Why are baddies always better organized?

Changes of guard are symbolically charged events. This is why every day at 11 o’clock the change of guard in front of Buckingham Palace happens with so much pomp and circumstance, in plain sight of thousands of tourists from all over the world, gathered there to gawk at men with unnaturally tall heads prance around with guns.

At the Nippon Keidanren there may be less pomp and circumstance, but what they lack in bearskins they make up for in actual clout. The London change of guards sends only the hearts of sightseers aflutter, but the chairman of the Keidanren, representing upwards of 1600 Japanese companies and economic organizations, tends to carry a tad bit more weight. So little wonder that, when he (so far, only “he”) publicly announces the name of his successor, Japanese business journalists gaze deep into their crystal balls, trying to tease out from the details of the appointment what the future holds in store for Japan.

The appointment of Yonekura Hiromasa to Mitarai Fujio’s position starting May 2010 must have made for some difficult tea leaf reading. As the Mainichi Shinbun points out, Mr Yonekura was not seen by many as a favourite in the race for the position. His connections to the current political establishment are seen as slight (even though that may be a somewhat misleading piece of criticism, given the novelty of the DPJ administration).

His appointment however strikes more seasoned Japan watchers as odd because Mr Yonekura is the Chairman of the Sumitomo Chemical, which belongs to the pre-war Sumitomo zaibatsu. After the end of WWII the US Supreme Commander of Allied Powers made sure to disassemble these Japanese economic conglomerates, which it saw as the initiators of Japanese aggression. The Keidanren has traditionally taken great care not to nominate leaders from the ranks of companies tracing their legacy back to the pre-war zaibatsus. Furthermore, while there is no shortage of such companies, Sumitomo is a Kansai zaibatsu, seen as something of an outsider in a world dominated by Kantō conglomerates, making Mr Yonekura’s appointment even more of a surprise.

The Keidanren has been a very vocal opponent of aggressive mid-term greenhouse gas emissions reduction targets for Japan. Some of its past leaders are said to have been privately more willing to consider international pledges going beyond the -6% relative to 1990 that Japan is committed to for the 2008-2012 period. However, inside the Keidanren high-emission industrial groups (such as the associations of steel, power and cement producers) wield great power behind the scenes, hampering more progressive leaders’ efforts to shift the business federation’s public stance away from this conservative consensus.

Fat chance in finding even this modicum of progressive thinking with Mr Yonekura: after all, he is the chairman of a chemical company, which is one of the Japanese industrial sectors with the highest level of GHG emissions. Being more accommodating for environmental concerns runs directly counter to his power base’s immediate interests. Discussing Japan’s new pledge to decrease its emissions by 25% by the year 2020 relative to the 1990 level with Japanese journalists in Davos, Mr Yonekura argued dismissively on January 27 of this year that the “basis for numbers if wrong”. Similarly, discussing together with the still incumbent Mr Mitarai his desire to “continue the deliberations and dialogue with the government”, he emphasized his desire to “deepen the consultations with the Japanese people” about Japan’s new pledge.

The Keidanren’s exhortations for more thorough consultations with the population are a matter of public record. On February 23, 2010, it has produced a statement　calling for a clear evaluation of the impact the implementation of the upcoming basic law on global warming would have on the population and enterprises, and requesting a clear policy road-map from the government that would gain the “understanding and the agreement of the people”.

Similar views are reflected by Japan Iron and Steel Federation, who had also gone on the record　on December 25, 2009, with its opposition　to putting the new pledge into law, to setting up a mandatory nation-wide emissions trading scheme, and to levying a carbon tax absent of a thorough “deliberative process”. While being specifically an association of iron and steel producers, JISF also somewhat mystifyingly took advantage of the opportunity to voice its concerns about the introduction of feed-in tariffs for renewable forms of energy absent a good understanding of their influence on electricity prices.

As evidenced by the recent closure announcements for several cement producing facilities, times are hard even for big Keidanren members. Conversely, steel makers are set increase their production, a development set to increase their absolute emissions and increase their unwillingness to have emissions trading systems and carbon taxes imposed upon them. In this economic climate and with this professional background, Mr Yonekura is unlikely to make friends with the current DPJ administration over climate policies. One wonders whether one factor why this dark horse candidate outshone other opponents despite his disadvantages precisely because of his stance on this currently most charged of political matters. It will be interesting to see what kind of strategies he will devise to cope with the policy direction PM Hatoyama announced in September at the United Nations beyond the transparent stalling tactics of generating a popular debate.

The fact is that there never is a good time to impose new costs on businesses. Still, Mr Yonekura’s personal convictions and professional background will likely make him a particularly principled detractor of progressive climate policy, rendering him potentially even more powerful opponent than his predecessors Mssrs Mitarai and Okuda had ever been. One eagerly awaits the promised March announcement of the DPJ’s policy package on climate change. For months the DPJ has prevaricated on this issue. Unable to get dissenting experts to produce fruitful policy recommendations, it has postponed more specific policy announcements on climate already a number of times.

At the Climate House we feel a bit strange agreeing with the more conservative Keidanren, but their request for clear roadmaps does ring true. In Mr Yonekura the DPJ will surely find a formidable foe on climate change. Time for this “mañana, mañana!” approach to policymaking to stop.