By Risa Maeda
TOKYO (Reuters) - Japan's electric power industry will likely buy more than double a planned 190 million tonnes of carbon credits from abroad in the five years to 2012 to meet its climate pledges to the government, an energy policy expert said.
"We estimate the electric power sector's purchases of CO2 credits from abroad will reach 400 to 500 million tonnes," Tetsunari Iida, executive director at the Institute for Sustainable Energy Policies, said in an interview for the Reuters' Global Environment Summit.
Iida also said Japan may have to take bold steps to introduce cleaner energy, such as liberalizing power grid systems, as the nation's commitments under the Kyoto Protocol depend largely on the electric power sector's voluntarily promised cuts.
Currently, the east and west of the country use different electric power systems, and each regional power company has its own power grid, making it hard to deal with wild swings in supply from renewable energy sources such as solar and wind power.
The sector's increased use of coal and other fossil fuels is also set to stay for some time, mainly due to the indefinite shutdown of Japan's biggest nuclear plant, operated by Tokyo Electric Power Co, after a July 2007 earthquake.
"But the year 2012 is not an end. It is rather at the beginning," Iida said, referring to ongoing U.N.-led talks aimed at agreeing to a replacement for the Kyoto Protocol. Developed countries have been called on to cut greenhouse gas emissions by 25 to 40 percent by 2020 from 1990 levels.
ENERGY EFFICIENCY TARGET
CO2 is the main greenhouse gas blamed for global warming and increases in line with economic activity.
Japan's electric power sector has voluntarily pledged to the government to cut CO2 emissions per kilowatt-hour by 20 percent to 0.34 kg on average over the five business years that started in April, compared with 1990 levels.
Utility firms have been trying to do so by either improving energy efficiency at home or investing in clean energy projects in developing countries which in exchange provide carbon credits.
The sector's purchase of credits to offset domestic emissions under Kyoto's Clean Development Mechanism is in addition to the Japanese government's planned buying of 100 million tonnes to fulfill public sector pledges for the 2008-2012 period.
Japanese utilities' CO2 emissions for the year ended in March averaged 0.453 kg per kilowatt-hour of electricity generated, which means the sector still has to reduce emissions by around 100 million tonnes per year.
Iida said emissions for the whole nation during the last business year may have climbed more than 8 percent above 1990/91 levels, with 80 percent of the increase attributable to the electric power sector and 10 percent to the steel sector.
Japan, the world's fifth-biggest emitter, is obliged to cut emissions by 6 percent in the 2008-2012 Kyoto period from 1990 levels.
Japan's greenhouse gas emissions fell 1.3 percent to 1,340 million tonnes in 2006/07 from a year earlier, but are still up 6 percent from 1990/91. Continued...
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