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Keynote address by Ambassador Hideaki Domichi at the Inaugural Session of ASSOCHAM Summit on Clean Development Mechanism and Carbon Trading in India
The Oberoi, July 18, 2008

Mr. Sajjan Jindal, President of ASSOCHAM,
H.E. Mr. Kapil Sibal, Honorable Union Minister of Science and Technology and Earth Science
Mr. Rahul Sharma, Chairman, Cool the Earth Initiative Council
Mr. D.S. Rawat, Secretary General
Distinguished participants,

   Thank you very much for inviting me to the ASSOCHAM Summit. I believe that I am invited as a representative of the country who has hosted recent G8 Summit as well as the leaders meeting of the major economies of Energy and Climate Change, so let me begin to report to you the findings of these important meetings.

   On the last day of the G8 Summit Meeting held in Japan, Leaders’ Meeting of Major Economies on Energy and Climate Change -called in short MEM- was held with the participation of the leaders from G8 and eight major economies including India. They came out with the Declaration that reads “they support a shared vision for long term global goal for emission reductions, and agreed to continue to work together and to hold the leaders meeting in the next summit to be held in Italy next year.”

   Although there is no mentioning of the figures like “halving the emission by 2050,” they agreed to “urge the serious consideration be given in particular to ambitious IPCC (Intergovernmental Panel on Climate Change) scenarios.” This indicates that the international community has started to take seriously the warning from IPCC.

   The Declaration also referred to the necessity of setting mid-term goals bearing in mind the year 2020-2030. The Declaration says, “the developed major economies will implement with international obligations, economy-wide mid-term goals and take corresponding actions in order to achieve absolute emission reductions.
   The developed countries “will first stop the growth of emission as soon as possible, reflecting comparable efforts among them.”

   As for developing major economies, they agreed to “pursue nationally appropriate mitigation actions, supported and enabled by technology, financing and capacity-building” by developed countries. The developing major economies also recognized to move forward from Business As Usual.

   On the other hand, there was no mentioning of the timing of emission peak out which Japan and EU has pursued. The developing major economies are demanding that the developed major economies should take the initiative in presenting mid-term goal.

   The discussion in G8 or MEM does not substitute the negotiation at UN. Nevertheless, it was significant that 16 countries which account for about 80% of the entire world’s emission has decided to continue the process of MEM and to continue to work constructively together towards the success of the Copenhagen climate change conference in 2009.
   There is no doubt that the US new Administration will honour the commitment and as far as both Presidential candidates are concerned. They show positive attitudes towards the climate change issue, including possible US Initiatives and the introduction of emissions trading.

   During the G8 Summit process, Japan has taken the lead to call for halving the global emission by the year 2050, as a long-term goal to be shared as a vision, not as a binding rule that might lead to the burden sharing.
   We thought that sharing such a vision is necessary as it will show that the world is united to tackle the issue. In this sense, we consider the declaration by the MEM leaders as a major step forward, though it fell short of presenting concrete figures.

   As far as Japan is concerned, we have declared to set a long-term goal of reducing by 2050, 60-80% of its current emissions. Japan is determined to realize low-carbon society.

   Prime Minister Mr. Fukuda said as follows;
   “Such transition to a low-carbon society is undoubtedly a major challenge confronting our generation. Yet we cannot meet this test only by viewing it as a burden upon us.
   First, we should view the transition to a low-carbon society as ‘a new opportunity for economic growth.’ Countermeasure to global warming will create new demand, new jobs, and new income.
   A low-carbon society is one that offers great opportunities for economic activity that is compatible with the environment.”

   In Japan, the transition has already started; shift to the next generation cars like hybrid-power cars or electrical cars or various energy saving technologies are already in place.
   Most recently, although still at an experimental stages, solar energy or fuel battery power generation at household has been introduced to the market, and is already affecting consumer minds together with the expectation of various incentives to be considered by the Government and the prospect of further price reduction.

   With regard to a mid-term goal, Japan has reaffirmed its preparedness to establish a quantified national target together with the other major economies. Japan is also proposing a “sectoral approach” as a means to ensure equity in setting the national target. This approach, a sort of bottom-up approach, is different from the existing cap measures.

   The national target could be set by computing first energy efficiency to be improved sector by sector, like in industry, transportation or civil sector that could be achieved by using the most advanced and available energy-conservation technology or a new technology, and by tallying up the amount of reducible emissions to calculate the national target.

   This approach is consistent with the principle of “common but differentiated responsibilities and respective capabilities.” The G8 noted that “sectoral approaches can be useful tools to improve energy efficiency and reduce GHG emissions.”
   In the declaration of MEM, it was also recognized that “they” will consider the role of cooperative sectoral approaches and sector-specific actions.”

   Based upon this sectoral approach, Japan recently announced that it is possible to achieve a further reduction of 14% from the current level by 2020.

   This figure of 14% is by no means conjecture. It was calculated through a rigorous application of sectoral approach, considering in great detail to what extent we would realistically be able to introduce the most advanced energy-saving and renewable-energy technologies that are expected to exist at various points in time.
   Setting aside the cost involved, this was the first attempt in the world to present a concrete picture of what is feasible at least technically. The Government of Japan will announce sometime next year our mid-term goal.

   In any event, in order to achieve the goal of halving total world emissions to peak out in the near future, it is essential to have a “total participation” framework that includes all the major economies.

   Japan will continue to negotiate tenaciously in order to build international agreement on “fare and equitable rules.” The premise of such rules will be greater contributions by developed compared with developing countries.

   Prime Minister Fukuda made a commitment at the Davos World Economic Forum in January that Japan will invest US$30 billion over the next five years in R&D in the environment and energy sector and to establish “Cool Earth Partnership” on the scale of US$10 billion, to cooperate actively with developing countries. Japan will also contribute up to US$1.2 billion to a new multilateral fund.

   Prime Minister Fukuda appealed the importance of developing innovative technologies while disseminating existing advanced technologies by saying; “We shall not be able to halve emissions by 2050, let alone reduce them by 80% no matter how extensively we disseminate existing technologies on energy conservation and other relevant areas. The challenge we face cannot be overcome without technological breakthroughs.
   The key lies in whether we succeed in developing innovative, carbon-free technologies that do not presently exist. Such developments will require a tremendous amount of effort and a certain number of years.
   Yet despite the announcement of bold targets to achieve 50% or 60-80% reductions by 2050, we hear very little about concrete measures for developing innovative technologies.
   Rather, the funding allocated worldwide to this purpose has now fallen to half its peak level at the time of the second oil crisis.
   The situation in Japan, however, is different. Comparing research and development investments in the energy sector in 2005 by national governments around the world, one would find that Japan has spent much more than the United States or European countries.
   In other words, more than any other nation in the world, Japan is seriously expending effort to develop innovative technologies that will be the key to saving the future of our planet.
   Towards the future, as an advanced nation in terms of the environment, Japan intends to provide generously world-leading energy-saving technologies and knowledge to developing countries and major economies such as China and India.

   In the context of India-Japan relations, we have a good understanding of the India’s position on climate change issue.

   India has recently released National Action Plan for Climate Change, which we take as a serious plan for India to tackle climate change.

   For India, sustainable and accelerated economic growth is a priority for the purpose of poverty alleviation, and that India is not able for the present to even consider quantitative restrictions on her emissions, except the commitment that emission per capita of India will not exceed the corresponding amount of the developed countries.

   The basic position of India has a bearing on how to recognize and face the principle of “common but differentiated responsibilities and respective capabilities.”

   We would continue to work in the form like MEM or UN to narrow the gap that still exists between the developed countries and the developing countries.

   On the other hand, we believe that there are huge areas that both countries could cooperate bilaterally. India has registered 339 CDM (Clean Development Mechanism) projects approved by CDM Executive Board. It accounts 32.3% of total CDM projects in the world. With Japan, seven projects have been registered so far and I think that this could be further expanded.

   Japan has highest quality of technology in the area of energy efficiency. For example, if the level of efficiency in Japan’s power plant is achieved in the three countries of the United States, India and China, the resulting CO2 emission reductions would amount to some 1.3 billion tons the equivalent of Japan’s annual total emissions.

   We have made demarche to India to obtain an understanding on the sectoral approach as we propose. We see some concerns expressed by the Indian side that this approach could be linked to trade sanction measures but we are up against anything that will lead to any kind of trade sanctions. We believe that sectorial approaches useful tools to improve energy efficiency and reduce GHG emissions.

   India is supposed to continue relying on coal as major energy source. I believe that bilateral cooperation between India and Japan in increasing energy efficiency in coal-fired generator including Clean Coal technologies should be vigorously explored.

   Also, we are interested in the civil nuclear energy. According to a certain research, the amount of CO2 that India could save by developing Nuclear Power stations in cooperation with the international community could be as large as the entire commitment of the 25 EU nations under the Kyoto Protocol, up to year 2020.

   There are active moves in both developed and developing counties alike to introduce nuclear power stations owing to their zero emission of CO2 and the recent steep rise in energy prices.
   A major role expected of Japan amidst such international trends is to promote its nuclear energy policy based on the most fundamental premise of ensuring safety and security on the one hand, and to provide Japan’s excellent safety technologies as well as convey its strict position on nuclear non-proliferation on the other.

   Japan is one of the largest partners for India’s economic development. We will continue to be so, and we hope that our cooperation in the area of environment will grow its weight as we pursue the way both Japan and India will find significant in this challenge that whole of human beings are facing.