Prime Minister's resignation fails to derail Japan's carbon trading plans

The shock resignation of Japanese Prime Minister Yasuo Fukuda last week will not impact on plans for the launch of a trial carbon cap-and-trade scheme this autumn, according to government sources.

An unnamed environment ministry official told the Reuters news agency that Japan's Cabinet Office and its environment and trade ministries were holding regular talks to finalise the details of the scheme, regardless of who replaces Fukuda as prime minister.

The carbon trading trial is at the centre of the Japanese government's recent commitment to cut emissions by between 60 and 80 per cent by 2050. It is also seen as an important step by carbon traders, who have noted that when combined with the US cap-and-trade scheme promised by both presidential hopefuls and the established European carbon market, a formal Asia-based scheme would enable 24-hour carbon trading, greatly increasing the liquidity of the global market.

The news came as Japan's environment ministry released new data suggesting that a voluntary carbon trading scheme involving 61 firms had exceeded its emission reduction targets.

The ministry said that all of the firms involved had achieved their target of cutting emissions by 19 per cent on the 2003 to 2005 period, with the group as a whole cutting emissions by 25 per cent, saving 280,192 tonnes of CO2.

The trading scheme, which is supported by government subsidies for those parcipating firms investing in energy-saving measures, has also seen the average price of carbon increase three per cent in the past year to an average of 1,250 yen ($11.63) a tonne.