Distinguished leaders, guests, thank you very much for inviting me to speak at this very important conference, particularly thanks to chairman Gao. My name is Yasuyo Yamazaki and I am the Chair of the “Sun-Based Economy Association.” I was a partner at Goldman Sachs & Co. based in the US until 2002. During my tenure as a partner, I became the president of their asset management business in Japan and launched the nation’s largest foreign-affiliated asset management company with a total asset of 30Billion Dollars. In 2002, in an attempt to become a more conscious global citizen, I established a think tank to advocate policies to improve economic relations around the world and shared my thoughts in writing through the 15 books that I published.
After the Lehman shock in 2009, I knew there was a need to change the world’s economic system and thus proposed the concept of the “Sun-Based Economy,” which I would like to explain further, and have launched the “Sun-Based Economy Association” which has gained many supporters. The “Sun-Based Economy” is not simply referring to solar power. It is an economic system that will replace the current “Oil-Base Economy” which started back in beginning of the 20th century. I will get into more details later during this presentation.
As you may all remember, a massive earthquake of a magnitude that comes only once in a thousand years struck eastern Japan on March 11th, 2011 at 2:26 PM, killing 20,000 people.
And on this day, Japan experienced an ultimate devastation with one of the largest nuclear meltdown at Fukushima Nuclear Power Plant, followed by hydrogen explosions.
But there was one blessing that day. On the morning of March 11th, the day of the earthquake, the “Renewable Energy Bill”, which I contributed to its writing, was passed by the cabinet during the cabinet meeting. This bill allows renewable energy power generation based on the “Feed-in Tariff (FIT)” policy, already proven successful in Germany, to also start in Japan. This law would not have been established if the cabinet meeting was scheduled in the afternoon, and would have seriously delayed the start of renewable energy initiatives in Japan.
This very last bill to pass through Prime Minister Kan's cabinet on August 27th, 2011 increased the momentum to build a sustainable society based on renewable energy in Japan.
Right after the earthquake, my friend Mr.Yuji Kuroiwa has taken my advice and pledged “solar power” as part of his public policy, and he then was elected as the governor of Kanagawa Prefecture, a municipality with second-largest population after Tokyo. This is a photograph taken at the “Kanagawa Conference of Sun-Based Economy” sponsored by Governor Kuroiwa. Minister of Agriculture, Forestry and Fisheries, Masayoshi Son (CEO of Softbank), Former President of Tokyo University, Governor Kuroiwa, and myself all participated in the event.
Kanagawa Conference of Sun-Based Economy - Let the Solar Revolution Begin! - held on June 28th, 2011
Top Seminar : "Strategy for Realizing a Sun-Based Economy"
The unprecedented earthquake and the nuclear crisis made me determined to start my renewable energy business. And among all the projects I am involved with, the largest solar power plant in Japan currently being built in Setouchi City in Okayama Prefecture gained a lot of attention.
"The Setouchi Kirei Solar Power Plant Project " (Image when Completed):
The size of the land is 500ha, 2 km times 2.5 km, which is 10 times the size of Tokyo Disneyland. This may be considered small in China, but it is the largest in Japan. This area used to be under seawater, but the water was drained to become Asia’s largest salt pan. Salt was produced by drying sea water under the sun. However, the salt business collapsed 50 years ago, due to new salt production technology, and the area has since then been left untouched.
In our response to the request from the Setouchi City mayor to "revitalize the region by utilizing wasteland," we have created a business plan to enable "permanent development of the region" which gained both local and national support.
And through this project, we introduced some key business and financial innovation. One was the formation of an international coalition.
While my company, Kuni Umi Asset Management, is the operating entity for the project, we brought in powerful Japanese companies such as Shimizu Corporation and Toyo Engineering as well as global energy power house such as GE and IBM and chose Trina Solar, the largest solar panel manufacturer in the world as our supplier—generating one of the most powerful and strategic coalitions among world's leading companies from China, Japan and US.
The other factor is the financial innovation. For this project, we have introduced global project finance and the newest securitization method, and thus, allowed 28 financial institutions, including 3 Japanese mega banks, participating in loans that led to raising of an unprecedented total of JPY 110 million in project finance, the largest in Japanese financial history. In addition, the “infrastructure fund” policy was also established and launched based on my recommendation to the Tokyo Stock Exchange. These events enabled renewable energy initiatives to officially start in Japan.
Now I turn to the global issue. Will renewable energy such as solar power thrives and have a sound future? Or, will this end up as a mere trend? To get a deeper understanding, let's try to take a closer look at the essence in the kinds of change that we are witnessing in the world. I believe it is very important for China and Korea and Japan should collaborate. Fundamentally, my idea of a new global economic system, the “Sun-Based Economy,” which I am advocating needs to replace today's mainstream “Oil-based Economy."
The Birth of “Oil-based economy” and its Limitations:
| Oil | |
| Sustainability | 70 years |
| Geographic Distribution | Unequal |
| Characteristic | Non-Renewable |
| Resource | Depletion |
| Environment | Air Pollution・Global Warming |
| Cost | Rising |
| Economic System | Monopoly |
| World Order | War・Conflict |
The "Oil-based economy" emerged in the beginning of the 20th century in the US, the lead oil-producing country at the time. The mass usage of this useful resource was made possible, mainly by the US, resulting in advancement of both motorized and aerial modes of transport, birth of petrochemical products for increased convenient, pesticides for increased food production, and the largest financial growth ever experienced by people.
The global economy which existed before the "Oil-based economy" was the "Coal economy" led by Great Britain where steam engine was invented. Then the US emerged as the global leader of 20th century global economy by introducing the "Oil-based Economy".
However, the "Oil-based economy" has its downside. It brought about war, disparity, terrorism, and social anxiety to the world. If we allow "Oil-based economy" to continue to dominate, it will inhibit economic growth, but more critically, it will hinder global stability and peace. This is rooted in the fact that oil is geographically-limited in its availability, non-renewable, and non-sustainable with a guarantee of complete depletion of supply soon.
Humans have been struggling over oil for some time. World War II started with Germany and Japan forming an alliance with the Axis force. It was the biggest mistake in history. It was the biggest mistake in history. But this war was also about fighting over global oil supplies. Japan declared war against the US after US announced an oil embargo to Japan. And Germany embarked on invading the Soviet Union to access their oil supply. World War II ended with victory for the Allies including China, however this did not mark the end of the struggle over oil supplies.
After World War II, many countries in the Middle East became independent. However, situation between the Middle East and the western nations became contentious. In the Iran-Iraq wars in the 1980’s the US supported Iraq. In the Gulf War in the 1990's, the US-led army fought against Iraq. Then there was the September 11th, 2001 terrorism in the US. The US invaded Iraq and later IS Islamic state would take control of most of Iraq. China and Japan import more than half of their oil from the Middle East. But it has been the center of countless civil wars, terrorism, ethnic conflicts, genocides and refugee crisis, in part due to its role as oil producer and provider.
Now, it is critical to acknowledge that the cause is deeply rooted in the world's heavy reliance and repeated conflict over a natural resource that is "geographically limited," "non-renewable," and "unsustainable". This situation must come to an end, and it can only happen by abandoning the Oil-based economy.
What is “Sun-Based Economy”
| Oil-based economy | Sun-Based Economy | |
| Sustainability | 70 years | 2 Billion years |
| Geographic Distribution | Unequal | Equal |
| Characteristic | Non-Renewable | Renewable |
| Resource | Depletion | Inexhaustible |
| Environment | Air Pollution・Global Warming | Clean・No Impact on Global Warming |
| Cost | Rising | Reducing |
| Economic System | Monopoly | Sharing・Mutual Cooperation・Network |
| World Order | War・Conflict | Coexistence・Peace |
On the contrary, the "Sun-Based Economy" which I am advocating, is fundamentally different from the "Oil-based Economy." The "Sun-Based Economy" promotes a fair and stable economic mechanism through "solar benefits" that are readily and abundantly available anywhere, anytime, and by anyone in the world. This equitable, sustainable and renewable resource cannot be depleted. In fact, its existence and its benefits are known to last at least another 2 billion years. It important to note that should "Sun-Based Economy" be adopted worldwide, basic human necessities are guaranteed by the "the Sun benefits" for years to come.
From ancient times, the sun was considered "grace of all things" and "divine." Plants grow by photosynthesis enabled by the sun, and those plants become food for animals including humans, and they also serve as fuel in forms of firewood and charcoal. Humans and animals survive by breathing air containing oxygen produced by the sun and plants.
Furthermore, the heat from the sun delivers water in forms of rain and snow. It is the sun that provides a habitable environment for all living beings with a complete ecosystem of air, water, nourishment and a purification system as well.
Now technological advancements of the last 100 years enable us to collect solar energy in different forms and methods: light, heat, winds, water, trees. Those natural phenomenon can be converted into electric power in massive amounts at a very low cost. This new form of energy is clean, safe and renewable, thus no longer requires any forms of fossil fuel such as oil, charcoal, natural gas, firewood or animal wastes.
I would like to emphasize that my definition of "solar benefit" is more than just "renewable energy." By "solar benefit," I am referring to it being an integration of the traditional benefits including food, fuel, water and environment with the "sun-generated electricity" which was enabled and is now in the hands of humans.
I would like to further note that "Sun-Based Economy" is also more than just a 'green' policy as in "Renewable Energy-based Economy" or the "Green New Deal" set forth by President Obama of the US at the time of his inauguration. It is a fundamental global economic system that will provide basic human needs for all mankind, fairly, sustainably and peacefully. It is a scalable economic system that will allow all global citizens to peacefully coexist and thrive, even with the world's population reaching 10 billion.
The good news is, "Sun-Based Economy" is very feasible. I can say this because Sun-Based Economy's biggest strength is that it can be executed at a very low cost.
Please look at the following graphs. These show the cost of solar power generation and wind power generation. The cost which is already less than thermal and nuclear power generation, is expected to become even lower.
"Lower pricing” is the inherent nature of "sun-generated electricity". We all know that the more we use oil, the more resource we deplete and thus result in increase in oil price. However, sun-generated electricity works in the exact opposite way-the increased innovation and mass production of power generators and power transmission systems will reduce the price of energy.
There are two other important points to add regarding "electricity generated from the sun."
One is that it is a truly environmentally-friendly form of energy. Electricity generated by solar and wind power, does not emit CO2 which causes global warming. And unlike coal or oil, it will not pollute the air and cause hazard to human health.
Additionally, sun-generated electricity does not pose any risk like the nuclear power plants. Nuclear power plants have the risk of causing devastating environmental destruction, driving millions of people away from their homeland as they did in Chernobyl, Russia and Fukushima, Japan. There are also difficulties in disposing the spent nuclear fuel. And in our world today, nuclear power plants have the possibility of becoming a terrorist target made increasing possible by advancement of nanotechnology and AI.
All the risks mentioned can be mitigated with sun-generated electricity. It is clean, safe and sustainable from both environmental and security aspect.
Leadership in "Sun-Based Economy" is the Key to Solidifying China's Superpower Status:
Based on your venerable leader, Deng Xiaoping's idea of "US-China Economic Alliance", a thought emerged in me that China will benefit most out of globalization and will become the world's largest economic superpower during the 21st century. This was back in 1993.
This was following Deng Xiaoping's famous "Southern Tour of China" and his quote "It doesn't matter if a cat is black or white, so long as it catches mice" was reported worldwide. Right around that time, I had a chance to talk about China's future with some of the top executives at Goldman Sachs, a company which I will eventually become a managing partner for. I expressed my thoughts that "China will become the world's largest economic superpower in the 21st century," and the response from them was that "China will become significant in the 22nd century." The concept of "China becoming the world's largest economy" was a fairytale even amongst the worldly executives at one of the most successful financial institution at the time. I wrote about this episode in my book "勝つ力 ( Katsu Chikara - The Ability to Win)" published in Japan in 2004.
In November 2001, Goldman Sachs published a report known as the BRICs report. In it, the report states that China will surpass the US by 2041 to become the world's largest economy in terms of GDP. However, I found the prediction of this report to be baseless. Under the current state, China, with a population of 1.3 billion, needs to overcome resource and environmental challenges, for them to surpass the US economy. Moreover, this means that China, in becoming the largest economic super power, will need to assume the responsibility of "securing the global economic system" as is currently held by the US, and to build a relationship of trust with countries all over the world. China can become the world's largest economic superpower as it overcomes these conditions, but how?
It is of paramount importance for China, as a non-oil producer, to break away from 20th Century Oil-based Economy and become a leading force to promote the 21st Century Sun-Based Economy – if it wants to surpass the US. Through writing my two books, "米中経済同盟 (Bei-Chu Keizai Doumei - US-China Economic Alliance)" published in 2007, and "太陽経済 (Taiyou Keizai: The Sun-Based Economy)" published in 2009, I could acquire a good understanding and clearly formulate an economic theory that "Sun-Based Economy" will be essential in a global economy centered around US-China economic alliance.
In 2016, China already proven itself to be the global leader in "Sun-Based Economy", through its strength in solar and wind power generation. And Trina Solar is now the world's top manufacturer of solar PVs, and Goldwin is the world’s largest in wind power manufacturing.
And State Grid Corporation of China (国家電網) has become the world's second largest company in sales volume, and are moving for a “ ‘Global Energy Interconnection’ power grid" which will enable distribution and utilization of sun-generated electricity around the world.
But above all, the Chinese government are moving steadily towards implementing policies that will become the pillars of the "Sun-Based Economy." Indeed, the current level of environmental pollution and health hazards in China is beyond tolerable. However, China's policies are moving away from fossil fuels and more towards ecology.
As long as China remains on this course, it will regain its 北京秋天 (The beautiful autumn sky of Beijing) and 山紫水明 (scenic beauty). The environmental healing can yield a recovery of the ancient Chinese culture as well.
China is positioned to become the leader in "Sun-Based Economy," faster than any other nations. The immediate challenge for China is its ability to transition its entire economic system to "Sun-Based Economy" to enable itself to become the most influential global superpower. Equally important is for China to become an advocate and enforcer of "Sun-Based Economy" around the world.
If China can pull the rest of the world out of the obsolete oil-based economic system based on the premise of geographic inequality, unsustainability, and depletion, and restore the global economy with Sun-Based Economy based on the principles of equality, sustainability, and renewability, it can then become an influential power in promoting peaceful and prosperous coexistence amongst nations and their people despite the population reaching or even exceeding 10 billion people. Only then, will China become the largest economic superpower, but also a premier world leader.
And I would like to conclude my talk by saying, that with the reputable companies and their cutting-edge technology, it is utmost importance for Japan to cooperate with China to spread the "Sun-Based Economy" around the world, and together, lead other powerful nations such as the US and India to achieve and realize this new economy for a better future for all citizens of the world.
Based on requests from my friends, I am scheduled to publish a Chinese version of my book on “Sun-Based Economy.” And this time I plan to title it as “Sun-Based Economy and the 21st Century-China,” as China should be the global leader for bringing the new, sustainable economic system to the world.
