Industry Statement on Cabinet’s Readoption of Bill on Global Warming Countermeasures

Statement signatories:
Kenji Fujiyoshi, Chairman, Japan Chemical Industry Association
Eiji Hayashida, Chairman, Japan Iron and Steel Federation
Toshiyuki Shiga, Chairman, Japan Automobile Manufacturers Association
Masataka Shimizu, Chairman, Federation of Electric Power Companies of Japan
Kazuhisa Shinoda, Chairman, Japan Paper Association
Akihiko Tenbo, President, Petroleum Association of Japan
Keiji Tokuue, Chairman, Japan Cement Association
Mitsunori Torihara, Chairman, Japan Gas Association

The implementation of measures to address climate change will have a critical impact on the economy, employment and household finances in Japan well into the future. Taking this into account, and for the reasons discussed below, the signatories of this statement find it highly regrettable that the Japanese Cabinet has readopted flawed draft legislation on mid-term targets and individual policy measures to combat global warming.

At a meeting of the Cabinet on October 8, the Japanese government once again endorsed draft legislation on countermeasures to global warming (first approved earlier this year but withdrawn from the previous Diet session), clearing the way for its resubmission to the current session of Japan’s parliament.

The bill was first endorsed by the Cabinet on March 12, despite the government’s failure to provide the public with adequate background information on this legislation and despite the absence of any national debate in this regard. At that time, our organizations issued an official response, expressing our consternation over this approval and calling for proper and comprehensive deliberations in the Diet and other forums on the specific content of the bill, so as to gain the understanding and consent of the Japanese people.

This time as well, it can hardly be said that adequate efforts have been made to inform the public of the significance of the content of this draft legislation. Under such circumstances, we wish to go on record for the second time with a strong message of dismay with the Cabinet’s action on this matter.

1. Regarding the bill’s greenhouse gas (GHG) reduction targets

The legislation stipulates, for GHG reductions in the medium term, numerical targets whose severity betrays insufficient examination of these goals from the standpoints of sustainability, appropriateness of the national burden, and international fairness. In particular as regards the impact of those reduction targets on the national economy, employment, and people’s lives, and despite the fact that these concerns constitute the most fundamental criteria in any rational assessment of the substance of this legislation, opinions have been from the outset and remain divided on whether the legislation will have positive or negatives effects in these areas. As a result, the Japanese government has yet to articulate a unified stance in this regard. In all deliberations on the content of the bill, we therefore believe that action should be taken as follows:

With respect to sustainability, clarification of the GHG reduction targets to be achieved; designation of the relevant sectors; stipulation of the specific types of technologies to be applied to those ends; and the creation of a roadmap establishing the compatibility of these measures with economic growth strategies;
With respect to the appropriateness of the national burden, clarification of the costs involved in implementing the roadmap, of the impact on the national economy, employment, and people’s lives, as well as the public financial burden thereby imposed;
With respect to international fairness, and based on the elements outlined in a) and b) above, verification of the target levels submitted to the United Nations by all the major emitting countries, together with other efforts to ensure international fairness, including confirmation of whether or not prerequisites are met.

2. Regarding the bill’s individual measures (emissions trading scheme, carbon tax, feed-in tariffs)

Individual measures and their linkage to medium/long-term targets should be identified within the total scope of global warming countermeasures. Only then should comprehensive and integrated studies of the overall issue be undertaken by government (the Japanese government, for one, having yet to do so). In the case of Japan, which already leads the world in energy efficiency, there is an extremely limited margin for rational reductions in carbon dioxide achieved on the basis of specific technologies. Yet the reality is that studies have not been conducted to determine the specific and broader costs and impacts of individual measures. The introduction of basic policies under such conditions could lead to greater industrial migration overseas and a further deterioration of the employment environment, among other consequences adversely affecting the domestic economy.

Japan’s industrial sector is grappling with increasingly harsh conditions attributable to, among other factors, a shrinking home market resulting from a declining birthrate and an aging population, the world’s highest corporate tax rate, and rapid yen appreciation. Under these circumstances, major Japanese manufacturers are often facing no viable option other than to transfer their production bases to less restrictive locations overseas. Notwithstanding the fact that it is virtually impossible for small and medium-size enterprises to effect such a migration, the inevitable result of such a trend will be the overseas exodus of jobs, tax revenue, and technology.

Considering today’s severe economic environment and the urgent need to expand investment and stabilize employment through the implementation of new growth strategies, this bill’s passage by the Diet would, in our view, lead to further unreasonable burdens and restrictions being imposed on industry in Japan. Climate change and other policies certain to have a major and enduring impact on the economy and on people’s lives should be formulated on the basis of transparent, non-partisan opinion gathering from all stakeholders; thorough and objective analysis and assessment; and national debate.

Japan’s industrial community stands ready to contribute vigorously to the promotion of global warming countermeasures on an international scale, and to work with the government in the study of such measures. Proposals have been submitted on industry’s pivotal role in the use of Japanese technologies for international application and initiatives to be made at the product stage—including the Japan Business Federation’s “Achieving a Low-Carbon Society of Global Scale” policy proposal, announced on September 14. We maintain our position that the CO2 reduction goal of 25% from the 1990 level is unfair from an international perspective and will be massively costly and restricting for the business community. In lieu of that goal, we would like to see measures formulated which genuinely promote environmental and economic compatibility. Such initiatives should make use of Japan’s world-leading energy conservation and environmental technologies in addressing climate change on a global scale, while ensuring further growth and development for Japan based on its commitment to cutting-edge levels of technology and industrial enterprise.

Back