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Issues on Competition Policies regarding Countermeasures Using Market-Based Instruments in the Measures against Global Warming: Discussion Points in the Japanese Emissions Trading Scheme (Interim Report)

March 31/2010
Japan Fair Trade Commission

 Having the Kyoto Protocol enacted in February 2005, Japan is obliged to reduce greenhouse gases (GHGs) by 6%between 2008 and 2012 from the base year 1990. Further, the government stated that, as its mid-term target, it aims to reduce GHGs by 25% by 2020 compared with the base year 1990, provided that parties including all the major countries will agree on the ambitious target. Moreover,it has been decided that discussions regarding the next framework of the Kyoto Protocol will be continued, and thus the promotion of global warming countermeasures is considered to be important.

 Among the countermeasures regarding global warming, domestic (regional) emissions trading scheme as one of the regulations by market-based instruments has been progressively introduced in various countries. Introduction of such schemes has been considered as an urgent concern also in our country, and in October 2008, the government began its effort toward Experimental introduction of an integrated domestic market for emissions trading, and in March 2010, it submitted to the Diet, the draft basic law on climate change countermeasures that integrates regulations regarding the establishment of the Japanese Emissions Trading Scheme. Upon such an action, it is expected that the discussion regarding the full scale introduction of the scheme will be promoted based on the peer review of the abovementioned trial implementation, etc.

 Considering that the scheme would influence competition between the business entities depending on its substance, the Japan Fair Trade Commission (JFTC) has recognized the importance of grasping and summarizing the discussion points, etc., of the competition policies before its introduction, regarding the substance of the scheme that is expected to be introduced and related private commercial transactions. JFTC has therefore reviewed the discussion points, etc., prior to the introduction from the viewpoint of the competition policies and since September 2009, has held Study Group on Government Regulations and Competition Policy to have opinions from the members about the peer reviews and compile an interim report.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.

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