In an official letter to the United Nations, the federation, which represents Japan’s electric power industry, said Japan is “facing various challenges,” in implementing Clean Development Mechanism and other emission-reduction schemes within the international Kyoto Protocol.
To address this, and to take advantage of a rule adopted in Cancun allowing U.N.-approved private organizations to submit written opinions concerning new mechanisms, the electric power companies are proposing a “bilateral offset” mechanism.
A bilateral offset mechanism would mainly give more emphasis to emission reduction projects between two countries, in this case between Japan and a developing country, although the federation is endorsing that it become the norm on the international level.
In the current C.D.M. system, industrialized countries that have large emissions can implement emission reduction projects in developing countries that earn saleable emission credits.
The federation did not specify the “challenges” it was contending with in the present system but a document EcoSeed retrieved from Japan’s Ministry of Economy, Trade and Industry outlines several problems with the scheme.
The document, dated December 2, 2010, said it takes over two years for projects to be registered with the C.D.M. due to examinations held separately by a partner country, a specialized agency, and the U.N.
Technologies covered or are allowed under the current program also tend to miss out on coal-fired power plants, nuclear power plants, the steel sector, and forestry projects under the Reducing Emission from Deforestation and Forest Degradation program, another U.N. tool.
Meanwhile, China gets the bulk sales of C.D.M. credits, having a 72 percent share of the market in 2009.
New proposal’s benefits
According to the Japanese electric power companies, a bilateral offset mechanism will encourage the active use of private investment and the distribution of low-carbon technologies, among other advantages.
The electric industry said the scheme will give more attention to the deployment of a wider range of low-carbon technologies and capacity building in the electricity sector.
It also aims for the creation of valuable incentives for developed countries’ businesses to invest in deploying the best available technologies and share best practices, and greater chances for developing countries to obtain support.
But immediately, Japan’s bilateral offset document said the benefit will come in terms of effective and speedy decision done between only two parties.
A bilateral offset scheme could reportedly provide a building block toward a global regime, especially as the emissions-checking Kyoto Protocol expires.
The Federation of Electric Power Companies has 10 member companies which include the Tokyo Electric Power Co., Hokkaido Electric Power Co., Okinawa Electric Power Co., and Kansai Electric Power Co.
The Japanese government and Japanese industries have reportedly been examining the feasibility of establishing a new bilateral mechanism with some developing countries.
The organization hopes its proposal will be fully recognized by the United Nations working groups crafting a new framework for a post-Kyoto emissions-cutting regime.
