Today, wind power and solar power have become the main stream of energy sources; from major electric power utilities to mega capital investors, many have entered the renewable energy sector. Mass-capital investment projects are also increasingly and rapidly expanding globally. It is not rare to find cases of such mega projects facing confrontations with local communities. Since the 1990s, the privatization of the energy sector has been significant, with Nordic countries and Germany seeing the advancement of privatization among community-operated energy utilities. Recently, however, there has been a movement to re-review this trend in order to revive public utilities. The recent reversal of the privatization trend means that the conventional way of decision-making with the participation of local governments and a few corporations is no longer appropriate, and there is a rise in the common understanding that the decision-making and governance method of local communities must be open and horizontally distributed. The rapid progress of ICT in recent years has raised awareness of risks in a governance system dominated by private companies, while raising technical capabilities to realize new and open decision-making and governance in local communities.
- Green new deal
- New global trends (electrification, transportation, sharing economy)
- Public commons
The explosive global spread of the COVID-19 pandemic has expanded even further. In Japan, a state of emergency was declared in April 2020, in which people and businesses were requested to self-quarantine to the extent that was close to the lock-downs in other countries. Despite the declaration and its lifting being repeated again and again to date, it is still uncertain and unpredictable how the pandemic and social conditions will unfold.
The COVID-19 crisis inevitably reminds us of another crisis that happened immediately after the Fukushima No. 1 Nuclear Plant incident a decade ago. At that time, ordinary daily routine or “normal days” were suddenly shattered and “out-of-ordinary” became the new normal. For several years after the Fukushima incident, all fixed order and customs, as well as conventional ideas of Japanese society, underwent drastic changes, like seeing the world upside down. After the “3.11 quake, tsunami, and Fukushima,” an entirely different reality, society, and politics are the common experience.
Now, after the global experience of the COVID-19 pandemic, or post-COVID-19, what kind of society do we need to reconstruct? To develop a plausible and acceptable scheme for a post-COVID-19 society, it would be meaningful to observe and consider the latest trend of the Green New Deal.
2 A Green New Deal Arising in Europe and USA
In the USA, Democratic congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey drafted a “Green New Deal” resolution in November 2018. On February 7, 2019, US Congress announced the related resolution that aimed for zero carbon emissions within 10 years, and 100% renewable energy. Even during the currently ongoing US presidential election, the Green New Deal has become a focal issue.
In Europe, under a new regime of the EU launched in December 2019 with Ursula von der Leyen as its chair, the “European Green Deal” aiming for carbon neutrality by 2050 has been set as the first priority on the agenda.
The background to this trend is the sense of climate change crisis. The EU’s opinion polls taken in the fall of 2019 indicated that concerns about climate change have grown year by year, becoming the second most important issue following the issue of immigration, surpassing economic and terrorism concerns (with concerns about the inflow of immigrants diminishing). In the US, about 90% of Democrat supporters expressed concerns about climate change (while less than half of Republican supporters worry about climate change, indicating a division of opinion). The symbol of the sense of climate crisis is Greta Thunberg of Sweden who started demonstrating alone holding a “school strike for climate” signboard in August 2018 at the age of 15. Later, those mainly young people inspired by, and supporting, her action launched the “Fridays for Future” movement, resulting in a social broad-ranging phenomenon with several million people participating in worldwide demonstrations at the same time.
When deciding on the postponement of the Glasgow Conference of Parties for the UN Framework Convention on Climate Change (COP26) to be held by the end of 2020, Patricia Espinosa, UNFCCC’s executive secretary, said in the UN News: “COVID-19 is the most immediate threat to today’s humans, but we must remember that climate change is still the biggest threat humans have faced for a long time”.
In 2018, the atmospheric concentration of carbon dioxide (CO2), the main factor in climate change, recorded 415 ppm (at Mauna Loa Observatory in Hawaii), which was the highest figure in its history. The World Meteorological Organization (WMO) reported that the world’s average temperature for the last 5 years was the highest and the last year was the second hottest year, due to greenhouse gas effects. The pictures of many kangaroos and koalas suffering burns from wildfires spreading to an unprecedented extent in the entire Australian continent caused heartache worldwide. In Japan, more than 80 percent of citizens have felt the effects of climate change, especially because of several strong typhoons hitting the metropolitan area in recent years.
Nevertheless, anticipation of a Green New Deal is rising in Europe and the USA, not only because of the strong sense of climate change crisis. Here, I reflect on the changes in the last 10 years that have been at the heart of such anticipation.
3 Brief History of the Green New Deal
The origin of the Green New Deal was the UK group’s report announced on July 20, 2008, which recommended countermeasures to respond to the financial crisis (Lehman shock) ongoing at that time along with a rapid rise in oil prices, while simultaneously implementing measures for climate change. Needless to say, the phrase “Green New Deal” was taken from the New Deal policies launched by the late US president Franklin Roosevelt to overcome the Great Depression after the Great Wall Street Crash.
Right after the UK group’s announcement, the Green New Deal brought a kind of “boom” in a world that sustained damage from the Lehman shock, with the United Nations Environmental Plan (UNEP) launching a “global green new deal,” followed by the newly elected US president Barack Obama, and the leaders of other countries, such as China and later Japan.
The boom of the Green New Deal at that time, however, soon disappeared without manifesting any real effects, as the financial system stabilized and oil prices decreased. This was because it was too early to have a boom. This reminds us of the difference in the outcome between the Copenhagen Climate Summit (COP15) in 2009 and the Paris Climate Summit (COP21) in 2015.
Right before the opening of COP15, the US presidency transferred from the George W. Bush administration with close connections to the fossil fuel industry to the Barack Obama administration that had high motivation to adopt climate change measures. In Japan, also, there was the change of power from the Liberal Democratic Party administration with close associations with the Keidanren to the Yukio Hatoyama administration of the (then) Democratic Party with greater eagerness to adopt climate change measures. With the political power changes in two major countries most reluctant in climate change measures, there were high expectations of COP15 hosted by Denmark, an environmentally developed country, to result in an agreement for the next framework to succeed the Kyoto Protocol. The result was a betrayal of these expectations.
COP21, on the other hand, succeeded in adopting the epoch-making Paris Agreement, despite being held under the lame-duck Obama administration in the US and climate change-passive Shinzo Abe’s LDP administration in Japan. The main factor of its success was the reality of renewable energy presenting a realistic solution. In 2009, the year of COP15, renewable energy was only one of many options available as climate change and energy measures, and the climate change regime fell into confrontation of “environment versus economy.” In 2015, when COP21 was held later, the structure of the climate regime had been transformed to “environment plus economy plus energy” due to the dissemination of the viewpoint that more realistic climate change measures would be the shift to renewable energy. One proof of such trend would be the start of the “RE100” movement in 2014, which many global corporations have been joining.
4 Great Transformation in the Last Decade
Looking back on the past decade, it is evident that we have been in the middle of a great transformation. Here, three major sectors directly related to the Green New Deal, i.e., electricity and energy, transportation, and shared economy are overviewed.
4.1 Electricity and Energy Sector
In the electric power sector, the most notable trends include the dissemination and expansion of wind power and solar power as well as their cost reduction. For 10 years since 2010, the total wind power generation in the world quadrupled from 198 GW (giga watts = 1 million watts) to 743 GW, while its cost decreased by 70% (Fig. 1). Solar power generation increased almost 20 times from 40 GW to 760 GW, with its cost decreasing by 90%. Both wind power and solar power costs less than coal thermal power in many countries and regions in the world, and will continue to decrease in the future. In addition to the accumulation of cost reduction efforts exerted in the past, the most influential factor may be the rapid dissemination of the feed-in-tariff (FiT) system in many countries in the world including China. Introduced by Germany in 2000, FiT is a measure to promote marketization of renewable energies by guaranteeing the purchase price of power generation. FiT has brought market expansion, leading to a beneficial spiral of technology learnings, performance improvement, and costs reduction.
The “mainstream” experts of governments and corporations used to consider fossil fuels and nuclear energy to be the core of the energy mix, and regarded solar power and wind power as clean but high-cost impractical energy sources 10 years ago. Now, many of these mainstream experts have realized that these energies are clean, domestically available, inexhaustible, and least-cost energy sources.
Now, even the collapse of fossil fuel industries has been forecast. In September 2019, one financial expert think-tank in the UK reported that “the fossil fuel market of the several-hundred-trillion-yen scale will collapse within ten years or so.” The report also indicated that “continuous cost reduction of solar, wind, and batteries will enable them to cost less than existing fossil fuel power by the mid-2030s, making most of these fossil fuel power plants “‘stranded assets,’” i.e., having unrecoverable expenses (Fig. 2). Moreover, from the perspective of environmental social governance (ESG), the moves toward divestment from fossil fuels and nuclear power generation are expanding its scope, indicating the end of the fossil fuel era.
Furthermore, the industrial structures themselves are changing. ABB sold its divisions of nuclear and thermal power generations as early as in 1999, while Siemens sold its nuclear power division in 2011, and spun off its thermal power division as a listed company in September of 2019. GE and Hitachi still maintain their joint nuclear power division, although they have shifted their core businesses to wind and solar power. To sustain their survival, Germany’s energy giants, E.ON and RWE, established a new joint corporation in 2018 with renewables as core businesses, while promoting further industrial reorganization through M&A.
As the cost reductions of solar and wind power generation are reaching an astounding level, matters unforeseeable 10 years ago are transpiring. It is called “sector coupling,” which enables various sectors such as heating, transportation, industry, and agriculture to take advantage of the benefits created by “cheaper electric power” generated by solar and wind. The typical aspect of such sector coupling is the use of electric power from electric cars. In Denmark, which is the most developed country in regional heat supply, any excess electricity generated from wind power stations is used for “thermal storage” in the form of water heating, while developing a concrete plan to produce “wind gas (methane gas)” via hydrogen to replace fossil-origin natural gas.
4.2 Transportation Sector
The annual sales of electric vehicles (EV) have increased a thousand-fold from approximately two thousand vehicles in 2008 to two million in 2018, which, in turn, decreased the costs of lithium ion batteries to one-fourth (Fig. 3). The performance and costs reduction of these three power sector technologies—solar, wind, and batteries—will be likely to continue improving through technology learning processes, so that these technologies taking a central role in the great transformation of the electric power and energy sectors in the future is the most ensured vision.
The transportation sector will not only move toward electrification. In 2017, A Stanford University report sent a shock wave to the world by reporting that, within the next 10 years, no gasoline engine cars and diesel engine cars will be sold in the world. This report predicted that the world would advance toward “mobility as a service (MaaS),” no longer requiring the ownership of automobiles, due to the advancement of self-driving vehicles and dissemination of ride-share services, in addition to the electrification of automobiles. Ride-share is a “mobility service” using vehicles during spare time, such as those represented by Uber and Lyft.
By combining electrification, self-driving vehicles, and ride-sharing, the mobility cost decrease by one digit, when compared with the case of fossil-fueled car ownership. Thus, people will be motivated to adopt MaaS. When assuming the shift toward MaaS, today’s vehicle operation ratio of several percent on average will increase by one digit. There will be no more traffic congestion in cities, and no need of urban parking lots.
The report also indicated that there would be a possibility of a major collapse of the big automobile industry, in which each major automobile company has been practicing the “sell out” of several to ten million cars per year. Such major collapse of an industry is also possible in the oil industry, in which automobile fuels have had the share of 30% in crude oil demand. These trends would likely require each government to make fundamental reviews of their policies, including tax revenues, urban planning, etc.
4.3 Share Economy Sector
Continuing to show significant advancements are the information and communication technologies (ICT) sector including the internet, artificial intelligence (AI), internet of things (IoT), big data, etc. Since 2007, when Apple announced their milestone innovation of iPhone (so-called smartphone), not only the ways of industry and economy but also our life style has been transformed in the past 10 years, including the worldwide spread of social media and YouTube, online map applications, and other applications.
The advancements in these fields have improved the efficiency of production and distribution of assets and services to an extreme extent, while drastically reducing the marginal costs. Thus, a new phenomenon called the “sharing economy” has arisen, in which not only assets and services are shared, such as the aforementioned Uber as well as Airbnb to utilize the “unoccupied time” of homes, but also information and knowledge, such as the case of Wikipedia, college lectures, and know-how, such as cooking methods, for free.
Solar and wind power generation also have zero marginal costs. The Sun will not present a bill for the use of its energy. Selling of power generated can bring revenues. We find gradual development and dissemination of concepts such as demand response (DR) and virtual power plants (VPP), which use ICT to aggregate the distributed energy sources of solar power and batteries to create one virtual power station.
The sharing of services, knowledge, know-how, etc. among tangible and nontangible assets and services with no marginal costs will become essential factors of the Green New Deal, which is an open, resource-saving type with a lower environmental burden. Moreover, such sharing economy is to bring a fundamental change to the way of conventional capitalism.
4.4 Major Progress in Other Related Sectors
In addition to the above, I briefly discuss other major progress related to the Green New Deal: the resurrection of the regional heat supply system in the thermal heat supply sector including heating systems and water heaters. Denmark has led the world in the theories and practices of this sector by systematically developing the concept of “fourth-generation district heating” in 2014 and becoming the central force in the EU’s research group to develop Heat Road Map Europe (starting from 2016), which aims for a 80% carbon reduction in the air-conditioning sector by 2050. This fourth-generation district heating is a regional heat supply system that provides higher thermal efficiency and lower carbon emissions, by combining renewable energy, such as solar heat and wind power generation, and the use of industrial waste heat.
Another important factor is the improvement of demand-side efficiency. In the US, total energy efficiency improved five-fold from 2.5% in 1900 to 14% in 2010. Still, 86% of energy was lost. IoT would be able to improve this demand-side efficiency to 60%.
The residential sector is an important element in demand-side efficiency improvement. In the EU, the Energy Performance of Buildings Directive (EPBD) has been implemented, which requires all new houses and buildings to become “zero-energy buildings (ZEB)” by 2021. In the US, the state of California has introduced a “zero net energy (ZNE)” regulation, which includes the obligation to install solar panels by 2020, with the goal of achieving zero net energy in 50% of existing residential buildings by 2030. In particular, the retrofitting of existing residential buildings to improve heat insulation and air-tightness would not only improve the residential environment and overall efficiency of a society, but also attract a significant amount of investment as well as employment.
5 Power to the People
“Power to the People” is a song John Lennon released in March 1971. In that age of “hippy culture” (political culture of resistance) symbolized by the Beatles, an anti-nuclear movement as well as an anti-war and world peace movement arose globally. Natural energy, such as wind power generation and solar power generation, were the dream and symbol of the anti-nuclear movement: the “energy of hippies.”
Today, however, wind power and solar power have become the main stream of energy sources. The major electric power utilities and mega capital investors are participating in the renewable energy sector, Moreover, mass-capital investment projects, such as gigantic off-shore wind power generation and mega solar projects, are advancing globally at a rapid pace. Disputes with local communities about these mega projects are not uncommon.
As time passes another round, “Power to the People” has regained its importance. The English word “power” has two meanings: authority and electricity (energy). Renewable energy is fundamentally a regional distribution-type energy, and has a long history of development, including the bottom-up development efforts by the Danish Wind Industry Association and others since the 1970s. For this, it has been essential to have a robust governance system in the local community, to manage local resources (such as land, landscape, and natural environment), and to build consensus in the use of local resources. In Denmark, local communities still have an obligation to bear at least 15% of investments for wind power generation. In view of these ongoing trends, the World Wind Energy Association drafted the “three principles of community power” (local ownership, local consensus building, and the return of benefits to local communities) in 2010, as social policy recommendation.
Since the 1990s, there have been a general trend of deregulation, privatization, and marketization. In particular, the privatization of energy sector has been significant, with Nordic countries and Germany seeing the advancement of privatization among community-operated energy utilities. Recently, however, there has been the movement to re-review such trend so as “to revive public utilities.” The forerunner of this movement has been the Schönau Electric Power Corporation in the southern part of Germany, which was established in 1997 by the citizens purchasing the power transmission network. Later, 287 out of 900 local electric power companies in Germany were “to revive the status of public utilities,” including the Hamburg Electric Power Company (which regained public utility status in 2014).
The recent reversal of the privatization trend means that conventional decision-making processed with the participation local governments and a few corporations is no longer suitable, and the common understanding that the decision-making and governance method of local communities must be open and distributed horizontally is increasing. The rapid progress of ICT in recent years has raised awareness of risks in a governance system dominated by private companies, while raising technical capabilities to realize new and open decision-making and governance in local communities.
Electric power projects, in particular, used to be executed by dominantly local stakeholders centered around the power grid. Renewable energy projects, on the other hand, are distribution types not only in their structure but also in their ownership. With such renewable energy projects spreading rapidly, what is required now is how to develop and maintain clarity, fairness, and transparency in the ownership and governance of power transmission and distribution networks, as well as the applicable regulations and rules, and their operation.
6 Directing Toward the Green New Deal in an “After COVID-19” World
Returning to the discussion of the COVID-19 pandemic at the beginning of this paper, this pandemic is one occurring simultaneously all over the world, and unwittingly exposing the inadequacy of responses taken by Japanese political and administrative systems, which can be described as malfunctioning. COVID-19 is highly contagious, with the number of cases doubling within several days, and thus spreading explosively in a very short period.
To counteract such rapid spread of infections, various countries, including Korea, Taiwan, and Germany, took immediate measures to develop appropriate testing and medical treatment systems, while providing adequate economic aid to citizens directly. Contrarily, Japanese governmental measures were clearly too late and too small. The Japanese regime fell into malfunction due to bureaucratic inertia and excessive formalism, as well as political distortion and inaction.
Despite the difference in time scale, this may be fundamentally connected to the states of Japanese politics, administration, and social system that failed to respond appropriately to the rapid dissemination of renewable energy and the change of their roles in the past 10 years. We must remember how Japanese politics and administration could not make use of the latest knowledge and technologies about COVID-19 unfolding day by day, in addition to considerable rigidity of existing organizational structures. Moreover, we need to remember the current political posture of the Japanese government that do not seem to make efforts to protect the lives and health of its nationals, let alone their livelihoods. These politics and administration that cannot address the immediate crisis will not be able to respond properly to the long-term crisis of climate change, nor to nuclear accident, which has happened before, and its post treatment.
A “post-COVID-19” society to be reached after passing through the current pandemic will be one to be rebuilt from largely devastated livelihoods and economies, unfortunately. To rebuild and revitalize human society, the Green New Deal can play an important role. In the US, like-minded experts in economics and environment publicized an open letter addressed to the US Congress at the end of March 2020, titled “Green Stimulus to Rebuild our Economy Recovery” after COVID-19, in which they recommended immediate measures for economic recovery from the “great depression” caused by the pandemic, for the imminent threat of climate crisis, and for extreme economic disparity.
The Green New Deal requires fundamental updating of social infrastructures, and the reviewing of ownership, ruling, and the way of governance. In his article, Tanaka (2020) points out the adverse effects of Japanese administration’s organizational logic adopting partial optimization, and the LDP and business associations supporting such logic. This logic could be the essence of the current Japanese political and administrative failure in responding to the COVID-19 crisis, which we are facing today. Another example of such failure could be another Green New Deal that became a simple subsidy program of the Environmental Ministry. Conventional energy policies of Japan have been developed mostly through the processes of finding partial optimization and balancing of benefits and losses among stakeholders, bringing significant adverse effects.
In the future, it is necessary to rebuild and redevelop policies and decision-making processes that can overcome the logic of partial optimization for various stakeholders, the vertical divisions of ministries and agencies, and bureaucratic inertia, in order to find “total optimization” with the goal of realizing “people’s happiness.”
The Green New Deal, which has been proposed in alignment with a great energy transformation in the history of civilization, requires the utilization of distributional-type technologies as an axis, and a deepened understanding of democracy that enables more open, horizontal, and participating ruling.
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Iida, T. (2022). How to Overcome the Combination of Crises?. In: Asuka, J., Jin, D. (eds) Energy Transition and Energy Democracy in East Asia. Springer, Singapore. https://doi.org/10.1007/978-981-19-0280-2_2
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