Japan faces pressure on coal funding

Tokyo / Bloomberg

Environmental groups urged the Japanese government to use the Group of Seven summit meeting to be held from Friday in western Japan as a platform to announce a shift away from fossil-fuel financing.
The groups, including 350.org Japan and Friends of the Earth Japan, staged rallies outside government offices in Tokyo on Thursday ahead of submitting a petition to the Ministry of Finance and the Japan Bank for International Cooperation, a state-owned lender to development projects around the world.
“As the President of the G7, Japan has an obligation to be a leader, not a laggard on climate,” the environmentalists said in the petition signed by 80 international and Japanese groups. “First, Japan must stop subsidizing fossil fuels overseas. On the home front, it is time for Japan to reject the fossil fuel and nuclear technologies of last century and instead embrace a clean and sustainable energy future.”
Japan’s energy policy is under close scrutiny, especially for its reliance and support for coal. The country has plans for 49 new coal-fired power projects at home, according to the environmentalists. The groups also criticize Japan’s support for the Batang coal-power plant in Central Java, Indonesia, and the Darlipali project in Odisha, India, saying both projects are “rife with human rights abuses.”
Some developed countries are shifting away from coal, the most polluting fossil fuel, to reduce emissions and health risks. While resource-poor Japan has been trying to diversify its energy sources following the 2011 Fukushima nuclear disaster, the country has made clear in its energy policies that coal will continue to play a role — accounting for 26 percent of the nation’s power output in 2030.
The shuttering of much of Japan’s nuclear reactor fleet following the Fukushima disaster has created a greater reliance on fossil fuels.

Financial Risks
About a dozen environmentalists on Thursday gathered in front of the finance ministry and handed out plastic bags containing a piece of coal and a brochure saying “Coal is not cool,” in reference to the government’s “Cool Japan” campaign to promote Japanese culture and services.
“The world is moving toward decarbonizing our societies,” Shin Furuno, a Japan divestment campaigner for 350.org., said. “Financing clean energy, which is the technology of the future, is better for economic development and good for protecting the environment. And we can earn more respect from the international community.”
“As a government organization, we will consider the allocation of loans in accordance with the policies of the Japanese government,” Junsuke
Arita, a spokesman for JBIC, said by phone.
Interest is growing in the relationship between climate change and the sustainability of financial institutions, according to Megumu Murakami, one of the authors of a report on
the topic for the Japan Research Institute, Ltd.
Last year was a turning point for the issue as Group of 20 nations and the Financial Stability Board highlighted the importance of global-warming issues, she said on Wednesday at a briefing.
The study was put together to examine the possible impact on financial activities from global warming and to identify issues for the Japanese government and banks to consider. Japan’s presence is weak amid global efforts to address climate-change risks to the financial system, Murakami said.
“Investors here don’t take as many initiatives as those in the U.S. and Europe do,” Eiichiro Adachi, counselor and the head of ESG Research Center for the think tank, added. The biggest reason is structural, without much pressure coming from investment management companies and pension funds in Japan, he said.