Japan greenhouse emissions fell 6.2% last year

By Risa Maeda

TOKYO (Reuters) - Japan's greenhouse gas pollution fell 6.2 percent in the last financial year, the government said on Wednesday, confirming market views that the worst recession in decades largely contributed to emission cuts.

Emissions in the first year of Japan's Kyoto Protocol obligations totaled 1.286 billion tonnes of CO2-equivalent, compared with a revised 1.371 billion tonnes in the previous year ended in March 2008, a record high.

The 2008/09 figure is approaching the Kyoto goal for the world's fifth biggest emitter of 1.186 billion tonnes a year.

The government and companies have bought hundreds of millions of tonnes of emissions offsets, helping the country meet its 2008-12 Kyoto target in deals worth billions of dollars at current prices.

"The figure suggests we're currently at levels sufficiently (low) enough to achieve the target," said Yasuo Takahashi, who heads the environment ministry's climate change policy division.

"But we're not saying that we no longer need to carry out the emission-cut plans," he said at a news conference after the data was released. "2008/2009 was an unusual year."

With deflation expected in coming years, there seems little risk of Japan not meeting its Kyoto goals.

The Bank of Japan said in a report last month that Japan will experience three years of deflation, forecasting the economy to contract another 3.2 percent in fiscal 2009/2010 before recovering in the following two years.

MID-TERM HURDLE

Analysts forecast a further fall in emissions in 2009/2010 as the steel sector, which accounts for 10 percent of total greenhouse gas emissions in Japan, would be among the hardest hit by recession.

"Another 5 to 6 percent fall in CO2 emissions from burning fuel is quite possible this fiscal year given an expected fall year-on-year in crude steel output," said Tsutomu Toichi, chief executive researcher at the Institute of Energy Economics of Japan.

In 2008/2009, carbon emissions from energy consumption, which accounted for 88 percent of Japan's total greenhouse gas emissions, fell 6.7 percent to 1.14 billion tonnes.

It was the steepest fall on record as the world's No.2 economy shrank 3.2 percent.

But analysts said the news, while good, could make it harder for Japan to meet ambitious cuts beyond 2012 when Kyoto's first period ends unless the government takes steps now to spell out tougher measures to slash carbon pollution by 2020.

"The government has not yet decided whether to introduce a carbon tax. But that sounds like a joke to me," said Mitsuhiro Fukao, president of Japan Center for Economic Research.