Japanese Gov’t Backs Away from New Carbon Tax
13 November 2004
Japan is one of the signatories of the Kyoto treaty, and was the host of the 1997 UN convention on climate control, but its greenhouse gas (GHG) emissions are going in the wrong direction—i.e., more emissions, not less.
Instead of being on track to meet its reduction target of 6% below 1990 levels by 2010, Japan has seen its emissions rise to 8% above 1990 levels at the end of last year. To meet the Kyoto targets by 2010, Japan now will have to reduce emissions by 14% based on last year’s rate. If emissions continue to climb, the amount of reduction would of course have to increase as well. The transportation sector accounts for an estimated fifth of the total.
The Environment Ministry is responding with planned stricter emissions standards in October 2005, and last week announced a new carbon tax. One week later, the Environment Ministry has decided to give up the planned implementation of the carbon tax in favor of “more discussion.” (Japan Today)
The tax as originally conceived would have levied a surcharge on processors and importers of fossil fuels of 3,400¥ ($32) per ton of carbon, the surcharge presumably to be passed on to consumers. Internal opposition to that amount pushed it down to 2,400¥/ton ($23). Consumers would have paid approximately 1.5¥ ($0.014) extra per liter of gasoline, according to the ministry. The average annual burden on households would have come to approximately 3,000¥ ($28). (The Japan Times)
Opposition was swift to the original announcement of the carbon tax.
At an environmental panel meeting of the ruling Liberal Democratic Party on Friday last week, questions about the tax were aired. One panel member said, “If the environment tax is levied, industry’s competitiveness against China and other countries will be weakened.”
The Japan Business Federation and the industrial community, including the Japan Iron and Steel Federation, have already expressed their opposition to the new tax.
The Ministry of Economy, Trade and Industry, and relevant lawmakers are also against it.
But civic groups that have been seeking the introduction of the tax reacted bitterly to the Environment Ministry’s compromise to the industry.
Jiro Adachi, secretary general of the Carbon Tax Research Society, a nongovernmental organization based in Tokyo, said, “The tax rate is too low, and as there are many reduction measures it is questionable whether the tax can actually reduce emissions.”
We’ll see what kind of reaction deferring the tax catalyzes.
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