Why is Japan so reluctant to take a leadership role in global climate change negotiations and is trailing in the development of renewable energy? This chapter argues that the source of Japan’s inaction in climate diplomacy arises from its energy policy, which has been discouraging the extensive development of renewables. The root cause of this energy policy is Japan’s energy security concerns that have prevailed in its energy policy since the two oil crises in the 1970s. Since then, the Japanese government has promoted nuclear energy as the primary alternative source to oil, not renewable energy, while pursuing energy conservation. Climate change mitigation policy is closely tied to energy policy over which the Agency for Natural Resources and Energy (ANRE) of the Ministry of Economy, Industry and Trade (METI) has jurisdiction. The lack of strong political leadership on energy and climate policy renders organized economic interests and METI as the most influential. Thus, despite its tremendous potential to become a leader, Japan effectively has relinquished its leadership in climate diplomacy and the development of renewable energy.