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Loss and Damage - Adverse Impact of Climate Change

At present, Japan relies on imports for nearly all of its energy sources. According to the Energy and Environment Council, each year we import fossil fuels worth approximately JPY17 trillion, and release approximately 1.1 billion tons of CO2 associated with energy use, amounting to 90% of the greenhouse gas emissions of our country. On 11 March 2011, the occurrence of the Great East Japan Earthquake and accident at the Fukushima Daiichi nuclear power plant led the government to establish the Energy and Environment Council in June of the same year and initiate debate. Following a year of debate, on 29 June of this year, three scenarios for a decrease in the ratio of nuclear power were announced. Options for reduction from the approximate 26% actual value of 2010 prior to the earthquake disaster are first to zero percent, second to about 15%, and third to about 20-25% by 2030. This month, we will hear from Professor Toru Morotomi, scholar on global warming and energy issues.
Toru Morotomi
Professor, Graduate School of Economics, Kyoto University

Earned a degree in Economics from Doshisha University in 1993, and a Ph.D. from Kyoto University’s Graduate School of Economics in 1998. Obtained his current position in March 2010. Former Assistant Professor positions at Yokohama National University’s Faculty of Economics, and at Kyoto University’s Graduate School of Economics. Also served as Visiting Researcher at the University of Michigan.

Temporary Member on the Advisory Committee for Natural Resources and Energy of the Ministry of Economy, Trade and Industry, and also Member of the Central Environment Council Special Committee on a Taxation System for Global Warming Measures and other Committee of the Ministry of the Environment, Japan.


July 2012

The Choice of the People:
What Energy Would You Choose?

Toru Morotomi
Professor, Graduate School of Economics, Kyoto University


Energy, the Three Options

--How would you assess the three energy options put forth by the Energy and Environment Council?

Morotomi:
We have nearly 20 years until the year 2030, the target year of all three scenarios. I think that the government has set aside enough time to reform the current facilities and achieve the objectives. There are a number of nuclear power plants that will reach 40 years since the start of their operation before 2030. How we deal with these will considerably change the shape of energy supply in the future. The three options set forth by the government indicate three different ways of dealing with these nuclear power plants.

The scenario for a 15% ratio by 2030 presumes that nuclear power plants will be consistently decommissioned after 40 years of operation and that new facilities will not be constructed. We can speculate that from the perspective of the government, mutual agreement on this scenario would be the easiest to achieve among a wide range of stakeholders. The issue of maximum years of operation of nuclear power plants is a complicated one, and power companies in fact believe that operation can exceed 40 years. For instance, the United States has authorised operation exceeding 40 years in several cases. The Nuclear and Industrial Safety Agency of Japan has recently released a decision to recognise operation by power companies exceeding 40 years. On the other hand, routine inspections of nuclear power plants have revealed that deterioration of reactor walls due to neutron damage is progressing more quickly than expected. In light of these facts, the decommissioning of nuclear power plants at 40 years is not a bad idea from the perspective of safety. However, this scenario does not touch upon the use of nuclear power after the nuclear power ratio is decreased to 15% in 2030, thus leaving some ambiguity.

Using the 15% scenario as a standard, the 20-25% scenario can be interpreted to include the extended operation of nuclear power plants to 50 to 60 years, or alternatively as sustainment of the 40 year decommissioning rule on one hand while recognising the construction of new nuclear power plants. As the 20-25% scenario is "premised on strong public confidence in nuclear energy and administration (P.9)”, it is a considerably unrealistic option considering prevailing public opinion.

I personally believe that the zero nuclear power scenario is not impossible given the time available until 2030 and my sense is that public opinion lies closer to the zero nuclear power scenario. Policies to realise this scenario call first for the thorough adoption of renewable energies. Moreover, enacting measures to facilitate changes in consumer behavior, such as lowering of electricity fees during non-peak hours in exchange for raising electricity fees during peak hours, will not only lead to a “peak shift” for power, but also to the realisation of energy conservation in general. Also effective is more active utilisation of waste heat from factories for water heating and air-conditioning.

Key Points?

--What points should the average citizen pay attention to when considering the three scenarios?

Morotomi:
In Japan following the Fukushima Daiichi nuclear accident, the biggest point in question is “What should we do about nuclear power?” Thus, we must first examine our degree of dependence on nuclear power and what our choice will be in this regard. The three scenarios have effectively brought us to a crossroads. Careful thought must be given to all scenarios in terms of what is required to realise the chosen scenario, including renewable energies and reduction of greenhouse gas emissions.

Next, we must note how the differences between the options for nuclear power dependence could potentially impact our lives. If dependence on nuclear power is lowered, thermal power plants with high fuel costs will have to be increased for the time being. Thus, the increase in fuel costs will presumably be transferred to the price of electricity. Are we willing to accept increases in electricity prices and consequent impacts on the economy as a whole as the cost of abolishing nuclear power? Thorough consideration must also be given to the issue of additional greenhouse gases due to increased thermal power generation. Meanwhile, we must guard against having all the negative results of the rise in power generation costs forced down the throats of the general public. In the current debate on electricity prices, will the general public continue to have no say in price hikes? Further, the easy transfer of rising costs onto electricity prices has undoubtedly been made possible under the business model based hitherto on lack of competition, regional monopolies and integrated power producer and distributor. On this point, more competition should be stimulated through reform of the power system, which will lead to debate on whether or not electricity prices should be controlled.

Photo of Fukushima No.1 nuclear power plant
about 30 Km off the coast on 11 Nov. 2011
source: Asachan
Energy Vision for the Future of Asia

--What do you think about the potential for energy cooperation in Asia?

Morotomi:
Promotion of the export of nuclear power to Asia formed a part of the national growth strategy drafted during the Kan administration. In actuality, there are only a limited number of companies around the world that can build and manage nuclear power plants. Many of the major players in the nuclear power industry are concentrated in Japan, such as one major electric company that bought out a major US-based corporation. An order for a nuclear power plant export is large in scale and can range from billions to tens of billions of Japanese yen. As there is no price competition, it has become a huge business for Japanese industry.

However, I personally have doubts about any stance to scale down nuclear power domestically after the Fukushima Daiichi accident, while continuing to actively promote it overseas. Moreover, it is unclear as to whether the export of nuclear power will continue to be a profitable business in the future.

Tokyo Electric Power Company (TEPCO), although intended to function at the core of the nuclear power export business in Asia, declared its withdrawal from nuclear power export initiatives following the Fukushima Daiichi nuclear accident. Moreover, the national government normally acts as a guarantee for debt to back up the overseas expansion of the private sector in this business. However, business risks related to nuclear power, such as augmentation of environmental standards and safety controls, as well as delays in construction work, are expected to increase in the future, raising doubts as to whether our taxes should be utilised to engage in such business. Furthermore, other issues are involved. In the case of Viet Nam and other developing countries, nuclear power plants are normally built in remote locations and require a transmission network to deliver power to the major cities where it is consumed. Developing countries are in some cases not equipped with transmission networks. Even if a nuclear power plant is built, there is the issue of whether networks can be used to appropriately deliver electricity to the location of consumption. We must consider whether the building of something that will involve large-scale investment in a power transmission network is really desirable for developing countries in the first place, or whether the construction of a decentralised power system would be more efficient and less costly. Both Japan and developing countries must deliberate in earnest on these issues, and I really feel that caution is warranted.

I think that rather than export nuclear power with its uncertain future, we should cooperate with developing countries to tap renewable energies. With the start of the fixed price purchasing scheme for power generated from renewable energies, Japan will surely become a good testing site to improve a variety of renewable energy power generation technologies. As a nation, Japan should work alongside its companies to lower the costs of wind, geothermal, and small and medium-sized hydropower generation while improving upon these technologies. The technologies established should be utilised to develop renewable power sources that make efficient use of the national land of developing countries, namely the promotion of export of renewable energies.

The renewable energy market will surely expand in the future, and we need to make global efforts to control unstable power sources and develop a system to stabilise the technology. Many newer 21st century industries, including the IT industry, are involved in the development of system stabilising technology for control and management, bringing about the potential for the export of renewable energies to become Japan’s new growth model. Looking towards the future of business in Japan, I feel that promoting the export of renewable energies is a more appropriate growth model for Japan as opposed to continued dependence on large heavy industries and wagering our survival on the export of nuclear power. I am sure that developing countries are likely to favour this type of cooperation as well.



--Thank you very much.

Takeshi Kuramochi, Associate Researcher, Climate Change Group, IGES contributed to this article.
  Related link: - 80% Reduction of CO2 by 2050 is Possible with Reduced Nuclear Energy -

three scenarios


About "Monthly Asian Focus: Observations on Sustainability"

Until 2010, IGES released "Top News on the Environment in Asia" on a yearly basis. For over 12 years since its establishment of IGES in 1998, "Top News" collected and organised information about environmental issues and policy trends in the region.

In January 2011, IGES launched the new web-based series "Monthly Asian Focus: Observations on Sustainability" in which leading environmental experts deliver their take on latest trends of sustainable Asia.

 

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