Japan launches massive stimulus package

Shinzo Abe: Bad guy done good?

The Japanese government has approved a massive emergency stimulus package, worth ¥10.3trn (£71.5bn), aimed at restoring growth in the long-stagnant economy.

The package will be used to fund infrastructure investment, disaster mitigation projects, subsidies for companies which invest heavily in research and development, and financial aid to small businesses. The government hopes to raise growth by 2 percentage points, as well as add over half a million jobs to the economy.

The prime minister, Shinzo Abe, also made clear again that he is planning to exercise far more direct control over Japanese monetary policy than is conventional. Before Abe was elected, he announced that the BoJ should embrace "unlimited easing" and cut interest rates below even the 0.1 per cent paid on deposits "to strengthen pressure to lend".

Today, Abe reiterated that pressure, telling a press conference:

We will put an end to this shrinking, and aim to build a stronger economy where earnings and incomes can grow. For that, the government must first take the initiative to create demand, and boost the entire economy.

Abe has no qualms with wild policy. Last week, he "nationalised" industrial stock in Japan, buying private infrastructure with public funds in order to force the pace of investment in the country.

It seems quite clear that Abe is prepared to use every possible channel available to him to push for a return to growth in Japan. The results have been positive so far; bond yields have stayed low, while the yen has finally dropped (which might be bad for the country's elderly, but is very good for its economy overall).

Paul Krugman argues that all of this success isn't exactly on purpose. It bears more hallmarks of Abe –  "a nationalist, a denier of World War II atrocities, a man with little obvious interest in economic policy" – doing exactly the opposite of what he's told to do based purely on his contempt for learned opinion:

It will be a bitter irony if a pretty bad guy, with all the wrong motives, ends up doing the right thing economically, while all the good guys fail because they’re too determined to be, well, good guys. But that’s what happened in the 1930s, too…

On the 22nd, the Bank of Japan will meet, and we'll see how much it listened to Abe. If it does follow his requests/demands for aggressive monetary policy, the country will solidify its reputation as one to watch in the immediate future.

Shinzo Abe. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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To preserve the environment we hold in common, everyone has to play their part

The challenge of building a clean future based on the common good of Londoners demands that politicians, business, communities and individuals each take a share of the responsibility and of the benefits.

The environmental challenge facing our capital city can seem overwhelming. Our air is poisonous. Our infrastructure built for the fossil fuel era. The need to build a clean, low carbon future can seem incompatible with competing challenges such as protecting energy security, housing and jobs.

The way we tackle this challenge will say a lot about the type of city we are. We inherit the world we live in from the generations that went before us, and only hold it until it is time to hand it over to future generations. The type of environment we leave behind for our children and grandchildren will be affected by the decisions we need to take in the short term. Our shared inheritance must be shaped by all of us in London.

Londoners currently face some crucial decisions about the way we power our city. The majority of us don't want London to be run on dirty fuel, and instead hope to see a transition to a clean energy supply. Many want to see that clean energy sourced from within London itself. This is an appealing vision: there are upsides in terms of costs, security and, crucially, the environment.

Yet the debate about how London could achieve such a future has remained limited in its scope. Air pollution has rightly dominated the environmental debate in this year’s mayoral election, but there is a small and growing call for more renewable deployment in the city.

When it comes to cities, by far the most accessible, useable renewable energy is solar, given you can install it on some part of almost every roof. Rooftop solar gives power to the householder, the business user, the public servant - anyone with a roof over their head.  And London has upwards of one million roofs. Yet it also has the lowest deployment of solar of any UK city. London can do better. 

The new mayor should take this seriously. Their leadership will be vital to achieving the transition to clean energy. The commitments of the mayoral frontrunners should spur other parts of society to act too. Zac Goldsmith has committed to a tenfold increase in the use of solar by 2025, and Sadiq Khan has pledged to implement a solar strategy that will make the most of the city’s roofs, public buildings and land owned by Transport for London.

While the next mayor will already have access to some of the tools necessary to enact these pledges (such as the London Plan, the Greater London Assembly and TfL), Londoner’s must also play their part. We must realise that to tackle this issue at the scale and speed required the only way forward is an approach where everyone is contributing.

A transition to solar energy is in the best interests of citizens, householders, businesses and employees, who can begin to take greater control of their energy.  By working together, Londoners could follow the example of Zurich, and commit to be a 2,000 watt society by 2050. This commitment both maximizes the potential of solar and manages introduces schemes to effectively manage energy demand, ensuring the city can collectively face an uncertain future with confidence.

Unfortunately, national policy is no longer sufficient to incentivise solar deployment at the scale that London requires. There is therefore an important role for the incoming Mayor in facilitating and coordinating activity. Whether it is through TfL, existing community energy schemes, or through individuals, there is much the mayor can do to drive solar which will benefit every other city-dweller and make London a cleaner and healthier place to live.

For example the new mayor should work with residents and landlords of private and social housing to encourage the deployment of solar for those who don’t own their property. He should fill the gap left by national building standards by ensuring that solar deployment is maximized on new build housing and commercial space. He can work with the operator of the electricity grid in the capital to maximize the potential of solar and find innovative ways of integrating it into the city’s power demand.

To bring this all together London should follow the example set by Nottingham and Bristol and create it’s own energy company. As a non-profit company this could supply gas and electricity to Londoners at competitive prices but also start to drive the deployment of clean energy by providing an attractive market for the power that is generated in the city. Community schemes, businesses and householders would be able to sell their power at a price that really stacks up and Londoners would receive clean energy at competitive prices.

The challenge of building a clean future based on the common good of Londoners demands that politicians, business, communities and individuals each take a share of the responsibility and of the benefits. Lets hope the incoming Mayor sees it as their role to convene citizens around this aim, and create incentives to virtue that encourage the take up and deployment of solar, so that we have a healthy, clean and secure city to pass on to the next generation.