China and Japan: The Green Connection
An 11-story building in Beijing is one of the few places in China where you'll hear people speak fondly of Japan. Inside are the offices of the Sino-Japan Friendship Center for Environmental Protection, where experts study how Japan became one of the world's greenest countries, with the aim of applying those lessons and methods to China. "Japan, on an international level, is a responsible country," says the center's vice director, Xia Guang. "We recognize that Japan's work promoting environmental protection in China has real seriousness, and we thank the government and people of Japan."
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It's hard to fathom China's thanking Japan for anything. The relationship between the two Asian giants has been strained for decades and occasionally erupts into open hostility. Japan perceives China as a rising economic competitor and a rival for political influence in Asia. Many Chinese still believe Japan never properly repented for its brutal invasion of China during the 1930s and '40s. Only three years ago, that resentment exploded into anti-Japan demonstrations in several Chinese cities.
Yet on the issue of the environment, the two nations have strong reasons to heal past wounds. So do lots of others. Pick a pair of developed and developing nations--the U.S. and Russia, Germany and Poland, Britain and India--and there is history, but at the same time beckoning opportunity. At next week's G-8 summit, to be held in Japan, the leaders of the world's most advanced economies hope to make headway on one of the biggest opportunities: an agreement to reduce greenhouse-gas emissions that would succeed the Kyoto Protocol, which expires in 2012.
The U.S. never ratified the Kyoto Protocol, but last year President Bush embraced the idea of a long-term reduction in greenhouse-gas emissions. G-8 representatives are trying to craft an agreement to cut emissions 50% from 1990 levels by 2050. The U.S. may push for even deeper cuts in the future. The Republican nominee, John McCain, has called for a 60% reduction over the same period; the Democratic contender, Barack Obama, would like to see an 80% cut. Bush and the GOP, reflecting U.S. auto-industry concern about changing public opinion on global warming, accepted tighter auto-emission standards this spring after years of resisting them.
As the world's biggest energy user, the U.S. is part of the problem. The opportunity is that reducing greenhouse gas offers environmental as well as economic benefits. Green tech is leapfrog tech: it will allow emerging economies to jump to the leading edge.
That's certainly true of China and Japan, which, despite their animosity, need each other desperately. China's costly and wasteful use of energy and escalating environmental degradation threaten the sustainability of its economic boom. Japan, one of the greenest, most energy-efficient countries in the industrialized world, is brimming with the know-how that could help China alleviate these problems. China could benefit from Japanese technology in everything from advanced nuclear reactors to clean steel mills to hybrid cars. And Japan has every incentive to sell that technology to generate new business for its otherwise sluggish economy. That's why the environment was a prominent topic of discussion when China's President Hu Jintao and Japan's Prime Minister Yasuo Fukuda met in Tokyo in May.
The more China roars, the more pollution pours out of all its new Buicks, coal-fired power plants and cement factories. Last year China surpassed the U.S. as the world's top producer of greenhouse gases. Major upgrades are needed to its power stations, steel mills and chemical factories. Not only does Japan have the technology and money to help China, India and the rest of emerging Asia reduce emissions, it also has the will to share them. The Japanese government sees environmental assistance as a way to bolster its waning influence in the region, a phenomenon its people lament as "Japan passing."
Japan certainly knows how to transform developing economies from energy wasters to energy savers after surviving its own era of environmental destruction. Much like China today, Japan in the 1950s and '60s placed modernizing industry and elevating incomes above improving the environment and public health. The air in Japanese cities was so filthy that residents walked around in masks. In the 1970s, the nation was also alarmed by the two oil shocks, which exposed its vulnerability to the global oil market. A consensus formed that Japan needed to balance growth with greater conservation, and a nationwide effort was launched to reduce energy use and clean up the environment. The result: for every dollar of GDP generated, Japan uses only one-eighth as much energy as China. "Japan was a front runner in economic development in Asia and suffered some bitter experiences," says Ichiro Kamoshita, the nation's Minister of Environment. "Japan wants the countries that are now trying to develop to become prosperous without going through such bad experiences."
Japan has shared much of its top technology with China. Since the 1990s, Japan has sponsored 18 "model projects" in China, through which the government finances the installation of the latest Japanese emissions-reducing and energy-saving systems--for example, facilities that capture the heat and pressurized-gas by-products of cement and steel manufacturing, and garbage-incineration plants to generate electricity.
Environmental protection isn't just a good-neighbor policy; it's an industry, and a new way for Japan to turn a profit from China's economic boom. Selling eco-friendly technology is potentially big business, and one in which Japanese firms still have a tremendous competitive advantage. Toshiba's Westinghouse unit, for example, (yes, once part of a famous U.S. company) is building four advanced nuclear reactors in China at about $3 billion to $4 billion each. Nippon Steel, Japan's largest steelmaker, introduced a type of eco-friendly coke-making technology called dry-quenching in China that has become widely used throughout the industry. It produces the coke, a form of carbon essential for making steel, by cooling it with nitrogen rather than water, which significantly reduces the amount of carbon dioxide released. The resulting steam is captured and used to produce electricity. Nippon has supplied about 30 of these systems at an estimated $20 million to $40 million each. In 2003, Nippon Steel set up a joint venture with Shougang, a Beijing-based steelmaker, to develop energy-efficient technologies in China.