In advance of the Pacific Energy Summit that will take place in Hanoi, Vietnam on March 20-22, PESD associate director Mark Thurber spoke with Jacqueline Koch of the National Bureau of Asian Research about the pivotal role of coal in Asia’s power generation mix and what “clean coal” means in the Asian context.

Wolak's presentation focused on assessing the market performance impacts of the recent implementation of convergence (or virtual) bidding in the California wholesale electricity market.  

Frank diagnosed possible causes of the adverse market outcomes related to convergence bidding and suggested possible market design changes to address them.  He also chaired a panel discussion on the progress of the implementation AB 32, California’s greenhouse emissions permit cap and trade program.  This panel focused on current implementation challenges and trading activity in advance of the market opening.

South of Mount Fuji, along Japan’s central eastern coast, sits Shizuoka Prefecture. Home to green tea plantations, hot springs resorts, and Yamaha pianos and motorcycles, Shizuoka Prefecture is a vibrant agricultural, tourist, and manufacturing region. It is also home to Katsunori Hirano, a current Corporate Affiliates Visiting Fellow at the Shorenstein Asia-Pacific Research Center (Shorenstein APARC).

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Nearly a year has passed since an earthquake triggered a tsunami that swept away entire communities on Japan’s northeastern coast, leading to a series of accidents at the Fukushima nuclear complex. Since the March 11 disaster, Japan is experiencing a growing sense of community, and it faces a potential opportunity for innovation in the energy industry and economy. Masahiko Aoki and Kenji E. Kushida discuss post-March 11 developments, and a related conference at Stanford scheduled for February 27.

Aoki is the Henri and Tomoye Takahashi Professor Emeritus of Japanese Studies, and director of the Japan Studies Program at the Shorenstein-Asia Pacific Research Center at Stanford University.

Kushida is the Takahashi Research Associate in Japanese Studies at Shorenstein APARC, and a Stanford graduate (BA ’01, and MA ’03).

One Year After Japan's 3/11 Disaster will bring together experts from Stanford, Japan, and Europe for a discussion of the major economic, political, energy, and societal challenges and growth in post-Fukushima Japan.   

Looking back a year later, what do you think are important lessons we can learn from March 11?

Masahiko Aoki: Japan has often faced disasters leading to the complete destruction of cities and enormous losses of life. In the last century alone, there was the great Tokyo earthquake of 1923; wartime damage in Hiroshima, Nagasaki, and other metropolitan areas; the Kobe earthquake of 1995; and so on. Each time, Japan rebuilt its life and infrastructure anew. Accepting the reality of a disaster and making efforts to rebuild is in a sense deeply embedded in Japan’s collective DNA. However, the March 11 disaster was not only just a natural disaster. People are now well aware that there were lots of elements of human and institutional error in terms of preparing for and coping with natural disasters. Recent geographical studies and historical documents reveal that large-scale earthquake-tsunami disasters comparable to March 11 have occurred four times in the last 4,000 years. It provides Japan with a good opportunity for thinking about how to build sustainable societies and cities.  

Kenji Kushida: Big shocks always cause big changes, and the type of change depends on the kind of shock. With March 11, there was the human tragedy of people literally getting washed away. It also raised the question of how to restructure energy markets, which is an area where outcomes in Japan can affect worldwide restructuring. This particular shock then is triggering a whole set of fairly slow moving, but very transformative changes that could take place over the next few years.

What trends are we seeing in Japan’s energy industry now, and what are the implications for Japan’s future energy policy?

Aoki: When I flew into Tokyo the day after the great earthquake, the city was quite dark. But by the summertime, it was not only lit up, but there was a blue hue to the light—this was due to the wide adoption of energy-efficient LED lighting. Even with the nuclear plants down and 25 percent of the electric capacity gone, there were no major blackouts thanks to energy-saving measures. This kind of incident motivates people to explore ways to innovate the energy industry. For example, Japan’s energy-efficient auto industry took off in the late 1970s in reaction to the Oil Shock.

Japan’s energy industry is currently run by regional monopolies. Tokyo Electric Power Company (TEPCO), for example, monopolizes everything from power generation to retail distribution. In the past, there had been an attempt to break up the different parts of the power monopolies into separate entities. But only a bit of reform was made because of very strong resistance from TEPCO. Now TEPCO is on the verge of insolvency, so Japan has a very good chance to restructure its power industry. People are again starting to think about breaking up the regional monopolies and about innovation, which several experts will discuss during our conference.

Kushida: We will also draw on Stanford’s being in California to think about how to prevent Enron-style market manipulation and rolling blackouts from happening in Japan. A lot of it has to do with the rules and regulations that create an energy market. In the tsunami-devastated areas of Japan, there is also a tremendous opportunity for ground-up investment in new forms of energy. Silicon Valley technologies and companies can help design the next generation of renewable, sustainable energy systems in those areas.
In Japan, there is a sense that people have rediscovered their ties to one another after the disaster.

-Masahiko Aoki, Director, Japan Studies Program

During the recovery, many Japanese citizens demonstrated a remarkable strength and collaborative spirit. Has this changed?

Aoki: Annually on New Year’s Day in Japan, a high-level Buddhist priest writes the calligraphy for a word representing the spirit of the people. This year he wrote “絆”—“bond” (kizuna)—signifying the ties both among Japan’s citizens, and between Japanese and the generous help and aid that poured in after March 11.

In Japan, there is a sense that people have rediscovered their ties to one another after the disaster. Before March 11, there was some worry that young people were not so concerned about others and about tradition. Many young people now want to become volunteers, and there is also a better sense of community.

What has the impact been on Japan’s economy, and what are the prospects for recovery?

Aoki: There is an increasing awareness that Japan cannot sustain the same kinds of export-oriented, manufacturing-based industrial structures it has over the past decades.

Since 2007, Japan’s net foreign exchange receipts from royalties, investments, and the like have exceeded those from trade. The economic structure is becoming less export oriented, so the March 11 disaster might trigger the acceleration of a more domestic-oriented economy. It might also lead to an increase in foreign direct investment, prompted in part by population aging and partly by appreciation of the yen. Japan will become more domestic market oriented, while at the same time more internationally active. A lot next year depends on what will happen with Europe’s economy, but otherwise the prospect for Japan’s GDP is not bad because of reconstruction demand.

Kushida: Recovering from March 11 presents a potentially more productive experience than the 2008 global financial crisis. In 2008, Japan’s exports dropped dramatically for a few months and then there was a sharp recession that recovered quickly. There was not a whole lot that people or companies could do, other than adjust to the potential decline. March 11 provides more opportunities for innovation at the company and individual level. 

As it is finding growth in the domestic market, Japan has been criticized lately for being “inward-looking.” But two things from this latest crisis are contributing to looking outward a little more. One is the sense of vulnerability and transience, so strengthening Japan’s economic base becomes a much more urgent matter. The second is that in the aftermath of the euro crisis, the very strong yen has also led to a huge move toward outward acquisitions that are becoming integrated with the domestic economy.

On January 17, Stanford CISAC and the Woods Institute for the Environment co-sponsored a daylong conference that examined the relationship between security and the environment.

The event brought together political scientists, physicists, historians, biologists and others from across the university, and focused on how climate change might affect political stability, the role of international agreements in protecting the environment, food security and freshwater, ocean and other resource conflicts.

The goal of the event, said CISAC Co-director Mariano-Florentino Cuéllar, was to start a dialogue about the potential relationships between security and the environment, with the expectation that it would lead to future research projects and collaborations, and ultimately to policy recommendations.

In addition to Cuéllar, participants included Woods Co-directors Jeffrey R. Koseff and Barton H. Thompson, David Holloway, Katherine D. Marvel, Kenneth A. Schultz, David Lobell, Kaitlin Shilling, Meg Caldwell, Lynn Eden, Toshihiro Higuchi and Walter P. Falcon.

A year has passed since the Egyptian uprising, one of the defining moments of the democratic wave that surged across the Arab world. Since Jan. 25, 2011, three long-standing Arab dictatorships have toppled and citizen movements continue to challenge entrenched autocratic regimes. Reflecting on this pivotal moment, five scholars at Stanford's Center on Democracy, Development, and the Rule of Law talk about how these events changed the course of democracy – if at all – and what they mean for the region as a whole.

What are the prospects for democracy in the Arab world today?

Larry Diamond: The near-term prospects for democracy are mixed and uncertain – but far better than they were a year ago. Within the space of a single year, Tunisia has become an electoral democracy – the first in the Arab world since Lebanon fell apart in the mid-1970s. This is an astonishing achievement, and Tunisia’s prospects to build democracy are quite good. Egypt has a chance to turn the corner politically, but it depends on whether the Muslim Brotherhood will evolve in a truly democratic and tolerant direction, and whether the military will step back from power. Libya must still disarm its militias and build democratic institutions and a viable state. Syria and Yemen remain much more deeply troubled, with a risk of civil war.

In examining the arc of history, was the Arab Spring inevitable? Should we have been surprised by what happened?

Francis Fukuyama: Economic growth and technological change foster the rise of a middle class that fosters demands for political participation. This is the social basis for democratic revolutions around the world. Some people argued that cultural factors – Islam, Arab passivity –would prevent this from unfolding in the Middle East, but this has clearly been proven wrong. These structural shifts do not imply inevitability, since it is human agents who must translate social demands into political action. This is why the general phenomenon of a revolt may have been predictable, but the timing absolutely uncertain.

Have living conditions improved in the Arab world, or are they worse for the average citizen?

Lina Khatib: The Arab Spring has brought immense change in the lives of Arab citizens. Political taboos have been broken, and the wall of fear that used to govern their everyday lives has crashed down. The Arab world still has some way to go before it can be called democratic in the full sense. While the economy in particular has taken a hit in the current period of transition and uncertainty – making conditions worse for many in the short term – the average Arab citizen today can actually look forward to seeing freedom of expression, human rights, and political and economic reform. These are no longer unrealizable dreams.

What are some of the lessons U.S. policymakers have learned from the Arab Spring?

Jeremy M. Weinstein: A number of fundamental ideas that underpinned 30 years of U.S. policy in the Middle East were upended by the events of 2011. The idea that Arabs do not care about democracy, are politically apathetic, and are too frightened to resist oppressive regimes has been disproved. The notion of authoritarian stability is now questioned, and it is no longer taken for granted that “the autocrats we know” are the safest bet to secure U.S. interests. And the fear of Islamists is slowly receding among policymakers as they confront the electoral success of Islamist parties and begin to directly engage a new cadre of leaders.

How did Arab monarchies weather the storm and avoid the experiences of Egypt, Libya, and Tunisia?

Ahmed Benchemsi: Except in Bahrain, where security forces opened fire on unarmed crowds, Arab monarchies generally managed to outflank their respective protesters in a peaceful way. They did so either by implementing illusory reforms while in fact playing for time (in Morocco and Jordan) or by buying off the opposition with huge social spending (in the Gulf). As this last tactic may remain effective for some time, non-oil monarchies’ victories are more likely to prove short-lived. New rounds of popular anger could be spawned sooner rather than later by, if anything, growing economic difficulties. These will be harder to quell by subterfuges.

Looking forward, are you hopeful that democracy will prosper in the Arab world?

Diamond: Yes, I am quite hopeful that democracy will develop in the Arab world, but I think there will be wide variation among Arab countries in the near term, and much will depend on whether there emerges an instance of clear democratic success that inspires other countries. This is why I think we should bet heavily now on Tunisia, while also intensively engaging Egypt, the largest Arab country.

Fukuyama: In the long run yes, in the short run, no – a safe answer.

Khatib: Even if democracy takes decades to materialize, the Arab world has finally taken the first steps in what – as history has taught us – is always a long and difficult journey, and that’s an important milestone.

Weinstein: All of us know that the road to democracy is uncertain and filled with obstacles. But I take comfort in the fact that no one could have predicted a 2011 in which Ben Ali, Mubarak, Gadhafi, and Saleh would leave the stage. Something profound has changed in the region, and I am confident that – having lost their fear – citizens will make their voices heard as the struggle for democracy continues.

Benchemsi: For democracy to have a real chance in the Arab World, liberals must build grassroots organizations – ones that would be large and strong enough to challenge both autocratic regimes and Islamist groups. When this is done, I will have reason for optimism.