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Japan’s New Leader Sets Goal of Being Carbon Neutral by 2050

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TOKYO — Japan will be carbon neutral by 2050, its prime minister said on Monday, making an ambitious pledge to sharply accelerate the country’s global warming targets, even as it plans to build more than a dozen new coal-burning power plants in the coming years.

The prime minister, Yoshihide Suga, laid out the goal during his first major policy speech since taking office in September, when Japan’s longest-serving leader, Shinzo Abe, abruptly resigned. The announcement came just weeks after China, Japan’s regional rival, said it would reduce its net carbon emissions to zero by 2060.

Addressing Japan’s Parliament, Mr. Suga called for the country to “be carbon neutral in 2050,” a declaration that drew loud applause from lawmakers. Achieving that goal will be good not only for the world, he said, but also for Japan’s economy and global standing.

“Taking an aggressive approach to global warming will bring about a transformation in our industrial structure and economic system that will lead to big growth” in the economy, he said, answering critics who have warned of the economic consequences.

ImagePrime Minister Yoshihide Suga of Japan giving his first policy speech during a special session at the lower house of Parliament in Tokyo on Monday.
Credit…Kazuhiro Nogi/Agence France-Presse — Getty Images

Japan is the world’s fifth-largest emitter of greenhouse gases. It had previously said it would go carbon neutral “at the earliest possible date,” vowing to reduce greenhouse gas emissions 80 percent by 2050.

Japan now joins China, the largest polluter, and the European Union in promising to bring their net carbon emissions down to zero. China’s leader, Xi Jinping, made his country’s pledge last month during the United Nations General Assembly.

The two announcements from Asia’s largest economies reinforced just how much of an outlier the United States, the world’s second-largest carbon emitter, has become after President Trump moved in 2017 to pull the country out of the Paris agreement. Joseph R. Biden Jr., his challenger in the presidential election, has vowed to restore the United States’ participation in the accord.

Japan’s decision was most likely driven by a combination of domestic and external political pressures, said Takeshi Kuramochi, a climate policy researcher at the NewClimate Institute in Germany.

While environmental groups have long argued that the country needed to speed up its progress on reducing emissions, momentum toward the move has been building in recent years, “especially in business and finance sectors,” Mr. Kuramochi said.

Mr. Suga probably also felt it was important not to cede leadership on the issue to China, he added. As a developed nation, Mr. Kuramochi said, it would be “somewhat embarrassing for Japan to have a net zero emissions timeline later than China.”

Credit…Noriko Hayashi for The New York Times

It is not clear whether Mr. Suga’s commitment is feasible, and he offered few specifics about how Japan would reach its goal, saying only that he would harness the power of “innovation” and “regulatory reform” to transform the country’s energy production and usage.

Achieving the new timeline will require a major overhaul of Japan’s infrastructure, which is highly dependent on carbon dioxide-producing fossil fuels. The country has made steady progress in reducing its emissions, but still generated 1.06 billion tons of the gas in the one-year period that ended in March 2019, placing it among the top 10 per capita emitters.

“When you look at Japan as an economy, there’s a lot of considerations that have to go into formulating this ambitious goal,” said Jane Nakano, a senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies.

“It would require a much deeper look into the resources that Japan has, perhaps the way that different sectors have been operating,” she said, adding that “not just the government, but many business entities and industrial stakeholders” would also need to commit to achieving net zero by 2050.

By the early 2000s, Japan had made substantial progress in curbing carbon dioxide emissions through the use of nuclear power. But the meltdown of a nuclear power plant in Fukushima after a devastating earthquake and tsunami in 2011 led to a widespread shutdown of the country’s energy-producing reactors, which had generated roughly a third of Japan’s total power supply. Only a handful of the plants have since restarted.

Credit…Aaron Sheldrick/Reuters

Short on energy sources, Japan decided to reinvest in coal. It has planned or is in the process of building 17 new coal-burning power plants, even as other major economies are moving away from the power source.

Japan currently plans to reduce — but not eliminate — its dependence on coal, decreasing its contribution to the country’s electricity production from 32 percent in 2018 to 26 percent by 2030, partly by shutting down inefficient plants.

The country has also vowed to end contentious government subsidies for the export of coal-fired power technology to developing nations, where the use of coal for electricity continues to rise. Japan is currently supporting three such projects and says it will consider financing more only in “exceptional” cases.

Further efforts to decrease Japan’s domestic commitment to coal will likely meet powerful resistance from Japanese industry, which is still heavily dependent on the fuel. Still, Mr. Suga’s announcement may cause the country to rethink its commitment to coal in favor of cleaner, more diverse energy sources.

Japan is already considering a substantial increase in its supply of wind and solar power, and it is also looking at newer, less-established technologies, such as plants that burn ammonia or hydrogen.

Credit…Koji Sasahara/Marubeni Corp., via Associated Press

Restarting nuclear power plants may also be on the table, despite widespread public resistance to the idea. In his speech on Monday, Mr. Suga said that Japan would continue to develop nuclear power with “maximum priority on safety,” a remark that drew a round of boos and hisses from members of Parliament.

Some parts of the country will have a head start on Mr. Suga’s overall climate pledge. Movement toward the new goal had already started on the local level, where 150 municipal governments have pledged to be carbon neutral by midcentury.

Major corporations such as Toyota and Sony have committed to similar timelines for zeroing out their emissions.

But even if Japan achieves its goal, it will not by itself be enough to halt or even slow the current trend of global warming, a goal that requires a global effort.

Japan is already feeling the consequences of climate change. Rising temperatures across the country have contributed to deadly heat waves. And scientists say that global warming also contributed to the size and intensity of the devastating typhoons that struck the country last year.

Preventing a climate catastrophe will require “a transformation of the energy system that has underwritten modern society,” said Kentaro Tamura, director of Climate and Energy Area at the Institute for Global Environmental Strategies in Kanagawa, Japan.

“There’s no question that having to make such a drastic change in the extremely short period of just 30 years is very difficult,” he said.

But, he added, “I’m optimistic.”

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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