One of the standout features of international relations since Russia’s invasion of Ukraine has been the warming of Western relations with Japan. This was showcased again at last week’s G7 summit, hosted in Hiroshima, which saw a well-organized event lead to a series of key diplomatic outcomes, including in the geopolitical arena.
Moreover, last year Fumio Kishida became the first Japanese prime minister to attend a NATO leadership meeting, and there is even some speculation about Tokyo being invited into Western intelligence forums such as the “Five Eyes” alliance of the US, Canada, UK, Australia and New Zealand.
These examples illustrate that much of the attention around warming ties has focused on the defense and intelligence arenas. In part, this reflects Japan’s ambition, since the Ukraine war began, to try to tie together the threats from Russia in Europe with its own concerns about the rise of China in Asia Pacific where it wants to ensure Western support vis-a-vis Beijing.
Below that security policy radar screen, however, another far less commented-upon area of enhanced cooperation since the Ukraine war began is centered around the sustainability agenda. Just months after Russia’s invasion in May 2021 when energy markets were still spiking, for instance, Tokyo and Brussels agreed on a “green alliance” to accelerate the transition of both economies diversifying away from fossil fuels toward becoming climate-neutral, circular and resource-efficient in coming decades by better protecting the environment, doing more to conserve biodiversity, and vigorously fighting climate change.
In recent weeks, too, Japan and Canada have held talks around this green agenda with Kishida meeting Canadian Prime Minister Justin Trudeau in Ottawa to explore how the two sides can better help each other with their energy transitions, including working together to make their nuclear supply chains more resilient. The Canadian government will lead a delegation to Japan this autumn, and Japanese firms interested in areas such as electric-vehicle battery components plan to visit Canada next spring.
However, the most recent, significant agreement in this area came only last week with the announcement by Kishida and UK Prime Minister Rishi Sunak of a new UK-Japan “sustainability energy partnership.” London now has a blossoming relationship with Tokyo, with the Japanese government one of the strongest supporters of the UK’s accession to the Comprehensive and Progressive Trans-Pacific Partnership trade and investment agreement.
The new UK-Japan sustainability deal will not just deepen bilateral political ties, but also economic ones, too, triggering a new wave of investment between the two markets. Take the example of the UK, which has huge incentives to drive this agenda forward with Japan and other key nations following the US Inflation Reduction Act and counter subsidies from the EU’s Green Deal Industrial Plan for the Net Zero Age.
There are growing concerns from UK stakeholders that the nation could miss out on an increasing wave of green investment as the global economy grows from about $90 trillion today to a forecast $190 trillion by the mid-21st century when the world may hit net-zero emissions. Even the UK government’s own Skidmore Net Zero Review, released in January, highlights that Britain risks losing out on significant tranches of new green investment.
Despite these challenges, however, the UK does have some long-standing strengths in this arena that Japan recognizes and appreciates. For instance, London tends to have a more pragmatic approach than Brussels to sustainable and green issues, including technology implementation in energy and chemical platforms.
In the case of the circular economy in plastics, for example, the EU is pressing forward toward binding legal targets for reuse and recycling, which are not obviously supported by the reality of supply infrastructure, nor business appetite for investment at scale. The UK is generally more pragmatic with its implementation of “better” rather than “ideal” solutions that take account of current economic pressures since the pandemic and the beginning of the Ukraine conflict.
The high level of wind power generation capacity already installed in the UK also means it could be a great proving ground for Japanese and wider international innovation in power distribution infrastructure, and large-scale storage to balance and manage the intermittent nature of wind power. This may even lead to the emergence of differentiated UK-based technology and/or the need for such technology to be brought by Japanese firms.
The UK also benefits from strength and flexibility in its financial industry, via the City of London, which is of interest to Japan given that it sometimes struggles to attract money from overseas. The energy transition requires much capital and Japan could learn from UK best practice, and vice versa. For instance, the UK has a good track record in using fintech to support development of innovative green technologies.
Wider examples where such Japan-UK corporate collaboration could well be mutually complementary, in Asia and other areas, is in the energy transition, including carbon capture and storage, nuclear power and the digital solution fields. It is difficult for Japan to have all the technologies necessary for nuclear power supply chains on its own, and there is potential to join nations such as the UK with common values, including potentially around small modular reactor development.
Taken together, the West’s warming relationship with Japan is therefore the highest profile in the “hard” security area. However, the scope of these better ties is broader, including “softer” green issues that could help drive a significant new wave of clean energy investment in the years to come.