Tokyo to pass cap-and-trade emissions plan

TOKYO (Reuters) - Tokyo is set to pass a revised version of a bill limiting greenhouse gas emissions from big offices and factories later this week, making it a pioneer in Japan by applying a mandatory cap-and-trade scheme of emissions.

The revised bill will impose emission caps on 1,300 of the biggest emitters in Tokyo that are responsible for 20 percent of emissions in the capital, the Tokyo Metropolitan Government said.

The proposed bill was passed unanimously by the environment committee of the Tokyo Metropolitan Assembly on Monday and is set to be adopted by the assembly on Wednesday.

If implemented, it will help Tokyo achieve its mid-term goal of reducing greenhouse gas emissions by 25 percent by fiscal year 2020/21 from 2000/01, said Satoshi Yamashita, a director at Tokyo's environmental policy planning section.

"We recognize that this is a rare case where the mechanism is centered on business buildings" rather than just factories, he said.

Carbon emissions from business buildings in Tokyo, such as offices and hotels, rose 33 percent in fiscal 2005/06 from 1990/91, he said.

"Unless we target them, it is difficult for Tokyo to cut down on emissions," he added.

For firms that fail to comply the bill, Tokyo plans to charge a penalty fee of 500,000 yen ($4,630), or conduct emission trade for them and charge them for the costs, Yamashita said.

The detailed figures of the emission cap, which Tokyo aims to implement from 2010, will be decided in the fall by a committee, he added.

Business organizations have concerns against the bill.

"If it is only Tokyo where the rule is strict, then businesses may choose to invest elsewhere," Hiroshi Fuse, an official at the Tokyo Chamber of Commerce and Industry said.

Fuse said while the Chamber has agreed to pursue Tokyo's cap-and-trade scheme if a bill comes into place, it is worried about how the emission cap will be set for each firm. There are also concerns about varying standards across the country.

"If gaps emerge between this plan and the nation's plans, then it will be a problem for businesses that operate nationwide," he said.

The Japanese capital, with around a tenth of the nation's population, emitted around 60 million tons of greenhouse gas in fiscal 2005/06, or around 5 percent of the nation's total emissions.

(Reporting by Yoko Kubota; Editing by Sanjeev Miglani)