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Published online by Cambridge University Press: 07 May 2025
Japan's tragic March 11 earthquake, tsunami and its continuing nuclear crisis struck in the midst of the world's unfolding financial, economic, environmental and energy crises. The Fukushima Shock is drastically reshaping Japan's energy policy and politics. This opportunity for change is being seized by a rapidly expanding coalition of large Japanese and foreign firms, small and medium businesses, subnational governments, farmers, NPOs, and others. Their interests are united and focused by the feed-in tariff policy championed by former PM Kan Naoto. They are further channeled and reinforced by the YEN 23 trillion commitment for the 10-year rebuild of Tohoku, a project committed to renewables and smart-city infrastructure. Meanwhile, Japan's central government is adrift, its fiscal and regulatory tools blunted by a continuing rearguard action to undermine renewables and keep nuclear as the main pillar of Japan's power economy. The clash between contending energy regimes is being played out at the international level as well, and remains very fluid and difficult to predict. What is certain is that it involves strikingly different political coalitions and implies equally contrasting infrastructure choices, institutions and ideas. In Japan, the challenge is whether to protect a monopolized, centralized, expensive, and probably cul de sac power economy or opt to innovate a potentially world-beating decentralized smart-power economy. The evidence suggests Japan risks forfeiting an historic opportunity if renewable power generation does not become the main pillar of an emerging, smart power economy.
1 At this writing, recent revelations include the French Institute for Radiological Protection and Nuclear Safety's October 26 estimate that marine radioactive pollution was 30 times the Japanese government's published figures. The Norwegian Institute for Air Research also reported on October 21 that tallying of 1000 international monitoring sites suggests atmospheric releases were well beyond Japanese estimates. See “Fallout levels twice estimate,” October 29 2011 Japan Times, link.
2 On the 2010 energy plan, see John Duffield and Brian Woodall, “Japan's new basic energy plan,” Energy Policy, 39 (2011).
3 On the nuclear village and related matters, see Jeff Kingston, “Ousting Naoto Kan: The Politics of Nuclear Crisis and Renewable Energy in Japan,” The Asia-Pacific Journal Vol 9, Issue 39 No 5 September 26, 2011, link.
4 On the Kan and Noda regimes, see for example Daniel Sneider “Japan in a Post 3/11 World – Part I,” October 5, 2011, Yale Global Online, link.
5 See “Warm welcome for Noda,” Daily Yomiuri, September 2 2011, link.
6 In August of 1992, Keidanren was one of the main sources of opposition to former PM Miyazawa Kiichi's plan to clean up the bad asset crisis. See Emre Bayram, Sven Steinmo and Andrew DeWit “The Bumblebee and the Chrysanthemum: Comparing Sweden and Japan's Response to Financial Crisis,” manuscript under review. As Stephen Vogel notes in his Japan Remodeled: How Government and Industry are Reforming Japanese Capitalism (Cornell 2006, p 56), Keidanren has long had trouble advancing reform positions on energy issues because the energy sector is a pillar of the association's finances.
7 The already massive scale of Fukushima's compensation and clean-up costs have left Tepco clearly bankrupt, no matter how much the nuclear village's hired hands spin the numbers on various committees. That is why the November 5 Economist now calls for its nationalization, warning that “the longer the government dithers over nationalizing Tepco, the more the costs will rise and the impetus for action will wane.” See “Japan's nuclear conundrum: The $64 billion question,” The Economist, November 5: link.
8 On this see, “Noda to back exports of nuclear technology to Vietnam,” The Asahi Shinbun, October 28, 2011, link.
9 The subsidization includes the use of public monies to purchase land and otherwise clear the way for construction of plant. The corruption is evident in the regulatory coddling of TEPCO and other utilities
10 The White Papers from 2004 are available here.
11 See “Natural energy sources a growth sector everywhere but Japan,” The Asahi Shinbun, August 2, 2011, link.
12 The most authoritative and user-friendly site on feed-in tariffs is maintained by Paul Gipe: link.
13 The point is, of course, not to laud the military. They are responding to such institutional incentives as the rising human and energy cost of fighting wars for oil as opposed to other military priorities. But it is surely useful to look from their perspective and understand what they are learning about the climate and energy crises as well as options for an energy shift. Perhaps the most outspoken advocate of renewables among military circles is Navy Secretary Ray Mabus: link.
14 On the US military's programmes see, “Suzanne Goldenberg “Military thinktank urges US to cut oil use, “November 2 2011, The Guardian, link. See also the introduction and download link to the October 27 released RAND report on encouraging cooperation between Army bases and utilities to expand renewables: link.
15 The use of the FIT for reducing reliance on fossil fuels was indeed one of the elements of the METI-led strategy to dump the Kyoto Agreement and stress single-country approaches: link.
16 See “Siemens returns as does domestic vigour: the race in the wind market intensifies” (in Japanese) October 15 Sankei Newspaper, link.
17 See “Tepco's Deal With Devil Signal End to Postwar Era,” Bloomberg Businessweek, October 21, 2011, link.
18 A concise introduction is available at “Towards a Distributed-Power World: Renewables and Smart Grids Will Reshape the Energy Sector,” Boston Consulting Group, June 2010, link.
19 For an example of how this is playing out in America, a relative laggard in the smart revolution, see this link.
20 See Melanie Hart “China aims to dominate US in smart grid investments just as it has with renewables,” at Climate Progress, October 24, 2011, link.
21 For a recent Indian perspective, see Hari Pulakkat “How smart cities are drawing city of tomorrow and redrawing cities of today,” November 3 2011 Economic Times of India, link.
22 See Paul Harris “Population of world could grow to 15bn by 2100,” October 22 2011, The Guardian, link.
23 A through study of the issues is available in “Climate Neutral Cities: How to make cities less energy and carbon intensive and more resilient to climatic challenges,” Economic Commission for Europe, Committee on Housing and land management seminar, October 2011: link.
24 See “Smart Cities: Exporting the Environmental City,” (in Japanese) Japan IBM: link. See also “The outline of the Chinese smart grid becomes evident,” (in Japanese) July 5, 2010, Nikkei Newspaper, link.
25 For example, “Smart City projects revived by disasters,” October 4, 2011, link.
26 See his comments during the press conference: link.
27 On this, see for example Scott Victor Valentine, “A STEP toward understanding wind power development policy barriers in advanced economies,” Renewable and Sustainable Energy Reviews 14 (2010), link.
28 One example is seen in “NEC to pitch smartcity projects to over 30 municipalities,” in Nikkei November 3: link.
29 This policy line is detailed in depth at the General Affairs Ministry website.
30 A recent entrant into the Japanese power market is venerable Marubeni, which has committed heavily to geothermal builds. Marubeni had evolved a business model of using overseas FITs by acting as the middle man for independent power producers. Marubeni's subsidiary “Smartest Energy,” is the biggest such firm in the UK. Its helpful guide to FITs is instructive: link.
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