Energy Economics and Society Research Institute LLC Changes caused by the energy crisis within the meaning of “sustainable”: Continuing to have an interest in how it changes
We interviewed Mr. Go Matsuo, a speaker at the Hiroshima Business Forum for World Peace 2022 and Managing Director of the Institute for Energy Economics and Society, LLC.
1 Please describe your company’s business.
We started our operations as a think tank in 2021, specializing in energy. We provide services to the energy industry organizations, such as electric power companies, renewable energy generators, and oil companies, and domestic and foreign financial institutions. We mainly conduct research on market systems for electricity and fuels in Japan and abroad, and provide business execution support. Recently, we have also been involved in research on market systems for investments related to Green Transformation (GX) (Note 1).
2 Initiatives related to your remarks made in the session
In this session, you commented that the importance of achieving S+3E (economic efficiency, energy security, and environmental friendliness, based on the premise of safety) has been increasing more than ever in all regions of the world. Regarding this comment, please tell us what kinds of efforts are necessary at (1) the government level, (2) the company level, and (3) the individual level.
<① Government level >
I understand that the current energy crisis has been significantly changing the meaning of the word “sustainable.” Up until now, the focus has been on the environment, especially the efforts to reduce greenhouse gas emissions as a countermeasure against global warming. After having gone through the recent energy crisis, elements other than the environment, such as poverty alleviation, have been gaining more importance among the factors related to the word “sustainable.” I believe that it is necessary to explore sustainability from all angles now, including social and economic perspectives and international relations.
As a symbolic example, we can point to the international relations after COP26 (Note 2). With the United Kingdom holding the presidency of COP26, phasing out coal was a major focus. In addition to accelerating the exit from coal-fired power generation, coal-producing countries such as South Africa and Colombia were pressured to transition their economies away from a dependence on coal exports. After the recent energy crisis, however, coal imports have reached a record high in Europe. Moreover, coal-producing countries are being asked by Europe to further expand their coal exports. Some things cannot be helped due to the crisis, but it can also be pointed out that Europe, which has sought to phase out coal, is receiving help from coal-producing countries. As we enter the carbon neutral era, how can we proceed with a smooth transition in a sustainable manner? I understand that this is not just a problem for Japan, but needs to be discussed internationally.
<② Company level >
Companies are conspicuous in their efforts to reduce emissions. Considering the impact on export industries, Japanese companies in particular believe that it is vital to continue to make efforts to seek zero-emission electricity and renewable energies, and reduce emissions. Meanwhile, companies need to recognize that the meaning of the word “sustainable” is changing throughout society. Internationally, there is a possibility that factors other than the environment will be emphasized, and I think it is necessary for companies to explore management policies while closely watching society and the economy.
<③ Individual level >
It is a very big story, so I don’t think there is much that we can do on an individual level, but I think we can continue to take an interest and show our solidarity. While the implementation of effective anti-global warming measures are becoming an urgent issue, we need to again raise our environmental awareness. Furthermore, we must look at sustainability from various perspectives, such as poverty and other social issues. In other words, I believe that we need to continue to have an interest in a “sustainable society.”
3 Please tell us some actual examples of such efforts taken globally, if there are any.
I’m afraid that my answer may not fit your question, but I feel that the upcoming COP28 could be a major watershed.
COP28 will be hosted in the UAE (United Arab Emirates), and will be chaired by the CEO of ADNOC (Abu Dhabi National Oil Company) and Minister of Energy and Infrastructure. His argument is that we will need oil and gas for the foreseeable future.
We also need to recognize once again that a completely decarbonized economic zone has never been achieved in a modern nation after the industrial revolution. I feel that COP28 must address the difficult problem of dealing with the ideals and reality of decarbonization at the same time.
I do not deny the necessity of decarbonization. Furthermore, I believe that efforts to reduce greenhouse gas emissions are vital to help achieve decarbonization. However, we must be fully aware of the hurdles to achieving our ideals, and we must continue our efforts toward technological innovation and a change in consciousness.
I think that it is becoming very important to build up the environmentally friendly efforts that we are able to do, one by one.
4 Expectations for Hiroshima Prefecture
Do you have any expectations for Hiroshima Prefecture’s future activities toward the realization of a truly peaceful and sustainable international community?
I would like to express my expectations for Hiroshima Prefecture from the perspective of energy. During the Russian military invasion of Ukraine, a range of energy infrastructure in Ukraine has been destroyed by attacks with missiles and other weapons. To our deepest regret, nuclear power plants such as Zaporizhzhia and South Ukraine have also been facing attacks by the Russian military. These were the world’s first military attacks on an operating nuclear facility. There are also reports that Russian energy experts are cooperating with the military in attacking energy infrastructure. It has also been pointed out that Russia is using energy as a weapon, such as by suspending natural gas supplies to Europe.
I strongly feel that knowledge about energy and the energy industry should be utilized for its stable supply and social and economic peace. In reality, energy has been tossed about in the power struggles between nations, such as the ABCD siege (Note 3) just before the Pacific War and the “moral embargo” (Note 4) during the Fourth Middle East War. Energy is, however, still one of the most necessary elements in a civilized society. It can be a cause of war, but I believe that it can also help achieve peace depending on how it is used. I strongly feel that it is essential for Hiroshima, a city of peace that experienced an atomic bombing, to convey the basic spirit of building a new international order, including energy.
(Note 1) GX (Green Transformation): Promoting transformation of the economic and social system through efforts to achieve a decarbonized society.
(Note 2) COP26: The 26th Conference of the Parties to the Framework Convention on Climate Change held in Glasgow, Scotland in 2021.
(Note 3) ABCD siege network: Economic sanctions imposed on Japan since the late 1930s by four countries: the United States, the United Kingdom, China, and the Netherlands.
(Note 4) Moral embargo: An export ban for moral reasons. In the Fourth Middle East War, the Organization of Arab Petroleum Exporting Countries (OAPEC) including Saudi Arabia suspended or restricted the sale of Arab crude oil to countries supporting Israel.
Mr. Go Matsuo
Energy Economics and Society Research Institute LLC
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