Reference 1-1

January 19, 2001
Federation of Electric Power Companies (FEPC)

January 15, 2001
Koji Kaibe
Director and Secretary General
Federation of Electric Power Companies

To meet Japan's greenhouse gas reduction targets as established by the Kyoto Protocol (6% below 1990 levels), it is obvious that an appropriate domestic system must be created, but it is also crucial to conduct studies that are based on the true nature of the global warming problem. Specifically, this means recognizing that: 1) global warming is indeed global in scope, beyond the ability of any one country to solve; 2) a long-term approach is necessary; and 3) the issue of global warming is inseparable from the question of energy consumption, which is essential for people's daily lives and economic activity. It is important to recognize that no solution can be found unless all three of these aspects are considered.

We in the electric power industry are committed to providing an economical and stable supply of electricity, which is an indispensable resource in the lives of the Japanese people. At the same time, we recognize that power generation is responsible for approximately 25% of all CO2 emissions in Japan. Therefore, we have formulated an environmental action plan that simultaneously tackles the three interrelated issues of economic growth, energy security, and environmental conservation, and are doing everything we can to fulfill our various obligations.

In view of the above, we take the following position with regard to the sub- committee's report.

1. The Need to Conduct a Comprehensive Evaluation of All Domestic Policies from a Global Perspective.
-	We agree that every effort must be made in the realm of domestic policy to meet the goals stipulated in the Kyoto Protocol. However, it was agreed under COP 3 that the Kyoto mechanisms would be utilized, and those are based on the principle of taking a cost-effective approach from a global perspective.
-	We must recognize that Japan has already achieved the highest level of energy efficiency in the world, and that the cost of further reductions is higher in Japan than elsewhere.
-	Therefore, when domestic policy packages are being considered, economic feasibility must be taken into account from a global perspective. With regard to the policy package models now being proposed, it is necessary to consider the appropriate timing while being aware of international negotiations both at the reconvening of the COP 6 meeting and other venues.
-	Concerning the five policy package models contained in the subcommittee's report, evaluations have been conducted with an emphasis only on the "reliability of emissions control," forcing us to conclude that a balanced evaluation of the report as a whole is lacking. It is essential that a comprehensive assessment be conducted, with factors such as the following taken into consideration: effects on the Japanese economy; fairness between the transportation, residential, and industrial sectors; and energy security.
2. The Need for a Long-Term Approach
-	While it's important to meet the goals specified in the promised period of time, that alone will not solve the problem. Continued efforts will be necessary, and we must be extremely cautious about adopting hasty regulatory or economic measures that are likely to result in various abuses or side effects.
-	Efforts should be made to adopt sustainable, long-term policies, which must be based on citizen cooperation and a respect for their autonomy. For example, educational programs that change people's lifestyles may not have much of a short-term impact, but deserve to be given the highest priority as a sustainable, long-term policy.
-	Concerning CO2 gas emissions associated with electricity use, Japan's electric power companies have taken the initiative in formulating an environmental action plan and are doing everything possible to achieve the goals they have set for reducing emissions per unit of electricity. In the long run, however, it is imperative that consumers also conserve more electricity and cooperate in improving the efficiency of their power use. Furthermore, long-term success cannot be expected by coercing people into saving electricity through regulatory or economic measures, or by manipulating electricity rates. Therefore, emphasis should be placed on sustainable policies based on the autonomous decisions of consumers.
3. The Need to Obtain Citizen Cooperation and Adopt Policies That Respect Their Autonomy
-	To gain citizen cooperation in implementing domestic policies, it is necessary to establish a PDCA (Plan, Do, Check, and Act) cycle for every policy the government adopts to achieve its goals. As part of this, the government must check the results of its policies and explain their results to citizens in a way that's easy to understand.
-	As a first step, a PDCA cycle should be established for every policy that has been adopted under the Guideline of Measures to Prevent Global Warming which is currently being implemented by the government, so that extraneous measures can be avoided.
-	For example, in recent years there have been marked increases in CO2 emissions generated in the transportation and residential sectors, both of which are closely connected to citizen lifestyle. Efforts should therefore be made to quickly analyze the causes of these increases and explain them to the Japanese people in a way that is easy to understand.
-	In addition, we have entered an era of deregulation in all fields with the expectation that those who are active in those fields will take responsibility for their own actions. Policies that are adopted should therefore respect the autonomy of those who will be affected. In other words, it is necessary to consider flexible policy packages based on self-responsibility similar to the voluntary measures currently being implemented in the industrial sector.

In view of these concerns, we believe that Model 1 of the five models presented in the current proposal should be the focal point of discussions.