Oil Report

Japan industry unites against carbon tax

* Japan urged to seek broad, effective climate deal

* CO2 cuts primarily achieved by technology-steel industry

TOKYO, Dec 7 (Reuters) - Japan should not consider a carbon tax as it would damage the economy which is already among the world’s most energy efficient, its top industries said in a rare combined stand on the opening day of the Copenhagen climate conference. [ID:nCLIMATE]

The nine industry groupings also called for Tokyo to keep unchanged its commitment to a 25 percent cut in greenhouse gas emissions by 2020 from 1990 levels only if all major emitters agree with a comparable and effective deal to fight global warming. [ID:nT112305]

“We joined hands quickly and came up with this request because visibility has been low in regard to the issue of an environment tax and the government’s strategic position for (Copenhagen),” said Kosei Shindo, head of the environment and energy policy committee at the Japan Iron and Steel Federation.

The other eight groups represented companies in oil, cement, paper, chemical, gas, electric power, auto manufacturing and electronics and information technology sectors.

Later this week, the government’s tax panel will compile a list of annual tax revision proposals for the next fiscal year that starts on April 1, in a move to make up for a steep fall in tax revenues caused by the faltering economy. [ID:nT17881]

If introduced, an environmental tax would be the first new tax since April 1989, when Japan introduced a consumption tax.

The nine groups said that they were opposing a an implementation of a new tax on fossil fuels, with the extra payments estimated at about 2 trillion yen ($22 billion) to be handed over to manufacturers and consumers.

The government has neither studied nor explained thoroughly enough why such a carbon tax is needed, how effective and fair it is and how the payments are to be used, they said.

"Taxation is one of the foundations of democracy. We're calling for comprehensive discussions," said Shindo, also Nippon Steel Corp's 5401.T Executive Vice President.

“We believe CO2 cuts are primarily achieved by innovation in technology,” he said, adding an environment tax or other policy steps would be supplemental. ($1=89.78 Yen) (For more stories on Japanese politics click [ID:nPOLJP]) (For more stories on the Japanese economy, click [ID:nECONJP]) (Reporting by Risa Maeda, editing by William Hardy)