A Rebirth of Japan’s Energy Policy?

Upon visiting Fukushima yesterday for the first time since assuming office a week ago, Japan’s new Prime Minister Yoshihiko Noda boldly declared that “without the rebirth of Fukushima, there will not be a rebirth of Japan”.

Such lofty statements belie the grave challenges Mr. Noda will face in charting Japan’s energy future after the accident at the Fukushima power plant in the country’s northeast in March.  His predecessor, Naoto Kan, tried to reshape the country’s energy policy but eventually failed due to a mix of coordination and political issues.

Despite this setback, it is clear, as Richard Samuels of MIT and others have argued, that the country needs to re-examine its approach to energy. While Japan lacks natural resources and currently relies on nuclear energy for about a quarter of its power, an overwhelming majority of Japanese now say they want to phase out atomic energy.  Policy options include shutting down nuclear reactors in unsafe locations, restructuring institutions, and rebalancing its energy mix with additions from other sources like wind and solar power.

Some of these measures are already underway. For instance, last month, Japan’s legislature passed a pill to subsidize wind and solar power, a critical move to make such energy options more profitable for the private sector to invest and thereby accelerate the shift to renewables.

At the same time, it would be naive to expect such a big transformation to happen overnight. With nuclear power accounting for 25 percent of Japan’s energy and wind and solar just 1 percent, such a gap will take a long time to bridge. Add in the political instability that has characterized Japan in recent years (Mr. Noda is Japan’s fifth prime minister in just six years), among other things, and it is not difficult to see that any rebirth of Japan’s energy policy will not be without some serious labor pain.