Japan’s new government is coming up against old familiar obstacles in its attempt act on climate change, meeting resistance from industry over its plans for an emissions trading scheme (ETS). An overarching climate bill before cabinet - and set to go through parliament by June - has had its emissions trading scheme provisions weakened. The bill will provide for the possibility of less onerous intensity-based carbon caps rather than absolute emissions reduction caps, environment minister Sakihito Ozawa has confirmed.

The Democratic Party of Japan (DPJ) government of prime minister Yukio Hatoyama came to power last year, ending the long incumbency of the Liberal Democrats and ushering in an ambitious climate change policy. A national 2020 target for a 25 per cent reduction below 1990 levels stills stands as among the strongest of developed nations, albeit conditional on being matched by other big emitters.

The DPJ wants an emissions trading scheme to be the cornerstone of efforts to meet that target but, as under the previous government, the strong industry lobby appears to have forced the Hatoyama government to moderate its carbon cap plans for businesses. The bill in its latest form is designed to balance the interests of environment protection and sustainable economic growth, Ozawa said.

The power sector and heavy manufacturing industries have opposed the scheme saying it would threaten their competitiveness with China and India, as their counterparts in the US and Australia have argued in recent cap and trade debate.

The hard detail on any emissions scheme for Japan would come in a specific ETS bill, scheduled to follow the climate bill and be drawn up within a year, the government says. The current climate bill also provides for consideration of a carbon tax starting from April 2011 and a renewable energy target, including nuclear, of 10 per cent by 2020.

Reuters, Bloomberg 11/3/10