CLIMATE STRATEGIES Emerging Japanese Emissions Trading Schemes and prospects for linking

The document analyzes Japan's transition from voluntary climate instruments, such as the Keidanren Voluntary Action Plan and the Japanese Voluntary Emissions Trading Scheme (JVETS), toward a mandatory ETS. It compares proposals from the Ministry of Environment (MoE) and the Ministry of Economy, Trade and Industry (METI), noting that the use of intensity-based targets and lenient penalties in some proposals could hinder direct bilateral linking with more stringent systems like the EU ETS. The paper concludes that while direct links are unlikely before 2013, indirect links via the Clean Development Mechanism (CDM) will remain primary until a mandatory system with absolute targets is established.

• The Japanese Voluntary Emissions Trading Scheme (JVETS), introduced in 2005, had limited effectiveness because major emitters did not participate, targets did not require deep reductions, and penalties were not severe.
• Japan planned a transition to a mandatory ETS starting with a voluntary test-phase in October 2008, allowing both absolute and intensity-based targets to encourage participation from companies under the Keidanren Voluntary Action Plan.
• The Ministry of Environment (MoE) proposed a mandatory ETS for 2010 featuring three trading periods, fines for non-compliance set substantially higher than allowance prices, and the requirement to offset excess emissions in the following period.
• The Ministry of Economy, Trade and Industry (METI) proposal is viewed as having more barriers to bilateral linking due to its preference for intensity-based benchmarking, a price cap, and a lack of strict non-compliance penalties.
• The Tokyo Metropolitan Government (TMG) passed a law in June 2008 to establish a mandatory regional ETS starting in April 2010, targeting approximately 1,300 large facilities consuming more than 1,500 kl of fuel/heat/electricity.
• Direct bilateral linking of a Japanese ETS to other schemes is unlikely before 2013 because absolute targets are not expected until then, and intensity-based targets are currently viewed as a barrier by the EU.
• Until 2013, the primary linkages for a Japanese ETS will be indirect, occurring through the use of Certified Emission Reductions (CERs) from the Clean Development Mechanism (CDM).

APA

KIMURA, H., & TUERK, A. (2008). CLIMATE STRATEGIES Emerging Japanese Emissions Trading Schemes and prospects for linking. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-5.pdf

Chicago

KIMURA, HITOMI, and ANDREAS TUERK. CLIMATE STRATEGIES Emerging Japanese Emissions Trading Schemes and prospects for linking. Climate Strategies, 2008. https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-5.pdf.

Wikipedia

{{cite report |last1=KIMURA |first1=HITOMI |last2=TUERK |first2=ANDREAS |title=CLIMATE STRATEGIES Emerging Japanese Emissions Trading Schemes and prospects for linking |publisher=Climate Strategies |date=October 2008 |url=https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-5.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kimura2008climate, author = {KIMURA, HITOMI and TUERK, ANDREAS}, title = {{CLIMATE STRATEGIES Emerging Japanese Emissions Trading Schemes and prospects for linking}}, institution = {Climate Strategies}, year = {2008}, month = oct, url = {https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-5.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }