Japan’s steel industry’s arguments on GHG emissions trading seemingly focus on the cost burden, on specific reduction targets and the government’s consultation procedures. The cost burden may be large, but it should not be any heavier than that born by the EU industry; and similarly the risk of carbon leakage from Japan should also not be a greater problem than for the European steel sector. Elsewhere, specific targets are often requested by industry on the grounds that they reduce uncertainty, so it is strange to see them questioned in this case.
Yomiuri Shimbun 15 March The basic climate bill approved by the Cabinet last week has prompted concerns and criticism from the industrial sector that measures stipulated by the bill may lead to increased burdens on business.
The bill passed by the Cabinet on Friday stipulates measures to deal with global warming, notably a midterm target to cut greenhouse gas emissions by 25 percent from 1990 levels by 2020.
Nine industry organizations, including the Japan Iron and Steel Federation and the Petroleum Association of Japan, issued a joint statement opposing the bill, which said: “We have been opposed to the stipulation of mid- and long-term reductions targets or other individual measures. The Cabinet approval of the basic bill is extremely disappointing.” Masamitsu Sakurai, chairman of the Japan Association of Corporate Executives (Keizai Doyukai), also said in a statement, “The government has failed to provide sufficient explanation about the merits and burdens on the economy and the lives of the public.”
The industrial sector has been intensifying its opposition to the bill because the huge emissions cuts will require companies to scale back industrial activities, which will result in declined earning capacities.
The government has put forth three measures as pillars of a package to tackle global warming: an emissions trading scheme; a new environmental tax on oil and other fossil fuels; and a system under which power companies purchase electricity generated by renewable energy sources at fixed prices……
According to the Japan Business Federation (Nippon Keidanren), the country’s industrial sector emitted about 454 million tons of carbon dioxide in fiscal 2008, a decrease of 10.5 percent from fiscal 1990, partly due to the economic downturn resulting from the global financial crisis. Despite those large cuts in CO2 emissions, the reduction amount is far from the 25 percent goal of the basic climate bill, meaning companies would be required to bear considerable burdens to achieve the target.
Meanwhile, criticism has been leveled against the discussion processes for the bill. As ministers and senior vice ministers from relevant ministries have discussed the bill behind closed doors in principle, there have been few opportunities for industrial circles to state their opinions.
Shoichi Shirahaze and Masahiro Takeishi