Cap and trade won’t hurt: eco panel


The proposed cap-and-trade emissions program would have little adverse effect on Japan’s economic growth or jobs, and would cut greenhouse gas emissions by up to 18 percent by 2020, according to a report by an Environment Ministry panel.

The program for firms to limit and trade greenhouse gas emissions was one of the campaign pledges by the Democratic Party of Japan but was shelved for the immediate future due to concern over potential effects on economic growth and employment.

An expert panel from the Environment Ministry simulated the program’s effects on the economy, using an economic model to predict production and earnings for cases where firms meet their emissions reduction requirements.

According to the simulation, if the program requires all Japanese firms to cut emissions 10 percent from the average amount of emissions between 2006 and 2008, and allows them to trade their excessive emissions to meet their respective requirements, the nation’s greenhouse gas emissions could be 84 million tons in 2020 — 18 percent less than without the program, according to the panel’s report, which was released Monday.

The program may lead to energy cost cuts and greater production of energy-saving products while exerting little adverse effect on any industrial sector, the report says.

Its impact on employment may be limited to less than 0.3 percent of a natural fall in productive population through 2020, the report adds.

The cap-and-trade emissions program has been adopted in Europe and California as an effective means to reduce greenhouse gas emissions.

Although the program has been shelved in Japan, calls backing it are expected to grow to help reduce emissions, which are likely to rise after more fossil fuels are used to generate power to cover for idled nuclear power plants.

Solar power exemption

The Ministry of Economy, Trade and Industry will exempt solar power stations from regulations under the factory location act to encourage construction of large-scale facilities.

The decision is in line with the government’s efforts to promote renewable energy amid heightened public concern over the safety of nuclear power due to the crisis at the Fukushima No. 1 power plant.

The rule change would eliminate the obligation of the operators of solar power plants to notify municipal governments of their plans 90 days before starting construction and use 25 percent of the plant site as green spaces or environmentally friendly facilities.

The relaxation of rules was approved Monday during a subcommittee meeting of the Industrial Structure Council, a METI advisory body.

After soliciting public opinion, the ministry will revise related ministry ordinances ahead of the planned introduction in July of a renewable energy feed-in tariff system.

Under the system, utilities will be required in principle to buy all power generated by companies, households or others from renewable energy sources.

So far, solar power plants with site areas exceeding 9,000 sq. meters have been subject to the factory location act.

The committee determined that solar power plants should be exempt from such regulations because of their limited adverse impact on the environment.

Energy efficiency

The Cabinet approved a bill Tuesday that would encourage improvement in building materials’ energy efficiency and promote companies’ reduction of electricity use in peak hours.

The bill to amend the act on the rational use of energy is aimed at enhancing energy-saving measures as the government seeks to reduce dependency on nuclear power.

Under the existing law, energy-consuming machinery, including cars, air conditioners and lighting, are subject to the government’s so-called top runner rule, which requires manufacturers and importers to ensure that their products’ energy efficiency levels meet a high standard by a target year.

Building materials, including windows and heat insulating materials, would be subject to the rule.

Companies that reduce purchases of electricity through the use of their own generators and other means in peak hours will be treated by the government as having reduced usage more than they actually have and help them meet their required energy conservation targets.