Confusion reigns over Japanese climate bill

www.carbon-financeonline.com
03 March, 2010

Japan's government is reviewing a proposed climate bill – just days after it was unveiled – following industry lobbying. The Democratic Party of Japan (DPJ) released the bill last week for cabinet approval, a precursor to appearing before the legislature. But the Ministry of Environment (MOE)-drafted bill was yesterday withdrawn for further consideration and industry comment.

The bill contains the framework for the DPJ's climate change mitigation strategy as outlined in its 2009 election manifesto, and would enshrine the government's 2020 target, to reduce emissions by 25% from 1990 levels, provided other developed nations adopt similar cuts.

It also outlines, with few details, an emissions trading scheme (ETS) but does not mention mandatory emissions caps. It also mentions a possible carbon tax from 2011, a renewable energy feed-in tariff, and a goal to increase renewable energy from 1.3% of total generation capacity last year to 10% by 2020. However, according to media reports, an MOE spokesperson today denied claims that the bill would be delayed beyond the cabinet's planned 5 March approval. The ministry failed to return requests for comment.

"I think they are going to change the content of the bill again," said Yugo Nagata, an associate at law firm Baker and McKenzie in Tokyo. "The steel and electricity lobbies are against this bill; the cabinet did not have any chance to communicate with them about it and I think they now realise that they can't publicly decide on the bill at this time."

Since last year's change in government, communication between the Ministry of Economy Trade and Industry (METI) and industry groups has decreased. Under the previous administration, METI was seen as a conduit between the government and industry lobbies such as Nippon Keidanren.

"We understand that the ETS is also one of the sticking points," added Baker and McKenzie partner Gavin Raftery, "and we understand that industrial groups are voicing their opposition to that approach at this stage." "My feeling is that there are still strong opinions for and against an ETS," he continued, adding that METI minister Masayuki Naoshima has voiced concern about putting too many details of their plan into law prior to commensurate actions by other developed countries. He added that progress in the US on climate legislation may change industry views.