Tokyo plans own cap-and-trade emissions scheme

(Adds environment ministry comment, details)

By Yoko Kubota

TOKYO, June 24 (Reuters) - Metropolitan Tokyo is set to impose limits on greenhouse gas emissions from 1,300 big offices and factories, pioneering a mandatory cap-and-trade scheme to fight global warming ahead of a Japanese government trial.

The limits, set to be passed by the city assembly on Wednesday, will target Tokyo's biggest emitters responsible for 20 percent of emissions in the capital, an official from the Tokyo Metropolitan Government said.

While Tokyo is jumping ahead of government plans for its own trial system for carbon trade this year, the plan was welcomed by the environment ministry as in line with a drive by Prime Minister Yasuo Fukuda to cut emissions blamed for global warming.

However, business organisations warned Tokyo may become less competitive if its rules were more strict than those in other places.

The capital, home to one in 10 Japanese people, emitted around 60 million tonnes of greenhouse gas in the year to March 2006, or around 5 percent of Japan's total emissions.

If passed, the new limits would help Tokyo achieve a goal of reducing greenhouse gas emissions by 25 percent by the year to March 2021, compared with 20 years earlier, said Satoshi Yamashita, a director at Tokyo's environmental policy planning section.

The limits go beyond factories because carbon emissions from business buildings in Tokyo, such as offices and hotels, have jumped 33 percent in the space of 15 years, he said.

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

Firms that fail to comply with the limits will face either a penalty charge of 500,000 yen ($4,630) or the city government will conduct emission trade for them and then bill them, he said.

Japan has so far relied on voluntary reductions from industry, with steelmakers and other big emitters opposing mandatory emission limits like those seen in Europe.

But the environment ministry backed Tokyo's plan for compulsory limits.

"This is an encouraging effort... We want to welcome it and at the same time, show our respect," Environment Minister Ichiro Kamoshita said at a media conference on Tuesday.

The proposal was passed unanimously by the assembly's environment committee on Monday and is set to be adopted by the assembly on Wednesday, but a business lobbyist said the metropolitan government was running a risk.

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

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

The environment ministry, recognising these concerns, called on Tuesday for central and local governments to coordinate their policies to combat global warming.

Japan, the world's fifth-largest emitter of greenhouse gases, is struggling to meet its target under the Kyoto Protocol on global warming.

It is to host the Group of Eight leaders at a summit on July 7-9, with Fukuda pushing for progress towards a new agreement to curb global warming.

The detailed figures of the emission cap, which Tokyo aims to implement from 2010, will be decided later this year by a committee, Yamashita added. (Reporting by Yoko Kubota; Editing by Rodney Joyce and Hugh Lawson)