The government said Tuesday it will put off creation of a greenhouse gas emissions trading system until after fiscal 2013 in the face of strong resistance from business, a move that bodes ill for the country’s efforts to combat global warming.
The Democratic Party of Japan-led government has already submitted to the Diet a basic bill on climate change that includes an environment tax and fixed-price purchases of power generated by renewable energies, but is apparently backing off on the emissions-trading system while the bill is pending.
Cabinet ministers had decided to introduce an environment tax during fiscal 2011 and a system for power utilities to buy electricity generated with renewable energy sources at relatively high fixed prices in fiscal 2012.
Skepticism lingers, however, about whether Japan can take effective measures down the road because the administration of Prime Minister Naoto Kan has not shown a tough stance on global warming.
Under the planned emissions-trading system, each company would be given a quota, and firms that emitted greenhouse gases in excess of their quota would have to purchase credits from other firms that are below their limit. This has fanned fears that the system could increase the burden on companies.
The environment tax, which the government plans to introduce next October, will raise rates on fossil fuels, depending on the degree of carbon dioxide emitted, and appears only to tweak upward existing levies on oil and coal products.
A program boosting renewable energy will receive “cautious discussion” with a view to its launch in fiscal 2012.