March 12 (Bloomberg) -- Japan’s Cabinet has endorsed a climate-protection draft law today that would cap industrial emissions for the first time and thrust the second-biggest economy into the $125 billion market for trading carbon credits.By Shigeru Sato and Takashi Hirokawa
A group of unspecified polluters could buy and sell permits for releasing greenhouse gases under the plan, to be submitted to the current session of parliament, Trade Minister Masayuki Naoshima told reporters in Tokyo. Some polluters will get a flat ceiling on all emissions, and others will have a limit per unit of production, he said.
Prime Minister Yukio Hatoyama set a goal for Japan to cut emissions 25 percent by 2020 and may pursue a European-style carbon trading system. Power utilities, steelmakers and seven other industry groups have said now isn’t the time to pass a law they claim will hurt Japanese business as it competes with peers in China and India who won’t face the same pollution limits.
“Industrial groups have more reason than ever to oppose emissions cap as companies struggle to stay competitive and capture bigger shares of overseas markets as local demand shrinks” because of the declining population, said Kuniyuki Nishimura, director of the global-warming division of Mitsubishi Research Institute Inc. in Tokyo, an industry think tank.
The government, which needs parliamentary approval, will complete designing the cap-and-trade program within a year from the date when the bill becomes law, Environment Minister Sakihito Ozawa said yesterday. By that time the government also will determine the start date for proposed carbon trading as well as emissions-limit levels for industries.
The draft calls for a possible carbon tax from the year starting April 2011, the construction of more nuclear reactors and the expansion of premium “feed-in” power rates to cover all renewable energy, including hydropower, solar, wind and geothermal power and generation from biofuels, Ozawa said last night.
--With assistance from Tsuyoshi Inajima and Yuji Okada in Tokyo. Editors: Alex Devine, Ang Bee Lin
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