Ratification of Kyoto Protocol May Boost Competitiveness
August 2, 2002

The 1997 Kyoto Protocol, which aims to combat global warming by requiring industrialized nations to reduce their emissions of carbon dioxide and other greenhouse gasses, was ratified by the Japanese Diet in June, and the government and private sector are now working hard to implement anti-global-warming measures, such as energy saving. At the same time, moves by industry to develop related technologies appear likely to give birth to new principles of competition and may lead to a new phase of economic growth.

Right now automakers are going to great lengths to increase the number of hybrid cars on the road and to make fuel-cell vehicles more practical. Electronics makers are endeavoring to reduce the amount of electricity used by home appliances on stanby. Utilities companies, meanwhile, are developing more fuel-efficient heaters, and the materials industry is striving to reuse waste products. It is hoped that the efforts of companies in all these different industries will lead to a revolution in environmental technology and serve as an opportunity to revitalize the Japanese economy.

Competition to Develop Hybrid, Fuel-Cell Cars
The Kyoto Protocol was adopted in December 1997 in Kyoto at the third session of the Conference of the Parties to the U.N. Framework Convention on Climate Change (COP3). The protocol stipulates that developed nations will reduce their emissions of carbon dioxide and five other greenhouse gasses to more than 5% below 1990 levels by 2008-12, and it establishes numerical targets (6% for Japan, 7% for the United States, and 8% for the European Union) with legal force behind them.

Industry, meanwhile, is already working to develop new technologies, and many hope that strengthening measures to combat global warming can be tied into improved competitiveness. Because the amount of carbon dioxide emitted by cars when they burn gasoline is growing, automakers are making strenuous efforts to improve fuel efficiency. Hybrid cars achieve high fuel efficiency while continuing to use a conventional engine along with an electric motor, so hopes are growing that hybrid technology may provide the quickest method of raising fuel efficiency. Toyota Motor Corp. was the first company to make them commercially available, and Honda Motor Co. soon followed suit. Other makers are also feverishly laboring to develop their own hybrid models, and competition concerning which model of hybrid technology will become widespread looks set to intensify.

Further down the road, fuel-cell vehicles will likely play a large role in reducing greenhouse gases. Fuel cells create electricity by combining hydrogen with oxygen taken from the air outside, the reverse of the scientific process of splitting water into its separate components using electricity. Fuel cells do not emit carbon dioxide or such harmful gasses as nitrogen oxide and sulfuric oxide, so it is hoped that they will enable the development of a new generation of environment-friendly cars. Toyota plans to go ahead and release fuel-cell vehicles commercially at the end of 2002 - one year ahead of its original schedule. Although only 20 vehicles will be made available to the public, their sale will be groundbreaking in that they will be the first fuel-cell vehicles put on the market anywhere in the world. Both foreign and domestic makers are working to develop their own fuel-cell vehicles, and competition is building to see which company will take the lead in the development of this new technology.

Spurring Innovation
Competition is also heating up among appliance makers as they strive to develop new technologies that will help meet the targets established by the Kyoto Protocol. The focus of much of their attention is standby electricity - the power consumed by electric appliances when they are not in use. For example, a television will require a small amount of electricity while awaiting a command from its remote control, even when it is switched off. Standby electricity accounts for some 6.6% of all the electricity used by households annually. Matsushita Electric Industrial Co. has developed an electronic component that is able to determine that an appliance is no longer being used once the electric current drops below a certain level; it can then switch the appliance into an energy-saving mode. Matsushita plans to begin manufacturing about 8 million of these components every month beginning this fall. Other makers are taking different approaches, such as installing a separate component in machines that draws less power while in standby mode than the main power supply otherwise would.

Electricity and gas companies have long been rivals in the area of household energy, but this competition has mainly revolved around price. Now that taking measures against global warming has become an issue, improving energy efficiency is becoming a hot topic. An electric company developed and released a hot-water heater that can produce heat equivalent to more than the amount of energy needed to operate it by drawing in heat from carbon dioxide in the surrounding air. Competition is now intensifying, and the gas industry has responded by releasing new models that are 10% more energy efficient than its previous hot-water heaters.

The materials industry, which consumes a great deal of energy in the process of producing things like steel and cement, has little room to further reduce its emissions of carbon dioxide, so many have hopes that it can be transformed into a recycling industry that is indispensable for a sustainable society. The steel industry has made plans to reduce its energy consumption 1.5% by 2010 by using plastic waste as a blast-furnace reducing agent. Waste products and byproducts from places like steel blast furnaces and thermal power plants, such as slag and coal ash, already comprise 20% of the material used in the formation of cement, and other waste products like old tires and plastic account for 4% of fuel involved in the process.

The Kyoto Protocol is speeding the arrival of an age in which successfully combating global warming by developing new technologies is the key for companies to become market leaders.

Copyright (c) 2002 Japan Information Network. Edited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.
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