A cap-and-trade system for reducing greenhouse gas emissions would be effective in promoting Japanese firms' involvement in the battle against global warming, a report compiled by five major Japanese firms said Friday.

The proposed emission credit trading system, which sets an upper limit on emissions and requires companies to curb greenhouse gas output, has come under fire for potentially impeding business activities.

But the positive assessment it receives in the discussion paper by Aeon Co., Ricoh Co., Fujitsu Ltd., SAP Japan Co. and Tokyo Steel Co. could affect debate about steps to combat global warming.

The firms also proposed to consider the introduction of a carbon tax that targets small entities and households not covered under the emissions trading system, to achieve a more equitable sharing of burdens.

The paper pointed out the current voluntary action plan set by the industry creates inequality between companies that follow the rules and those that do not, and said the cap-and-trade system would more equally encourage companies to work on cutting emissions.

Introducing the system would also provide an advantage for firms such as solar panel manufacturers.

On the proposed carbon tax, which would be imposed depending on the amount of carbon dioxide emitted, the paper said the levy would encourage consumers to purchase energy-saving products and services.

Experts welcomed the discussion paper, despite it being limited to five firms, and called for further debate among industries.

"It is a great step forward in deepening our discussions over measures against global warming," said Takejiro Sueyoshi, a special adviser to the United Nations Environmental Program's finance initiative, adding entities should speak for themselves instead of using industrial groups' names in voicing opposition.