The Japan Bank for International Cooperation said Wednesday it will provide assistance for a project to promote the use of fluorescent lamps, which consume less electricity than incandescent bulbs, in Chinese homes.
The initiative, which aims to reduce greenhouse gas emissions, is designed to earn emissions credits for Japanese companies, which will then be sold to help fund the project, the government-affiliated bank said.
Similar efforts in the past have involved large-scale projects such as wind farms. It is unusual for the bank to sponsor residential energy conservation projects.
The project has two objectives: to improve the environment in China, which is the world's second-largest emitter of carbon dioxide, and to promote the use of the fluorescent lamps, creating opportunities for Japanese manufacturers of energy-saving appliances.
The Japan Electrical Manufacturers' Association is also taking part in the project, the bank said.
The Chinese side will subsidize the purchase of fluorescent lamps by consumers. Assuming 1.5 million Chinese households switch to fluorescent lamps, power use would be cut by 500,000 kw, JBIC estimates. Revenue from the sale of emission credits will be used to cover part of the cost of the subsidies.
JBIC will extend loans for the project and introduce to the Chinese government Japanese companies looking to purchase emissions credits.
Projects to encourage the use of energy-efficient refrigerators and air conditioners in China are also being studied.
Under the 1997 Kyoto Protocol, Japan is required to reduce its greenhouse-gas emissions between 2008 and 2012 by 6 percent from 1990 levels.
The target can also be met through the U.N. Clean Development Mechanism, which allows companies in rich countries to earn carbon emissions credits in exchange for helping cut greenhouse gases in developing nations.
Such transactions are complex and risky, so JBIC will coordinate between developing countries and Japanese firms.