G8 ENERGY MINISTERIAL -- JAPANESE GOALS

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 001505

SIPDIS

DOE FOR SECRETARY BODMAN
STATE FOR G, EEB, OES, AND EAP/J
NSC FOR PAUL BROWN AND JONATHAN SHRIER
CEQ FOR JAMES CONNAUGHTON

E.O. 12958: DECL: 06/01/2018
TAGS: ENRG KGHG AADP OVIP JA
SUBJECT: G8 ENERGY MINISTERIAL -- JAPANESE GOALS

REF: A. TOKYO 1496

B. TOKYO 1411

C. TOKYO 1476

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Classified By: Ambassador J. Thomas Schieffer for reasons 1.4 (b),(d).


1. (C) SUMMARY: The agenda for the June 8 Aomori G-8 Energy
Ministerial includes the world oil and gas markets and the
energy investment climate. Much of the press and public
focus in Japan, however, will be on climate change and the
steps Japan and other economies will take to reduce
greenhouse gas emissions. The various ministries have each
been responsible for organizing and running the various
ministerials under Japan's G8 presidency and METI has long
taken a hard-nosed attitude towards the need to include
China, India, and other major emerging economies in any
international framework to cut gashouse gas emissions.
However, recent high-level meetings suggest the GOJ is
shifting positions on how to achieve a post-Kyoto framework.
END SUMMARY.

Japan's Political Backdrop to Aomori
--------------


2. (C) Since Japan's Ministry of Economy, Trade and Industry
is organizing and running the June 7 - 8 G8 Energy
Ministerial, expectations had been that GOJ positions would
be largely in line with those of the U.S. METI has long
opposed cap and trade. Officials there have long been
concerned with energy security and also looked at the
potential for new Japanese technologies both to reduce energy
use and to cut greenhouse gas emissions. With its deep ties
to Japan's industry, officials have generally argued China
and the other major emerging economies need to act with
developed industrialized countries to cut greenhouse gas
emissions. Draft statements which the U.S has had input on
include points on energy security, diversification,
efficiency and investment is very much in line with U.S.
interests. Working level METI officials have assured us
after the Environment Ministerial that Minister Amari will
not stray from these points. The U.S. will have a chance to
review the proposed statements once again in a prepatory
meeting in Tokyo June 4-5.


3. (C) Nevertheless, the Energy Ministerial comes two weeks
after the G8 Environment Ministerial in Kobe where Japan's
Environment Minister issued a Chair's Summary that did not
take into account the views of all G8 members -- including
those of the U.S. -- and ran counter to long-standing GOJ
positions. Indications suggest a shift may be underway in
the Fukuda Government's approach to energy and climate change
matters. Chief Cabinet Secretary Machimura's remarks to the
Ambassador (ref A, C) and statements from the Cabinet's
Special Advisor on Climate Change (ref B) show top levels in
the Fukuda government are considering whether the best
concessions from emerging economies on the outline of a
post-Kyoto climate framework, including on greenhouse gas
emissions cuts, could come in the MEM Leaders' Meeting Fukuda
will chair on July 9, or out of the G8. In addition, there
are signs the GOJ is shifting its thinking on cap-and-trade
and greenhouse gas limits, making it seem more in line with

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that of the EU than with the U.S. or Japan's long-standing
position on these questions.


4. (C) The background for this shift is Japan's domestic
political situation. Fukuda's approval ratings have been low
for some time and continue to drop. Climate change, an issue
the PM has publicly said is a centerpiece for the Summit, is
an area where the government sees some hope of a publicly
demonstrable accomplishment. With rumors of elections or
cabinet change later in the year, observers suggest the
Fukuda government seeks to leverage progress on climate to
boost its political fortunes.


5. (C) In April, METI itself, long a strong opponent of
cap-and-trade or mandatory greenhouse gas targets, announced
it was undertaking a study of a possible mandatory domestic
cap-and-trade system in Japan. (Unlike MOE, METI has long
opposed Kyoto-style caps, in line with the views of the
Japanese industries whose interests METI represents.) A few
weeks later, Chief Cabinet Secretary Machimura -- in essence,
Japan's Deputy Prime Minister -- told the press, and Japan's
chief climate change diplomat confirmed privately, the PM
will announce a domestic goal for reducing Japanese
greenhouse gas emissions by 2050, likely 60-80% from 2000
levels.

What Japan Wants from Aomori
--------------


6. (C) Japan is now trying to come across as ambitious as
possible on climate change and be seen as a leader on the
issue. For some time now, Japan has been frustrated over
getting little credit for action, particularly in comparison
to the EU, even though Japan has one of the world's most
energy-efficient economies. Since the Kyoto Protocol
measures emissions reductions against 1990 -- right after
Japan's economy soured and investment into energy efficiency
R&D dried up -- Japan now has Kyoto targets it cannot meet.
Japan is supposed to cut emissions to 6% below 1990 levels by
2012; they are now 8% above 1990 levels. Even though METI
has not supported the Kyoto Protocol the way others in the
government have, there could again be sudden pressure in
Aomori for a more ambitious output than the U.S. can accept
-- as we saw in the Enviornment Ministerial.


7. (C) Japan's strategy to date has been to make proposals
to draw "all major emitting countries" -- i.e., to include
the U.S. and emerging economies such as China and India --
into a future framework, to address one of Kyoto's
shortcomings. Until now we have seen this as compatible with
our goals in the MEM: to involve all the most important
countries in discussions on the outline of a post-Kyoto
climate treaty, so that we can engage emerging economies on
the commitments they have been loath to discuss in UNFCCC
meetings.


8. (C) Yet the Environment Ministerial in Kobe went beyond
this, alienating the U.S with a proposal for a dialogue that
would undermine the MEM. Even though the Foreign Ministry
has assured us repeatedly that as organizer for the Lake Toya
G-8 Summit, it understands the parameters of the G8 process

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and the idea ministers should not be seen issuing
instructions to or circumscribing the abilities of leaders to
make decisions, MOE was certainly not so circumspect in Kobe.


Ministerial Arrangements
--------------


9. (C) METI Minister Akira Amari will chair each session of
the Ministerial. Secretary Bodman last met Amari on the
margins of the World Economic Forum in Davos, Switzerland on
January 24, 2008. In addition to the G8 Ministers,
representatives from China, India, and Korea will participate
in the outreach sessions. Except for the IEA, the meeting is
closed to other international organizations or NGO
stakeholders.


10. (C) METI has coordinated with key officials at DOE,
State, and the White House on what Japan wants to see on
climate in the negotiated Joint Statement. Officials at METI
say Japan and the U.S. are on the same page on key points and
that there will be no last-minute surprises on any of these
issues in Aomori -- in contrast to the Enviornment Minister's
actions at the G8 Ministerial in Kobe. Although METI
supports Japan's "Cool Earth 50" proposal to halve global
emissions by 2050, it does not want to promote a long-term
goal, or other specifics of a post-Kyoto climate change
agreement, in Aomori. Rather, METI officials want to focus
discussion on how energy policy can contribute to solving the
climate problem more generally. METI identifies energy
efficiency, the role of nuclear power, clean technology
development, and the development of innovative technology
roadmaps as the key climate topics it wants to cover, and
officials reiterate their sense that Japan and the U.S. have
common interests in all of them. METI is not looking to
discuss targets for any of these areas, nor is it looking to
discuss new funding instruments or amounts of funding for
climate change activities "at this moment," a METI official
told emboffs May 30.


11. (C) METI officials say they are also particularly keen
to mention the sectoral approach and a new innovative
technology partnership in the Ministerial statement. Japan
discussed the sectoral approach with Chinese President Hu
Jintao during his May visit to Japan and a METI energy white
paper released last week promoted it again. Japan included
the sectoral approach in the Enviornment Minister's
Chairman's Text as well as in other recent documents,
including those in connection with the May 28 - 30 Tokyo
International Conference on African Development. METI
officials report that in Amari's meeting with Secretary
Bodman, the Minister will note eagerness to reach agreement
with DOE on a joint statement to promote nuclear power,
carbon capture and storage technology, zero-emission
coal-burning power plants and energy from methane hydrates.
Japan also will look to address high oil prices by calling
for transparency and stability in global energy markets, an
improved investment climate and better cooperation with the
IEA in emergency preparedness.
SCHIEFFER