http://www.bloomberg.com/apps/news?pid=20601101&sid=aFfmkmcuSOsM

Draft legislation for a new Japanese climate bill omits mention of a limit on emissions by industry, a sign Prime Minister Yukio Hatoyama’s government may retreat from an earlier promise to start a cap-and-trade system.

Japan should start an emissions-trading program at an unspecified time to help cut emissions by 25 percent in the medium term, according to the draft, released by the Environment Ministry Feb. 26. The document doesn’t propose a mandatory cap on emissions, and while it includes a possible carbon tax from 2011, it doesn’t say which industries would be subject to it.
Hatoyama’s Democratic Party of Japan pledged to start a cap-and-trade system and consider a carbon tax in a policy paper published July 23, a month before the party won government in a landslide. The DPJ’s popularity has since plunged, and the party may put debate over mandatory emissions caps, which the nation’s business lobby opposes, on hold while it prepares to fight Upper House elections slated for July, said Satoshi Hashimoto, a senior climate researcher at Mitsubishi Research Institute Inc.
“Hatoyama’s government is putting off this big debate on whether or not Japan will go with or without a cap-and-trade,” Hashimoto said by phone from Tokyo. “The election is just around the corner, and Hatoyama may be ruling out any potential factors that could further hurt the party’s popularity.”
The discussion comes as the “climategate” scandal fuels arguments by skeptics who question the science behinds global warming, undermining popular support for efforts to stop it by governments worldwide.
Deadline Nears
Environment Minister Sakihito Ozawa wants Cabinet to listen carefully to the concerns of industry over the bill while moving quickly to approve a draft by March 5 so it can be submitted to the current session of parliament, a ministry spokeswoman, who declined to be named because of internal policy, said by phone today. She denied a news report that the bill may be delayed.
The draft should get Cabinet endorsement no later than March 12 if it is to be debated in the current Diet session, which lasts through mid-June, according to the environment ministry.
Tokyo Electric Power Co. President Masataka Shimizu told a government committee on climate change last month that there needs to be more nationwide discussion of carbon trading before it’s included in any legislation, according to spokesman Ryo Shimizu. Utilities accounted for 31 percent of Japan’s emissions in fiscal 2008, according to data from the environment ministry.
Hatoyama’s government on Jan. 26 formally reiterated a promise to the United Nations to cut Japan’s emission of heat- trapping gases blamed for global warming by 25 percent by 2020 from 1990 levels. The pledge comes with the condition that “all other major emitters agree to a fair and realistic international treaty that calls for an ambitious reduction target.”