The Environment Agency has decided to submit a bill on attaining Japan's reduction target for greenhouse gas emissions to the 150-day regular Diet session beginning in January 2002, agency sources said Saturday.

The agency envisions including two economic measures in the law. One would impose an environment tax on oil and other fossil fuels, and the other would allow companies and local governments to trade emission rights, the sources said.

But the law may stipulate only that the measures will be introduced, without specifying details. Working out an environment tax and an emission rights trading system could be left to later discussions among government officials, the sources said.

They said the delay is being considered because there are many things to be examined, including how much tax is needed to create a reduction in emissions, although the measures are generally considered cost-effective.

The new law may also oblige the state and prefectural governments to draw up plans, including forest absorption, on emissions cuts.

In addition, the law may establish a system for monitoring emission cuts by state and local governments, they said.

Also being considered is a mechanism for buying emission rights from abroad.

The agency plans to consign discussions on the new law to a subcommittee of the Central Environment Council, an advisory panel, beginning Aug. 23, and will work out the framework for the legislation by the end of this year.

A law promoting cuts in greenhouse gas emissions was promulgated in April 1999, but it contains no measures other than calling on local governments and companies to work out cut plans.

The agency thinks the new law is needed to carry out Japan's commitment under the 1997 Kyoto Protocol to cut carbon dioxide and other greenhouse gases by 6 percent from 1990 levels between 2008 and 2012.

The protocol was adopted by some 160 countries during the third Conference of Parties to the U.N. Framework Convention on Climate Change in Kyoto in December 1997.