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UNCLAS SECTION 01 OF 06 TOKYO 005357 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 09/19/06 
 
 
INDEX: 
(1) LDP presidential election tomorrow; Mounting bills carried over 
from previous session await extra Diet session; Social Insurance 
Agency bill may wait until next year 
 
(2) Whether new administration continues Koizumi reform line depends 
on lineup of economic ministers 
 
(3) Abe eyes having five prime ministerial assistants 
 
(4) Japan will come up with own proposal for developing countries' 
CO2 reductions at upcoming UNCCC-Nairobi 
 
(5) Underground storage of CO2: Master card for greenhouse gas 
emission reduction 
 
ARTICLES: 
(1) LDP presidential election tomorrow; Mounting bills carried over 
from previous session await extra Diet session; Social Insurance 
Agency bill may wait until next year 
 
NIHON KEIZAI (Page 2) (Abridged) 
September 19, 2006 
 
The Liberal Democratic lawmakers and local rank-and-file LDP members 
will determine the 21st LDP president tomorrow to replace Junichiro 
Koizumi, who is also prime minister. With Chief Cabinet Secretary 
Shinzo Abe's commanding lead over Finance Minister Sadakazu Tanigaki 
and Foreign Minister Taro Aso remaining unshakable, the focus is now 
how far Abe will be able to outdistance the runner-up. Heated debate 
with Minshuto (Democratic Party of Japan) is expected in the next 
extraordinary Diet session, scheduled to open on Sept. 26, to handle 
many important bills that have been carried over from the previous 
Diet session. 
 
A new lineup of the three top LDP executives is likely to be 
determined by Sept. 25. Immediately after the extraordinary Diet 
session opens on Sept. 26 to run for 81 days, chances are that the 
new LDP president will be designated as new prime minister and that 
he will launch a new cabinet later the same day. The ruling 
coalition plans to conduct question-and-answer sessions in both 
houses of the Diet for three days starting on Oct. 2 following a 
policy speech by the new prime minister on Sept. 29. 
 
Minshuto President Ichiro Ozawa is expected to take the Diet floor 
to question the new prime minister's views of the state centering on 
his Asia policy. This will be the first time for Ozawa since 
February 2003, when he was serving as head of the now-defunct 
Liberal Party. Ozawa also intends to propose a party-head debate for 
Oct. 18, days before the Oct. 22 Lower House by-elections, to lock 
horns with Abe. 
 
Extending the Antiterrorism Law a top priority 
 
Extending the term of the Antiterrorism Special Measures Law, which 
is to expire on Nov. 1, for one year is a top priority for the 
ruling coalition. The Minshuto is expected to question the 
appropriateness of the Maritime Self-Defense Force's refueling 
activities in the Indian Ocean, which have been underway regardless 
of declining demand and high oil prices. 
 
In tandem with the antiterrorism legislation, the ruling camp plans 
to begin deliberations on other important bills, including a bill to 
 
TOKYO 00005357  002 OF 006 
 
 
amend the Basic Education Law, Abe's top priority. The Minshuto 
thinks an education reform bill requires deliberations lasting a 
year or two. 
 
Conspiracy legislation another priority 
 
The ruling camp will also aim for the speedy enactment of a bill 
amending the Organized Crime Punishment Law to create a new charge 
of conspiracy so as not to allow it to have any adverse effects on 
the unified local elections and the Upper House election next year. 
 
Abe also intends to craft a set of new bills to reform the Social 
Insurance Agency, which has drawn fire from the general public due 
to its lenient punishment of its employees over the pension due 
exemption scandal. But the government and the ruling coalition may 
not be able to map out bills until next year's regular Diet session 
because such work is time consuming. 
 
(2) Whether new administration continues Koizumi reform line depends 
on lineup of economic ministers 
 
NIHON KEIZAI (Page 2) (Full) 
September 18, 2006 
 
Now that Chief Cabinet Secretary Shinzo Abe is viewed as a shoo-in 
in the Liberal Democratic Party presidential election, attention is 
being focused on who will be appointed for such key posts as Policy 
Research Council chairman and economic ministers. The Koizumi 
administration paved the way for economic revival by pursuing 
structural reforms over five years and a half. Will the new 
administration continue the Koizumi reform line? The new economic 
team also could affect the life span of the new administration. 
 
Weight to be added to LDP Policy Research Council chairmanship 
 
"Should Policy Research Council Chairman Hidenao Nakagawa be 
appointed to be secretary general, who will assume his current 
post?" This question has been raised not only in government and 
ruling party circles but also among market players. The government's 
Council on Economic Fiscal Policy once had the lead in mapping out 
guidelines for economic management, including the budget for next 
fiscal year. But Nakagawa took back that leadership from the Koizumi 
government and demonstrated his own influence as the party's Policy 
Research Council chairman. The possibility is now surfacing that 
Nakagawa might be appointed secretary general, but the post of 
Policy Research Council chairman is likely to retain its importance 
in the new administration. 
 
Both the political administration and the ruling parties are 
responsible for managing economic affairs in Japan, so some have 
suggested that the one who holds the post of Policy Research Council 
chairman should also assume an economic portfolio in the cabinet. 
The aim is to avoid a struggle between the Kantei and the LDP over 
policymaking. Abe proposed allowing vice ministers in each 
government agency take the chairmanships of departments in the LDP 
Policy Research Council. 
 
Under such a situation, attention is being paid to who will become 
the economic ministers in the new administration, such as finance 
minister, state minister in charge of economic and fiscal policy, 
and the economy, trade and industry minister. 
 
Heizo Takenaka, minister of internal affairs, has supported Prime 
 
TOKYO 00005357  003 OF 006 
 
 
Minister Junichiro Koizumi as the control power for economic 
management. But there is no such person around Abe. State Minister 
in Charge of Economic, Fiscal and Financial Policy Kaoru Yosano, who 
was at loggerheads with Takenaka, and LDP's Tax System Research 
Commission Hakuo Yanagisawa have been named as candidates for such 
economic posts. 
 
Yosano is now in charge of the Council on Economic and Fiscal Policy 
in place of Takenaka. He has often clashed head-on with Takenaka, 
who has criticized Yosano's stance as tilting toward the Finance 
Ministry. Yanagisawa, who heads the election campaign headquarters 
for Abe, was also at loggerheads with Takenaka, who insisted on a 
hard landing for the disposal of financial institutions' 
non-performing loans. As a result, Yanagisawa, who was serving as 
financial services minister, left the Koizumi cabinet in 2002. 
 
Some persons attribute Takenaka's sudden resignation as a Diet 
member to the emergence of the possibility that Yosano and 
Yanagisawa were likely to become economic ministers in the next 
administration. 
 
Vice Foreign Minister Yasuhisa Shiozaki, who is close to Abe and 
used to be a Bank of Japan official, is another candidate for an 
economic portfolio. In the Diet session in 1998, in which the focus 
of deliberations was on banking issues, he took part in the process 
of drafting bills as one of the new breed of lawmakers specialized 
in making financial policy. He is well versed in both banking 
regulations and policies. Since he is also an expert on judicial 
affairs, he will surely be helpful in effectively managing the 
nation's economy, which has become more and more complicated. 
 
Some observers anticipate that Minister of Economy, Trade and 
Industry Toshihiro Nikai may stay on. He contributed to underscoring 
the revival of METI, which had been dubbed as a declining government 
ministry, and also took the lead in drawing up a new strategy to 
push up the economy. Many ministry officials expect Nikai to retain 
the current post. 
 
LDP Research Commission on Highways Chairman Nobuteru Ishihara, 
whose name has been cited as a candidate for the post of chief 
cabinet secretary, and former foreign minister Nobutaka Machimura 
are also among candidates for economic ministerships. Some observers 
think that a person who is named as a candidate for the post of 
chief cabinet secretary but fails to fill the post may be appointed 
as an economic minister. 
 
Besides, some persons recommend Deputy Policy Research Council 
Chairman Toshiaki Amari, who has clearly expressed support for Abe 
in the presidential race, for an economic portfolio. Coordination on 
the lineup of economic ministers is likely to continue until the 
last moment. 
 
(3) Abe eyes having five prime ministerial assistants 
 
MAINICHI (Page 5) (Abridged) 
September 16, 2006 
 
The National Congress on 21st Century Japan composed of experts 
(chaired by former University of Tokyo President Takeshi Sasaki) 
held a forum yesterday at a Tokyo hotel to promote a policy-oriented 
LDP presidential race, with Chief Cabinet Secretary Shinzo Abe, 
Finance Minister Sadakazu Tanigaki, and Foreign Minister Taro Aso 
attending. 
 
TOKYO 00005357  004 OF 006 
 
 
 
In the session, Abe proposed having five prime ministerial 
assistants, the maximum number allowed under the Cabinet Law, with 
each one responsible for a separate area such as foreign and 
security affairs, "second chance" programs, and education. He would 
increase the number of deputy chief cabinet secretaries for 
parliamentary affairs, which is now set at two. Abe also proposed 
establishing a Japan-style National Security Council. 
 
With strong local opposition in mind, Abe indicated that submitting 
a decentralization promotion bill to the extraordinary Diet session, 
scheduled to open on Sept. 26, would be difficult. Abe also 
expressed eagerness to revise the Public Offices Election Law to 
meet the needs of the times by allowing candidates running in local 
elections to distribute policy manifestos and use the Internet as 
part of their campaigning. 
 
He also revealed a plan to let senior vice ministers double as heads 
of party policy research council departments to realize decision 
making at the initiative of politicians. 
 
(4) Japan will come up with own proposal for developing countries' 
CO2 reductions at upcoming UNCCC-Nairobi 
 
MAINICHI (Page 3) (Full) 
September 19, 2006 
 
Takeshi Yamamoto 
 
The second meeting of the Conference of the Parties (COP) to the 
Kyoto Protocol (COP/MOP2) are due to take place in Kenya in 
November. The meeting is likely to focus on future targets for 
emission reductions in 2013 and later, an item not covered by the 
Kyoto Protocol. Ahead of this meeting, the Japanese government 
decided to propose that the upper limits of carbon dioxide emissions 
be changed in proportion to the population of a country and the 
gross domestic product (GDP). By setting a rule that is easy for 
developing countries to accept, such as China, a country with a 
growing economy, Japan aims to get as many countries as possible to 
take part in the framework for greenhouse gas emissions control. 
 
The proposal is likely to make a pitch for several countries that 
are already willing to participate in the framework in 2013 or later 
to become more positive about it. But negotiations are likely to run 
into difficulties, given that the United States and many of the 
developing countries are highly wary of the proposal, arguing, "It 
will disturb economic growth." 
 
There is a prediction that 62 percent of carbon dioxide emitted by 
countries on the globe by 2050 will be countries other than 
industrialized ones (or nonmembers of the Organization for Economic 
Cooperation and Development (OECD). But most of the countries 
obligated to reduce emissions at present are industrialized 
countries. 
 
Given this situation, the Japanese government pointed out in a 
written statement submitted late last month to the secretariat of 
the COP/MOP2: "It is necessary for developing countries to address 
emission reductions." In the statement, Japan also asserted that in 
addition to the current framework that sets the country-by-country 
upper limit of the total carbon dioxide emissions, such steps as 
controlling the efficiency of energy use as well as restricting the 
per capita emission of carbon dioxide or emissions based on GDP 
 
TOKYO 00005357  005 OF 006 
 
 
should be taken in order to reduce emissions. 
 
A senior official at the Environment Ministry said: "If those 
measures were taken, even though the total emissions of carbon 
dioxide may increase, making efforts to reduce emissions by 
improving the energy efficiency would become possible. Countries 
whose population or GDP tends to rise would find it easy to join the 
protocol." 
 
The statement also calls for extending the first commitment period 
(2008-2012) requiring each member country to reduce their emissions 
of carbon dioxide from the current five years to a longer period so 
that measures should be implemented from a longer point of view. The 
statement also pointed out the need for punishments if the 
obligation for emission cuts was not observed. 
 
(5) Underground storage of CO2: Master card for greenhouse gas 
emission reduction 
 
MAINICHI (Page 3) (Excerpts) 
September 19, 2006 
 
Two trillion tons of CO2 can be stored across the world; Hopes 
pinned on arresting global warming 
 
The Environment Ministry has begun looking into the possibility of 
introducing a carbon dioxide capture and storage (CCS) system, 
meaning containing carbon dioxide (CO2), a greenhouse gas, 
underground, including the sub-seafloor structure. Hopes are being 
pinned on this system as the master card for extensively reducing 
CO2. 
 
This technology is drawing attention, because locations used for 
this purpose are abundant in the world. According to a special 
report of the United Nations Intergovernmental Panel on Climate 
Change (IPCC), submitted to the first meeting of the Parties to the 
Kyoto Protocol late last year, it is possible to store at least 2 
trillion tons of CO2 in the world under this system. This is the 
amount of emissions equivalent 70 to 80 years worth of emissions in 
terms of the current emission level (approximately 24 billion tons a 
year). Some NGO-related sources even said, "It will not be possible 
to prevent global warming without applying this method." 
 
The Ministry of Economy, Trade and Industry (METI) projected that 
Japan has the capability of storing 5.2 to 150 billion tons of CO2. 
CO2 emissions in Japan in fiscal 2004 were about 1.355 billion 
tons. 
 
The Kyoto Protocol designed to prevent global warming mandates 
parties to the pact to cut CO2 emissions, but it does not give much 
consideration to how to store it. With calls for acknowledging the 
CCS as a portion of CO2 emissions reduced by the international 
community gaining grounds, authorizing the CCS is beginning to 
become a trend. 
 
Impact on environment unclear; concern about leakage 
 
The concern about the CCS system is whether there is the possibility 
of contained CO2 leaking. 
 
The IPCC report does not assure that there is no possibility of 
leakage, noting that the probability of the CO2 stored and 
controlled underground at properly selected locations not leaking in 
 
TOKYO 00005357  006 OF 006 
 
 
100 years' time is 90-99 percent. Even if a leakage probability were 
1 percent, if 2 trillion tons of CO2 are stored, leakage from there 
would reach 20 billion tons. Atsushi Ishii, an associate professor 
of science, technology and sociology, noted, "Nobody knows how much 
contained CO2 will leak." 
 
Environment Minister Yuriko Koike inquired the Central Environment 
Council of the propriety of dumping CO2 in the sub-seafloor 
structure. Ishii pointed out the difficulty of assessing such a 
risk: "We do not know the eco-system of the deep sea-floor itself. 
There is concern that if CO2 contained there should leak, acidified 
seawater containing melted CO2, acid substance, or an increased 
level of CO2 in seawater might have a grave impact on the 
environment." 
 
There is also concern about possible earthquakes in Japan. The 
authentication test being carried out in Niigata Prefecture showed 
no problem about leakage even after the Chuetsu Earthquake in 
October 2004. However, the full-fledged introduction of the system 
will require caution. 
 
Enormous costs: Energy conservation is royal road to reduce CO2. 
 
Another issue is the cost. Realizing the CCS requires the costs of 
constructing related facilities and transporting the material. METI 
has estimated that such a cost would be 5,000 to more than 10,000 
yen per ton, if those costs are taken into account. It could be 
nearly seven times higher than the cost needed by foreign countries. 
METI said that in order to disseminate the CCS system, it is 
necessary to lower the cost to around 3,000 yen per ton. 
 
There is also concern that if a large amount of funds is injected in 
the CCS, funds to cover energy-conserving measures might be 
slashed. 
 
The advantage of the CCS is that in oil fields, where oil and 
natural gas reserves are decreasing, more oil could be obtained, by 
injecting CO2. The development of this technology is now under way. 
 
The US is one of the countries that are most enthusiastic about 
developing this technology. It has vast stretches of strata that can 
store CO2, such as oil fields, gas fields and coal seams. It also 
has networks of pipelines to transport CO2, allowing the realization 
of the CCS system at low costs. Some sources involved in the process 
of mapping out measures to arrest global warming said: "If the Kyoto 
Protocol acknowledges the portion of CO2 stored underground as 
amounts reduced and grants the carbon emissions trading right to the 
countries that have contained CO2 in such a way so that they can buy 
and gain or trade emission rights to offset reduction costs, the US 
might join the pact." 
 
SCHIEFFER