- The Washington Times - Thursday, January 16, 2003

TOKYO, Jan. 16 (UPI) — Japan is expected to advise Russia on reducing carbon emissions and carbon trading, government officials said Thursday.

Russia would be the second country Japan has advised on cutting emissions.

A delegation of 16 senior bureaucrats of the Ministry of Economy, Trade and Industry is at present in Moscow, talking with their Russian counterparts on how exactly the two sides can cooperate, the ministry said.

Last year, the Japanese government began advising the Kazakh government on the issue, as an increasing number of developing countries realize they can not only potentially increase the amount of financial assistance they receive for pursuing environmentally friendly policies, but also that they can profit from the carbon trading market in the longer term. Russia has yet to sign the Kyoto treaty on reducing carbon emission, but Japanese sources say the country could sign the pact as early as 2004. If Moscow does become a signatory to the treaty, it will have to reduce its emissions volume significantly from current levels.

At the same time, Japan's Ministry of the Environment announced Thursday it will begin officially promoting carbon trading by creating a market for it as early as 2005, and spend the next two years looking into details of making the concept a reality by encouraging it to grow at an experimental level. As one of the first countries to sign the Kyoto treaty, Japan must by 2012 reduce its carbon dioxide-emissions level by 6 percent from the level it produced in 1990.

Specifically, Japan hopes to have participating companies actively seek to reduce their carbon-emissions levels both at their factories and in their offices. After being assessed for carbon levels by a third party, companies that have succeeded in reducing emissions beyond expectations can sell the difference in target and achieved levels of carbon emission to another company that has been unable to reach its target.

The environment ministry anticipates about 30 companies signing on to the project, and will begin advertising for participating corporations this spring. Meanwhile, the Japan Bank for International Cooperation, formerly part of the Export-Import Bank of Japan, has made clear that it too anticipates establishing a fund of about $33 million geared specifically towards promoting carbon trading.

So far, Denmark had produced a carbon trading market in 2001, which allows energy companies to trade, while Britain established a market that allows interested companies to take part in 2002.

As a nation that has few natural resources, Japan is one of the world's biggest importers of petroleum and other energy sources. Moreover, it has become one of the world’s most energy-efficient countries and many Japanese manufacturers have concentrated on developing more environmentally friendly products as a potentially lucrative business venture.

Separately, Japanese petroleum retailer Cosmo Oil said Thursday it will start selling the carbon dioxide emissions it produces at $4.23 per ton. The company expects to sell several hundred tons of carbon dioxide over the next few years to research facilities and other organizations that would use of the gas. Cosmo has already started selling gasoline with carbon trading rights, giving incentives to motorists to be more fuel-efficient, on a pilot basis as of last year.

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