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'Hatoyama Initiative' on Global Warming

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'Hatoyama Initiative' on Global Warming TOPICS ‘Hatoyama Initiative’ on Global Warming Vowing 25% Cut in Japan’s CO2 Emissions By Hiroshi OKABE Photo: Kyodo News Hatoyama said in the al property rights. By incorporating this U.N. speech. “These issue, Hatoyama sought to encourage the will include the introduc- private sector to expand investment. tion of a domestic emis- Hatoyama revised sharply upward the sion-trading mechanism 8% target laid down by the administration and a feed-in tariff for under his predecessor Taro Aso, making renewable energy, as the new, ambitious goal Japan’s interna- well as the consideration tional pledge. Hatoyama, who showed of a global warming tax.” Japan’s new role to the international com- At the same time, he munity, faces a tough challenge of how to said: “Japan’s efforts achieve the 25% reduction target in the alone cannot halt climate years ahead. The domestic business change even if it sets an community, on the other hand, is worried ambitious reduction tar- that Japanese corporations might be left get. It is imperative to behind in international competition due to Prime Minister Yukio Hatoyama speaks at a U.N. climate change establish a fair and higher costs if they are to realize the 25% summit in New York on Sept. 22, vowing to cut Japan's effective international cut when they have already achieved a greenhouse gas emissions 25% from their 1990 level by 2020. framework in which all higher energy-saving structure than US The dramatic change of power in Japan major economies participate. The com- and European firms. Large gas-emitting has led to a major shift in the country’s mitment of Japan to the world is industries such as steel are concerned role on the stage of international negotia- premised on agreement on ambitious tar- that they could no longer maintain pro- tions on climate change. Addressing the gets by all the major economies.” He duction in Japan. The high-level target United Nations Summit on Climate thus urged the United States, China, could also impose a heavy burden on Change in New York on Sept. 22, Prime India and other major gas emitters to join individual households which would be Minister Yukio Hatoyama set out Japan’s the Japanese initiative. required to introduce ecologically friendly mid-term goal of sharply reducing emis- Concerning the focal point of support motor vehicles and solar power genera- sions of CO2 and other greenhouse gases for developing nations, the Hatoyama tion equipment. Hatoyama would need to on condition that all major gas-emitting Initiative laid down a four-point policy clear high hurdles to forge domestic con- nations, including the United States and package. It calls for (1) developed coun- sensus in achieving the mid-term goal. China, join an international framework to tries, including Japan, to help developing Fortunately, Japan has an experience be negotiated. “Japan will aim to reduce countries “through substantial, new and of surviving two oil crises in the 1970s by its emissions by 25% by 2020, if com- additional public and private financing”; developing energy-saving technologies to pared to the 1990 level,” he said, going far (2) developing rules that will facilitate lay the groundwork for economic growth beyond the previous government’s reduc- international recognition of developing later. Some say Japan’s high-level emis- tion target of 8% by the same standard. countries’ emission reductions, in particu- sion-cutting target might slow economic On support for developing countries, lar those achieved through financial assis- growth in the short term. But from a the new Japanese leader proposed a tance, “in a measurable, reportable and longer point of view, Japanese corpora- “Hatoyama Initiative” outlining Japan’s verifiable manner”; (3) establishing an tions would be able to achieve one of the financial aid and transfer of energy-saving international system to “facilitate one-stop world’s top levels of international competi- technologies to help them reduce green- provision of information on and matching tiveness in the environmental field if they house gas emissions. Hatoyama thus of available bilateral and multilateral could advance their technologies to clearly showed Japan’s readiness to take financing”; and (4) setting up a framework achieve the reduction target. “I have full the lead in international talks toward the to promote the transfer of low-carbon confidence in the abilities of the Japanese U.N. Climate Change Conference in technologies in a manner ensuring the people and our companies,” Hatoyama Copenhagen in December. The confer- protection of intellectual property rights. told the U.N. climate change summit. ence is intended to build a new framework The fourth point was included in the initia- “Political leaders at this time also have a succeeding the 1997 Kyoto Protocol. tive as many Japanese businesses are responsibility to future generations to cre- “I am resolved to exercise the political worried that the transfer of energy-saving ate a sustainable society by transforming will required to deliver on this promise by technologies to developing countries the social structure that we have known mobilizing all available policy tools,” could lead to an outflow of their intellectu- since the Industrial Revolution.” 2 JAPAN SPOTLIGHT • November / December 2009 TOPICS Spurring Consumer Spending by Direct Funding Hatoyama Gov’t Makes Economic Policy Shift The economic policy of Prime Minister care allowances of 26,000 Yukio Hatoyama’s administration is yen a month per child under characterized by its attempt to revive the 15 and abolish expressway economy by rerouting fund flows to tolls. households from the state through such The government aims to measures as creation of child-care transform Japan’s economic allowances and abolition of expressway structure under which wages tolls. The Hatoyama government failed to increase while firms regards these policies very important to generated record profits as raise wages and invigorate consumer export-driven growth contin- spending. ued. This is based on a As his Democratic Party of Japan strategy to transform the pledged in its policy platform to increase Japanese economy into a the disposal income of households and domestic demand-led one change Japan’s economic growth pat- by fostering new businesses tern to one led by domestic demand, the in low-profile sectors such as agriculture, slow down even more as early as the Hatoyama administration aims to stimu- healthcare and nursing care. end of the year when the effects of stim- late stagnant consumption by directly The problem is that it takes time for ulus measures such as public works pro- funneling cash into consumer pockets. those “structural reforms” to begin hav- jects and tax cuts for the purchase of To be more precise, the government ing economic recovery effects. Although eco-friendly cars are expected to wane. plans to squeeze out 16.8 trillion yen in the Japanese economy has managed to How to strike a balance between eco- fiscal 2013 by boldly overhauling the 207 get out of the economic crisis following nomic recovery and structural reforms trillion yen budget set aside for both gen- the shock of Lehman Brothers’ collapse, holds the key to successful economic eral and special accounts, and use the the pace of recovery remains slow. management by the Hatoyama adminis- funds made available to finance child- Economists are concerned that it may tration. Land Prices Plunge across Japan Some Optimists Foresee Rebound in Fall Japan’s real estate market – an impor- survey began. Iwasa, head of the Japan Real Estate tant indicator foreshadowing economic Tokyo topped the list of declines in Association and also president of Mitsui activity – is accelerating its downtrend, commercial land prices in the three Fudosan Co., said, “Property rental fees but some economists see a possible largest metropolitan areas with 8.9%, have declined as well, making it easier change of tide in the offing. According to followed by Nagoya with 7.3% and for tenants to rent out office or store a survey by the Land, Infrastructure, Osaka with 7.1%. All the three areas space. I feel office demand improving Transport and Tourism Ministry, land logged the first land price fall in four since last April.” prices as of July 1 dropped from a year years. Other major cities also saw With the effect of a tax incentive for before in almost 99% of 150 major com- prices sag markedly. “The global eco- home buyers and other policy measures, mercial and residential areas. On the nomic slump forced more offices and demand for condominiums has begun to national average, prices of commercial stores to be closed or downsized. show a sign of improvement. Some land declined 5.9% for the second Housing demand also shrank,” a min- long-term foreign investment money is straight annual drop and those of resi- istry official said. returning to the Japanese property mar- dential land went down 4.0% for 18 years In sharp contrast with the survey, ket. An economist said “upward momen- of fall in a row. Both declines were the however, optimistic sentiment is spread- tum in land prices will become much largest in the past five years. ing among some real estate people, if clearer” if the economy pulls out of the Out of 23,000 locations surveyed not all. “Although the market will remain slump. nationwide, including industrial areas, sluggish in local cities, land prices may only three spots saw their land prices rise again in Tokyo,” a real estate ana- Hiroshi Okabe is a senior business news rise, the fewest since 1975 when the lyst said. An industry leader, Hiromichi editor at Kyodo News. JAPAN SPOTLIGHT • November / December 2009 3.
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