Japan to launch trial carbon trading in autumn -PM

Japan will start a trial system for carbon trade in the autumn, Prime Minister Yasuo Fukuda said on Monday, unveiling a new climate change policy that set a goal for cutting greenhouse gas emissions for 2050 -- but not for 2020.

Japan, the world's fifth-largest emitter, estimates it can cut greenhouse gas emissions by 14 percent by 2020 from current levels, Fukuda said, acknowledging but not bowing to pressure to set a firm interim target as host of the G8 summit next month.

Japan will aim to cut its emissions by 60-80 percent by 2050 and announce an interim target sometime next year and contribute up to $1.2 billion to a new multilateral fund with the United States and Britain that will help developing countries fight global warming, Fukuda added in a speech.

"When talking about the near future, we no longer have the luxury of encouraging others or spending time playing a game of setting targets for political propaganda," said Fukuda.

"We would like to announce a national target at an appropriate time next year."

Japan hopes to clinch agreement on a "shared vision" to halve global emissions by mid-century at the Group of Eight summit, where a climate change session will also be attended by big emerging countries such as China and India.

"It is impossible to achieve this goal without the participation of major emitter countries and unless all the countries of the world take part in some form," Fukuda said.

The European Union, which has already set a target of reducing emissions by 20 percent by 2020, and developing countries argue rich nations should take the lead by setting bold 2020 targets for reducing emissions that cause global warming.

But the United States, a top emitter along with China, has said it will only accept binding emissions curbs on condition major emerging countries also agree, something they have so far refused to do so. Washington's stance, however, is likely to change after a new president takes office in January 2009.

Fukuda also said Japan would introduce in the autumn a trial system for carbon trading, seen as one effective way to reduce greenhouse gas emissions. But he steered clear of giving a date for the launch of a full-scale trading scheme.

Unlike the European Union, which imposes a cap-and-trade system to bind polluters to mandatory emissions limits, Japan has encouraged voluntary pledges from industries to cut emissions.

Some Japanese industries, such as steelmakers, oppose a European-style system, saying it would hurt their global competitiveness. "Our country ... should shift to a positive stance of proposing effective rules rather than continue to spend time and energy on looking for problems with the system," Fukuda said.

"It will be important to set effective rules that lead to real efforts to reduce emissions and to technology development, and to create a healthy market based on real demand, that does not lend itself to money games," he added.

Fukuda also proposed raising the proportion of Japan's energy from "zero emission power" sources such as nuclear, solar, wind and hydro power to more than 50 percent from the current 40 percent, and said an environment tax should be considered as part of overall tax reforms to be debated later this year.

Opposition party lawmakers and environmentalists have urged Fukuda to take a bold stance on an interim target to persuade industry and voters to get serious about climate change and convince emerging countries to join a new global framework.

Japan is the only one among the world's top five emitters under pressure to meet a Kyoto Protocol target. Domestic industries still resent the tough target of reducing emissions by 6 percent set for Japan under Kyoto, which binds 37 industrialised nations to cut emissions by an average 5 percent below 1990 levels by 2008-12.

Source: WBCSD