7 January 2011

Japan has delayed the set-up of a greenhouse gas emission trading system by a year until after April 2014 in the face of strong resistance from the business lobby, according to Reuters and other news agencies.

Powerful business groups warned of job losses as they compete against overseas rivals facing fewer emissions regulations.

The Japan Government has submitted a climate bill to parliament that includes a one-year deadline to design a national trading scheme. That bill now faces revisions in the next parliamentary session that begins later this month.

The decision is a blow to the European Union's hopes that other top greenhouse gas polluters will introduce emissions trading schemes and follows setbacks to similar efforts in the United States and Australia.

A U.N. meeting in Cancun, Mexico, this month failed to clear uncertainty over a global climate framework beyond 2012. This is likely to cause some big emitters to take their time in rolling out tougher greenhouse gas regulations, particularly for carbon dioxide (CO2) from burning fossil fuels such as coal and oil.

Neighbouring South Korea has delayed the introduction of its emissions trading laws into parliament until February, also because of business concerns.

The centre-left Japan Government of Prime Minister Naoto Kan had planned to launch the system – in which companies would essentially buy and sell "licences to pollute" – starting in April 2013.

But his environment and other ministers decided to postpone the plan, saying the country will first "carefully consider it", Jiji Press and Kyodo News reported. Immediate confirmation was not available. This will make it even harder for Japan to meet its long-term target of cutting carbon dioxide emissions from fossil fuels by 30% below 1990 levels by 2030.

Japan has long championed the Kyoto Protocol on reducing greenhouse gas emissions, named after its ancient capital. But it opposed the extension of the protocol at a UN meeting in Mexico this month, calling it unfair because it does not include 70 per cent of the world's emissions, with top polluters China and the United States absent.

China, the world's largest emitter, has no obligations under the Kyoto Protocol as it is considered a developing country. The United States, alone among rich nations, has rejected the treaty.

Most scientists say the world is far off track on meeting a goal, codified at the UN climate talks in Mexico, of keeping temperatures from rising more than 2 deg Celsius above pre-industrial levels.

Sources: Benzinga.com, Skynews, Reuters