Japan and the United States are each making big once-in-a-political-lifetime policy and fiscal bets in order to transform their fossil fuel economies to clean energy ones.

Both countries are racing the clock on the climate crisis and on beating global competitors on the clean energy playing field. But are the two governments doing it right?

Public spending numbers are staggering. Under Japan's Green Transformation Strategy, its government will spend 20 trillion yen ($133 billion) over 10 years. Under the United States' Inflation Reduction Act, its government will spend $369 billion over 10 years via tax credits and investment programs.

Supplied photo shows Alan Yu, senior vice president at the Center for American Progress. (Kyodo)
Glen S. Fukushima. (Kyodo) 


Both governments' bold actions should be commended. At the same time, it is important to ask hard questions about what each country is trying to do -- and how.

There are tradeoffs between action now and investment for the future. While the Biden administration's IRA spending strategy makes strategic research and development investments in future technologies, it prioritizes funding the deployment of existing clean energy technologies like renewables and electric vehicles to cut greenhouse gas emissions.

Japan's GX strategy takes the opposite approach, instead focusing on costly over-the-horizon pilot projects like ammonia-coal and hydrogen-gas co-firing, which seek to dilute but not replace fossil fuels.

Japan's funding of these approaches extends the lifespan of fossil fuel dependence. At this critical juncture when major global economies must lead climate action and take the crucial yet politically difficult steps toward a clean energy future, Japan has instead created market conditions that will incentivize coal-fired power plants to stay online. It is the only Group of Seven country to do so.

Like GX, the Ministry of Economy, Trade and Industry's Asia Zero Emission Community initiative also risks making the wrong bet on a fossil fuel future -- in this case, by financing Japanese energy investments in fast-growing Southeast Asia.

METI asserts that a 1.5 trillion yen initiative will finance energy projects to advance zero-emission transitions across the region.

The underemphasized detail, however, is that a number of those country-specific strategies result in 2060 or 2070 net-zero timelines -- far past the 2050 target to achieve global net-zero GHG emissions established by the Paris Agreement.

These post-2050 timelines remove time pressure for decarbonization in Southeast Asia, and open the path for Japan to finance natural gas-fired power infrastructure, which will lock in high emissions for decades.

Prime Minister Fumio Kishida has also announced Tokyo's support for Japan-led manufacturing and commercialization of perovskite solar cell and offshore wind technologies by 2025.

Japan's support for innovation in green hydrogen, perovskite technology, and offshore wind is the right move. But METI should take a "yes, and" approach by also immediately boosting funds to deploy existing clean energy technologies like solar and wind power -- technologies that have already proven successful for Japan.

The importance of investing in clean energy R&D is undisputed, both from climate and competitiveness perspectives. But the world is facing a climate crisis that demands action now.

Japan -- and METI -- has a chance to leverage Japanese innovation in clean technologies to create commercial opportunities in the global energy transformation and to meet the climate crisis.

It is clear that the countries that will reap the greatest industrial benefits from the clean energy transition will be the ones that invest heavily -- and quickly -- in the renewables of today. It is not a moment too soon for the climate.

(Alan Yu is senior vice president, national security and international policy, at the Center for American Progress in Washington. Glen S. Fukushima is senior fellow, inclusive growth, at CAP)

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