Thursday, 17 November 2011

WHOSE SUSTAINABLE DEVELOPMENT - An Analysis of Japanese Foreign Aid Policy and Funding For Energy Sector Projects

Sustainable Development?
An Analysis of Japanese Foreign Aid Policy
and Funding for Energy Sector Projects
Hideka Yamaguchi
Center for Energy and Environmental Policy,
University of Delaware
This article evaluates Japanese foreign aid policy
in light of the World Commission on Environment and
Development’s concept of sustainable development by
focusing on Japanese official development assistance
(ODA) to energy sectors in the global South. The analysis
reported here finds two fundamental weaknesses
in Japanese ODA policy on the energy sector: first, its
premise of the compatibility of economic growth with
environmental sustainability and, second, its heavy reliance
on modern science. As an alternative, this article
suggests a policy of promoting small and decentralized
renewable energy technology.
Japanese foreign aid policy, energy
sector, sustainable development, ODA, development
strategy, global South
ver the past century, modernity has brought high
levels of economic growth and material affluence to
the global North. At the same time, however, it has
contributed little to progress in the global South.
Indeed, the inequity between rich and poor nations has
been aggravated (Elliott, 2001, p. 11), and negative
impacts, includingpopulation growth problems, environmental
degradation, food shortage, and energy
resource scarcity, have brought additional suffering to
the global South (Ministry of Foreign Affairs [MOFA],
With theworld’s second largest economy, Japan has
attempted to help alleviate these distortions by adoptingthe
idea of sustainable development as a core strategy
of Japanese foreign aid policy since the 1980s.
Japan’s budget provided by the government for development
of the global South in the form of official
development assistance (ODA)was theworld’s largest
from 1991 to 2001 (Komori, 2002, pp. 90-91). However,
its contribution has not always been successful in
terms of bringing social and environmental prosperity
to the global South. This is especially true of its aid in
support of energy sector development. An evaluation
of Japanese foreign aid policy to energy sectors in the
global South shows little evidence of its contributions
to sustainable development.
A History of Development Strategy and
the Idea of Sustainable Development
Gustavo Esteva (1992) defined development as “a
process through which the potentialities of an object or
organism are released, until it reaches its natural, complete,
full-fledged form” (p. 8). In reality, however,
since the study of development first emerged in the
1950s, the concept has been discussed mainly in relation
to the economic performance of the global South
(Elliott, 2001, p. 10). To understand the basic idea of
development thinkingand its transition, this section
examines a history of development strategy.
In the early stage of development debate, Rostow
(1960)was influential. He offered amodel of the linear
stages of economic development, which came to be
used as a means of categorizing all countries in one of
five development stages—the traditional society, the
preconditions for takeoff, the takeoff, the drive to
maturity, and the age of high-mass consumption—
AUTHOR’S NOTE: This article was originally presented at the National Association of Science, Technology, and Society’s 18th annual
conference under the title “Japan’s Foreign Aid Policy in the Energy Sector: Is It Doing Good or Harm?” (2003).
Bulletin of Science, Technology & Society, Vol. 23, No. 4, August 2003, 302-310
DOI: 10.1177/0270467603256089
2003 Sage Publications
accordingto their economic capacities (Rostow,
1960). This model suggested that the degree of development
was to be measured by economic growth and
level of consumption. Development problems confrontingsocieties
could be solved, accordingto the
framework, by empoweringmark ets to allocate
resources, embracingforeig n aid and investment to
speed up “takeoff,” and applyingsimply modern scientific
and technical knowledge to address each country’s
particular needs. This concept of development
helped build a hierarchical orderingwith financially
and technologically developed countries at the apex
and less financially and technologically developed
countries at the bottom. Consequently, the latter
became collectively referred to as “underdeveloped”
countries. In short, Rostow’s development thinking
was firmly founded on an assumption that progress
could be accomplished through economic growth
induced by technological improvement. Such an
assumption rationalized the acceleration of technology
transfer from the global North to the South as a
means of stimulating progress in the latter.
These development strategies to pursue economic
growth and technological improvement through technology
transfer, however, often resulted in negative
outcomes in the global South. In examining the experience
of Africa, Bade Onimode (1988) attributed the
primary cause of the crises in Africa to technology
transfer from the global North. He criticized technology
transfer, stating that much of what was given to
Africa was undesirable because it was inappropriate,
capital intensive, and resource exploitative and
favored foreign investment rather than domestic transformation
(p. 140). From his point of view, the basic
idea of technology transfer is a myth as it contributed
little to progress and, instead, promoted economic and
knowledge dependencies. In a similar vein, foreign
technology applications in Chile with the aim of skill
upgrading in the country’s production facilities demonstrated
that technology transfer does not always
help bringabout positive consequences for the global
South (see Pavcnik, 2003).
Another pattern is at play in the introduction of
technology transfer, exemplified in both radar equipment
in Angola and DDT in Guinea. In the former
case, radar machines were transferred to Angola as a
means to reduce car accidents. However, with no one
trained to operate the equipment, the machines were
found to be useless (although the European company
realized a profit) (see Bazin, 1986). In the latter case,
DDT was transferred to Guinea to eradicate malaria.
However, it resulted in damaging children’s health
because of an insufficient investigation of its impacts
(Bazin, 1986). Bazin (1986) argued that “modern”
technology tended to be mystified in the process, creatinga
belief in the global South of the superiority of
Northern methods and strategies, when the reverse is
frequently true. As a result of the mystification process
urged on by technology transfer, technologies are
accepted one after another without questioningthe
impact of their introduction in the global South. Such
mystification, moreover, often results in cultural
destruction by replacing indigenous technology and
reducingthe global South’s self-reliance and autonomy
to determine its own path to development (Bazin,
1986). The same logic is also observed in China. The
pervasive idea that technology transfer is key to modernization
has greatly encouraged Chinese students
and scholars since the late 1970s to aggressively pursue
Western scientific knowledge. This strategy has
succeeded in turningout many intellectual elites who
believe in the superiority of Western knowledge and
culture and has contributed to strengthening the linkage
between Western technology and progress. Not
surprisingly, however, the result of the dominance of
Western “values” is the loss of traditional values and a
lack of belief in the efficacy of self-definition of
China’s own course of development (Chafy, 1997).
Equally serious is the effect of technology transfer
on environmental conditions in the global South. The
case of the green revolution provides an example of
howtechnology transfer can lead to environmental crisis.
Between 1966 and 1970, modern technology in the
form of new high-yielding varieties of wheat and rice,
the so-called miracle seeds, was transferred to farmers
throughout the global South. The green revolution initially
showed signs of success, making remarkable
advances in food supply. By the early 1970s, however,
the intensive chemical use of fertilizers and pesticides
began to pollute rivers and degrade soils, and the production
of grains and fish began to decline (Redclift,
1984, p. 108). Accordingto Vandana Shiva (1992),
“instead of transcendingthe limits put by natural
endowments of land and water, the Green Revolution
introduced new constraints on agriculture by wasting
and destroyingland, water resources, and crop diversity”
(p. 46).
By the 1980s, after recognizing that technology
transfer did not bringsatisf actory progress in development
for the global South, questions regarding the
validity of conventional strategies were raised.
Accordingly, new development models, which would
address contradictions in the global South, were
sought. The rise of a global environmental consciousness
in the 1980s also helped accelerate this tendency.
Under pressure to devise new strategies, the term
was introduced to address at
least some of the problems produced earlier by development
policies. In 1987, the term achieved
widespread impact with the release of the UN report
Our Common Future submitted by the World
Commission on Environment and Development
(WCED). This report defined sustainable development
as “development that meets the needs of the
present without compromisingthe ability of future
generations to meet their own needs” (WCED, 1987,
p. 43). This definition has been globally recognized as
a core ideology of development strategy that seeks to
resolve the dilemmas of the past destructive method of
The basic idea of the WCED’s concept is that sustainable
development can realize a society that economically
and technologically develops and, at the
same time, meets the long-term aims of social equity
and environmental balance. Under the concept, progress
is to be measured not only in economic and technological
terms but also in social and environmental
terms. To help realize these goals, the WCED stressed
the need for technological improvements in both the
global North and the South. From the WCED’s point
of view, new technology is not only a mainspring of
economic growth but also an effective device to
improve the environmental resource base. Japan
warmly embraced this logic of sustainable development,
redefiningits aid and technology transfer policies
to improve the economies and the environments in
partner nations of the global South.
Japanese ODA: Recent
History and Policies
The government of Japan adopted the WCED’s
strategy as the primary means to guide development in
the global South in the late 1990s. This policy shift is
specifically expressed in the new objectives and methods
of ODA,
1 major government’s financial resources
assigned for development of the global South.
Japan’s role as an aid donor dates from the San
Francisco Peace Treaty in 1951 with an agreement to
pay reparations for World War II (Komori, 2002, p.
78). Hence, Japanese ODA in the 1950s was provided
mainly in the form of reparations, and accordingly
recipient countries were limited to the nations that
were harmed duringWorldWar II (includingthe Philippines,
Indonesia, SouthVietnam, Burma, Singapore,
Thailand, Cambodia, Laos, Malaysia, South Korea,
Mongolia, and Micronesia). This reparations-centered
assistance lasted up to 1985 when Japan provided its
first loan to India.
The 1970s and the 1980s saw a drastic increase in
the ODA budget in parallel with economic growth in
Japan. In particular, the implementation of two plans,
“The First Medium-Term Target of ODA: A Plan to
Double ODA in Three Years” in 1978 and “The Second
Medium-Term Target of ODA: A Plan to Double
ODA in Five Years” in 1981, contributed to the
increased ODA budget. Under these plans, $34.1 billion
was provided for ODA from 1976 to 1985.
Increasing the ODA budget was an explicit goal of the
period, and this strategy eventually has made Japan the
world’s largest foreign aid donor since 1991 (see Figure
Another important feature of Japanese ODA in the
1980s was its focus on the improvement of the economies
in the global South, believing that economic
growth was indispensable for reducing poverty.
Although there was no specific written policy until the
1992 ODA charter, an official document of ODA policy,
Japanese aid in the 1970s and 1980s was allocated
based on three basic philosophies (Komori, 2002, p.
107): First, from a humanitarian viewpoint, the country
ought not to ignore the fact that many people are
still sufferingfrom famine and poverty in the global
South; second, the country ought to cooperate with
and recognize the interdependence among nations of
the international community; and third, the country
ought to support self-help efforts for economic development
in the global South. In sum, Japanese ODA
was primarily designed to enhance economic conditions
in the global South.
By the late 1980s, with global calls for sustainable
development emerging, Japan changed its priorities. It
no longer would place primary importance solely on
economic growth; instead, it would propose to pursue
economic growth simultaneously with environmental
enhancement. On the eve of the Arche Summit in
1989, Japan pledged to expand its ODA contributions
in the environmental field to accomplish sustainable
development with partner nations. In addition, at the
Earth Summit in 1992, Japan promised to increase
environmental ODA to between $0.9 billion and $1.0
billion (MOFA, 1999b).
This trend was accelerated with the enactment of
the basic environment law in 1993 and the environ-
mental impact assessment law in 1997. Under the
basic environment law, the necessity of conservingthe
environment in southern countries is specified in the
section on “international cooperation for global environmental
conservation” (Section 6 of chapter 3).
Under the environmental impact assessment law, the
importance of conductingan environmental impact
assessment in advance of projects is stipulated to protect
the environment (chapter 1).
In addition, the government announced the Initiative
for Sustainable Development Towards the 21st
Century (ISD). Under the ISD, sustainable development
was stressed as the primary goal of foreign aid
alongwith human security and ownership (MOFA,
1999c). A basic philosophy of sustainability was installed
in the ODA charter:
Japan attaches central importance to the support
for the self-help efforts of developingcountries
towards economic take-off. It will therefore
implement its ODA to help ensure the efficient
and fair distribution of resources and “good governance”
in developingcountries through developinga
wide range of human resources and
socio-economic infrastructure, including
domestic systems, and throughmeeting the basic
human needs, thereby promotingthe sound economic
development of the recipient countries. In
so doing, Japan will work for globally sustainable
development while meetingthe requirements
of environmental conservation. (MOFA,
In short, sustainable development, from the Japanese
government’s point of view, is achieved when a balance
is struck between economic efficiency and environmental
Effects of Japanese ODA Policy on
Recipient Country Energy Sectors
The government of Japan believes that facilitating
development in the energy sector plays an important
role in efforts to meet sustainable development in the
global South:
Energy problems constitute a global-scale policy
issue that is closely related to the response to
global environmental problems and the achievement
of sustainable development. Moreover, in
many developingcountries, securingaccess to
adequate energy supplies constitutes to be a vital
challenge in the realization of economic development.
(MOFA, 1999d)
As the quotation indicates, the Japanese government
believes that energy issues are closely linked
with economic and environmental circumstances, and
thus, development of the energy sector is key to progress
of both areas. For this reason, Japan has actively
provided substantial ODA for energy projects. Furthermore,
it recognizes that technology can play a significant
role in social, economic, and environmental
improvements (MOFA, 1999d). In particular, the development
of large, centralized power systems has
been assigned high priority.According to a report from
the Japan Center for Sustainable Environment and Society
(JACSES), an NGO in Japan, large coal-fired
power plant projects (i.e., facilities larger than 500
MW) constituted 10% of all ODA-supported coal
plant projects, whereas one third ofODA-financed hydroelectric
power plant projects involved dams with
electrical capacities greater than 500 MW (JACSES,
1998). There are two assumptions behind this reliance
on large-scale advanced technology: first, that economic
improvement and environmental enhancement
are compatible under the concept of sustainable development
and, second, that advanced technology (in this
case of large and centralized energy-related infrastructure)
is a mainspring of sustainable development.
Contrary to these assumptions, however, this strategy
of promoting large, centralized energy infrastructure
has frequently created tragic social and environmental
consequences in recipient nations. Two cases
that demonstrate the sorts of effects Japanese foreign
aid policy can have on societies are provided in the followingsections.
The Paiton coal-fired power plant
construction project in Indonesia and the San Roque
9,439 9,358
11,151 11,259 10,952
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
$ Million
Figure 1. Official Development Assistance (ODA) Spending
Trends by Major Development Assistance Committee
Countries, 1991-2000
Source: Ministry of Foreign Affairs.
multipurpose dam project in the Philippines offer
glimpses of typical Japanese energy ODA.
The Paiton Coal-Fired Power Plant
Construction Project in Indonesia
A $2.6 billion venture was launched in 1995 by
Paiton Energy Company (PEC), a joint holding of
Mitsui & Co., Ltd. of Japan, Mission Energy Co. and
GE Capital Corporation of the United States, and
Batu Hitam Perkasa of Indonesia. The consortium
constructed two 615-MW coal-fired power plants,
usingdomestic coal in the Paiton District of the Indonesian
island of East Java. The plants were designed
to keep up with increased electricity demand in East
Java province (Japan Bank for International Cooperation
[JBIC], 2002). For the project, a maximum of
$900 million was financed mainly by the Japanese
government-owned JBIC, the Export-Import Bank of
the United States, and several Japanese and U.S. commercial
banks. In addition, approximately $100 million
of Japanese ODA was provided for construction
of grid extensions and transformer substations to distribute
electricity from the new plants (Fujibayashi &
Nagase, 2002, p. 197).
Instead of spurringeconomic growth and environmental
sustainability, however, this capital-intensive
project had negative impacts on local communities and
the ecosystem. First, people whose electricity is supplied
by the Paiton coal plants pay an extremely high
price for the electricity. The tariff is set at 8.6 cents
(U.S.) per kilowatt-hour of electricity, which is 32%
higher than comparable tariffs in Indonesia and 60%
higher than those in the Philippines (United Kingdom
Parliament, 2002). Users are powerless to challenge
the price because the project is based on an agreement
that the government-owned electric utility (PLN) must
purchase fixed volumes of electricity from PEC for 30
years under any circumstances. Moreover, the PEC
project is a component of an electricity liberalization
policy adopted by the government and, as such, has
displaced older, allegedly less efficient state electricity
enterprises. To date, the unbundlingof the energy system
in Indonesia has reduced worker job security,
increased unemployment, decreased medical welfare
coverage, and eroded worker solidarity (International
Federation of Chemical, Energy, Mine and General
Workers Union–Asia/Pacific Region, 2001). Along
with these social costs, the project has also contributed
to global environmental problems. An estimated 195
million tons of CO
2 are annually emitted from these
plants (Friends of the Earth Japan, n.d.-b). This
amount is equivalent to 61%
3 of CO2 emissions in
Indonesia in 2001 and 17%
4 in Japan in the same year.
Such levels ofCO
2 emissions are certainly unhelpful to
combat any global warming.
In sum, with ODA and the private sector’s support,
Japan has managed to facilitate a project that has
increased the cost of electricity; harmed the economic
condition of the sector’s workforce; contributed little,
if any, to economic development; and significantly increased
Indonesia’s greenhouse gas emissions—hardly
desirable impacts for a sustainable developmentinspired
The San Roque Dam in the Philippines
The San Roque multipurpose dam project is an
ongoing $1.9 billion venture, which will represent the
largest dam when completed. This project is being
implemented by the San Roque Power Corporation
(SRPC), a joint holdingof Marubeni (41%) and
Kansai Electric Power Co. of Japan (7.5%) and Sithe
Energies Inc. of the United States (51%—29% is
owned by Marubeni). The purpose is to construct a
345-MW hydroelectric power plant. Approximately
$410 million has been financed by JBIC and several
Japanese commercial banks. An additional $400 million
has been loaned by JBIC to the National Power
Corporation, the government-owned electric utility
(Fujibayashi & Nagase, 2002, p. 209). This project
was designed to control flooding and to support irrigation
in Central Luzon and Cordillera province. Its provision
of much needed electricity from arguably the
cleanest source is cited to substantiate JapaneseODA’s
claim of sustainability. Electricity produced by this
plant will be sold to the National Power Corporation at
2.98 pesos (U.S.$0.056)
5 per kilowatt-hour for 25
years (Friends of the Earth Japan, n.d.-a).
The economic impact of this project is likely to be
enormous. Accordingto a report from ECA Watch
(2002), “the cost of power from San Roque is hugely
inflated, and SRPC stands to gain massive profits from
the project, whether or not it successfully produces
power.” Of course, electricity consumers will suffer
because they will have to pay some of the highest rates
for hydropower in the world. Moreover, the Philippine
economy will suffer as a substantial amount of capital
is diverted to awasteful project.A$2.0 billion infusion
into other areas could have important benefits, but
these are lost when San Roque dam sequesters such a
high level of investment.
In contrast to the fact that this project generates
profits for Japan and the United States, the construction
of the large dam will almost certainly damage the
Philippines socially and environmentally. Indigenous
people have been insufficiently compensated for their
dislocation. Approximately 150,000 indigenous people
livingon 39,504 hectares classified as watershed
areas were dislocated, and more than a thousand hectares
of farmlands and fishponds were wiped out
(Tucay, 2002). As the livelihoods of indigenous communities
in the affected areas are closely connected
with access to healthy ecosystems, the loss of and degradation
of the watershed threaten to bringcollapse to
the local social system and the disappearance of traditionally
valued knowledge and technologies. In addition,
the project has triggered long-lasting environmental
problems. The project site was once covered
with forests, but the project induced large-scale deforestation.
Furthermore, degradation of water quality
has occurred from seawater intrusions and contamination
by toxic chemicals from miningpo wered by the
dam’s electricity station (Tucay, 2002).
Assessing the Sustainability
Claims of Japanese Energy ODA
The core logic of the WCED’s idea of sustainable
development is that it promises to bringboth economic
growth and a healthy environment through the use of
advanced technology. This logic is claimed by the Japanese
government to guide its current ODA strategy in
the energy sector. Yet as the two examples suggest,
Japanese ODA has contributed to promotinglar ge and
centralized energy–related infrastructure to realize
economic growth, often at the expense of environment
In particular, two weaknesses in Japanese energy
ODA can be identified: First, the premise that economic
expansion and environmental sustainability are
compatible often seems tenuous, and second, the
heavy reliance on and belief in modern technology
neglect a wide range of social and ecological effects.
Regarding the first dilemma, the fallacy is that the
application of such thinkingoften justifies additional
present-tense economic growth, whereas protecting
and enhancingthe environment are given as a futuretense
goal. In other words, despite an annual commitment
to environmentalism as a critical element of project
evaluation, this thinkingactually brings about
accelerated market development, lettingcapitalist processes
influence the direction of emerging economies
at strategically key stages. Projects, such as the Paiton
plant and the San Roque dam, build in energy and natural
resource intensity that can stimulate growth and
make it difficult to later slow down adverse environmental
impacts. As more energy users connect to grids
powered by these technologies, minimal energy service
requirements to support economic and social
demand are raised, thereby entrenchingthe society in a
high-energy future. Regardless of howefficient a highenergy
future is supplied, environmental intensity
grows. Ultimately, economic expansion remains primary
and environmental conservation becomes secondary
in this context.
Herman Daly (1998) showed a good deal of insight
into this contradiction between economic expansion
and environmental sustainability.As he has argued, “It
is impossible for the world economy to grow its way
out of poverty and environmental degradation” (p.
285). Defining“the economy [as] an open subsystem
of the earth ecosystem, which is finite, non-growing
and materially closed” (p. 286), he underscored the
necessity of suspendingeconomic growth, because its
foundation is the earth’s ecosystem, which develops
but does not grow. From this point of view, an unbalanced
relationship between the earth’s ecosystem and
the economic subsystem can only result in a breakdown
of the ecosystem. In other words, economic
growth does not invite environmental sustainability.
Instead, it only brings threats to the ecosystem.
Japanese development strategy demonstrates the
fundamental weakness in its basic assumption. In both
the Paiton and San Roque projects, there is no evidence
that environmental sustainability was achieved.
The only evident impact was the support of economic
growth (although the Paiton plants may not even contribute
this). The strategy to seek both economic and
environmental progress allowed environmental considerations
to be treated as subordinate to economic
goals. This reality then led to underestimation of ecosystem
impacts in the process of searchingfor economic
The second weakness of Japanese ODA can be
identified in its recognition of technology transfer as a
vital factor to achieve sustainable development in the
global South. In this regard, its policy raises the risk of
what Claude Alvares (1992) has called “technological
colonialism.” The relationship between economic
development and environmental conditions is one that
Japanese ODA strategy assumes to be positive for
recipient counties. But the evidence is, to say the least,
mixed on this score.
Alvares (1992) found in the historical record evidence
of what he regarded as intellectual violence
resultingfrom the arrival of modern science in non-
Western cultures duringthe industrial era. He argued
that knowledge associated withWestern science tends
to reduce issues in society and nature to mere design
problems. Application of modern science promotes
efficiency and productivity, thereby emphasizing
mechanical design over that based on community
scale and capacity.Modern science in the non-Western
world has found itself in conflict with local knowledge
and practice, which are regarded as inefficient and
nonproductive. As a result, the effort to promote economic
growth through science and technology transfer
often means discardingcommunity-based knowledge.
Advanced energy technologies introduced by Japanese
ODA produced the problems raised by Alvares,
especially when indigenous communities are
involved. On one hand, coal-fired power plants and
dams allowcountries to quicken the pace of industrialization.
On the other hand, indigenous people are
disempowered by their dislocation and the devaluation
of traditional knowledge and technologies. Along with
adverse social impacts, the ecosystem is transformed
by its productive use. Not only are local ecosystems
affected, but the relationship between nature and community
is altered. Heretofore, livelihoods and relatively
undisturbed ecosystems were linked, but under
the sway of a more scientific, technical approach, a
more abstract relation emerges in which earning
income through the use of natural resources takes over.
By adoptingg rowth-based sustainable development,
the government of Japan has assumed that the
“traditional” development scheme is obsolete. However,
Japanese energy aid has little capacity to resolve
the poverty dilemmas of the global South. At the same
time, Japan’s policies can seriously threaten both
social and environmental sustainability. In this
respect, Japan’s energyODAhas changed little despite
its new development aid strategy of sustainable development.
Although proclaiming an interest in sustainable
development, the Paiton and San Roque projects
illustrate that the energyODAstrategy still depends on
ideas of economic growth and technology transfer as
key elements for progress and, as a result, still risks the
adverse impacts discussed by Alvares and others.
The concept of sustainable development defined by
the WCED and embraced by Japanese foreign aid policy
has failed to deliver a shift in the country’s development
aid paradigm. Not surprisingly, little evidence
exists that the country’s energy ODA is leading to different
results than those of the earlier framework. This
throws into doubt the validity of Japan’s promise to
improve sustainability by means of its energy ODA.
An Alternative Policy for
Japan’s ODA to Accomplish
Sustainable Development in
the Global South: Promoting
Small and Decentralized
Renewable Energy Technology
If Japanese foreign energy aid policy is unlikely to
deliver social as well as environmental progress to the
global South, perhaps it is time to consider an alternative
to a policy that emphasizes a large, centralized
energy–related infrastructure. Below, a policy to
implement small and decentralized renewable energy
technology options is considered.
There are three reasons to suggest this policy. First,
the poor, who remain mostly neglected under contemporary
development schemes, would directly benefit
from this policy. Because the installation of large, centralized
technology in rural areas where demands for
energy resources are often extremely low is not economically
competitive, people in remote villages have
longremained without electricity. In contrast, the
installation of small and decentralized renewable
energy technology systems is economically and technologically
suitable for rural communities (see Zhou
&Byrne, 2002). Promotingsuch technology increases
the potential to bringelectricity to those most in need.
Electricity generated for these areas allows not only
lighting, water pumping, and refrigerating of medications
but also better communications, which can
reduce the isolation of rural populations and enhance
social life and safety. Moreover, the technology creates
educational opportunities forwomen and children
by freeingthem from time-consumingacti vities such
as fuel collection (Global Environmental Facility,
2002). In the end, small-scale renewables could contribute
to improving the welfare of the poor.
Second, traditional knowledge and skills would be
protected through this alternative policy.We have seen
in the Paiton and San Roque projects that indigenous
people’s knowledge and technology are underestimated
and displaced by modern technology because
large, centralized infrastructure depends on experts
and operational approaches that are out of the control
of indigenous communities. In contrast, small-scale
renewable energy technology could be managed by
local communities, allowingvillag ers to participate in
the decision-makingprocess, thereby empowering
indigenous knowledge and practice. This would allow
the community’s values to coexist with the new technology,
and as a result, the culture of indigenous and
their livelihoods-based relations with ecosystems
could be enhanced.
Third, environmental degradation would be significantly
reduced. As renewable energy technology produces
no greenhouse gas or other toxic chemicals in
the process of supplyingener gy service, it contributes
positively to long-term environmental health. A
renewables-based energy system could allow communities
to decide their development aspirations without
beinglock ed into the environmental contradictions of
modern energy technologies and their reliance on massive
resource extraction.
The Japanese government has applied the WCED’s
concept of sustainable development to its energy aid
policy with the aim of removingsome of the risks of
the country’s past development strategies in the global
South. However, instead of leadingto sustainable
development, Japanese energy ODA projects have
tended to reproduce a common pattern of social and
environmental risk. Indigenous communities, in particular,
have been harmed by the new policy (as the
Paiton and San Roque projects illustrate). In short,
Japanese energy aid policy has produced little evidence
of fosteringsustainable development despite the
fact that this is its proclaimed goal.
An analysis of two highly touted Japanese aid projects—
the Paiton coal-fired power plant project in
Indonesia and the San Roque multipurpose dam project
in the Philippines—demonstrates the persistence
of an incompatibility between the new Japanese
energy aid policy and sustainability. If Japan is to seriously
tackle energy problems in the global South in a
manner consistent with sustainability, it is recommended
that the government shift to a policy that promotes
small and decentralized renewable energy technology.
Such a policy has a far greater potential to
improve social and environmental conditions in the
global South while preserving indigenous cultures,
knowledge, and livelihoods-based relations with ecosystems.
1. In terms of the Japanese government’s financial flows, economic
cooperation is divided into two categories: official development
assistance (ODA) and other official flows (OOF). Generally,
economic cooperation that conveys a grant element of at least 25%
is called ODA, and others are called OOF. ODA is considered as
the major governmental form of foreign aid.
2. The ODA budget during 1976 to 1980 was $16 billion and
during 1981 to 1985 was $18.1 billion (Komori, 2002, p. 87).
3. Accordingto the Energy Information Administration, the
amount of CO
2 emitted in Indonesia in 2001 from combustingfos -
sil fuelswas 87.13 million metric tons of carbon equivalent (87.1
44/12 = 319.4 million metric tons of CO
2). Therefore, 195/319 ×
100 = 61%.
4. Accordingto the Energy Information Administration, the
amount ofCO
2 emitted in Japan in 2001 from combustingfossil fuels
was 315.83 million metric tons of carbon equivalent (315.8
44/12 = 1158.0 million metric tons ofCO
2). Therefore, 195/1158 ×
100 = 17%.
5. The exchange rate used above is U.S.$1.00 = 52.86 pesos
(April 19, 2003).
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Hideka Yamaguchi is a Ph.D. candidate and research associate
at the Center for Energy and Environmental Policy,
University of Delaware, Newark, DE 19716-7381; e-mail:
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