Need for the Realization of Global Low Carbon Growth METI 1
Low Carbon Growth Enhancement of competitiveness, while appropriately addressing environment/low-carbon concerns is becoming a common interest of many countries. In order to effectively address the climate change issue, it is necessary for both developed and developing countries (especially, industrializing ones) to realize low carbon growth. Widespread use of advanced low-carbon technologies and products in various fields, (e.g., renewable energy, highly efficient power generation, home electronics, low-emission vehicles) should be further accelerated. 2
Emissions Projections of Major Countries (Cancun Pledge) GHG emissions by major developing countries will increase rapidly, based on their 2020 target (i.e., lowering CO2 emissions intensity of GDP) 10,000 9,000 China: Lowering of CO2 emissions per unit of GDP (40 45% compared to 2005 level) 8,000 [100 万トン ] 7,000 6,000 U.S.A.: Reduction of GHG (17% compared to 2005) 5,000 4,000 EU27: Reduction of GHG (20% 30% compared to 1990) 3,000 2,000 1,000 0 Russia: Reduction of GHG (15% 25% compared to 1990) India: Reduce emissions intensity of GDP (20 25% compared to 2005 level) Japan: Reduction of GHG (25% Compared to 1990) (under zero based review) * For EU, U.S., Japan, calculated based on UNFCCC data (all GHGs) / For China and India, calculated based on IEA data (CO2 only: 7% annual growth scenario) 3
Recent developments in Japan s policies related to Climate Change Instruction by PM Abe (first meeting of the Industrial Competitiveness Council (January 25 th )) (Building a responsible energy policy) The Minister of Economy, Trade and Industry is to conduct a zero-based review of the energy and environment strategy of the former government and to forge a responsible energy policy taking account of the needs for stable energy supplies as well as the reduction of energy costs. (Re-examination of climate change policies) The Minister of the Environment and other relevant ministers are to conduct a zerobased review of the 25% emission reduction target by COP19 in next November as well as to develop assertive diplomatic strategies to tackle climate change with the aim of contributing to the world by fully utilizing Japanese advanced technologies. 4
(Ref.) Potential of CO2 Emissions Reduction through Japanese Advanced Technologies Iron and Steel By applying the best practices of iron and steel plants from Japan, to other plants in the world, it is estimated that 130 million tons of CO2 can be reduced. Coal Power Generation By applying the best practice of coal fired power plants in Japan to that of the US, China and India, it is estimated that 1.3 billon tons of CO2 can be reduced. Potential reduction of CO2 by applying BAT(Best Available Technology) Potential amount of reduction(million t CO2) World China UA India Brazil Russia SA CA OECD US Korea Japan Other Source: The Institute of Energy Economics Japan Home Electrical Appliance(Air Conditioner) Potential amount of reduction(t CO2 / crude steel t) Existing CO2 Emission from Coal Power Plant in 2004 Japan Cutting-edge Application Case Existing US Cutting-edge Application Case Existing Cutting-edge Application Case Existing 387(mil. t) + 776(mil. t) + 184(mil. t) 1.3 billion ton Cutting-edge Application Case China India Source: The Institute of Energy Economics Japan By improving the efficiency of all air conditioners in the world, making them as efficient as Japan s air conditioners that are equipped with an inverter controller, it is estimated to be 100 million tons of CO2 can be reduced. Temp. Preset Temp. Start operation Cool the air in short time Comfortable Over cooling Small difference in temperature Feel hot Operating time Inverter Air conditioner Non-Inverter Air conditioner Non-Inverter Air conditioner Inverter Air conditioner Comparison of energy consuming 30% Energy saving 7.5 mil. units Europe 5.5 mil. units Market Share for inverter air-conditioner China Asia 21 mil. units Oceania Inverter equipped Non inverter equipped 0.75 mil. units N America 7.4 mil. units M&S America 5 8.3 mil. units 3.8 mil. units
Domestic Efforts towards the Realization of Low Carbon Growth 6
Business sectors efforts Moving ahead on domestic global warming policies Japanese industries have been making voluntary efforts to tackle climate change both domestically and globally, by making use of their advanced technologies, which have resulted in successful outcomes in the first commitment period of Kyoto Protocol (2008 2012). While encouraging business sectors voluntary efforts, Japanese Government has been promoting such measures as i) research and development and ii) regulatory measures. Keidanren s Commitment to Low Carbon Society Steady efforts on emission reduction (e.g. energy conservation) Contribution to emission reduction in other sectors and overseas Domestic Credit System Promote low carbon investment of SMEs that have greater emissions reduction potential, using capital and technologies from large companies Certified credits will be utilized for Japan s emissions reductions Measures by the Government Support for R&D Regulatory Measures i) Feed in Tariffs ii) Energy Conservation Law iii) Tax as countermeasure to global warming, etc Domestic Market (e.g., households) Low Carbon Technology and products Overseas (JCM/BOCM) 7
Each industry sector sets its own target and makes an effort to achieve it. The government evaluates/verifies the plans strictly through advisory councils, etc. in order to secure the achievement. Each industry sector chooses the indicator of the target from 1) CO2 intensity, 2) absolute CO2 reduction amount, 3) energy intensity, or 4) total energy consumption. Voluntary action plans are considered as one of the main countermeasures in the Kyoto Protocol target achievement plan in industrial and energy-conversion sectors. (Note) Voluntary Action Plan 114 industry sectors established (53 industry sectors, 42 business sectors, 17transportation sectors, 4 energy conversion sector) *as of June 2012 Outline of Progress(FY2011) Target Index Base Year Target Level Performance in FY2008 (Compared to base year) ( ): Performance in FY2007 (Compared to base year) CO 2 Emissions (10,000 tons-co 2 ) (FY2008) CO 2 Emissions (Compared to previous year) CO 2 Emissions (Compared to base year) Federation of Electric Power Companies of Japan Japan Iron and Steel Federation Japan Chemical Industry Association CO 2 emission intensity Energy consumption FY1990 20% 16.1%( 15.8%) 31,700 (3,100) Not integrated +3.5% +15.3% FY1990 10% 6.7% ( 17.2%) 18,602 +12.4% 7.3% Energy intensity FY1990 20% 17% ( 15%) 5,980 +3% 3% Petroleum Association of Japan Energy intensity FY1990 13% 16%( 16%) 3,963 +1% +28.1% Japan Paper Association CO 2 emission intensity Energy intensity FY1990 16% 20% Amount of depreciation of Kyoto Mechanism Credits etc 24.0% ( 19.7%) 25.4% ( 22.1%) 1,840 3.9% 27.5% Industry Actual results in FY2010 Actual results in FY2009 Actual results in FY2008 Total Federation of Electric Power Companies of Japan 57 million t-co 2 52 million t-co 2 64 million t-co 2 173 million t-co 2 Power Producers and Suppliers 137 thousand t-co 2 238 thousand t-co 8 2 85 thousand t-co 2 460 thousand t-co 2
Voluntary Measures by business sectors (Commitment to a Low Carbon Society) Voluntary Action Plan ( 2012) Commitment to a Low Carbon Society( 2020) Voluntary Action Plan (VAP) Commitment to a Low Carbon Society(CLCS) Sectors participating in the plan 114 industry sectors 52 industry sectors (which have decided on this plan) METI requested all sectors which took part to formulate VAP. Cover ratio Contents of the plan Note Half of all Japanese emissions, 80 percent of the industry and energy sector Their own emission reduction targets (Average of 2008 2012) There are several sectors which purchased Kyoto credits etc., voluntarily in order to achieve their targets. Their own emission reduction targets to be achieved by 2020 Plus Diffusion and development of low carbon products (which contribute to emission reduction in the transportation, business and household sectors) International contribution through advanced technology transfer, dispatch of experts and so on (expansion of energy efficient technology and expertise in developing countries, including BOCM/JCM) Development of innovative technology (aiming at practical use from 2030 to 2050) Each sector is currently considering how to achieve reduction targets. 9 10
Future Pioneering Projects: Example of R&D activities In 2012, the new Future Pioneering Projects were commenced in order to support drastic innovation. It was designed to revitalize Japanese economy and society by innovation, and furthermore, provide solutions to global challenges all over the world. Specific examples related to climate change are as follows; Zero Energy Loss Revolution Oil-free Chemistry Revolution Magnetic material technology for highly efficient motors [Budget: 2 billion Yen, Term: 10 years] Reduce energy loss of motors by 25% (Electric consumption by motors accounts for 55% of total domestic consumption.) Develop rare-earth-free, highefficiency magnets which have double the magnetic force Highly efficient motor Next generation automobile, consumer electronics Optical electronics technology [Budget: 2.8 billion yen, Term: 10 years] Significantly reduce electric consumption (-33% ) of electronic equipment. Replace electric wiring on circuit board or between servers with optical wiring. Optical wiring FPGA DRAM CPU GPU Circuit Board Server Develop basic design and evaluative technology of optical LSI Chemical process based technology [Budget: 1.65 billion yen, Term: 10 years] Develop innovative catalyst which synthesizes chemicals from CO2, water and solar power. Petroleum Water CO2 Develop design and analytical technique of catalysts which can produce new type of F/C 10
(Reference) Tax as a measure against global warming Purpose Strengthening promotion of renewable energy and energy saving Creating industry and employment Tool Increasing petroleum and coal tax rate according to CO2 emissions Tax revenues 480 billion yen (current) + 260 billion yen (eventual) 3/3 rate 1/3 rate 2/3 rate 2012.4 2012.10 2013.4 2014.4 2015.4 2016.4 current rate 2012.10.1 2014.3.31 2014.4.1 2016.3.31 2016.4.1 crude oil and imported petroleum products 2,040 +250 (2,290) +250 (2,540) +260 (2,800) liquid petroleum gas, natural gas 1,080 +260 (1,340) +260 (1,600) +260 (1,860) coal 700 +220 (920) +220 (1,140) +230 (1,370) 11
(Reference) Basic Mechanism Basic of Mechanism the Feed-in Tariff of Feed-in Scheme Tariff Those engaged in the power generation business using renewable energy sources Sale of electricity produced from renewable energy sources Electric utility Electricity supply Purchase of electricity at a fixed price for a government guaranteed period Payment for the purchase cost Submission of the collected surcharge Collection of surcharge together with the electricity charge Surcharge adjustment organization (organization to collect and distribute the surcharge) Deciding tariffs and durations, respecting the opinion of the special committee (every fiscal year) Decision of surcharge unit price per kwh (every fiscal year) Electricity customers Those who generate power at home Approval of facilities (Government confirms whether the facility can generate electricity stably and efficiently. The approval is cancelled when the facility no longer satisfies the requirements.) Minister of Economy, Trade and Industry Opinion on tariffs and duration Special committee for determination of tariff s and durations Government 12
Efforts towards the realization of Low Carbon Growth Globally 13
Multi layered structure towards the realization of Low Carbon Growth With a view to realizing low carbon growth globally, Make steady progress on the new framework of UNFCCC, based on the principle of applicable to all and bottom-up approach. While proceeding the UNFCCC negotiation, utilization of regional/plurilateral/sectoral/bilateral initiatives would be also effective. UN Regional/ Plurilateral Sector Bilateral Basic rule/system Management of Review Process Sharing Best Practice Overall Picture (Gap with Long-term Objective etc) APEC Tariff Reduction of Environmental Goods East Asia Low Carbon Growth Partnership Energy Efficiency Initiatives in IPEEC, EAS, APEC etc Renewable Energy in IRENA CCAC Innovative R&D by interested Parties IMO, ICAO, Global Superior Energy Efficiency Partnership (GSEP) etc International Industry Association (e.g., Steel, Cement, Chemical, Aluminium etc) Joint Crediting Mechanism/Bilateral Offset Credit Mechanism (Japan) 14
(Reference) Japan s submission on ADP (12 March, 2013) (a) Application of the principles of the Convention Japan considers it indispensable that the future framework will be applicable to all Parties in order to effectively tackle climate change. Japan notes that the principles of the Convention are dynamic concepts which should appropriately reflect various evolutions since 1992 and the reality of the international community. The application of the principles of the Convention should be considered in a pragmatic way which allows differentiated substantive measures to be taken by each Party, taking into account each Parties national circumstances. (b) Building on the experiences and lessons learned from other processes under the Convention and from other multilateral processes, as appropriate Japan places importance on existing various elements and systems based on the Convention and the Kyoto Protocol, such as GCF, CTCN, MRV system, and accounting rules including removals by sinks and flexible mechanisms. Collecting, sharing and analyzing experiences of various initiatives outside UNFCCC could be useful inputs as well. 15
(Reference) Japan s submission on ADP (12 March, 2013, cont d) (c) The scope, structure and design of the 2015 agreement An international framework which imposes emission reduction obligation only on a part of Parties, like the Kyoto Protocol, doesn t lead to effective measures against climate change and broader participation. It is also necessary for the future framework to accommodate all kinds of schemes in order to significantly enhance mitigation ambition, including an effective international review system of each Party s efforts and facilitative elements (d) Ways of defining and reflecting enhanced action Japan considers it appropriate that each Party pledges its climate program including an emissions reduction target and all possible measures, while taking into account national circumstances. Japan also considers those measures should be mobilized comprehensively through various tools and approaches such as promotion of energy-saving and renewable energy, innovation, development and transfer of technology, low carbon growth strategy, measures and actions in each sector, market mechanisms and so on. Japan is promoting the Joint Crediting Mechanism/Bilateral Offset Credit Mechanism (JCM/BOCM), which contributes to the ultimate objective of the UNFCCC. Japan is confident that experiences of the JCM/BOCM would provide useful inputs to the discussion of market mechanisms under the future framework. 16
Effective utilization of various initiatives outside UNFCCC Regional/Plurilateral initiatives (e.g., East Asia, APEC) Raising the awareness on the necessity of low carbon growth, both in general and each measure (e.g., energy conservation, renewable energy) Knowledge sharing based on each member s good practices Sectoral initiatives (e.g., IMO, ICAO, GSEP, etc) Knowledge sharing among major members of a specific sector Benchmarking based on the best available technologies (BATs) Bilateral initiatives (e.g., Joint Crediting Mechanism/Bilateral Offset Credit Mechanism) Tailor-made cooperation (capacity building, technology transfer, etc) based on the concerns/interests figured out from regional/plurilateral/sectoral initiatives. JCM/BOCM could be a good example. Various initiatives outside UNFCCC should be further enhanced and combined together in order to promote actions on climate change. It is important to discuss how to benefit from these efforts and to identify effective and pragmatic activities. 17
Facilitate diffusion of leading low carbon technologies, products, systems, services, and infrastructure as well as implementation of mitigation actions, and contributing to sustainable development of developing countries. Appropriately evaluate contributions to GHG emission reductions or removals from Japan in a quantitative manner, by applying measurement, reporting and verification (MRV) methodologies, and use them to achieve Japan s emission reduction target. Contribute to the ultimate objective of the UNFCCC by facilitating global actions for GHG emission reductions or removals, complementing the CDM. JAPAN Basic Concepts of the JCM/BOCM Leading low carbon technologies, etc, and implementation of mitigation actions MRV Methodologies will be developed by the Joint Committee Host Country JCM Projects MRV Used to achieve Japan s emission reduction target Credits GHG emission reductions/ removals 18
Governmental Consultations Japan has held consultations for the JCM with developing countries (e.g. Mongolia, Bangladesh, Indonesia, Vietnam) since 2011 and made similar briefing to interested countries as well. Japan will continue consultations/briefing with any countries which are interested in the JCM. Japan and Mongolia signed the bilateral Document for the JCM. (first case of signature of the bilateral document for the JCM) On January 8, 2013, H.E, Mr. Takenori Shimizu, Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia and H.E, Ms. Sanjaasuren Oyun, Minister for Environment and Green Development of Mongolia signed the bilateral document for the JCM in Ulaanbaatar. 19