Need for the Realization ofGlobal Low Carbon Growth

METI

1

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.

Low Carbon Growth

2

Emissions Projections of Major Countries (Cancun Pledge)

[100万トン]

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

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

EU27:Reduction of GHG (20% ‐30% compared to 1990)

Japan:Reduction of GHG (25%Compared to 1990) (under zero‐based review)

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

China: Lowering of CO2 emissions per unit of GDP (40‐45% compared to 2005 level)

* 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)

GHG emissions by major developing countries will increase rapidly, based on their 2020 target (i.e., lowering CO2 emissions intensity of GDP)

India: Reduce emissions intensity of GDP (20‐

25% compared to 2005 level)

3

Recent developments in Japan’s policies related to Climate Change

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

(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-based 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

【Market Share for inverter air-conditioner】

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

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. 

Iron and Steel

Potential reduction of CO2 by applying BAT（Best Available Technology）

Pote

ntia

l am

ount

of r

educ

tion(

milli

on t

CO

2)

Pot

entia

l am

ount

of r

educ

tion(

t CO

2 / c

rude

ste

el t)

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

Source: The Institute of Energy Economics Japan

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. 

Coal Power Generation

Exi

stin

g

Cut

ting-

edge

Appl

icat

ion

Cas

e

Japan

Exi

stin

g

Cut

ting-

edge

Appl

icat

ion

Cas

e

US

Exi

stin

g

Cut

ting-

edge

Appl

icat

ion

Cas

e

Exi

stin

g

Cut

ting-

edge

Appl

icat

ion

Cas

e

Source: The Institute of Energy Economics JapanIndiaChina

▲387(mil. t)+▲776(mil. t)+▲184(mil. t)▲1.3 billion‐ton

CO2 Emission from Coal Power Plant in 2004

Cool the air in short time

Small difference in temperature

Temp.

Preset Temp.

Start operation Operating time

InverterAir

conditioner

Non-InverterAir

conditioner

Over cooling

Comfortable

Feel hot

Non-Inverter

Air conditioner

InverterAir

conditioner30%

Energy saving

21mil. units

3.8mil.units

0.75mil.units

5.5mil.units

7.5mil.units

8.3mil.units

7.4mil.units

China

Europe

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.

Asia

N America

OceaniaM&S America

Home Electrical Appliance（Air Conditioner)

Comparison of energy consuming ■Inverter equipped ■Non inverter equipped

5

Domestic Efforts towards the Realization of Low Carbon Growth 

6

Moving ahead on domestic global warming policies

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

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

Regulatory Measuresi) Feed in Tariffsii) Energy Conservation Law iii) Tax as countermeasure to global 

warming , etc

Low Carbon Technology and products

Domestic Market(e.g., households)

Overseas(JCM/BOCM)

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. 

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) 114 industry sectors established (53 industry sectors, 42 business sectors, 17transportation sectors, 4 energy conversion sector) *as of

June 2012

Voluntary Action Plan

◆ Amount of depreciation of Kyoto Mechanism Credits etc

◆Outline of Progress(FY2011)

Target Index Base Year Target Level

Performance in FY2008(Compared to base year)

( ): Performance in FY2007(Compared to base year)

CO2 Emissions(10,000 tons-CO2)

(FY2008)

CO2 Emissions(Compared to previous year)

CO2 Emissions(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 Federation

Energy consumption 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%

Japan Paper AssociationCO2 emission

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)

10

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 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

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)

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

Each sector is currently considering how to achieve reduction targets.

9

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

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

Chemical process based technology[Budget: 1.65 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.

DRAMCPU GPUFPGA

Optical wiring

ServerCircuit Board

Optical electronics technology[Budget: 2.8 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, high-efficiency magnets which have double the magnetic force

Highly efficient motor Next generation automobile, consumer electronics

Magnetic material technology for highly efficient motors

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

Zero Energy Loss Revolution Oil-free Chemistry Revolution

Develop basic design and evaluative technology of optical LSI

Petroleum Water CO2

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;

Future Pioneering Projects: Example of R&D activities

10

•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)

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)

2012.4 2013.4 2014.4 2015.4 2016.4

1/3 rate 2/3 rate

3/3 rate

2012.10

(Reference) Tax as a measure against global warming

11

Basic Mechanism of the Feed-in Tariff Scheme

Electricity customers

Government

Electric utility

Purchase of electricity at a fixed price for a government

guaranteed period

Sale of electricity produced from renewable energy sources Electricity supply

Collection of surcharge together with the electricity charge

・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.) Special committee for determination

of tariff s and durations

Those who generate power at home

Those engaged in the power generation business using renewable energy sources

Minister of Economy, Trade and Industry

Opinion on tariffs and duration

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

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

Surcharge adjustment organization (organization to

collect and distribute the surcharge)

Submission of the collected surcharge

Payment for the purchase cost

(Reference) Basic Mechanism of Feed-in Tariff

12

Efforts towards the realization of Low Carbon Growth Globally

13

UN Basic rule/system Management of Review Process Sharing Best Practice Overall Picture (Gap with Long-term Objective etc)

Regional/Plurilateral

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

Sector IMO, ICAO, Global Superior Energy Efficiency Partnership (GSEP) etc International Industry Association (e.g., Steel, Cement, Chemical,

Aluminium etc)

Bilateral Joint Crediting Mechanism/Bilateral Offset Credit Mechanism (Japan)

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 of

“applicable to all” and “bottom-up approach”.While proceeding the UNFCCC negotiation, utilization of

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

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 UNFCCCcould be useful inputs as well.

15

(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.

(Reference) Japan’s submission on ADP (12 March, 2013, cont’d)

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

JAPANHost

CountryLeading low carbon technologies, etc, and implementation of

mitigation actions

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.

Basic Concepts of the JCM/BOCM

MRV

JCMProjects

GHG emission reductions/

removals

MRV Methodologieswill be developed

by the Joint CommitteeUsed to achieve Japan’s emission reduction target Credits

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