Japan to launch trial carbon trade in autumn

Japan will start a trial system for carbon trade in autumn, Prime Minister Yasuo Fukuda said, unveiling a new climate change policy that set a goal for cutting greenhouse gas emissions for 2050 - but not for 2020.

Japan, the world's fifth-largest emitter, estimates it can cut greenhouse gas emissions by 14 per cent by 2020 from current levels, Mr Fukuda said, acknowledging but not bowing to pressure to set a firm interim target as host of the G8 summit next month. Japan will aim to cut its emissions by 60-80 per cent by 2050 and announce an interim target sometime next year and contribute up to €770,000 billion to a new multilateral fund with the US and Britain that will help developing countries fight global warming, Mr Fukuda added in a speech.

"When talking about the near future, we no longer have the luxury of encouraging others or spending time playing a game of setting targets for political propaganda," said Mr Fukuda.

"We would like to announce a national target at an appropriate time next year." The EU, which has already set a target of reducing emissions by 20 per cent by 2020, and developing countries argue rich nations should take the lead by setting bold 2020 targets for reducing emissions that cause global warming.

But the US, a top emitter along with China, has said it will only accept binding emissions curbs on condition major emerging countries also agree, something they have so far refused to do. Washington's stance, however, is likely to change after a new President takes office in January.

Mr Fukuda also said Japan would introduce in the autumn a trial system for carbon trading, seen as one effective way to reduce greenhouse gas emissions. But he steered clear of giving a date for the launch of a full-scale trading scheme.

Unlike the EU, which imposes a cap-and-trade system to bind polluters to mandatory emissions limits, Japan has encouraged voluntary pledges from industries to cut emissions. Some Japanese industries, such as steelmakers, oppose a European-style system, saying it would hurt their global competitiveness.

"Our country... should shift to a positive stance of proposing effective rules rather than continue to spend time and energy on looking for problems with the system," Mr Fukuda said.

"It will be important to set effective rules that lead to real efforts to reduce emissions and to technology development, and to create a healthy market based on real demand, that does not lend itself to money games," he added.