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HOME  > Past issues  > 2018 December 19 - 2019 January 8  > Japan is running last in disinvestment from coal-fired power
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2018 December 19 - 2019 January 8 [SOCIAL ISSUES]

Japan is running last in disinvestment from coal-fired power

December 20, 2018
In the UN climate meeting held this month, Japan made no visible contribution to discussions on global efforts to combat climate change, and it was criticized as being the world’s biggest investor in the carbon-intensive coal-fired thermal power industry.

At the venue of the 24th Conference of the Parties to the UN Framework Convention on Climate Change on December 5, environmental NGOs published the names of banks that provide a large amount of funds to projects to construct coal-fired power plants. The top lender was Japan’s Mizuho Financial Group which invested 12.8 billion dollars in high-emission coal power plants. The second and fourth largest investors were also Japanese banks. These three banks combined made up 30% of investments and loans in coal-fired thermal power projects worldwide.

Even a high-efficiency coal-fired power plant emits two times more carbon dioxide than an LNG-fired plant. The Paris Agreement seeks to reduce the world’s total CO2 emissions to zero in the late 21st Century. More and more investors worldwide came to think that loans to coal-fired power projects can become irrecoverable in near future because such highly-polluting power plants will most likely be shutdown due to the tightening of environment regulations.

Under this situation, around 1,000 institutional investors, such as insurance companies, which manage 900 trillion yen in assets in total, have decided to withdraw money from fossil fuel investments. From 2019, France’s pension fund will stop lending money to companies which earn more than 10% of their profits from coal-related businesses.

In stark contrast, as mentioned earlier, Japan’s major banks are pouring a huge amount of money into coal-fired power projects. In addition, Japan’s Government Pension Investment Fund provided 7.3 billion dollars to 41 coal-fired power projects. Marubeni, Japan’s leading trading company which has coal-fired power plants with a total power output of three million kilowatts, this year announced that it will stop investing in projects building new coal-fired plants, but it will continue with the ongoing projects in Vietnam and Indonesia.

Japan’s stance promoting coal-fired power represents the Abe government’s energy policies. The government in 2013 in its Japan Revitalization Strategy expressed its intent to make full use of highly efficient thermal power plants, including coal-fired ones, thus encouraging private investment in this field. The government designates the export of coal-fired power technology as a key measure in PM Abe’s economic policies.

The Abe government should change its outdated stance and work to catch up with the ongoing global trend of moving to renewables.
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