Awaji Conference Statement 2007

On August 3 and 4, 2007 the 8th Asia Pacific Forum－Awaji Conference－was held at Hyogo Prefectural Awaji Yumebutai International Conference Center, with the main theme: Asia, Struggling with Energy Issues. The Conference featured enlightening presentations and lively discussions, both reflecting radical changes in global political and economic environments pertaining to energy.

In and around the 1960s, the Japanese economy continued to achieve high growth rates for 18 consecutive years, which was called a "miracle." Following this miracle, East Asian economies maintained high growth rates, primarily during the 1980s, but lasting until the economic crisis in 1997. During that period, high growth centers shifted from Japan to NIEs, to ASEAN, and finally to China. This East Asian economic growth was also called a "miracle." Currently, we are witnessing the third wave of the "miracle." Over the past 30 years since the initiation of China's economic reform and the introduction of the open-door policy, both by the late Deng Xiaoping, the Chinese economy has been growing at a remarkably high rate. Moreover, during the 1990s, another Asian giant－namely India－entered a high economic growth phase. Since both China and India have more than ten times the population of Japan, their economic development is having immeasurable impact on the world economy.

The economic development of such giant powers entails immeasurable energy consumption. Drawing a chart that shows both GDP and energy demands of a certain country is likely to demonstrate correlation between the two. Based on this recognition, we participants of the Awaji Conference discussed whether it is possible to meet soaring energy demands in Asia, led by China and India. Specialists who assembled at this Conference from within and outside Japan believe it is possible. Although it is often said that oilfields will drain in 30 or 40 years, such a prediction is based on the assumption that conventional technologies will remain unchanged. By promoting technological innovation and investing more funds in resource development, we believe that human beings will be able to exploit more underground resources.

On the other hand, even though the total quantity of natural resources is sufficient to meet future demands, uneven distribution of such natural resources imposes a serious problem. In the case of petroleum, for instance, oilfields are located primarily in the Middle East, the region most vulnerable to political instability. Following the Middle East, Russia has the second largest oil reserve. It is of grave concern, however, that due to surging resource nationalism, Russia has begun to use its energy sources as political cards to play.

Regarding energy sources, Asian countries primarily depend on fossil fuels, such as petroleum, coal and natural gas. Even in Japan, a country that has highly developed nuclear power technology, fossil fuels comprise approximately 80% of its energy sources. In China and India, coal is the primary energy source among diverse fossil fuels. Such great dependency on coal and other fossil fuels results in serious environmental problems. As stated earlier in this Statement, we believe that it is possible to meet the soaring demands for energy in China, India and the rest of Asia by exploiting underground resources. On the other hand, rapid economic development in Asia is likely to worsen global environmental challenges. Mass consumption of fossil fuels and the resulting mass emission of carbon dioxide (CO2), sulfur oxides (SOx) and nitrogen oxides (NOx) cause not only local air and water pollution, but also acid rain, which worsens the environment in broader regions, and eventually global warming.

Meanwhile, eradication of poverty is the primary national concern in most developing countries. Driven by the general public who desire to get rid of poverty, national governments of the countries whose economies have taken off place the utmost priority on continuing national industrialization, which absolutely necessitates securing an energy supply. At the same time, however, the national governments of such growing economies can no longer ignore local pollution problems resulting from industrialization. Yet, those countries pay little attention to global warming primarily caused by CO2 emission. Many developing countries evade their responsibilities for global warming, passing the responsibility to advanced countries. Moreover, many developing countries are reluctant to take initiatives to curtail CO2 emission, in consideration of the costs involved.

In this environment, we participants in the Awaji Conference explored solutions to global environmental problems. The first possible solutions suggested at the Conference were technological ones. Currently, Japan's energy efficiency is at the world's highest level, because Japanese engineers developed various innovative technologies in response to oil crises and worsening pollution during the 1970s. For instance, Japanese engineers developed car engines of high fuel efficiency and power generators equipped with desulphurization systems. We believe that such technological innovation, which simultaneously meets demands for improving efficiency and mitigating pollution, should be sought after by industries in all development stages, from primitive to the most advanced.

Like the U.S. government that enacted the Muskie Act during the latter half of the 1960s, the Japanese government imposed rigorous emission regulations on private enterprises during the first half of the 1970s. At that time, some criticized the government for endangering the very survival of Japanese industry. In the subsequent decade, however, Japanese enterprises dramatically enhanced their international competitiveness by developing innovative technologies that meet the rigorous regulations. Japan's exceptional competitiveness in the automobile and other industries during the 1980s was the result of efforts by private enterprises that were urged by the national government, as well as by the general public, to develop environmentally sound technologies.

During this Conference, many success stories were introduced. Reporters emphasized that those stories were not about past achievements, but about ongoing progress. There were reports on various ongoing initiatives to improve auto fuels in various parts of the world. Hybrid cars that combine petroleum fuel and electricity, for instance, are realizing even higher fuel efficiency and lower environmental impact, thanks to the progress in battery technologies.

It was also suggested that when discussing the environmental impacts of various energy sources, we should take into account not only the environmental impacts caused by energy consumption, but also the impacts caused during energy source production. From this perspective, ethanol, which is currently attracting keen attention worldwide, is excellent, since its raw materials－vegetables－convert carbon dioxide into oxygen. Ethanol, however, has only limited effect, since its raw materials can be used as food, which is equally essential for human beings. In other words, before converting edible vegetables into ethanol, we have to choose either food or energy. During the Conference, in addition to the potential of bio-fuels, there were reports on the recent evolution of photovoltaic power generation technologies and their future prospects. There were also reports on wind power generation, which is in practical use in various parts of the world.

At present, we do not have a single, ideal solution for current energy problems. Rather than resorting to a single solution, we must seek the best combination of various technological solutions. Whereas nuclear power is re-attracting global attention as a clean CO2-free energy source, the accident at the Kashiwazaki Nuclear Power Plant in Japan, which was caused by the recent Niigata Chuetsu Offshore Earthquake, has upset many Japanese people. Yet we need to use nuclear power, at least for the time being. At the same time, however, we must invest sufficient funds toward improving the safety of such power plants and resolving nuclear waste problems.

To resolve energy problems, political and legal solutions are equally as important as technological solutions. In Japan, the private sector has developed environmentally conscious technologies, urged on by decisions made by lawmakers. On the other hand, although European countries have already introduced an environmental tax, Japanese people have not yet reached a consensus regarding the introduction of such a tax system. At the Conference, some speakers suggested that Japan should take the initiative in establishing an environmental tax system.

When we seek political solutions, it is essential to involve all countries in the world in the efforts to address environmental challenges. At present, however, advanced countries and developing countries are opposing each other in regard to global warming. Some advanced countries do not participate in the framework for addressing the problem, on the grounds of the nonparticipation of large developing countries, such as China and India. Developing countries, on the other hand, claim their rights to use energy for economic development, attributing to advanced countries the responsibility for greenhouse gas emissions. If this trend continues, it will possibly lead to destruction of the global environment. Although it is obvious that advanced countries are the most responsible for the present global warming, programs to curtail greenhouse gas emissions should also involve developing countries, at least large developing countries such as China and India, which consume great volumes of energy sources. Excepting extremely poor nations, all countries should share the responsibility. Rather than considering participation in environmental programs as a burden or loss for the national economy, every country should consider participation in such programs as being an ideal opportunity to regulate pollution and promote sustainable development.

At the same time, advanced countries must actively transfer the technologies that they have developed for resolving energy and environmental problems. By introducing such technologies to developing countries, advanced countries must work to promote sustainable development on a global basis. Introducing an environmental tax worldwide will financially help efforts toward technological transfer.

Energy and environmental challenges that are becoming increasingly serious in Asia can possibly cause bloody conflicts between the nations concerned. On the other hand, the challenges can be converted into ideal opportunities to understand the destiny of our only planet, and to build partnerships based on solid mutual trust. If Japan, for instance, provides China with relevant technologies so as to initiate joint development programs for the East China Sea, this we believe would usher the entire Asian region into a brighter future of enhanced partnerships and co-prosperity.

At this year's Awaji Conference, by showing the examples of several countries, participants stressed the importance of public awareness and lifestyle reform, in addition to the roles of national governments and businesses in addressing energy and environmental problems.

In conclusion, it is the sincere hope of all participants in the Awaji Conference that technological, political and social solutions sought in Japan will be shared by other Asian countries, as well as by the rest of the world.