"The Japanese government plans to purchase greenhouse gas emission quotas, known as “carbon credits", from Hungary, which will help Tokyo meet its obligations under the Kyoto Protocol on climate change, government officials said on Monday.This will be the first time Japan, the world's second-largest economy, buys carbon credits from a foreign government.
The Kyoto Protocol is a protocol to the international Framework Convention on Climate Change with the objective of reducing Greenhouse gases that cause climate change.
The Kyoto Protocol was adopted at the third Conference of the Parties to the UNFCCC (COP 3) in Kyoto, Japan, on 11 December 1997.
“The objective of the Kyoto Protocol is to achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.
Because it will affect virtually all major sectors of the economy, the Kyoto Protocol is considered to be the most far-reaching agreement on environment and sustainable development ever adopted.
However, any treaty not only has to be effective in tackling a complicated worldwide problem, it must also be politically acceptable. Most of the world’s countries eventually agreed to the Protocol, but some nations, including the United States and Australia, chose not to ratify it.
US President George W. Bush has rejected the Kyoto treaty, claiming it was unfair by making no demands of growing emitters among developing nations.
Following ratification by Russia, the Kyoto Protocol entered into force on 16 February 2005.
The Kyoto Protocol requires Japan to cut greenhouse gas emissions by 6% from fiscal 1990 levels between 2008 and 2012.
Japan saw its emissions actually rise 7.8% in 2005 from 1990 levels.
The Kyoto Protocol allows a company or a country that reduces its carbon-dioxide emissions below the target level to sell the extra reduction as credit to others.
Read more about emissions trading here.
"We are negotiating with several developed countries in the Middle and Eastern Europe, including Hungary, Poland and Czech Republic," AFP cited Yasuo Takahashi, an official at Japan's environment ministry, as saying.
He noted that the talks with Hungary were “in the final stage" and Japan strives to conclude an agreement already by the end of the year.
Representatives of the two countries plan to meet and sign a memorandum as early as this week, in which Tokyo will buy quotas for greenhouse gases equivalent to a maximum 10 million tonnes of carbon dioxide for 2008, earthtimes.org cited unnamed sources as saying.
“Hungary will reach its Kyoto Protocol target with up to 100 million tons of emissions to spare because its domestic industries, mainly the heavy chemical industry, have stagnated since the introduction of a market economy," the portal added.
Hungary is to use the proceeds from the deal (cc. JPY 20 bn or USD 184.4 m, based on the prices of carbon credits in European emissions trading markets) on environmental protection schemes to and reduce energy consumption. Japan will propose measures that include a project to help Hungarian households install solar-electric generation panels.
The poll of 100 leading Japanese firms found 63% consider meeting the Kyoto goals to be difficult and 3% believe it would be impossible. Only 11% said it was possible."
Source: Portfolio Online Financial Journal
26.11.2007