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Japan is preparing for the test-run from next January of an emissions-trading market designed to combat global warming.

Environment Ministry sources said the plan will be conducted with the Mie prefectural government and will incorporate about 30 companies. The initiative will allow the ministry to observe such a market before establishing a national market in 2005 or later, the sources said.

Strong opposition to the market remains among business groups, such as the Japan Business Federation (Nippon Keidanren), over fears that the trading regime will restrict corporate activities.

The companies, mostly from the manufacturing sector in Mie Prefecture, are expected to participate in the initiative. They will set their own maximum-emission levels for a year and then buy or sell emission rights based upon whether they come in over or under the limits.

The system, in which firms trade carbon dioxide and other global-warming gases they emit, has been adopted in Britain and Denmark, where it is being used as a means to reduce the countries’ overall levels of emissions while at the same time curtailing costs.

A ministry official has declined to name the companies involved in the test program, saying that the participating firms are “in a delicate position that makes it difficult for them to participate publicly.”

Firms will be able to sell their rights to emissions in the new market if they reduce global-warming gases through energy conservation or the introduction of new energy sources.

Those that emit beyond allowable levels, however, must purchase the right to emit the excess amount from other market participants. The emission and reduction levels will be based on participating firms’ declarations.

The market will be run five or six times to compile a report for February, the sources said.

The establishment of the trading regime springs from Japan’s ratification in 2002 of the 1997 Kyoto Protocol on global warming.

The pact requires Japan to cut emissions of such gases between 2008 and 2012 by an average of 6 percent from 1990 levels.

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