Japanese Policy Mix Needs Strong Shot Of Emissions Trading



An effective policy approach to turn Japan

into a low-carbon economy needs emissions

trading at its heart, a WWF report has found.

The new research shows that a strong emissions trading scheme would have little impact on the Japanese economy, while allowing the Hatoyama government to effectively reach its ambitious targets for emission reductions.

“Japan has wasted years playing around with voluntary emissions trading, so it’s high time to finally get serious and design a strong scheme for this country, in order to regain our role as a competitive and modern economy”, said Naoyuki Yamagishi, Climate Programme Leader at WWF Japan.

At the centre of WWF’s new Policy Mix Proposal is an economy-wide cap and trade scheme, covering 60% of the country’s CO2 emissions and setting caps in line with Japan’s mid-term and long-term targets for emission cuts – 25% by 2020 and 80% by 2050 against 1990 levels.

The report includes comparative analysis of emissions trading schemes in Europe and America, suggesting that auctioning should be the preferred approach to allocating emission allowances to companies covered by the scheme, i.e. making polluters pay rather than giving them a free ride.

However, the report also looks at alternative allocation approaches for the initial phase of the scheme and other measures to assist polluting industries and major emitters in adjusting to operating in a carbon-constrained world.

“Our research shows that reaching the ambitious targets enshrined in the government’s Climate Bill is possible, and that a strong emissions trading scheme is key to making Japan fit for the low-carbon future”, said Yamagishi.

“Attempts by industry groups to weaken the targets in the Climate Bill or the emission trading scheme are essentially attempts to weaken Japan’s prospects to catch up with countries like Germany that are currently leading the race towards a low-carbon economy.”

The WWF report highlights that emissions trading approaches can also be applied to decarbonise non-industrial sectors which would not be covered by a cap and trade scheme. For example, it recommends reducing emissions from commercial buildings by strengthening a scheme developed for the Tokyo metropolitan area which could then be extended to include the rest of the country.

“We welcome the launch of Japan’s first real emissions trading scheme in Tokyo this week”, said Yamagishi.

“Tokyo’s example shows that the debate for or against emissions trading is over. Our entire country should now follow the capital’s lead to reap the benefits of going low-carbon. The question is no longer if we need such schemes, but how we can design them in optimal ways.”

Apart from emissions trading, the WWF report also outlines a range of other options for rapid decarbonisation in different sectors, e.g. reforming the fuel efficiency standards under the Top Runner scheme that’s aimed at cleaning up the transport sector, starting a nationwide “Energy Conservation Concierge” programme to reduce emissions from private households through advice on smart energy consumption, or introducing a carbon tax on fossil fuels Japan imports from overseas.

“Japan has been in a depression for a long time, and we urgently need to get this country back to dancing”, said Yamagishi.

“Our proposal is basically the perfect recipe for a low-carbon policy cocktail that would do the trick. And the best thing is: it comes almost for free.”