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Fallout From the Fukushima Shock: Japan’s Emerging Energy Policy via Japan Focus

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.

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