Tuesday, July 22, 2008

Japan's Energy Efficiency Trade

Japan is reaping the profits of decades of investment in environmental technologies. Japan is a working model of modern energy efficiency and the world leader in environmental technology. Despite prodigious growth, Japanese industry has reduced energy consumption and lowered emissions.

As reported in The New York Times, "Corporate Japan has managed to keep its overall annual energy consumption unchanged at the equivalent of a little more than a billion barrels of oil since the early 1970s, according to Economy Ministry data. It was able to maintain that level even as the economy doubled in size during the country’s boom years of the 1970s and ’80s." Amongst Japan's environmental technologies are systems which harness waste heat and gas to generate power. This is one reason why engineers come from all over to study Japanese industry.

Japan's conservation record has earned it a leadership role on the environment. "According to the International Energy Agency, based in Paris, Japan consumed half as much energy per dollar worth of economic activity as the European Union or the United States, and one-eighth as much as China and India in 2005."

The burgeoning cost of oil is increasing the demand for Japan's power-saving technology and Japan is ready, willing and able to meet this demand. “Superior technology and a national spirit of avoiding waste give Japan the world’s most energy-efficient structure,” Prime Minister Yauo Fuda said. “[Japan] wants to contribute to the world,” he said.

Japan's energy conservation efforts have been good for the environment, they have reduced operating costs and spawned an entire industry in the process. Investment in Green technologies can pay lucrative dividends. However, as illustrated by Japan's example, governments play an important role in researching and developing environmental technologies. "[Japan] is also the only industrial country that sustained government investment in energy research even when energy became cheap again. Japan taught itself decades ago how to compete with gasoline at $4 per gallon,” said Hisakazu Tsujimoto of the Energy Conservation Center, a government research institute that promotes energy efficiency. “It will fare better than other countries in the new era of high energy costs."

The "Sector Approach" is a model for energy management based on Japan's frugal energy standards. According to the calculations of Yoshitsugu Iino, group leader of JFE Steel’s climate change policy, the international application of Japanese standards in the steel industry alone could reduce annual carbon emissions by 300 million tons. The Sector Approach would also increase demand for Japanese energy saving technologies and skills. As the Japanese example illustrates, investment in Green technologies is not only about saving the planet, environmental foresight leads to significant trading opportunities in an industry that is destined to grow exponentially.

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