Last summer, blistering heatwaves in Japan killed and hospitalized thousands. Kumagaya reported an all-time temperature high for Japan of 41.1C.
Last October, the Intergovernmental Panel on Climate Change issued the world’s most authoritative report on the impacts of climate change. The report showed that if average global temperatures increase to 1.5ºC above pre-industrial levels, 14 percent of the world’s population would suffer deadly heatwaves every five years. If average global temperatures increase by 2ºC, that number goes up to a staggering 37 per cent. Every fraction of a degree magnifies human suffering and ecological turmoil.
Against this backdrop, Prime Minister Abe used an opinion piece in the UK’s Financial Times to ask the world to “join Japan and act now to save our planet”. At the World Economic Forum in Davos last month, the Prime Minister referred to the need to hold temperature to within 1.5 degrees and announced that Japan would use its G20 chair this year to put action on climate change back at the top of the global political agenda in pursuit of net zero global emissions by 2050. The Prime Minister added that “spending money for a green earth and a blue ocean, once deemed costly, is now a growth generator. Decarbonization and profit making can happen in tandem.”
Now that the destination is clear, the urgent question on the table is how Japan will get itself on track with that goal, and how quickly that can be done. Undoubtedly, Japanese ministers, government agencies, public investment arms and companies will need to quickly follow through with new commitments, policies and a sense of purpose to accelerate decarbonisation in their own economy as well as their influence over others. Prime Minister Abe has already set the bold challenge to Japanese business to seize the growth opportunities from disruptive innovations such as clean hydrogen and artificial photosynthesis. In addition, Japan’s existing leadership in energy efficient technology can be deployed to the building sector.
The cruel reality is that, despite predictions of more deadly heatwaves, typhoons, forest-fires and flooding, global CO2 emissions continue to increase, driven largely by renewed growth in coal use in Asia. If the world continues to burn coal at current rates, limiting global warming to 1.5ºC this century will not be possible.
The world’s climate scientists have explained that two-thirds of the world’s current coal power capacity needs to be phased out by 2030 if we are to have a chance of limiting warming to below 1.5ºC. And all major economies in the OECD must have phased out their own coal power completely by 2030.
Japan is currently the only G7 country building new coal power stations at home, and financing them abroad. Japan is the second largest public financier of coal plants globally, supporting an industry that is in rapid decline, and in danger of creating $60 billion in stranded assets in South-East Asia alone. For example, it is difficult to understand recent news that the Japan Bank for International Cooperation is considering finance for dirty old coal power technology in Vietnam that would breach OECD guidelines.
However there are signs that the tide is turning.
Many of Japan’s public financial institutions, investors and companies are already preparing for a decarbonized future. They see climate change as a serious financial risk, and climate-friendly businesses and technologies as a huge new opportunity.
For example, Marubeni Corporation, the biggest player in Japan’s power generation business, has announced that it is moving away from coal. In a recent statement, the company said that climate change “threatens the co-existence of the global environment and society” with a potentially “enormous effect on Marubeni’s business and its shareholders.”
Marubeni now intends to cut its coal-fired power generation of approximately 3GW in half by 2030, and will not enter into any new coal generation business, unless under exceptional circumstances. Marubeni is also scaling up investment in renewables from 10 per cent of its current portfolio to 20 per cent.
This is a good starting point. Marubeni is aligning itself with most of the world’s major financial institutions in backing out of coal. Investors are moving to protect their portfolios and beneficiaries from climate risks. They are also acutely aware of the international reputational damage from financing coal power in other countries.
Financiers are increasingly looking for opportunities in 21st Century energy technologies. As a result, the energy transition is happening far faster than even the most optimistic analysts predicted, with renewable energy and battery storage experiencing exponential growth as prices fall rapidly. Renewables will out-compete coal in most markets as early as 2020. With serious attention to energy market reform, and policy and fiscal incentives, this can also be the case in Japan.
Japanese companies have the technical skills and experience to be the global leader in renewables. Japan is already the world’s second largest exporter of solar PV, and in 2018, 14 Japanese companies including Fujitsu and Sony pledged a shift to using 100 per cent renewable energy. And Japan is poised to lead in a range of breakthrough technologies, such as clean hydrogen.
The atmosphere doesn’t care where emissions come from, nor how they are funded. Every additional tonne of CO2 released is one more tonne to worry about. The public is demanding a new social paradigm built on a cleaner and healthier environment free from particulate pollution and deadly climate impacts.
With the G20 Summit right on the horizon, Prime Minister has an opportunity to lay out a plan to achieve the new vision for real climate leadership that he has articulated. This includes charting a course to net-zero emissions by 2050; using public money to invest in a strong and resilient Japan, and ensuring that no new coal power stations are built or funded by the Japanese government at home or abroad.
“Saving the planet” requires all of this and more.