The primary fruits of a promised $550 billion funding settlement between the US and Japan are already tainted with air pollution.
A unit of SoftBank Group Corp. will make investments $33 billion in a pure fuel energy station in Ohio that may be the world’s greatest non-renewable energy station. One other $2.1 billion shall be spent on a crude oil export terminal. The 2 initiatives are the principle parts in the primary tranche of a deal supposed to scale back tariffs on Japanese imports from 25% to fifteen% in return for investments within the US.
That carbon-heavy consequence would possibly come as no shock for Washington, the place the administration of President Donald Trump has been ordering the Pentagon to purchase coal-fired energy and turning lumps of gasoline into kawaii mascots. However absolutely Japan — the land that invented the lithium-ion battery and hybrid automobile — is aware of higher?
Not likely. In fact, Japan has been quietly doing for years what Trump is so loud about now — combating a rearguard motion towards the vitality transition to guard the standing of incumbent companies. Its involvement within the newest swath of Trump initiatives is much less a plot twist than a reversion to sort.
Japan’s export-finance company, the Japan Financial institution for Worldwide Cooperation, or JBIC, is the “dirtiest international financier” in Southeast Asia, in keeping with a examine final yr by the Heart for Vitality, Ecology, and Growth, a Philippines-based clear energy think-tank. Greater than a 3rd of Southeast Asia’s coal energy finance between 2016 and 2024 got here from Japanese banks, and greater than a fifth of fuel.
This exercise has continued despite Japan signing on to worldwide agreements, such because the 2022 Group of Seven communique promising to finish such state help. JBIC alone has offered $3.9 billion for such initiatives since its 2022 dedication, in keeping with Pals of the Earth Japan.
Authorities backing for soiled vitality abroad is greatest understood as an extension of the magical pondering that passes for an vitality transition coverage at dwelling. Japan is resting a lot of its hopes for decarbonization not on closing its fossil energy vegetation, however on scattering biomass and ammonia into furnaces nonetheless fueled 80% by typical lumps of coal.
That reduces emissions solely marginally and raises prices by about 50%, so by most measures it’s a non-starter. If authorities cash can be utilized to prop up an export marketplace for the expertise, nonetheless, there’s a slim probability Japan’s industrial firms can promote it, whereas its utilities keep away from having to write down down out of date belongings.
A standard justification for Japan’s foot-dragging is that clinging to fossil fuels is critical to withstand clear vitality provide chains dominated by China.
That’s not proper, although. Sharp Corp. was at one time the largest producer of photo voltaic panels on the planet, and Panasonic Holdings Corp. and Kyocera Corp. have been main producers too. All have largely exited the enterprise now, squeezed as a lot by an atrophying home market as by competitors from hungrier Chinese language rivals. Simply 4 gigawatts of photo voltaic was put in in 2024, the bottom determine since 2012.
It’s related with wind, which barely operates in Japan due to objections from farmers, fishing vessels and landowners. Mitsubishi Heavy Industries Ltd. was as soon as a giant participant, nevertheless it has been left behind by European, US and Chinese language rivals who construct generators 10 occasions greater. In a enterprise the place competitors from Chinese language exports is nonetheless largely absent, its affiliate Mitsubishi Corp. final yr give up three offshore wind initiatives anyway.
The very best rationalization for what’s taking place is not so very completely different to the state of vitality politics in Washington today: Japan’s oligarchic utility sector has captured its personal regulators, alongside JBIC and the highly effective Ministry for Financial system, Commerce and Business, to prop up its present enterprise and exclude cleaner rivals.
The US can a minimum of make the argument that it’s wealthy in fossil fuels. It exports about 9% extra vitality than it consumes, on web. Japan, nonetheless, is likely one of the most energy-import-dependent economies on the planet, with solely 13% produced domestically.
That’s an existential danger that its fossil gasoline dependancy makes worse. Inside the previous few months alone, Prime Minister Sanae Takaichi has discovered herself in a bruising diplomatic battle with Beijing over how Japan would reply to an assault on Taiwan. On the similar time, the Chinese language navy has been practising how it could blockade Taiwan’s ports and interdict delivery within the western Pacific in simply such a disaster.
Have been Japan to seek out itself lower off from the sources of its imported vitality within the occasion of such a battle, its inventories of the LNG and coal that present two-thirds of its electrical energy would run out in round a month. Crude would final for six months, due to stockpiles launched after the 1973 oil embargo plunged the nation into simply such a disaster of panic shopping for and recession. Nuclear gasoline would deplete inside two years. The photo voltaic panels and wind farms that Japan is at the moment spurning, nonetheless, would hold going nicely into the 2050s. That appears like vitality safety, if solely Tokyo would acknowledge it.
Earlier generations of Japanese strategists understood the dangers of vitality insecurity. By aligning with an isolationist US to bolster its quixotic marketing campaign towards a world transitioning to scrub vitality, at present’s leaders danger compounding these risks — for Japan, and for the planet.
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This column displays the private views of the writer and doesn’t essentially replicate the opinion of the editorial board or Bloomberg LP and its house owners.
David Fickling is a Bloomberg Opinion columnist overlaying local weather change and vitality. Beforehand, he labored for Bloomberg Information, the Wall Road Journal and the Monetary Occasions.
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