March 19, 2008

Japan Spending $500 Billion to Cut Greenhouse Emissions

Japanese households and businesses could end up paying more than $500 billion to cut greenhouse gas emissions by 11 percent over the next decade, the trade and industry ministry said Wednesday.

The report mapped out the changes that consumers and industry would have to make in order to cut emissions of carbon dioxide and other gases blamed for global warming below 2005 levels by 2020.

The forecast, by the Ministry of Economy, Trade and Industry, comes as Japan is struggling to meet obligations under the Kyoto global warming pact to cut greenhouse gas emissions by 6 percent under 1990 levels by 2012.

In negotiations that eventually are to lead to a treaty to succeed Kyoto when it expires in 2012, Japan has pushed for a global goal of cutting emissions by 50 percent by 2050, though it has not set a base year.

The METI report, however, predicts a hefty price tag for relatively modest gains.

Cutting gas emissions by 11 percent from 2005 levels only translates into a 4 percent reduction from 1990 levels - meaning the steps outlined in the report would fall far short of what Japan has already committed to under Kyoto.

The forecast estimates households could spend $269 billion on steps such as installing solar panels and buying energy efficient appliances, air conditions and automobiles. The annual cost for household came to about 40,000 yen, or a little over $400.

Industry, meanwhile, faces expenditure of $258 billion by switching to energy efficient technology, using fleets of clean-burning cars, and increasing dependence on nuclear energy.

The report, however, did not include estimates on how much money consumers and businesses would save by cutting electricity and gasoline bills, for instance. The study also was based on presently available technology.

Japan's reduction levels could also be bolstered by purchasing carbon credits on the open market. Such credits are issued by countries that for whatever reason have cut gas emissions more than they are obligated to.

They then make money by selling so-called pollution rights to countries such as Japan that are having difficulties reducing emissions.

The Kyoto Protocol, negotiated in 1997 in Japan, commits 36 industrialized nations to cut greenhouse gas emissions an average of 5 percent below 1990 levels between 2008 and 2012.


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Ministry of Economy, Trade and Industry