Japan is preparing both incentives and taxes to encourage companies to cut greenhouse gases, a government official said on Wednesday, shrugging off criticism that he said focused on higher costs from proposed taxes.
Tetsuro Fukuyama, deputy chief cabinet secretary, said however that a divided parliament makes it hard to set a legal framework as planned that could raise costs for companies and consumers.
The ruling Democratic Party of Japan lacks a majority in the upper house, meaning opposition parties can block legislation even if it is passed by the more powerful lower house.
Prime Minister Naoto Kan has said he wants to prioritise passing a climate change bill during the current parliament session ending on Dec. 3, which will also focus on a supplementary budget to finance an economic stimulus to support the fragile economy.
“Incentives are included, for example, in the latest economic package. So we’d like company managers to look not just at cost burdens from policy steps in a climate change bill, but at the package of government measures as a whole,” Fukuyama said in an interview with Reuters.
He also said Japanese firms are no longer wholly opposed to the steps as some have started spending on emission cuts while competing with global rivals.
“I don’t think all companies are opposing it while standing still and doing nothing.”
Japan, the world’s fifth-biggest greenhouse gas emitter, has pledged to cut greenhouse gas emissions by 25 per cent from 1990 levels by 2020 if all major emitters adopt similar targets.
Passage of the bill would make the pledge legally binding. It also calls for three clean-energy policy steps — an environment tax, an electricity bill scheme and an emissions trading system.
Too early to compromise
Fukuyama said passage of the bill during the current parliament session is desirable but it is too early to compromise on it with opposition parties.
Fukuyama, an upper house lawmaker, is one of two politicians holding the post of deputy chief cabinet secretary under Chief Cabinet Secretary Yoshito Sengoku, who is effectively the No.2 in Kan’s government.
“We’ll start talking to each opposition party after passing (bills related to) the supplementary budget,” Fukuyama said.
“I don’t know yet if the LDP won’t change its position at all,” he added, referring to the main opposition Liberal Democratic Party which has sought to have the bill watered down.
The third-largest party, New Komeito, favours a tougher stance.
Fukuyama also said regardless the timing of passage of the bill, the government is preparing policy steps, including an environment tax to start in the fiscal year from next April.
Earlier this week, Kan told parliament he opposes simply extending the Kyoto Protocol, which would bind almost 40 rich nations to curb emissions beyond 2012, as that covers less than 30 percent of global emissions.
Asked what he expects at a UN climate meeting in Cancun, Mexico, from late November, Fukuyama said Japan would like to see more countries take part in the Copenhagen Accord, to which major emitters including China offered emission-cut pledges.
“I hope Cancun will be the place where discussions provide a key process to create a legally binding pact at a later meeting,” he said.
