VZCZCXRO0274
PP RUEHAST RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHLN RUEHMA RUEHNAG
RUEHNH RUEHPB RUEHPOD RUEHTM RUEHTRO
DE RUEHKO #0683/01 0850736
ZNR UUUUU ZZH
P 260736Z MAR 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 1805
INFO RUEATRS/TREASURY DEPT WASHDC PRIORITY
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHFK/AMCONSUL FUKUOKA 3180
RUEHNAG/AMCONSUL NAGOYA 0916
RUEHNH/AMCONSUL NAHA 5520
RUEHOK/AMCONSUL OSAKA KOBE 6972
RUEHKSO/AMCONSUL SAPPORO 3720
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NSC WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEAEPA/HQ EPA WASHDC

UNCLAS SECTION 01 OF 02 TOKYO 000683 
 
SENSITIVE 
SIPDIS 
 
STATE FOR S/SECC, IO, EEB, EAP/J 
STATE ALSO FOR OES/EGC - BDEROSA-JOYNT, EFENDLEY 
DEPT PASS CEQ 
NSC FOR CCONNORS, JLOI 
USDOC FOR NOAA CLIMATE CHANGE OFFICE - STHURSTON 
DOT FOR LLAWSON, CMITTELHOLTZ 
EPA FOR SFULTON 
USDOE FOR S-3, RMARLAY, SRUEN 
FAA FOR CBURLESON 
PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR PGOV JA
SUBJECT: INFO ON JAPANESE GREEN INVESTMENTS IN STIMULUS PACKAGES 
 
REF:  STATE 26022 
TOKYO 596 
TOKYO 219 
06 TOKYO 2690 
 
TOKYO 00000683  001.2 OF 002 
 
 
¶1. (U) In response to the Department's request for information on 
green investments in Japan's stimulus packages (Ref A), Mission 
Tokyo provides the following information on the GOJ's budget and 
environmental legislation. 
 
--------------------------------------------- ---------- 
FY 09 Budget: Kyoto Protocol Target Achievement Package 
--------------------------------------------- ---------- 
 
¶2.  (U) Since FY 2006, the GOJ has allocated around 1 trillion yen 
($10 billion) annually in its budgets to help meet Japan's Kyoto 
Protocol target of reducing greenhouse gas (GHG) emissions by 6 
percent from 1990 levels by 2012 (Ref D).  The package covers a wide 
range of green investments from low-carbon research and development 
to increasing energy efficiency.  For FY 2009, a proposal totaling 
1.2 trillion yen ($12 billion) is currently under consideration in 
the Diet and is widely expected to pass soon. 
 
The breakdown of the proposed FY 09 Kyoto package follows: 
 
-- Renewable energy (solar, wind, hydro, biofuel, geothermal, etc.) 
114.5 billion yen ($1.1 billion); 
 
-- Energy efficiency (including conservation and demand-side 
management) 
67.1 billion yen ($671 million); 
 
-- Research and development in low-carbon technologies 
47.0 billion yen ($470 million); 
 
-- ImpQements to the power grid 
3.1 billion yen ($31 million); 
 
-- Low-carbon transportation, including related incentives for 
industry and consumers 
7.5 billion yen ($75 million); 
 
-- Mass transportation (general) 
28.2 billion yen ($282 million); 
 
-- Oil, gas and coal, including price subsidies 
10.0 billion yen ($100 million); 
 
-- Nuclear energy 
162.2 billion yen ($1.6 billion); 
 
-- Forestry (increasing carbon sink capacity) 
319.3 billion yen ($3.1 billion); 
 
-- Incentives to reduce the use of fossil fuels (i.e., incentives 
for green companies) 
724.6 billion yen ($7.2 billion); 
 
-- Green job creation and green worker training 
6.0 billion yen ($60 million); 
 
-- Miscellaneous greenhouse gas emissions projects 
1.2 trillion yen ($12 billion). 
 
(Note: because some categories overlap, accumulating each item does 
not equal the total budget allocation. End Note) 
 
TOKYO 00000683  002.2 OF 002 
 
 
 
-------------------------- 
FY 08 Supplementary Budget 
-------------------------- 
 
¶3.  (SBU) The Diet approved two supplementary budget packages for FY 
¶2008.  The first package, passed in October 2008, allocated a total 
of 147.5 billion yen ($1.4 billion) for environmental-related 
expenses, according to an informal internal Ministry of Finance 
(MOF) estimate provided to Post.  Major expenditures include: 
 
-- Promotion of a "low carbon society" 
(43.0 billion yen ($430 million); 
 
-- Subsidies for residential solar power units 
9 billion yen ($97.8 million); 
 
-- Financial support for farmers to offset fuel and food price 
hikes 
78.9 billion yen ($789 million); 
 
-- Financial support for fishers to offset fuel and food price hikes 
(which included a requirement to increase the energy efficiency of 
fishing vessels) 
60.0 million yen ($600 million); 
 
-- Energy efficiency measures 
8.2 billion yen ($82 million). 
 
¶4.  (SBU) A second supplementary budget, passed in January 2009, 
allocated 113.6 billion yen ($1.1 billion) to environmental-related 
expenses, according to MOF sources.  Major environmental/energy 
expenditures included: 
 
-- Subsidies to the Japan Self-Defense Forces and Coast Guard to 
offset fuel price hikes 
25.5 billion yen ($250 million) and 
 
-- purchasing energy efficient equipment for GOJ buildings 
7.4 billion yen ($74 million). 
 
--------------------------------------------- 
Policy Reforms to Spur New Private Investment 
--------------------------------------------- 
 
¶5.  (U) In addition to direct expenditures on environmental and 
energy projects, Japan has passed or is considering legislation 
aimed at spurring increased investment in, and increased consumer 
demand for, "green" technologies.  Recent examples include: 
 
-- A recent bill provides tax exemptions for hybrid, plug-in hybrid, 
and electric vehicles, amounting to about $1,200 per car; 
 
-- The Japan Electric Power Exchange introduced a "Green Power" 
trading scheme in November 2008 to enable wholesale buyers and 
sellers to specify the type of electricity generation they desire to 
purchase or sell from non-CO2 emitting sources; 
 
-- METI introduced a bill to the current legislative session calling 
for a feed-in-tariff (FIT)-like scheme to compel electric power 
companies to buy surplus solar photovoltaic (PV) power from 
residential generators (Ref B).