The Challenge of a Blue Water City: Emissions Cap-and-Trade Programs and a Sustainable Future - December 2003
In December 2003, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) announced that it is considering the introduction of an Emission Trading System (ETS) as a new environmental measure for sewerage projects. This system allows the trading of emission allowances (credits) among businesses in order to reduce emissions of carbon dioxide (CO₂) and other greenhouse gases. This allows businesses that have difficulty reducing emissions to achieve cost-effective emission reductions by purchasing credits from businesses that have made excess reductions.
In particular, sewage treatment plants along the Tokyo Bay coast are required to introduce advanced treatment technology for emissions, and by utilizing the Emissions Trading Scheme, the aim is to simultaneously modernize the facilities and reduce their environmental impact. Estimates indicate that the introduction of the ETS could reduce the cost of advanced treatment in the region by up to 10%. In addition, a trading system for waste landfill permits has already begun in the United Kingdom, and the introduction of a similar system in Japan is expected to strengthen incentives for businesses to take environmental measures.
The Ministry of the Environment and the Ministry of Economy, Trade and Industry have also launched an ETS demonstration experiment and are conducting trial transactions for specific industries. These include the electric power and manufacturing industries, and it is expected that application to the sewage treatment sector will be considered in the future. However, many issues remain to be addressed in introducing the system, including the appropriate setting of emission allowances, penalties for violations, and ensuring transparency in trading among businesses. Future legislation and industry response will likely determine the success of the system.
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