VZCZCXRO9349
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3448/01 3530850
ZNR UUUUU ZZH
R 180850Z DEC 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 9572
INFO RUCPDOC/USDOC WASHDC
RUEHFK/AMCONSUL FUKUOKA 1519
RUEHNAG/AMCONSUL NAGOYA 9480
RUEHNH/AMCONSUL NAHA 3876
RUEHOK/AMCONSUL OSAKA KOBE 5310
RUEHKSO/AMCONSUL SAPPORO 2085

UNCLAS SECTION 01 OF 03 TOKYO 003448 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/J 
 
E.O. 12958: N/A 
TAGS: ECON ETRD SENV EFIN EAGR PREL JA
SUBJECT: Japan Economic Scope for December 16, 2008 
 
SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 
 
¶1. (U) This cable contains the Japan Economic Scope for 
December 16, 2008 
 
Environment and Energy 
---------------------- 
 
¶2. (U) METI Unveils Sample Carbon Footprint Labels at Eco Fair 
 
The Ministry of Economy, Trade and Industry (METI) publicly unveiled 
samples of its proposed carbon footprint labels December 11 at the 
"Eco Products 2008" trade show in Tokyo.  The tenth annual show, was 
organized by the Nihon Keizai Shimbun newspaper (Nikkei) and the 
Japan Environmental Management Association for Industry (JEMAI) and 
drew an estimated over 170,000 consumers and representatives from 
green industries, government and environmental NGOs.  More 
information is on the Eco Products Fair web site. 
http://www.eco-pro.info/eco2008/english/index .html 
 
METI intends to launch a voluntary trial carbon footprint labeling 
program in early to mid 2009.  The program, based on the U.K. model, 
initially covers basic consumer goods. 
 
According to Shintaro Ishihara from METI's Distribution Policy 
Division, METI will use feedback from the Eco Products fair to 
develop appropriate guidelines.  METI is seeking competitive bids 
from private contractors to carry out the market experiment.  At the 
same time, it is recruiting companies to participate in the 
voluntary labeling program.  The carbon footprint labeling program 
has caused concern among U.S. companies that they may be 
disadvantaged in the Japanese market.  See TOKYO 2964 for further 
details. 
 
¶3. (U) Chinese Pollution Pushes Japan's Photochemical Smog to 
Unprecedented Levels 
 
Chinese pollution has helped raise Japan's photochemical smog to 
unprecedented levels, experts agreed at a recent symposium in Tokyo. 
 According to Teruyoshi Hayami, Ministry of Environment (MOE) 
Director, of the Air Environment Division, a record 28 prefectures 
published photochemical smog advisories in 2007.  These prefectures 
include Niigata and Ohita, which had never issued such advisories 
before. 
 
¶4. (U) Japan-India Conference Highlights Barriers to Energy 
Conservation in India 
 
A recent Japan-India conference, "Partnership between Japan and 
India Towards a Low-Carbon Economy - Business Opportunities in 
India: Energy Efficiency and Renewable Energy", in Yokohama revealed 
several potential areas for Japanese help in promoting energy 
conservation in India.  Dr. Rajendra Pachauri, Chair for the 
Intergovernmental Panel on Climate Change (IPCC), and a 2007 Nobel 
Peace Prize winner, opened the conference by praising the strong 
cooperation between Japan and India on energy technology. 
 
Seigou Mizunuma, Executive Managing Officer of Electric Power 
Development (J-POWER), stressed Japan's coal power generation 
efficiency is the world's highest.  If Japan's best practices were 
used in India, China and the U.S., the results would mean a cut of 
about 1.3 billion tons of CO2, a number equivalent to Japan's total 
annual CO2 emissions. 
 
However, there are still various barriers to promoting energy 
conservation in India, according to Takeshi Sekiyama, General 
Manager for the International Cooperation Department of the Energy 
Conservation Center, Japan, a Ministry of Economy, Trade and 
Industry (METI)-related organization.  Cheap energy prices 
subsidized by the Government of India (GOI), shortages of 
infrastructure, difficulties in searing financing  scarcity of 
experts and information, limits on foreign investment, and high 
tariffs all work against improvements in energy efficiency.  T.N. 
Thakur, Chairman and Managing Director of PTC India, a GOI-initiated 
public-private partnership focused on developing a power market, 
countered that rising electric bills would encourage greater 
conservation in the future. 
 
Insurance and Investments 
------------------------- 
 
¶5. (SBU) Insurance Policyholder Protection Fund Extended 
 
The Diet extended the life insurance Policyholder Protection 
 
TOKYO 00003448  002 OF 003 
 
 
Corporation (PPC) December 12 through a revision to the Insurance 
Business Law (IBL).  The PPC, which provides a safety net in case of 
life insurers' bankruptcies, consists of a pre-funded industry 
contribution and a "government fiscal commitment" which can be 
called upon if industry funding is insufficient.  The Diet's action 
authorized the system for an additional three years, until March 
2012, including the government's commitment. 
 
The PPC had been scheduled for a full review by the Financial 
Services Agency (FSA)advisory council in the run-up to its 
reauthorization, during which U.S. industry planned to advocate for 
changing the PPC to a post-funded system.  However, the FSA cut 
short the normal deliberative process and pushed a straight 
extension of the current system through for Diet consideration. 
Financial Services Agency officials shared that the decision to 
short-cut the deliberative process came from a political directive, 
as ruling LDP politicians reacted to policyholder unease over the 
failure of a small Japanese life insurer and global financial 
turmoil. 
 
Japan's Foreign Relations 
------------------------- 
 
¶6. (U) Japan's Statement in the Doha Financing for Development 
Conference 
 
At the Doha conference reaffirming the Monterrey Consensus, Vice 
Foreign Minister Minorikawa emphasized the need to carry out all 
existing commitments.  Japan will aggressively support developing 
countries which may be seriously affected by the financial crisis. 
Japan International Cooperation Agency (JICA) also participated in 
discussion about foreign direct investments and private fund flows. 
JICA emphasized the important role the Official Development 
Assistance (ODA) plays to encourage more private funds for 
development projects in the context of global financial uncertainty, 
which has affected the availability of private fund flows. 
 
¶7. (U) GOJ Stops Yen Loans to Vietnam 
 
Unlike past years, Japan made no pledge during the recent 
Consultative Group meeting held in Vietnam.  The GOJ stopped 
providing any new loans to Vietnam after a Japanese ODA consultant 
firm was indicted over the bribery case involving Vietnamese 
government officials,.  Ministry of Foreign Affairs official said 
Japan will suspend its yen loans until the Vietnamese government 
works out a recurrence prevention plan and punishes officeholders 
implicated in teh scandal.  Japan had been Vietnam's largest donor. 
Japan annually provided about $600 million of ODA to Vietnam in the 
past few years, about 75 percent of which in the form of loans. 
 
¶8. (U) GOJ to Provide Loan Assistance To Egypt 
 
The GOJ is providing a loan of 23.9 billion yen (about $260 million) 
to Egypt for three loan projects.  The note was exchanged between 
Japanese Ambassador Ishikawa and Egyptian Minister of International 
Cooperation, Aboulnaga on December 4.  The three loan projects 
include: support for small enterprises, construction of a solar and 
gas integrated power plant, and electricity supply system 
improvement. 
 
Transportation 
-------------- 
 
¶9. (U) Toyota's Mississippi Plant Another Victim Of Economic 
Downturn? 
 
Plummeting car sales in the U.S. have convinced Toyota, the world's 
biggest automaker, to postpone plans to produce the Prius hybrid car 
in Mississippi. 
 
NHK reported December 16 that Toyota has decided to postpone 
indefinitely the construction of its plant in Mississippi.  However, 
a Toyota executive told Consulate Nagoya construction of the plant 
will be completed by the spring of 2009.  About 90 percent of the 
construction has already been completed, but the installation of 
equipment and machinery will have to wait until the U.S. auto market 
improves.  Toyota saw its car sales in the U.S. drop 34 percent in 
November compared to the same month last year.  The popular Prius 
was hit even harder, with sales of this environmentally friendly 
vehicle dropping 48 percent. 
 
Toyota originally planned to produce Highlander SUVs at its 
Mississippi plant, its eighth plant in North America, but changed 
plans in July make fuel-efficient Prius models there instead. 
 
TOKYO 00003448  003 OF 003 
 
 
 
SCHIEFFER