Japan will develop a new climate change policy plan by early 2016 and as part of that process will consider using an emissions trading scheme to cut greenhouse gas emissions, the government said Tuesday, though government sources said Japan is unlikely to introduce a carbon market anytime soon.

Two panels – one from the Ministry of Economy, Trade and Industry (METI) and one from the Ministry of Environment – will develop the new climate plan, which will aim to help Japan meet its target of reducing GHG emissions to 26% below 2013 levels by 2030.

The panels will “carefully consider” whether to bring in an emissions trading scheme, a government statement said.

Estimates for how an ETS would impact Japan’s economy as well as carbon market developments abroad will play into the decision.

But even though new jurisdictions continue to launch CO2 markets, and Japan’s neighbouring economies – China, South Korea and Taiwan – all have or are planning emissions trading schemes, opposition in Japan from METI and powerful industry lobby groups remains strong.

“The situation has not changed. The basic position is that we will consider it carefully, but that has been the position for some time,” a government official who did not wish to be named told Carbon Pulse.

“I don’t think Japan will get an ETS anytime soon, but that is not to say that it can’t be introduced later,” the official said.

The policy plan, which will likely focus on issues such as financial incentives to keep increases in fossil fuel generation in check and technological innovation, is due to be published between March and May.

By Stian Reklev – stian@carbon-pulse.com

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