“Roadmap to Low-Carbon World”
Group 3: Enabling Low Carbon Societies:
Investment

February 13, 2008

Yurika Ayukawa
WWF Japan, Climate Change ProgrammeWhat the IPCC 4th AR Indicated• WGI showed the temperature increase in the past 100years was 0.78 degree C, and will increase by 0.2 degrees
C per 10 years till 2030.
It is inevitable to see anincrease of 1.14 degrees C by 2030.
• WGII showed the extent of impacts according totemperature increase. The “below 2 degrees C” threshold
is imperative in order to avoid serious impacts from climatechange.
• However, WGIII showed that it is still possible to avoid thedangerous temperature change by peaking the emissions
by 2015 and make a deep declining curve to a 50-85%
reduction from 2000 levels by 2050.

2 degrees C frompreindustrialized level

The Scenario We Need to Implement

The Scenario We Need to Implement

Halve 2050

Peak 2015

How to Make Deep Cuts Happen• Kyoto Protocol is only a first step, but an important stepforward• Need to start taking drastic steps NOW (during the 1stCommitment Period), to enable deeper emissions cuts thatwill be essential after 2012 when Kyoto Protocol is over.
• Most important factor is to put a price on carbon emission.
• The cost of GHG emissions should be implanted into every
sector economy-wide, as an economic measure, such ascarbon tax, or cap&trade emissions trading system.
• In this way, people will start to think seriously how to avoid it,
and will promote innovative technology to be dispersed
widely in the society.

Where does Japanese CO2 emit from?
（Direct Emissions for 2005）
Households
5%

Waste
3%

Power
Generation
32%

Commercial
8%

Total of the Blue
part is 65％

Transport
19%

Industrial
Process
4%

Industry
29%

Made from Greenhouse Gas
Inventory Office, May 29, 2007

Indirect Emissions Sources（compared to 1990）
600

Industries say thesesectors are theproblem, not them

400
300

1990

200

2005

100

Ind

as
te
W

ce
ss

us
tri

al
Proeh
ol
ds
ou
som
CH

m
er
ci
al

ort
nsp
Tr
aus
try
In
der

Se
ct
or

0Pow

1000 tCO2500（Greenhouse Gas Inventory Office of Japan, May, 2007）

Deeper Cuts Should Firstly Be Made inthe Large Emitting Sectors• WWF proposes a Cap&Trade Domestic Emissions TradingSystem as the most cost effective measure to enable deeper
cuts from the big emitting sectors, power & industry.
• The system will be one tool to accelerate social structuralchanges towards a Low Carbon Society• Such changes will be the driver to develop
new innovative technologies, expand the useof existing best practices at a lower cost, andimprove the efficiency of the society as awhole.
Released WWF Proposal, “Emissions Trading Scheme For
Decarbonizing Japan” (January 24, 2007)

Published it into a book (October, 2007)

WWF’s “Emissions Trading Scheme ForDecarbonizing Japan”①• GHG coverage: CO2 by Direct Emissions in a Downstream
type (Power generation, industry use, industrial processes)• Cap: 639 million tons CO2
Coverage: 64%• Allocation:Grandfathering + 5% auction + 5% new entrants
reserve (in the future,benchmarking+auctioning)• Grandfathering to each sector will be based on average ofbase year 2000-2004• First commitment period: 2008-2012• Allocation to each factory will be a bottom-up approachbased on average of base year, using a Compliance Factor
to adjust the total amount of allocation

WWF’s “Emissions Trading Scheme For
Decarbonizing Japan”②• Policy Mix ideas for sectors not directly covered by ETS
1) Tax• Tax on the upstream, with 75% exemption for those covered byETS• At the downstream, the tax will be paid indirectly throughincreased price shift2) Baseline & Credit Trading System
・ Sectors, such as commercial, residential, transport and othersmall business will do emission reduction projects and sell thereduction credit to those covered by ETS・ In this case, we propose a “Baseline & Credit Reserve” in the ETS
in order to avoid double counting of reduction from electricity andheat
・We also propose a Japanese version of the CDM EB to ensure a ton
is a real ton

Why Emissions Trading is Essential
１．Guarantees reduction amount by capping large
emitters
２．Abatement cost differs according to companies,
which enables companies to use this difference tominimize cost by using the trading system
３．Can sell the amount of efforts, but can also buy whennecessary, so flexibility is guaranteed
４．Can reduce risks from impacts of climate change aswell as climate policy to be introduced, and the investor
value will increase as a reliable company
５． Social/Economical structure will change to realize alow-carbon society

ETS essential from an Internationalperspective• EU ETS operating since 2005 as a pilot phase, its second
phase started 2008, and is already planning for the third phasestarting 2013 in order to realize the 20-30% reduction goal by2020.
• Norway, Canada, Australian States and 10 Eastern States inthe USA as well as California and 5 western states, midwestern states are developing a similar system, aiming to link
together with EU ETS.
• A global carbon market is being discussed at the International
Carbon Action Partnership (ICAP) established October, 2007.
• At the US Senate level, a Lieberman-Warner Climate Security
Act was voted out to the Senate floor in the end of 2007.

Growing Global Carbon Market
ICAP、(October 29, 2007)
Mid-western GHG
Reduction Accord

EU ETS
Phase 2（27countries）

MGA？

WCI

Australian Federal Level
discussion, Change of
Administration in November,
2007, ratified Kyoto Protocol

NSW GGASRGGI（10eastern states）

LiebermannWarner Bill
passed to Senate

Japan’s National Interest is being threatened,
as we are about to be left behind!
• Japan’s major climate policy is only based on voluntaryscheme.
• No mandatory scheme, no economic measures, or regulation.
• In the Lieberman-Warner bill, there is a provision that requires
importers of primary goods from countries that do not havecomparable GHG controls to buy and submit special
allowances to cover their products’ GHG emissions.
• If Japan sticks to just “Voluntary Actions”, it may be regarded“not comparable” to the cap&trade to be adopted in the USA.
• It is about time for Japan to really seriously consider these
consequences, and about making a low carbon society
nationally as well as worldwide.

Thank you very much！
http://www.wwf.or.jp/climate
climate@wwf.or.jp•© WWF-Canon / Adam OSWELL