized as YEN 788.2 billion, a substantialincrease over the previous year's allocation ofYEN 664.5 billion.

It is not only MLIT that is to receive allocationsfor bolstering the nation's communities andinfrastructure in the face of natural disastersand other threats. Another significant recipientof funding is the MAFF. This ministry'sappropriations are second to the MLIT, andtotal YEN 545.8 billion for 2016, a 121%increase over the previous year's allocation ofjust over YEN 450 billion. Some of the projectsto which the MAFF's funding is devoted includethe production of "hazard maps" around pondsand reservoirs that are subject to flooding. Thebudget for this activity is the lion’s share ofYEN 179 billion, which in itself is a significantincrease over the previous year's YEN 139.5billion (in this case, the entire budget is notdevoted to this particular allocation. TheJapanese usage is "uchisuu," which means“inclusive of” rather than a total per se). Otherexpenditures included in the MAFF's budget isbolstering of afforestation to reduce disasterthreats. One example is the strengthening ofseaside forests to deal with such naturaldisaster threats as tsunami. This expendituretotals YEN 66 billion (inclusive), versus the2015 total of YEN 55.8 billion (again, inclusive).

An important expenditure category where boththe MLIT and MAFF have s ignif icantexpenditures is in the construction of roads andfacilities to be used in the event of evacuation.The MAFF budget for this particular set ofactivities totals YEN 355.6 billion (inclusive),versus the previous year's expenditure total ofYEN 292.5 billion (again inclusive). The MLIT’sexpenditure for roads and facilities to be usedin the event of evacuation totals just under YEN1.265 trillion (inclusive) for 2016, versus justover YEN 1.08 trillion (inclusive) for 2015.

Again, an important feature of the nationalresil ience program is its progressiveintegrat ion with programs for localrevitalization, distributed energy, and the like.The minister for “Building National Resilience,”Yamatani Eriko, made this link explicit in anAugust 12, 2015 interview in the SME-orientedmagazine HanjoHanjo.53

Conclusions

The evidence indicates that core elements ofAbe’s Liberal Democratic Party (LDP) areincreasingly enthusiastic about the potential forrenewable energy and efficiency. After theMarch 11, 2011 (3-11) natural and nucleardisasters in the Tohoku region made“Fukushima” as notorious as “Chernobyl,” thepro-renewable faction’s numbers and influenceexpanded. With the exception of such LDPDietmembers as Kono Taro,54 they are notopposed to nuclear power, which has renderedthem politically invisible in the deeply polarized“nuclear vs solar” post-3-11 debate overJapanese energy policy and politics. But theyare now quite openly using the power of thestate against vested energy interests and onbehalf of local governments and their residents.

Japan’s evolving strategy seems a pragmaticresponse to extreme import dependence onenergy (especially fossil fuels), vulnerability inthe face of extreme weather and naturaldisasters, and the desperation of Abenomics. Inaddition, the powerful discourse of “disasterresilience” has presumably helped sellrenewables and their associated networks(local grids, district heating, etc) within theconservative LDP. If so, it may also be helpingto override opposition from the monopolies, thenuclear village, and other interests potentiallythreatened by the shift to local agency. In anyevent, it is certainly instructive, andencouraging, to watch Abenomics be driven ina potentially sustainable direction.

Andrew DeWit is Professor in RikkyoUniversity’s School of Policy Studies and an

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editor of The Asia-Pacific Journal. His recentpublications include “Climate Change and theMilitary Role in Humanitarian Assistance andDisaster Response,” in Paul Bacon andChristopher Hobson (eds) Human Security andJ a p a n ’ s T r i p l e D i s a s t e r(http://www.amazon.com/dp/1138013137?tag=theasipacjo0b-20) (Routledge, 2014), "Japan’srenewable power prospects," in Jeff Kingston(ed) Critical Issues in Contemporary Japan(http://www.amazon.com/dp/0415857457/?tag=theasipacjo0b-20) (Routledge 2013), and (withKaneko Masaru and Iida Tetsunari) “Fukushimaand the Political Economy of Power Policy inJapan” in Jeff Kingston (ed) Natural Disasterand Nuclear Crisis in Japan: Response andR e c o v e r y a f t e r J a p a n ' s 3 / 1 1(http://www.amazon.com/dp/0415698561/?tag=theasipacjo0b-20) (Routledge, 2012). He is leadresearcher for a five-year (2010-2015)Japanese-Government funded project on thepolitical economy of the Feed-in Tariff.

Recommended citation: Andrew DeWit,"Japan’sBid to Become a World Leader in RenewableEnergy", The Asia-Pacific Journal, Vol. 13, Issue40, No. 2, October 5, 2015.

Related article,

•Eric Johnston, Kyoto forum’s leaders warmu p t o r e n e w a b l e s(http://www.japantimes.co.jp/news/2015/10/17/n a t i o n a l / k y o t o - f o r u m s - l e a d e r s - w a r m -renewables/#.ViNdKKOhfIV).

Notes

1 See Aaron Sheldrick and Issei Kato “Japanrestarts reactor in test of Abe's nuclear policy,”(http://www.reuters.com/article/2015/08/11/us-ja p a n - n u c l e a r - r e s t a r t s -idUSKCN0QF0YW20150811) Reuters, August11, 2015.

2 See, for example Japan Renewable EnergyFederation Executive Director Ohno Teruyuki(in Japanese) “Coal-Fired Generation New Build

is a Risky Business that Runs Contrary toI n t e r n a t i o n a l P r o m i s e s , ”(http://www.jref.or.jp/column/column_20150611.php) JREF Natural Energy Update, June 11,2015.

3 Note the comments from Japan’s KikoNetwork and other observers cited in DavidMcNeill “Japan’s emissions have soared sinceF u k u s h i m a n u c l e a r d i s a s t e r , ”(http://www.irishtimes.com/opinion/japan-s-emissions-have-soared-since-fukushima-nuclear-disaster-1.2359864) The Irish Times,September 21, 2015.

4 On this, see Steve Hanley “Japan PushesForward With Hydrogen Society Ahead OfO l y m p i c s , ”(http://gas2.org/2015/09/18/japan-pushes-forward-hydrogen-society-ahead-olympics/) Gas2,September 18, 2015.

5 See (in Japanese) “Ministry of Environment2016 budget for energy-related spending up62%, for renewable and efficiency projects inl o c a l a r e a s , ”(http://www.kankyo-business.jp/news/011232.php) Kankyou Bijinesu Onrain, September 2,2015.

6 See (in Japanese) “Initial budget requests athighest even YEN 102 trillion, with speciala c c o u n t o f Y E N 3 . 8 t r i l l i o n , ”(http://www.asahi.com/articles/ASH944CJPH94ULFA00J.html) Asahi Shimbun, September 5,2015.

7 See (in Japanese) “Japan Iron and SteelFederation presents requests for reductions incorporate tax burden in 2016 tax reform,”(http://www.japanmetaldaily.com/metal/2015/steel_news_20150917_2.html) Nikkan KougyouShimbun, September 17, 2015.

8 On the taxes, and Japan’s green taxes incomparative perspective, see (in Japanese)Motoki Yuko and Naitou Aya, “RecentDevelopments in Japan and European Greening

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o f t h e T a x S y s t e m , ”(http://www.mizuho-ir.co.jp/publication/report/2015/pdf/mhir09_greentax.pdf) MizuhoInformation Research Report Vol 9, 2015.

9 A thorough discussion of METI’s spendingplans and institutional changes to enhancetheir effectiveness can be found (in Japanese)in Yoshioka Hi, “Subsidies for efficiency to YEN126 billion: METI resolved to triple them,”Nikkei Ecology,October 2015.

10 On the use of renewable power to generatehydrogen gas, see the 4-minute video at “Powert o G a s , ”(http://www.dw.com/en/power-to-gas/av-18544381) Deutsche Welle, June 28, 2015.

11 See (in Japanese) Ishida Masaya, “METI’sfiscal requests for 2016 centre on efficiency,with spending on energy overall at YEN 975.7b i l l i o n , ”(http://www.itmedia.co.jp/smartjapan/articles/1509/01/news049.html) Smart Japan, September1, 2015. The detailed METI request (inJ a p a n e s e ) i s a v a i l a b l e h e r e(http://www.meti.go.jp/main/yosangaisan/fy2016/pdf/02_2.pdf).

1 2 The B-DASH project is described (inJ a p a n e s e ) h e r e(http://www.nilim.go.jp/lab/ecg/index.htm).

13 On this, see (in Japanese) “Using the 15million households’ worth of heat energy buriedi n t h e c i t i e s , ”(http://bizgate.nikkei.co.jp/smartcity/technology/001873.html) Nikkei Smart City Consortium,January 30, 2015

1 4 S e e t h e i t e m i z a t i o n(http://www.soumu.go.jp/main_content/000372070.pdf) (in Japanese) on p. 9 of the materialstudied at the May 11, 2015 meeting MICresearch committee on Local-Government-LedLocal Energy Systems

15 See (in Japanese) “A sewerage heat-recovery

test project with Sekisui Chemicals: ToyotaCity’s future-challenge city partnership isc o n c l u d e d , ”(http://www.city.toyota.aichi.jp/topics/1010186/1010557.html) Toyota City News Release,August 27, 2015

16 See (in Japanese) “The 2016 solar subsidiesare for self-consumption and zero-energyhomes? We explain the METI and MLIT budgetr e q u e s t s , ”(https://www.solar-partners.jp/pv-eco-informations-42388.html) Solar Partners, September 11,2015

17 On these, see Andrew DeWit, "Japan’sResilient, Decarbonizing and Democratic SmartC o m m u n i t i e s "(http://www.japanfocus.org/-Andrew-DeWit/4236/article.html), The Asia-Pacific Journal, Vol.12, Issue 50, No. 3, December 15, 2014

18 On this, see (in Japanese) p. 3 of “Fiscal 2016M I C I C T - r e l a t e d m a j o r p r o j e c t s , ”(http://www.soumu.go.jp/main_content/000375374.pdf) Ministry of Internal Affairs andCommunications, Japan, August, 2015

19 On this, see (in Japanese) the transcript(http://www.soumu.go.jp/menu_news/kaiken/01koho01_02000414.html) of the September 4,2015 press conference with MIC MinisterTakaichi Sanae

2 0 On this, see Andrew DeWit and IidaT e t s u n a r i , T h e “ P o w e r E l i t e ” a n dEnvironmental-Energy Policy in Japan(http://www.japanfocus.org/-Iida-Tetsunari/3479/article.html), The Asia-Pacific Journal Vol 9,Issue 4 No 4, January 24, 2011

21 On this, see (in Japanese) “The LDP proceedstowards the Abe government with a budgetrevision that increases public works,”(http://www.yomiuri.co.jp/election/shugiin/2012/news2/20121214-OYT1T00213.htm) YomiuriShimbun, December 14, 2012

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22 See “Japan plans more renewables, lessn u c l e a r , ”(http://asia.nikkei.com/Politics-Economy/Economy/Japan-plans-more-renewables-less-nuclear)April 29, 2015

2 3 The comment is by Arakawa Chuichi,University of Tokyo professor of engineering,and is cited in Martin Foster, “Best-Mix aMisnomer for Japanese Energy Future,”(http://journal.accj.or.jp/best-mix-a-misnomer-for-japanese-energy-future/) The Journal, June2015

24 On this, see BMI “Japan Renewable Report,”Business Monitor International, October 1,2015.

25 Alexander Martin, “Japan Restarts NuclearPower A f t e r Two -Year Shu tdown , ”(http://www.wsj.com/articles/japan-restarts-first - r e a c t o r - s i n c e - f u k u s h i m a -disaster-1439259270) Wall Street Journal,August 11, 2015

26 See Stephan Lippert, “Energy: Uncertaintyover nuclear reactors in Japan’s 15-year energys t r a t e g y , ”(http://www.united-europe.eu/news-and-topics/european-topics/energy-uncertainty-over-nuclear-reactors-in-japans-15-year-energy-strategy/) United Europe, July 7, 2015

27 See Jason Furman and Jim Stock, “NewReport: The All-of-the-Above Energy Strategyas a Path to Sustainable Economic Growth,”(https://www.whitehouse.gov/blog/2014/05/29/new-report-all-above-energy-strategy-path-sustainable-economic-growth) The WhiteHouse, United States, May 29, 2014

28 An English-language summary of the studyand its background is available at “MOEForecasts 33% Renewables by 2030, NuclearPlants Not Prerequisite for Energy Mix,”(http://www.japanfs.org/en/news/archives/news_id035296.html) Japan for Sustainability, July 3,2015

29 See (in Japanese) “Concerning the Target forR e n e w a b l e E n e r g y , ”(http://www.pref.kanagawa.jp/uploaded/attachment/767342.pdf) Kuroiwa Yuuji, Governor ofKanagawa Prefecture, May 13, 2015

30 See (in Japanese) ISEP, “Towards an EnergyShift in Line With Historic Trends: A PolicyS u b m i s s i o n o n t h e E n e r g y M i x , ”(http://www.isep.or.jp/library/7557) Institutefor Sustainable Energy Policies, April 28, 2015

3 1 See, for example, Kikkawa Takeo (inJapanese) “The Government’s Calculations andthe 2030 Leve l o f Nuc lear Power , ”(http://politas.jp/features/6/article/377) Politas,May 23, 2015

32 See “Japan: International energy data anda n a l y s i s , ”(http://www.eia.gov/beta/international/analysis.cfm?iso=JPN) Energy Information Agency,January 30, 2015

33 See Christopher Adams, “Plunging oil pricesput question mark over $1.5tn of projects,”(http://www.ft.com/intl/cms/s/0/3ba5d0a8-5e29-11e5-a28b-50226830d644.html) FinancialTimes, September 21, 2015

34 See for example the analysis by Art Bermanand Ray Leonard, “Years Not Decades: ProvenReserves and the Shale Revolution,”(http://www.artberman.com/wp-content/uploads/HGS-NA-Presentation-23-Feb-2015.pdf)Presentation to Houston Geological SocietyHouston, Texas, February 23, 2015

35 See Jesse Colombo, “Keep your eyes on thisj u n k b o n d c h a r t , ”(http://www.forbes.com/sites/jessecolombo/2015/09/30/keep-your-eyes-on-this-junk-bond-chart/) Forbes, September 30, 2015

36 See “China’s Oil Refining Climbs to SatisfyR o b u s t G a s o l i n e D e m a n d , ”(http://www.bloomberg.com/news/articles/2015-09-13/china-s-oil-refining-climbs-to-satisfy-

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robust-gasoline-demand) Bloomberg News,September 13, 2015

37 The calculation can be found in the transcriptof a September 13, 2015 interview of JeffreyBrown, the originator of the “Land ExportModel” in oil studies. See Adam Taggart,“Jeffrey Brown: To Understand The Oil Story,You Need To Unders tand Expor ts , ”(http://www.peakprosperity.com/podcast/94378/jeffrey-brown-understand-oil-story-need-understand-exports) September 13, 2015

38 On this, see “Renewables to lead world powerm a r k e t g r o w t h t o 2 0 2 0 , ”(https://www.iea.org/newsroomandevents/pressreleases/2015/october/renewables-to-lead-world-power-market-growth-to-2020.html)International Energy Agency, October 2, 2015

3 9 See ( in Japanese) “Concerning theDevelopment of Projects in Renewable Energy,”(http://report.jbaudit.go.jp/org/pdf/261008_zenbun_2.pdf) Board of Audit of Japan, October2014

40 On the FIT, see Andrew DeWit, "A NewJapanese Miracle? Its Hamstrung Feed-in TariffA c t u a l l y W o r k s "(http://www.japanfocus.org/-Andrew-DeWit/4185/article.html), The Asia-Pacific Journal, Vol.12, Issue 38, No. 2, September 22, 2014

41 A Japanese-language description of thep r o g r a m m e i s a v a i l a b l e h e r e(https://www.env.go.jp/guide/budget/h28/h28-gaiyo/014.pdf).

4 2 See ( in Japanese) p. 14 of “Energy,Environment and SME-related materials,”(http://www.mof.go.jp/about_mof/councils/fiscal_ s y s t e m _ c o u n c i l / s u b -of_fiscal_system/proceedings/material/zaiseia261107/03.pdf) Budget Bureau, Ministry ofFinance, Japan, November 7, 2014

43 See (in Japanese) “Environment White Paper2 0 1 5 , ”

(http://www.env.go.jp/policy/hakusyo/h27)MoE, , pp. 53-5

44 See James Topham, “Japan's Kyushu Electricshuts off renewable suppliers from grid,”(http://www.reuters.com/article/2014/09/25/us-ja p a n - r e n e w a b l e s - r e j e c t i o n -idUSKCN0HK0WY20140925) Reuters,September 25, 2015

45 See Andrew DeWit, "Japan's Radical EnergyTechnocrats: Structural Reform Through SmartCommunities, the Feed-in Tariff and Japanese-S t y l e ' S t a d t w e r k e ' "(http://www.japanfocus.org/-Andrew-DeWit/4229/article.html), The Asia-Pacific Journal, Vol.12, Issue 48, No. 2, December 1, 2014

4 6 Watanabe Yuko (in Japanese), "LocalEconomic Revitalization Via the ComprehensiveU s e o f R e n e w a b l e E n e r g y , ”(http://www.fujitsu.com/jp/group/fri/report/newsletter/2015/no15-007.html) Fujitsu ResearchInstitute, August 7, 2015

47 See (in Japanese) Takiguchi Shinichiro,“Local Energy Works Responding to LocalRevitalization and Energy Deregulation,”(https://www.jri.co.jp/MediaLibrary/file/report/jrireview/pdf/8180.pdf) Japan ResearchInstitute, April 2015

48 Cited in Andrew DeWit, "A New JapaneseMiracle? Its Hamstrung Feed-in Tariff ActuallyW o r k s "(http://www.japanfocus.org/-Andrew-DeWit/4185/article.html), The Asia-Pacific Journal, Vol.12, Issue 38, No. 2, September 22, 2014

49 See (in Japanese) Weekly Daimond Editors,“Tepco and Softbank to set up a new firm in thes m a l l - r e t a i l p o w e r s e c t o r , ”(http://diamond.jp/articles/-/71231) WeeklyDaimond, May 11, 2015

50 See (in Japanese) “The 2014 Survey of newf i r m s i n t h e p o w e r s e c t o r , ”(https://www.tsr-net.co.jp/news/analysis/20150

APJ | JF 13 | 40 | 2

21

827_01.html) Tokyo Shoko Research, August27, 2015

51 On this, see (in Japanese) the transcript(http://www.soumu.go.jp/menu_news/kaiken/01koho01_02000414.html) of the September 4,2015 press conference with MIC MinisterTakaichi Sanae

52 Andrew DeWit, "Japan's "National ResiliencePlan": Its Promise and Perils in the Wake of theE l e c t i o n "(http://www.japanfocus.org/-Andrew-DeWit/4240/article.html), The Asia-Pacific Journal, Vol.

12, Issue 51, No. 1, December 22, 2014

53 See (in Japanese) “Interviewing NationalResilience Minister Yamatani: Bolstering theGovernment’s Policies for National LandsManagement and Local Revitalization,”(http://hanjohanjo.jp/article/2015/08/12/1316.htm) HanjoHanjo, August 12, 2015

54 See for example, Cheng Herng Shinn, “TaroK o n o , L D P R e b e l w i t h a C a u s e , ”(http://blogs.wsj.com/japanrealtime/2011/08/12/taro-kono-ldp-rebel-with-a-cause/) Wall StreetJournal, August 12, 2011