Need for the Realization of Global Low C b G thCarbon Growth

March19,  2013,

Hideo SUZUKIlDirector General,

Industry Science and Technology Policy and Environment BureauMinistry of Economy, Trade and Industry (METI), Japan

1

Enhancement of “competitiveness” while appropriately addressing

Low Carbon GrowthEnhancement 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.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  China: Lowering of CO2 emissions per unit of 

( d l l)

(i.e., lowering CO2 emissions intensity of GDP)

8,000 

9,000 GDP (40‐45% compared to 2005 level)

[100万トン]

6,000 

7,000  U.S.A.:Reduction of GHG (17% compared to 2005)

4 000

5,000 EU27:

Reduction of GHG (20% ‐30% compared to 1990)

3,000 

4,000 

Russia: Reduction of GHG (15%‐25% compared to 1990)

India: Reduce emissions intensity of GDP (20‐

1,000 

2,000 

Japan:Reduction of GHG (25%Compared to 1990) (under 

edu e e ss o s e s y o ( 025% compared to 2005 level)

0 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)

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Recent developments in Japan’s policies related to Climate Change

Instruction by PM Abe (first meeting of the Industrial Competitiveness Council (January 25th))( y ))

(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 zero-b d i f th 25% i i d ti t t b COP19 i t N bbased 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.

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(Ref.) Potential of CO2 Emissions Reduction through Japanese Advanced Technologies

Iron and Steel Coal Power GenerationBy 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. 

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）

illion

t C

O2)

2 / c

rude

ste

el t) 石炭火力発電からのCO2排出量 （2004年）

日本のベスト・プラクティス（商業中の最高効率）適用ケース

2000Mt-CO2

(▲387) (▲776）

▲３８７ （百万㌧）＋▲７７６（百万㌧）

▲387(mil. t)+▲776(mil. t)

CO2 Emission from Coal Power Plant in 2004

amou

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f red

uctio

n(m

amou

nt o

f red

uctio

n(t C

O2

19491562 2269

1493500

1000

1500

(▲387) (▲776）

(▲184）

（百万㌧）＋▲１８４ （百万㌧）約 ▲１３億㌧

( )+▲184(mil. t)▲1.3 billion‐ton

Pot

entia

l a

Pot

entia

l a

China UA India Brazil Russia SA CA OECD US Korea Japan OtherWorld

Source: The Institute of Energy Economics Japan

269 246 572 3880

500

実績

最新

鋭

導入

ケー

ス

実績

実績

実績

日本 米国 中国 インド

(▲23)

最新

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導入

ケー

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最新

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導入

ケー

ス

最新

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導入

ケー

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IndiaChina

【Market Share for inverter air-conditioner】

（財）日本エネルギー経済研究所 試算Source: The Institute of Energy Economics Japan

China

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. N America

Home Electrical Appliance（Air Conditioner)

Cool the air in short time

Small difference in temperature

Temp.

Preset T

InverterAir

conditioner

Comfortable

Feel hot

Non-

cond c30%

Energy saving

21mil. units

3 87 5

8.3mil.units

7.4mil.units

Europe

OceaniaM&S America

Temp.

Start operation Operating time

Non-InverterAir

conditioner

Over cooling

-InverterAir ditioner

InverterAir

conditioner

3.8mil.units

0.75mil.units

5.5mil.units

7.5mil.units

Asia Oceania

Comparison of energy consuming ■Inverter equipped ■Non inverter equipped

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Domestic Efforts towards theDomestic Efforts towards the Realization of Low Carbon Growth 

6

Moving ahead on domestic global warming policies

Japanese industries have been making voluntary efforts to tackle climate change both domesticallyJapanese 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 

h ) h d d l d ) l

Keidanren’s Commitment to Low Carbon Society

Business sectors’ efforts Measures by the GovernmentSupport for R&D

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

Support for R&D

Regulatory Measuresi) Feed in Tariffsii) Energy Conservation Law 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

) gyiii) Tax as countermeasure to global 

warming , etc

p

Low Carbon Technology gyand products

Domestic MarketOverseas

(JCM/BOCM)(e.g., households)

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Each industry sector sets its own target and makes an effort to achieve it. The government

Voluntary Action Plan

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 targetVoluntary action plans are considered as one of the main countermeasures in the Kyoto Protocol target achievement plan in industrial and energy-conversion sectors. (Note) 114 industry sectors established (53 industry sectors, 42 business sectors, 17transportation sectors, 4 energy conversion sector) *as of

June 2012

◆Outline of Progress(FY2011)Performance in FY2008(Compared to base year) CO2 Emissions CO Emissions CO2 Emissions

Target Index Base Year Target Level (Compared to base year)( ): Performance in FY2007

(Compared to base year)

(10,000 tons-CO2)(FY2008)

CO2 Emissions(Compared to previous year) (Compared to base

year)

Federation of Electric Power Companies of Japan

CO2 emission intensity FY1990 ▲20% ▲16.1%(▲15.8%) 31,700

(3,100) Not integrated ＋3.5% ＋15.3%

Japan Iron and Steel Energy FY1990 ▲10% ▲6 7% (▲17 2%) 18 602 ＋12 4% ▲7 3%pFederation

gyconsumption FY1990 ▲10% ▲6.7% (▲17.2%) 18,602 ＋12.4% ▲7.3%

Japan Chemical Industry Association 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%

CO2 emission ▲16% ▲24 0% (▲19 7%)

◆ Amount of depreciation of Kyoto Mechanism Credits etc

Japan Paper Association intensityEnergy intensity

FY1990 ▲16%▲20%

▲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-CO2 52 million t-CO2 64 million t-CO2 173 million t-CO2

Power Producers and Suppliers 137 thousand t-CO2 238 thousand t-CO2 85 thousand t-CO2 460 thousand t-CO28

Commitment to a Low Carbon Society( 2020)Voluntary Action Plan ( 2012)

Voluntary Measures by business sectors (Commitment to a Low Carbon Society)

Commitment to a Low Carbon Society(‐2020)Voluntary Action Plan (‐2012)

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.

C ti H lf f ll J i i 80 t fCover ratio Half of all Japanese emissions, 80 percent of the industry and energy sector

―

Contents of the plan Their own emission reduction targets （Average of 2008‐2012）

Their own emission reduction targets to be achieved by 2020（ g ）

Plus…

・Diffusion and development of low carbon products (which contribute to emission reduction in the transportation,  business and household sectors)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)

Note There are several sectors  which purchased Kyoto credits etc., voluntarily in order to 

Each sector is currently considering how to achieve reduction targets.

achieve their targets.

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In 2012, the new “Future Pioneering Projects” were commenced in order to support

Future Pioneering Projects: Example of R&D activitiesg j pp

drastic innovation.It was designed to revitalize Japanese economy and society by innovation, and furthermore, provide solutions to global challenges all over the world.

Zero Energy Loss Revolution Oil-free Chemistry Revolution

Specific examples related to climate change are as follows;

Chemical process based technology[Budget: 1.65 billion yen, Term: 10 years]

Si ifi tl d l t i

Optical electronics technology[Budget: 2.8 billion yen, Term: 10 years]

Magnetic material technology for highly efficient motors

[Budget: 2 billion Yen, Term: 10 years]

Develop innovative catalyst which synthesizes chemicals from CO2, water and solar power

Significantly reduce electric consumption （-33% ) of electronic equipment. Replace electric wiring on

Reduce energy loss of motors by 25% (Electric consumption by motors accounts for 55% of t t l d ti ti ) power.

ＣＯ２水石油

Replace electric wiring on circuit board or between servers with optical wiring.

DRAMCPU GPUFPGA

total domestic consumption.)Develop rare-earth-free, high-

efficiency magnets which have double the magnetic force

Petroleum Water CO2

Develop design and analytical

CPU GPUFPGA

Optical wiring

ServerCircuit Board

double the magnetic force

Develop basic design and technique of catalysts which can produce new type of F/C

Highly efficient motor Next generation automobile, consumer electronics

p gevaluative technology of optical LSI

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•Purpose

(Reference) Tax as a measure against global warming

•PurposeStrengthening promotion of renewable energy and energy savingCreating industry and employment

•ToolIncreasing petroleum and coal tax rate according to CO2 emissions

•Tax revenues480 billion yen (current) + 260 billion yen (eventual)

1/3 rate 2/3 rate

3/3 rate

current rate 2012.10.1‐2014.3.31 2014.4.1‐2016.3.31 2016.4.1‐

2012.4 2013.4 2014.4 2015.4 2016.42012.10

crude oil and imported petroleum products

2,040+250(2,290)

+250(2,540)

+260(2,800)

liquid petroleum gas, 1 080

+260 +260 +260natural gas

1,080(1,340) (1,600) (1,860)

coal700

+220(920)

+220(1,140)

+230(1,370)

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Basic Mechanism of the Feed-in Tariff Scheme

Sale of electricity produced

(Reference) Basic Mechanism of Feed-in Tariff

Electric utility

Sale of electricity produced from renewable energy sources Electricity supply

Those engaged in the power generation business using renewable energy sources

Purchase of electricity at a fixed price for a government Collection of surcharge

h i h hSubmission of the collected

Payment for the purchase costp g

guaranteed period together with the electricity charge

Surcharge adjustment organization (organization to

collect and distribute the surcharge)

the collected surcharge

purchase cost

Electricity Deciding tariffs and durations,

collect and distribute the surcharge)

customersDeciding tariffs and durations, respecting the opinion of the special committee (every fiscal year)

Decision of surcharge unit price per kWh (every fiscal year)

・Approval of facilities(Government confirms whether the facility can generate electricity stably and efficiently. The approval is cancelled when the facility no longer

Those who generate power at home

Minister of Economy, Trade and Industry

Opinion on tariffs and duration

Government

cancelled when the facility no longer satisfies the requirements.) Special committee for determination

of tariff s and durations

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Efforts towards the realization of Low Carbon Growth Globally

13

Multi‐layered structure towards the realization of Low Carbon GrowthWith a view to realizing “low carbon growth” globally,

Make steady progress on the new framework of UNFCCC based on the principle ofMake 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

Basic rule/system

regional/plurilateral/sectoral/bilateral initiatives would be also effective.

UNUN Management of Review ProcessSharing Best PracticeOverall Picture (Gap with Long-term Objective etc)

Regional/Regional/PlurilateralPlurilateral

APEC Tariff Reduction of Environmental GoodsEast Asia Low Carbon Growth PartnershipEnergy Efficiency Initiatives in IPEEC, EAS, APEC etcPlurilateralPlurilateral e gy c e cy a es C, S, C e cRenewable Energy in IRENACCACInnovative R&D by interested Parties

SectorSectorIMO, ICAO, Global Superior Energy Efficiency Partnership (GSEP) etcInternational Industry Association (e.g., Steel, Cement, Chemical, Aluminium etc)Aluminium etc)

BilateralBilateral 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(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 p p p y p

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 hi h ll diff i d b i b k b h P kiway which allows differentiated substantive measures to be taken by each Party, taking

into account each Parties’ national circumstances.

(b) B ildi th i d l l d f th d th(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 accountingConvention 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 UNFCCCcould be useful inputs as well.p

15

(c) The scope, structure and design of the 2015 agreement

(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

i i d ti t t d ll ibl hil t ki i t t ti lemissions 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 renewablevarious 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 p p g g(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)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 practicesKnowledge 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”Knowledge sharing among major members of a specific sectorBenchmarking based on the best available technologies (BATs)

Bilateral initiatives (e.g., Joint Crediting Mechanism/Bilateral Offset CreditBilateral 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. g g pJCM/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

Basic Concepts of the JCM/BOCMFacilitate 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.Appropriatel e al ate contrib tions to GHG emission red ctions orAppropriately 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 J ’ i i d ti t tJapan’s emission reduction target.Contribute to the ultimate objective of the UNFCCC by facilitating global actions for GHG emission reductions or removals, complementing the

JAPANHost

C tLeading low carbon technologies,

p gCDM.

JAPAN Countryead g o ca bo tec o og es,etc, and implementation of

mitigation actions JCMProjects

MRV MethodologiesMRV

GHG emission

MRV Methodologieswill be developed

by the Joint Committee

Used to achieve J ’ i i reductions/

removalsJapan’s emission reduction target

Credits

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Governmental Consultations

Japan has held consultations for the JCM with developing countries (e gJapan 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