25% CO2 Reduction, Message to be Delivered in Upcoming Diplomacic Settings by Prime Minister Mr.Hatoyama - What Does This Mean?

Sunday, September 20, 2009 – Osaka, Japan

The Chief Cabinet Secretary of the new Japanese government, Mr. Hirano, announced today which was just broadcasted in the 9 o’clock evening news, that 25% reduction of CO2 emission vs. 1990 is to be fulfilled by 2020. Mr. Hirano also said that this message will be strongly delivered by Mr. Hatoyama, the new prime minister of Japan, in his diplomacy debut, his first visit to the U.S. to meet President Obama, and at the United Nations General Assembly.

This policy was clearly stated in the manifest of the DPJ, the current ruling party, and although it is in line with the global trend of co-existence with the global environment, it is possible that this policy will provoke hot discussions and resistance from the industry world and Japanese citizens.

This policy would mean possible severe regulation and allocation of reduction in CO2 emission to each industry sector and companies operating in Japan (including Japan branch of foreign capital companies). Automobile companies have already taken this trend as a business opportunity and started aggressively to develop and market EV cars. And electronics companies are focusing on environmentally friendly energy and battery business and on developing and marketing eco (environmentally friendly, energy saving and economic) electric appliances. Such automobile and electronic companies had been recently benefiting from the old ruling party’s policy of “Eco Point”, leading to increase in sales. However, in general, severe regulation and allocation of reduction in CO2 emission would be a burden and negatively impact from cost perspective. This negative impact has already been seen reflected in the stock price, as stated in the article posted on September 19.

New Coalition Government Policy, High Yen and Supply & Demand Oppressing Japanese Companies Resulting in Behind Worldwide High Stock Prices Trend

This policy should drive energy saving in all settings (public and private; work place, public places and home settings), and therefore minimum use of electricity including further warm and cool biz is likely to be promoted. This kind of promotion at workplace may well encourage employees to improve productivity and go home as early as possible which also may mean work-life balance and further driving energy saving at public places and home settings. But too much promotion could lead to negative impact, such as debate leading to refraining illumination at amusement and shopping quarters and people would be deprived of entertainment at night and the town would lose “vigour”.

The Japanese new government needs to come into consensus on this policy with the industry world opinion leaders and win the positive public opinion. The government surely would not want to drop its supporting rate with this issue; from Mr. Koizumi’s reform, it is apparent that the “life line” of the Hatoyama government to successfully solve many problems to change Japan. As in the previous article posted on September 6,

The DPJ Expected to Lead Japan to Change Similarly to Turnaround of Ailing Companies but with More Dynamism and Complexity

this policy is not highly evaluated by the governor and citizen so it may well be tough for the new government to convince key members, but this process cannot be ignored, similarly to turnaround and change management of global companies.