November 1, 2007

Japan May Need Tax To Pay Potential Carbon Credit Bill

Japan needs to implement measures to lower greenhouse gas emissions in order to meet Kyoto targets and avoid a bill of as much as $10.5 billion to buy carbon credits in global markets, according to a report by the finance ministry’s fiscal system council, Bloomberg reports.

Japan must cut annual emissions during the five years starting April 2008 by six percent from the level in 1990. Japan emitted 7.8 percent more of the polluting gases in the year ended March 2006 than in 1990, driven by a 37 percent increase in household output and an 18 percent increase from transport-related sources.

The government may have to introduce a carbon tax. The environment ministry has proposed imposing a tax of 2,400 yen on each ton of carbon emitted by households using kerosene and liquefied petroleum gas, the main heating and cooking fuels.

Utlities and steelmakers are trying to help solve the shortfall. Tokyo Electric Power and Nippon Steel are among more than 70 utilities and steel makers that have agreed to buy more UN carbon emission credits in order to help Japan meet its greenhouse gas goals.

A nationwide program called Cool Biz has also been initiated to try and conserve energy.

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