Vested interests, energy efficiency and renewables in Japan

This paper sets out to analyze Japanese renewable energy policy. A default expectation is that countries with unsolved energy problems will have more ambitious renewable energy policies (including energy efficiency). The Japanese case only partially conforms. The theoretical proposition made here is that it is essential to analyze a country's vested interest structure before we can make any inferences about its renewable energy policies. The vested interest perspective – derived from a combination of Joseph Schumpeter and Mancur Olson, and focusing on structural economic change – both complements and rivals the default expectation. Structural economic change, like the rise of renewables, typically leads to resistance from the existing vested interest structure, which feels that it stands to lose from the rise of new industries. The position of a new industry vis-à-vis the existing vested interest structure is thus crucial. In the Japanese case, the solar industry has been far more on the inside of this structure than wind. This has made it far harder for the wind industry to rise than for solar. Energy efficiency is however the ultimate insider approach to energy policy, not challenging any vested interest structures, and has been the favored approach for over three decades.

► The importance of vested interest structures in understanding Japanese energy policy.
► Explaining why energy efficiency, solar and wind have fared so differently in Japan.
► Explaining why an energy-scarce country does not have more ambitious renewable energy policies.