ISSUE 190 : Mar/Apr - 2013 - Australian Defence Force Journal

adfjournal.adc.edu.au

ISSUE 190 : Mar/Apr - 2013 - Australian Defence Force Journal

Other environmental and economic issuesReplacing much of the nuclear capacity with fossil fuels in the short to medium term will havea significant effect on Japan’s greenhouse gas emissions. Even before the disaster, Japan wasrelying on coal for a significant amount of its electricity production, and lagging other OECDcountries in the development of its renewable energy industry. However, in June 2011, thenPrime Minister Kan outlined a plan to increase the contribution of renewables to 20 per centby 2020. Since then, renewable-related legislation has been introduced, with related feed-intariffschemes and government plans to put solar panels on 10 million roofs by 2030. 57The reality also is that Japan cannot afford to keep importing so much energy. Japan’s publicdebt to GDP ratio is the worst in the world, at 230 per cent; by way of comparison, the EU’spublic debt to GDP ratio is 82.5 per cent 58 and Australia’s is 23 per cent. 59 While most ofthis debt is owed to the Japanese public, it still creates a significant issue for governmentfiscal management. In January 2012, Japan’s trade deficit was a record ¥1.48 trillion (~US$17billion), due in part to large imports of LNG and other energy. 60 Japan’s trade deficit in 2011was the first in 31 years and attributed in part to rising crude oil prices, the increase in theprice of LNG and the rise in LNG imports. 61 What was so notable about the trade deficit in 2011was that Japan went from a trade surplus of ¥6.6 trillion in 2010 to a deficit of ¥2.6 trillion.As demand for oil increases in the region, so will prices. Oil consumption between 1999 and2009 has increased more than twice as fast in East and Southeast Asia as the world average. 62This is mainly due to the high rates of economic growth in the region, with accompanyingindustrialisation, urbanisation, increasing numbers of cars on the road and increases in thestandard of living, particularly in China. 63 Indeed, oil consumption is so high in the regionthat only Brunei, Malaysia and Vietnam are net exporters. And while Japan’s oil demand hasfallen—down from 60 per cent of Asia’s entire oil demand in the 1970s—it remains the world’sthird largest oil consumer and the third largest net oil importer. 64Adding to its dilemma is that the US has been pressuring Japan to reduce the amount ofoil it buys from Iran. While Japan has largely complied with US requests to boycott Iranianoil, its heavy reliance on oil—particularly as a replacement for nuclear power—will make itscontinuing compliance with the embargo very difficult.ConclusionThe next year or so will be very important for Japan’s energy security. Policy makers willneed to decide to what extent, if at all, nuclear power should contribute to Japan’s futureenergy mix. If there is to be no nuclear energy or a significant downscaling, the Governmentwill need to commit to robust measures to encourage the development of alternative energysources. Japan has the natural resources required for many renewable types of energy, suchas sunlight, wind, waves and flowing rivers, and has the technology to develop the industry.But the sector would need considerable Government investment and support to become amainstream supplier.In the short term, the arguments for retaining nuclear-generated electricity seem overwhelming.Japan’s economy is already relatively fragile, with the largest public sector borrowingin the world. Switching on at least some of the reactors would help guard against powershortages that would have a negative effect on the economy. One option could be ranking90

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