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Sunday, Nov. 7, 2004

RUSSIA'S RATIFICATION OF KYOTO

Japan now has to get serious about greenhouse gases


Staff writer

When Russian President Vladimir Putin put the finishing touches on his country's ratification of the Kyoto Protocol on Friday, reducing greenhouse gas emissions also moved one notch higher on Japan's policy agenda.

The 1997 Kyoto Protocol on curbing greenhouse gas emissions needed the ratification of industrialized nations that together accounted for at least 55 percent of emissions of developed countries in 1990. The participation of Russia, whose emissions accounted for 17.4 percent of the total, paves the way for the pact to take effect in February.

Japan will now have to redouble its efforts to meet its pledge of cutting greenhouse gas emissions by 6 percent from 1990 levels by 2008-2012. This is becoming an increasingly tall order to fill, as emission levels in fiscal 2002 were 7.6 percent higher than in 1990.

The Environment Ministry hopes to introduce a carbon tax, which it considers the most effective way to reverse this trend. While the business community strongly opposes the tax, observers say Russia's support has given the plan a push forward, as Japanese industry will come under increasing pressure to compromise.

Some experts also suggest Japan may have to purchase emissions credits from Russia, saying it would be difficult to achieve the reduction target on its own.

Naoyuki Yamagishi, climate change policy officer of the environmental group WWF Japan, said Russia's ratification dispels the atmosphere of uncertainty that surrounded the protocol and gave the impression that meeting the reduction goal was not urgent.

Facing the reality that Japan's greenhouse gas emissions continue to grow, more people will question the claim that voluntary efforts on the part of companies will be enough to achieve the target, he said.

"I believe criticism and doubts over industry's stance will gradually increase, serving as body blows" and nudging companies to compromise on the carbon tax and other measures to cope with global warming, Yamagishi said.

His view was shared by Kentaro Tamura, a climate policy researcher at the Institute for Global Environmental Strategies, a think tank researching environmental issues, who added that the business community might agree to the tax if the government proposes some conditions.

Industry, however, seems unruffled so far by the latest developments.

Although the Environment Ministry included various tax breaks to reduce the burden on industry when it unveiled details Fridays of its carbon tax plan, the Japan Business Federation (Nippon Keidanren) said its objection to the levy remains unchanged.

"Even if an environment tax were to be introduced, it would not necessarily lead to a decline in energy consumption," argued Meguri Aoyama, Keidanren's chief economist in charge of environmental issues.

He noted that while gas prices have gone up by about 20 yen to 30 yen a liter over the past half year due to higher crude oil prices, it has not led to a fall in demand.

Moscow's ratification can also give Japan new ammunition in its fight to curb greenhouse gases, in the form of emissions buying, experts say.

Russia has already met its emissions reduction target, largely due to falling economic activity since 1990. Thus it can sell any extra cuts to developed countries, which can include the purchased amount in their own reduction total.

Takamitsu Sawa, director of Kyoto University's Institute of Economic Research and a member of an Environment Ministry panel discussing the carbon tax, predicted that Japan will become a major customer of Russia's emissions credits.

Sawa said business circles, as well as the Ministry of Economy, Trade and Industry, might argue that the government would be better off spending money to buy emissions quotas from Russia to achieve the reduction target rather than investing in efforts to cut emissions domestically, as it is cheaper.

Because the United States has refused to join the treaty and the European Union will be able to fulfill its target of an 8 percent cut by itself, Japan will be the only country that would be buying a large amount of emissions quotas from Russia, he said.

Given such circumstances, "Russia may try to sell its emissions to Japan at a high price," he said, adding he fears Japan may be exploited and the business community won't try hard to meet the emission reduction target.

But Tamura of IGES said he does not think the business community and METI will simply demand that Japan purchase quotas from Russia without domestic efforts to cut emissions.

Such actions wouldn't contribute to emissions reductions on the global level and would be criticized by the international community, he said.

But Tamura acknowledged that because Japan is unlikely to be able to achieve its target by 2012, it would have no choice but to buy credits from Russia or the EU.



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