Japan

JP-10:Tokyo Cap-and-Trade Program

Policy Description

The Tokyo Metropolitan Government (TMG) introduced Japan's first mandatory cap-and-trade emissions trading program, that came into effect in April 2010. he sectors covered under this scheme include primarily the industrial and commercial sectors that account for approximately 40 percent of GHG emissions in Tokyo

Description

 

The Tokyo Metropolitan Government (TMG) introduced Japan's first mandatory cap-and-trade emissions trading program, that came into effect in April 2010 [1]. In its first compliance period (from fiscal year 2010 to 2014) the cap was set at 6 percent reductions for the industrial sector and 8 percent reductions from their base year emission for the commercial sector. For the second compliance period (from fiscal 2015 to fiscal 2019) it is set at 17 percent reductions below base year emissions. The sectors covered under this scheme include primarily the industrial and commercial sectors that account for approximately 40 percent of GHG emissions in Tokyo. The cap is applied to facilities that have an energy consumption of 1,500kL or more in crude oil equivalent in the previous fiscal year which is about 1400 of the most energy and carbon intensive sites in Tokyo. The scheme currently includes only energy-related CO2 emissions with the potential to add other gases in the future. Banking emissions for a future compliance period is allowed while borrowing is not allowed. Offsets and Renewable Energy Certificates can be used in this scheme but only up to one-third of an installations required emission reductions will be allowed from outside Tokyo. Covered facilities must report their emissions in the previous fiscal year annually. These emissions are verified by third-party verifiers registered with the Governor [2].

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Emissions Trading

Position in the Pyramid

About Us

Participation: Mandatory

Period

Start Date: 2012

Primary Objective:

Objective

Target Group

Large office building and factories. Facilities with an energy consumption (fuels, heat and electricity) equal to or greater than 1500 kl per year in crude oil equivalent

Driver of energy consumption or emissions affected by policy: Total Energy-related CO2 emissions

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Covers sectors that account for approximately 40 percent of GHG emissions in Tokyo

Quantitative Target? yes

Target: 6% reductions from base year emissions for the first compliance period and 17% reductions from base year emissions for the second compliance period

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Enforcement By

Organisation Type Organisation Name
Third Party

Sanctions: For facilities that are non-compliant, fine up to ¥500,000 could be enforced, along with publication of the bready and an additional surcharge which is proportional to the to the failure to fulfill the obligationIf reports are not submitted fines of up to ¥500,000 will be imposed along with naming and shaming

Requirements on the Target Group

 

Monitor progress and submit reports annually

Support by Government

Implementation Toolbox

 

Setting emission reduction targets

Developing a methodology for fair allowance allocation

Developing a measurement, reporting and verification system

Complexity of Implementation

Government

Government develops and manages various tools to run the ETS including registry, setting caps etc.

Target Group

Factories and businesses will need to understand a fairly complex market mechanism including developing their targets and strategies, reporting annually etc.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions In FY2010 emissions were reduced by 13% in comparison to the base-year emissions [3]. 64% of facilities met their targets for the first compliance period and 26% of facilities have already reduced emissions by 17% or more [3]. About 71% of facilities are expected to fulfill their reduction obligations through their own reduction efforts, if all reduction plans included in the reports are carried out through the end of FY2014 [3]. Not available
Estimated costs/benefits for industry Not available Not available
Estimated cost for government Not available Not available

References & Footnotes

References

[1] Environment of Tokyo (2013). Tokyo Cap-and-Trade. Available at http://www.kankyo.metro.tokyo.jp/en/climate/cap_and_trade.html

Footnotes

(*2) TMG (2010). Tokyo Cap-and-Trade Program. Available at http://www.kankyo.metro.tokyo.jp/en/attachement/Tokyo-cap_and_trade_program-march_2010_TMG.pdf

(*3) Tokyo Metropolitan Government (2012). The Tokyo Cap-and-Trade Program Results of the First Fiscal Year of Operation (Provisional Results)