Japan launches voluntary CO2 market

My Green Japan article in ICIS Chemical Business is now available online. In it are some examples of how the chemical industry is responding to the issue of climate change.

The article also reported about how carbon emissions from Japan’s industrial manufacturing sector (including energy, steel, chemical, petroleum, pulp and paper, cement, etc.) is closely being scrutinized by several Japanese green groups.

In relation to this, I just came across this news from Reuters about yesterday’s government launch of a “voluntary” carbon trading market in Japan, which could become a forerunner of a mandatory carbon cap-and-trade scheme in the future.The Japanese government is said to be reluctant to force the mandatory cap on companies’ emissions because of past efforts by industry to clean up and become more efficient. Top carbon emitters, electric power and steel companies, in particular, are resisting any mandatory targets, according to this Bloomberg news.

Under this trial carbon market, companies can sell the cuts they make in carbon emissions against their voluntary targets. Their targets by, the way, should be in line with their relevant industrial sector so as to avoid some sort of “unrealistic, a-load-of-crock targets”.

Companies, of course, that exceed their emissions targets can buy carbon credits from other firms which undercut their targets.

These targets can limit either the total volume of carbon dioxide a company emits or the amount of CO2 per unit of production.

According to Reuters, no pricing details have yet been announced. The Japanese government is now accepting applications for the trial scheme and the closing date is Dec. 12, 2008 for companies to set a voluntary emission cut target for the year to March 2009. The trial scheme will then be reviewed early next year.

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