Japan sets out domestic-focused low carbon action plan

The Japanese government will begin discussions with business leaders tomorrow in an attempt to drum up support for its climate change strategy ahead of this summer's election.

The nation's Democratic Party-led government issued a new draft action plan on energy usage up to 2030 earlier this week, that retained the country's target of cutting greenhouse gas emissions by 25 per cent on 1990 levels by 2020.

However, after delaying controversial proposals to introduce an emissions cap-and-trade scheme following intensive lobbying from industry, the new strategy shifts the burden of delivering emission reductions onto the utility and domestic sector.

The new proposals include plans to build 14 nuclear reactors boosting zero emissions electricity from 34 per cent of the grid mix to 70 per cent by 2030, and a new target to halve carbon dioxide emissions from homes and passenger cars by the same date.

The plan suggests that increased household energy efficiency, a smart grid and expanded renewable and nuclear capacity are a better way to achieve the targets than a cap and trade system or carbon taxes on business.

The move is being widely seen as an attempt by the government of Prime Minister Yukio Hatoyama to bolster popularity only seven months after taking power. The government remains committed to ambitious emissions targets and environmental action remains popular in Japan. However, with the country still suffering from deflation, the government fears any over-ambitious environmental legislation that appears to threaten the economy will cost it political support.

But despite the apparent willingness to delay plans for cap-and-trade, the latest plan has still drawn criticism from steel, electric-power and other industry groups, who fear it will still harm the economy.

In addition, any household efficiency or renewable energy subsidies will also increase Japans already sizeable fiscal debt, and the government has not yet said how it will meet the costs of such programmes.

Meanwhile, environmental groups are angry at the government's perceived pandering to carbon intensive industries and its willingness to water down its carbon trading scheme.

Yasuhiko Tabaru, senior consultant at the Mizuho Information and Research Institute, told Reuters that further cuts in emissions are going to be hard to make without a carbon tax or cap and trade system, adding that the country may have to abandon its ambitious emission targets. "Japan will sooner or later lower itself down from the minus 25 per cent hurdle," he said.