Last week I made brief visits to the Federal Republic of Germany, the United Kingdom (UK) and the Italian Republic. With exactly one month to go before the G8 Hokkaido Toyako Summit, I had very useful exchanges of view with the leaders of four European countries.

Ironbridge, in the UK, where the world’s first iron bridge was built in the second half of the eighteenth century, is preserved as a World Heritage site. Recognised as the start of the Industrial Revolution, the construction of the Iron Bridge was made possible by the use of coke, a fossil fuel that replaced charcoal to make the mass production of steel possible.

The energy source that underpinned the Industrial Revolution as symbolized by the Iron Bridge subsequently shifted from coal to petroleum. Through the use of fossil fuels, humanity has managed to build modern society at breakneck speed to this day.

Towards a low-carbon society

As the Intergovernmental Panel on Climate Change (IPCC) has repeatedly warned, if we fail to address the issue global warming, it will force future generations into a critical situation. Moreover, the world’s heavy dependence on fossil fuels, which lies behind the issue of global warming, is already giving loud warnings to the current generation.

When I was working for an oil company some 40 years ago, the price of crude oil was just a dollar per barrel. It has been said since that time that Japan’s rapid postwar growth was made possible by cheap energy in the form of petroleum. Today, however, the price of oil has surpassed 130 dollars per barrel. In addition, the surge in energy prices, together with other causes, has triggered other serious issues including the rise in food prices and the difficulty of securing sufficient supplies of food.

Now is indeed the time when we must free ourselves from our dependence on fossil fuels since the wake of the Industrial Revolution. We must greatly shift the country’s helm towards a low-carbon society for the sake of future generations.

This is not an issue for Japan alone. Global warming is a global problem, which knows no borders. Hence a broad, world-level perspective is the first requirement when discussing global warming.

New Opportunity

Achieving a low-carbon society requires a dual perspective: the need for a global undertaking, and at the same time that for grass-roots action by the whole nation.

Such transition to a low-carbon society is undoubtedly a major challenge confronting our generation. Yet we cannot meet this test only by viewing it as a burden upon us.

First, we should view the transition to a low-carbon society as “a new opportunity for economic growth”.

Countermeasures to global warming will create new demand, new jobs and new income. A low-carbon society is one that offers great opportunities for economic activity that is compatible with the environment.

Environmental Harmony

At the source of Japanese culture lies the idea of coexistence with nature. In the process of economic growth we once did suffer from environmental degradation. Yet by learning from our mistakes, we succeeded in building one of the foremost economies in the world under the banner of environmental harmony. The spirit of mottainai will certainly serve as a keyword in low-carbon societies to come.

Long-term goals

The effects of global warming are already apparent. In order for us to avert these dangers, we must stabilize CO2 concentrations at a fixed level. For this we must halve global CO2 emissions by the year 2050. This reduction target forms the crux of the “Cool Earth Programme” which Japan has proposed to the world. I aim to have this goal shared by the G8 and other major economies.

I believe it is incumbent upon Japan, as one of the countries, which has achieved development prior to others, should bear a heavier responsibility in this struggle to save our planet.

The European Union (EU) has set the goal of reducing emissions by 20 percent compared to the 1990 level by 2020. This will require a 14 percent reduction from the current (2005) level. Advanced in the field of energy conservation, Japan has already achieved energy efficiency rates that greatly exceed those of the EU countries. Notwithstanding, Japan recently announced that it is possible for it to achieve a further reduction of 14 percent from the current level, a reduction of the same order as that to be made by the EU.

Sectoral Approach

The number I am quoting is by no means conjecture. It was calculated through a rigorous application of the sectoral approach, considering in great detail to what extent we would realistically be able to introduce the most advanced energy-saving and renewable-energy technologies that are expected to exist at various points in time. The potential emissions reductions were each tallied up, resulting in this percentage figure.

Setting aside the cost involved, this was the first attempt in the world to present a concrete picture of what is feasible at least technically. In setting quantified national emission reduction targets, I will strive to gain the understanding of nations around the world on this sectoral approach. In concrete terms, we should persuade other nations to analyse the actual extent of their reduction potentials by applying a sectoral approach like Japan’s and to report on the results at the Fourteenth Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP14) due to be held in December this year.

As for the base year, there is debate on the wisdom of maintaining the year 1990, which is two decades ago. Given this and other points of discussion, a common methodology should be established, bearing in mind other countries’ assessments of the sectoral approach. Japan, for its part, intends to announce its quantified national target at an appropriate time next year.

Concrete Policies

We must squarely face the current state of the global environment and, instead of repeating empty calls, step up real action that will actually reduce greenhouse gas emissions. This is my sincere belief.

What then can we do to accomplish this? The concrete policies I have formulated consist of four main pillars.

• First, developing innovative technologies while disseminating existing advanced technologies

• Second, framework-building to move the entire country to lower carbon emissions

• Third, active roles to be played by local regions

• Fourth, having each citizen as protagonist in reducing emissions.

Cool Earth Partnership

At the Davos Conference in January, I announced a ‘Low-carbon Technology Plan’ through which Japan will invest 30 billion dollars over the next five years, as well as the establishment of a financial mechanism called the ‘Cool Earth Partnership’ through which Japan will provide 10 billion dollars in order to assist measures to be taken in developing countries.

Towards the future, as an advanced nation in terms of the environment, Japan intends to provide generously world-leading energy-saving technologies and knowledge to developing countries and major economies such as China and India. However, Japan’s efforts alone will not be sufficient to resolve the issue of global warming. The entire international community must be involved.

There must be a global roadmap for technological development which looks thirty to forty years ahead and which would cover innovative technologies in solar cells, carbon dioxide capture and storage (CCS) technology, as well as next-generation nuclear power technology. By having each country work on its respective area of advantage, the international community will work in unison to advance technological development.

A scheme will be created through which the achievements of this partnership will be shared also with developing countries as a common international asset.

Renewable Energy

In order to achieve a low-carbon society, we will need to make full use of existing advanced technologies until innovative technologies are developed. If we were to reduce our emissions by 14 percent from the current level by 2020, as I outlined earlier, we must increase to above 50 percent the ratio of “zero-emission power supply”, consisting of renewable energy sources that include solar, wind and hydro energy, biomass and untapped energy sources, as well as nuclear power.

We should now turn to the way we use energy. Owing to its industry’s technological prowess and the mottainai spirit, Japan has the most efficient energy structure in the world.

For example, we will work to replace all incandescent light bulbs with energy-efficient ones by 2012. Fluorescent light bulbs produce sufficent brightness while reducing energy consumption to a fifth, and they last ten times longer. By also replacing tube (CRT) televisions with liquid crystal TVs, accelerating the introduction of water heaters, air-conditioners and refrigerators that make use of energy-saving technologies such as heat-pump technologies in which Japan is at the forefront, we can significantly reduce CO2 emissions while reducing electricity fees.

We will also establish standards and mechanisms to facilitate the flow of public and private funds into eco-businesses and good environmental social infrastructure projects, aiming to make Japanese finance and capital markets a top runner in terms of environmental friendliness.

Private Sector

The second pillar is framework building to move the entire country to lower carbon emissions. The Government must certainly play a major role in solving environmental issues. Yet it is the private sector that bears the actual burden of reducing emissions. Hence, there is a need to ensure active use of methods, which encourage the development of technologies and reduction of emissions by pricing CO2 transactions and making full use of market mechanisms.

As one such method, an emissions trading scheme (EU ETS) was introduced within the EU in 2005. Japan should not devote endless time and effort merely to find problems with the scheme. I believe we should rather shift to a more proactive approach, for example, propose a more effective set of rules.

Tax Incentives

When a fundamental reform of the tax system is considered this autumn, we will not limit consideration to the expenditure purposes of revenue, which is to be re-allocated from road construction to general purposes. We will conduct a comprehensive review of the system with a view to promoting a low carbon society, including consideration of an environment tax, and thereby promote greening of the tax system.

It is not just the industrial sector, which needs to take responsibility for its carbon emissions. Each member of the public must take considered and responsible action in order to bring about a low-carbon society.

For this we must visualise CO2 emissions so as to provide the necessary information for consumers to take suitable decisions. In the UK, a carbon footprint system, which measures and labels the amount of CO2 that is emitted in the course of the production, transport to disposal of goods, and a food mileage system are being experimented, and there are moves to expand these on an international scale.

Citizens

The fourth and final pillar is making each citizen the protagonist in this endeavor. The creation of a low-carbon society requires each citizen to act with an understanding of the meaning and importance of this goal as well as of the methods and burden involved.

Education plays an extremely important role. We must introduce systems to teach and to learn about low-carbon and sustainable societies during compulsory education as well as at every level and occasion in the life-long process of learning.

We also need to change our lifestyles to bring about a low-carbon society. One way to share this awareness among the entire population is to introduce summer time. The ruling parties are among those who are studying this matter and I hope they will reach a conclusion as soon as possible.

I should also like to establish a ‘Cool Earth Day’ as another way to change people’s way of thinking.

Collective Effort

Global environmental issues cannot be resolved by some spectacular measure. The industrial sector and each member of the public must change their mode of thinking, and it is paramount that we work with countries around the world to move things forward in a steady and sustained manner. This issue can only be resolved by changing all of the following: economies, societies, communities and lifestyles.

Just as the Iron Bridge, built in the UK more than two hundred years ago, is now a World Heritage site and conveys to us today the successes of our ancestors during the Industrial Revolution, we must ensure that our descendants shall look back proudly two hundred years hence at our efforts as representing a “Low-carbon Revolution”.

Working seriously for this Low-carbon Revolution will enable Japan to enhance its standing in the international community. By leading the world in this way, we can further strengthen the Japanese economy. That is all the more reason why we must achieve a low-carbon society.