Japan shelves carbon emissions trading scheme

TOKYO, (Reuters) – Japan postponed plans for a   national emissions trading scheme yesterday, bowing to   powerful business groups that warned of job losses as they   compete against overseas rivals facing fewer emissions   regulations.

The government has submitted a climate bill to parliament   that includes a one-year deadline to design a national trading   scheme. After yesterday’s delay, that bill faces revisions in   the next parliamentary session that begins in January.

The decision is a blow to the European Union’s hopes that   other top greenhouse gas polluters will introduce emissions   trading schemes and follows setbacks to similar efforts in the   United States and Australia.
A U.N. meeting in Cancun, Mexico, this month failed to   clear uncertainty over a global climate framework beyond 2012.   This is likely to cause some big emitters to take their time   in rolling out tougher greenhouse gas regulations,   particularly for carbon dioxide (CO2) from burning fossil   fuels such as coal and oil.

Neighbouring South Korea has delayed the introduction of   its emissions trading laws into parliament until February   because of business concerns.

Japan’s National Strategy Minister, Koichiro Gemba, who   was appointed to review the government’s core green policy   steps, said the trading scheme needed further careful study,   indicating that it had effectively been shelved.

He stressed, however, that it had not been scrapped   entirely.
“Overseas circumstances have changed. Our views on   emissions trading schemes have also changed,” Gemba said,   referring to developments including U.S. and Australian moves   since the government approved its draft climate bill in March.

“But we haven’t given up on plans to introduce an   emissions trading scheme,” Gemba told a news conference after   ministers in charge of climate issues met yesterday morning.

Japan, the world’s fifth-biggest greenhouse gas emitter,   had been expected to launch a trading scheme that would curb   companies’ emissions from as early as 2013, after principles   for the plan had been discussed within the government.

Earlier this month, however, the ruling Democratic Party   said an emissions trading scheme could hamper investments in   key industries.

Gemba said it was important to get the timing of the   launch right, while the design of the scheme would depend in   part on businesses’ requirements. He said he no longer   believed that forcing companies to accept allocated emission   caps, as in Europe, would work in Japan.

Tokyo is expected to seek other ways to bind companies to   emissions goals so the country can meet an ambitious pledge to   cut greenhouse gas emissions by 25 percent by 2020 from 1990   levels.

Japan’s emissions reduction target, one of the toughest   among major emitters, would be virtually impossible to meet   without deeper emission cuts by manufacturers, power   generators and offices and commercial operations, which   together account for 60 percent of the country’s emissions. Japan also has a longer-term target to cut carbon dioxide   from fossil fuels by 30 percent from 1990 levels by 2030.

Tokyo remains committed, however, to levying a new tax on   CO2 in October next year and to expand a pilot plan floated   last year for increased renewable sources of electricity, with   related bills to be submitted in the next parliamentary session.

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