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Japan in Disarray Over Kyoto
[Analysis] Debate is heating up over drastic anti-global warming measures
Hisane Masaki (hmasaki)     Print Article 
Published 2007-12-06 04:24 (KST)   
This is the fourth part of a four-part article. Read part three.  <Editor's Note>
Debate is heating up within Japan over such drastic anti-global warming measures as a "cap and trade" mandatory emissions trading system and an environment tax levied primarily on fossil fuels such as oil, gas and coal. But any decision appears very unlikely anytime soon because of sharp differences, even within the government.

On the issue of a "cap-and-trade" mandatory emissions trading system, which has been in place in the European Union, the Environment Ministry is favoring the introduction of such a system. But the Ministry of Economy, Trade and Industry (METI) and the nation's most-powerful business lobby, the Japan Business Federation (Nippon Keidanren), are vehemently opposing the idea.

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Among other reasons, the Japan Business Federation, chaired by Canon chairman Fujio Mitarai, cites the difficulty of allotting emission volumes to business entities fairly and increased government controls over the economy. It also argues that the introduction of a mandatory emissions trading system would restrict growth of companies.

The Finance Ministry has recently joined the tug-of-war over a mandatory emissions trading system, clearly siding with the Environment Ministry and calling for the introduction of such a system.

A key advisory panel to Finance Minister Fukushiro Nukaga also warned on Nov. 19 of a possible "huge" public financial burden resulting from the government's larger-than-expected purchases of greenhouse gas (GHG) emission credits to reach the nation's Kyoto goal.

The Fiscal System Council, headed by Taizo Nishimuro, chairman of the Tokyo Stock Exchange, made the unusual warning in a recommendation submitted to the finance minister. The recommendation serves as a guideline for the Finance Ministry to draft a fiscal 2008 government budget in late December.

The warning reflects a growing sense of crisis among panel members over the ever-deteriorating fiscal condition of the world's second-largest economy, which is the worst among major industrialized countries.

Citing Finance Ministry estimates made recently, the advisory panel said in the recommendation that the government might have to buy GHG emission credits worth up to 1.2 trillion yen. "Since this huge burden would not gain the public's understanding, it is necessary for the nation to surely fulfill its 6 percent reduction commitment by mobilizing all possible domestic measures," the advisory panel said.

The advisory panel then stressed the need to take drastic measures to rein in the continued sharp growth in GHG emissions from offices and other commercial facilities as well as from households. "In order to reach the Kyoto goal, the nation needs to take effective policy measures appropriately without relying excessively on fiscal measures," the panel said.

Noting various risks involved in emission credit purchases, including possible higher purchase costs due to price rises and a weaker yen against the euro or the U.S. dollar, the panel also emphasized the need for the government to acquire emission credits "effectively and steadily" while gaining full public understanding.

On the equally controversial issue of an environment tax, the Environment Ministry has tenaciously pushed for the introduction of such a tax in recent years. But METI and the Japan Business Federation have vehemently opposed the introduction of an environment tax, claiming that any such extra tax burden would erode corporate Japan's international competitiveness.

A recent government survey shows, however, that those who support the introduction of an environmental tax to fight global warming have outnumbered those who oppose the move for the first time. Environment groups are also calling for the introduction as soon as possible of an environment tax as well as a mandatory emissions trading system.

Another controversial issue being hotly debated is daylight saving time. The government survey shows that 56.8 percent of the pollees want daylight saving time to be introduced as part of efforts to promote energy conservation, up from 51.9 percent in the previous survey in 2005. In contrast, 29.3 percent said they are against such a measure, down from 30.2 percent in 2005.

On Nov. 21, the joint council of the Environment Ministry and METI kicked off a full-scale debate on whether to take such drastic measures as a "cap-and-trade" mandatory emissions trading system, an environment tax and daylight saving time.

Although the joint council wants to draw some conclusions on those measures by the end of the year, the odds are clearly against their proponents. The joint council appears likely merely to include the pros and cons of the controversial measures in its final report, due out in late December.
Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy. This is the fourth -- and last -- part of an article that originally appeared on Asia Times on Nov. 30.
©2007 OhmyNews
Other articles by reporter Hisane Masaki

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