The Yen for a second green revolution

William Choong, Straits Times 20 Nov 09;

TUCKED away in nondescript Yokohama City, an hour's drive away from downtown Tokyo, lies the future of green Japan, if not the world.

The two-storey Soene House (Energy Creation House) looks ordinary. A closer examination reveals that Nippon Oil - Japan's biggest oil firm - has packed it with technological thingamajigs.

Layers of solar panels are built into the roof. The design of the house, in particular its central stairwell, leverages on natural winds that waft their way in. Insulation panels are built from volcanic ash to trap heat effectively.

The house uses cogeneration power units - essentially fuel cells that produce electricity and heat from hydrogen, natural gas and oxygen. A cutting-edge Home Energy Management System that maximises energy efficiency is the brains of the building.

It has been built with one goal in mind: Cut household carbon emissions by at least 50 per cent. The target has already been reached. 'This is a novel way to generate energy, without compromising the lifestyle of Japanese families,' Mr Ikutoshi Matsumura, Nippon Oil's executive vice-president, told a group of journalists from Asean.

Nippon Oil is not the only Japanese firm to go green. Mitsubishi Motors has come up with a world-first: the first mass-production electric vehicle.

The car, which is about the same size as a Honda Jazz, accelerates well in traffic, thanks to its low-end torque. Its battery can be charged via household mains or a special charging station. Best of all, it promises zero-emission driving.

'The founding of General Motors in 1908 led to the 100-year petroleum era. Hopefully, the i-Miev will start a new era for the next 100 years of the automobile,' said Mr Masataka Saito, general manager of Mitsubishi's electric vehicle unit.

Nippon Oil and Mitsubishi Motors are but two examples of green Japan. The country learnt its lesson in the oil crises of the 1970s. Since then, its energy efficiency has improved by 40 per cent and its oil consumption has decreased by 8 per cent, even as its gross domestic product has doubled.

Amid growing fears about climate change, the Liberal Democratic Party (LDP) rolled out a plan last year to slash carbon emissions by 15 per cent below 2005 levels by 2020. Its 'Cool Earth' plan included gas generation, superconductivity transmission networks and carbon-capture storage technology.

Not to be left behind, the new Democratic Party of Japan (DPJ) government led by Prime Minister Yukio Hatoyama aims to cut emissions by 30 per cent.

Not surprisingly, Japan's industrialists are fretting. Compared to other developed countries, Japan already has one of the world's greenest economies. For example, Japan uses less energy to produce a tonne of iron than any other country; Britain expends 22 per cent more energy, and the US and China 25 and 30 per cent more, respectively.

The argument of the industrialists is straightforward: The US and the European Union will find it easy to slash emissions if they switch to green technologies; for Japan, there is no luxury, as it has already made the switch. Thus, it would cost Japanese industry nearly US$500 (S$700) a tonne to reduce its carbon emissions, nearly 10 times the US$60 a tonne for the US and Europe.

Bragging does not come easily to Japanese. But one company official told me: 'We are so green, even the Germans cannot beat us. If Berlin removes the green subsidies, German firms will not go green any more. As for us, we try to go green as much as we can.'

Mr Yoshihito Iwama, director of the Environmental Policy Bureau of Nippon Keidanren, the country's leading business group, said: 'To achieve the 30 per cent cut will be expensive. Unless the government helps us, it is going to affect our competitiveness.'

But the DPJ government is more focused on slashing billions from the bloated budget it inherited from the LDP. Hence, it has not come up with fresh subsidies for green technologies.

'We understand that the biggest concern for the Keidanren is our climate policy,' said Senior Vice-Minister of Trade, Economy and Industry Teruhiko Mashiko, adding that more green subsidies 'might' be possible.

The challenge is pressing, weeks away from the global climate change talks in Copenhagen next month. Japan has proposed the 30 per cent target for emissions cuts, but the EU and the US are less ambitious.

The widespread use of green technologies will help unblock this impasse, said Mr Iwama. 'Technology is the key,' he added.

Privately, Japanese industrialists scoff at Mr Hatoyama's plans to switch from 'hard' industries such as manufacturing and construction to 'softer', people-centred areas such as households and the elderly. On green issues in general, they are more sympathetic to DPJ policies, but they want the government to do one thing: Show them the money.

Mr Hatoyama has often been lampooned as a 'spaceman' for his big eyes and his somewhat detached policies. If his government can muster the will - and funds - to back its climate change policy, Japan's second green revolution will certainly take off.