Redesigning of the Japanese Economy: Beyond the Earthquake Disaster

Looking at the Issue of Abandoning Nuclear Energy (30/JAN/12) Energy Saving and Renewable Energy Development Less Costly than Sticking with Nuclear Energy   --Nuclear Generation Could Cost Twice Government Estimates In our 38th Medium Term Forecast for the Japanese Economy released in early December , we considered and compared the cost of cleaning up the accident at the Fukushima Daiichi nuclear power station and continuing with nuclear power, against the cost of abandoning nuclear power by FY2050 (April, 2050-March, 2051), relying on solar and wind power to the extent that power transmission network upgrades are not required. We concluded that there was no distinct difference between the two. Taking the above forecast a step further, the present report estimates the cost of abandoning nuclear power by FY2050, relying on further energy conservation efforts as well as more widespread use of new forms of energy, including solar, wind, thermal, biomass and low head hydropower. We find that making efforts in both adopting new forms of energy and energy saving would likely be cheaper and more economically advantageous than continuing with nuclear power. Tatsuo Kobayashi, Senior Economist "Energy Saving and Renewable Energy Development Less Costly than Sticking with Nuclear Energy"

Influence of the electricity shortage on Japanese regions and industries (20/OCT/11) Structural Change in Industry to Ease Downside of Power Shortage   --Avert Current Account Deficit by Shifting Resources to Machinery Industry All nuclear power stations in Japan may be forced to cease operation in the wake of the disastrous accident at the Fukushima Daiichi nuclear power plant. We have used the JCER regional computable general equilibrium (CGE) model to estimate the impact of the electricity shortage over the medium to long term. Power shortages resulting from the shutdown of nuclear power stations and higher power costs associated with the substitution of thermal power generation are delivering shocks to the economy, but industrial restructuring could reduce the margin of decline to 0.4%. If Japanese industry could be structurally altered to power it through energy-saving technology, it might be possible to avoid a decline in the production of machinery, the nation's mainstay industry. Tatsuo Kobayashi, Senior Economist Katsuaki Ochiai, Associate Senior Economist Yuta Tachi, Economist "Structural Change in Industry to Ease Downside of Power Shortage"

Tax and Pension Reform (17/MAY/11) Pension Reform: Take 'Energizing' Approach   --Stimulate Private Investment and Consumption   --Scrap Premiums: Finance via Consumption Tax Coping with the problem of an increasingly aged Japanese population requires urgent reform of the nation's tax and social security systems. There is an active debate on how to fund this reform, but effecting it by relying mainly on higher taxes carries the risk of hurting the economy, which would render it even more difficult to increase tax revenue and rebuild government finances. It is most important to leverage the vitality of the private sector via thoroughgoing reform and give working young people a reason for hope. Kazumasa Iwata, JCER President "Pension Reform: Take 'Energizing' Approach"

Thinking Costs of Generating Electricity(19/JUL/11) FY2020 Nuclear Generating Cost Treble Pre-Accident Level   --Huge Price Tag on Fukushima Accident Cleanup Most observers now believe it will take several decades to clean up the accident at Tokyo Electric Power Company's Fukushima Daiichi nuclear power station which took place in the wake of the Great East Japan Earthquake."Impact to last Decade or more if Existing Nuclear Plants Ceasing", we estimated it would reach 5.7 to 20 trillion yen over the next ten years. Based on this estimate, we have calculated the estimated cost of electric power generation from nuclear plants. By fiscal year 2020 (April 1,2020-March 31,2021), the generation cost of 1 kilowatt hour (kWh) of electric power from nuclear plants could reach 17yen, or about three times that of pre-accident levels (5.4yen-6.4yen). These results make it difficult to argue that nuclear energy has any cost advantages over renewable forms of energy, such as wind power. Tatsuo Kobayashi,Senior Economist "FY2020 Nuclear Generating Cost Treble Pre-Accident Level"

Thinking of Energy Shortage (25/APR/11) Impact to last Decade or more if Existing Nuclear Plants Shut Down   --GDP Could Drop 2% on Power Shortages Two months have now passed since the Great East Japan Earthquake struck. Other than the tangible and intangible wounds inflicted by the disaster, constraints on electric power supplies owing to the major accident at the Tokyo Electric Power Company (TEPCO) Fukushima Daiichi nuclear station will continue to weigh heavily on the Japanese economy. According to estimates based on our economic model, if there is a 10% electric power shortage in the Kanto region this summer and economic activity in each industry declines in proportion to its dependency on electric power, economic activity in Japan could fall by over 4% during the summer and by 2% for the year as a whole. JCER Economic Research Department "Impact to last Decade or more if Existing Nuclear Plants Shut Down"

Policy Proposals for the response of the Great East Japan Earthquake (17/MAR/11) Urgent Need for 5 Trillion Yen Disaster Recovery Package The government should act quickly to assemble a 5 trillion Yen disaster recovery package to be financed by freezing proposed government programs, including the child allowance and other programs, while imposing a temporary "reconstruction tax" from the April 2012. JCER Economic Research Department "Urgent Need for 5 Trillion Yen Disaster Recovery Package"

Joint Policy Proposal with International Think Tanks(OCT/09)