The Tokyo Metropolitan Government launched a mandatory scheme Thursday to reduce carbon dioxide emissions from large office buildings and factories, involving Asia’s first cap-and-trade program allowing entities to purchase emissions credits achieved by others.
The government of Tokyo, home to nearly 13 million people, aims to achieve its goal of slashing greenhouse gas emissions by 25 percent from 2000 levels by 2020 through the newly launched scheme covering around 1,330 offices, commercial buildings and factories that annually consume more than 1,500 kiloliters of energy in crude oil equivalent terms.
In the fiscal 2010-2014 first phase of the scheme, the targeted entities will be required to cut carbon dioxide emissions by either 6 percent or 8 percent from base-year levels that are calculated from average emissions over a period of three consecutive years between fiscal 2002 and 2007.
In the fiscal 2015-2019 second phase, they will be required to slash emissions by 17 percent from their base-year levels.
To meet the emissions-cut targets, offices and factories in the capital can either make efforts on their own, such as updating to energy-saving equipment, or purchase emissions credits from other entities that have reduced carbon emissions more than obligated levels in a system known as cap and trade.
The entities can also buy credits earned through reduction efforts by small and medium-size companies in Tokyo and the entities’ branch offices outside the capital. Renewable energy certificates issued by power generators can be also purchased.
But the credits from outside Tokyo should not exceed one-third of required emissions-cut volumes.
Actual trading under the mandatory system in Tokyo is set to begin in fiscal 2011 after data on reduction efforts in fiscal 2010 are finalized.
Any entity that fails to attain its reduction goal will be ordered by the metropolitan government to cut emissions by 1.3 times the amount it failed to slash in the first phase.