Table 4-3-1 Key Tax Reforms Related to Climate Change Policy in Other Countries

Increased awareness of environmental issues since the 1980s, international negotiations on the Framework Convention on Climate Change (from 1990), etc.
1990	Finland	So-called carbon tax (additional duty) introduced
1991	Sweden	CO₂ tax introduced
Norway	CO₂ tax introduced
1992 Framework Convention on Climate Change adopted (took effect in March, 1994), Earth Summit held in June (Rio de Janeiro)
1992	Denmark	CO₂ tax introduced
Netherlands	General fuel tax introduced
1993	UK	Hydrocarbon oil duty raised in phases (until 1999)
1996	Netherlands	Regulatory energy tax introduced
1997 Kyoto Protocol adopted (took effect in February 2005)
1999	Germany	Mineral oil tax raised in phases (until 2003), electricity tax introduced
Italy	Excises on mineral oils revised (raised in phases until 2005, and coal and others added)
2001	UK	Climate change levy introduced
Germany	Fixed-price purchase system (FIT) started under the Renewable Energy Act
Reference: 2003 “EC Directive on the Community framework for the taxation of energy products and electricity” (Took effect in January 2004): Member states set tax rates in excess of the minimum rate for energy products and electricity
2004	Netherlands	General fuel tax integrated with the existing energy taxation (Fuel tax continues on coal (Tax on coal)). Regulatory energy tax restructured into energy tax
2005	EU	EU Emissions Trading System (EU-ETS) started
2006	Germany	Excises on mineral oils restructured into energy tax (coal included)
2007	France	Coal tax introduced
2008	Switzerland	CO₂ levy introduced
Source: Data from relevant governments and OECD

## Figure 4-3-2 FY 2011 Tax Reform Outline (Main Points)

Concretely, “Special Provision on Taxation for Global Warming Countermeasure” shall be established that imposes additional tax rate on current Petroleum and Coal Tax (the tax on whole fossil fuels such as crude oil, petroleum products, gaseous hydrocarbons, and coal), based on $ CO_{2} $ emission volume of each fossil fuel categories, in order to reduce energy-originated $ CO_{2} $ emission in wide range of fields.

The additional tax rate by this special provision is JPY 760 per kilo liter for crude oil and petroleum products, JPY 780 per ton for gaseous hydrocarbons, and JPY 670 per ton for coal.

This “broad and light” tax imposition shall avoid tax overload to the specific areas/industries and secure fairness of taxation. Moreover, in introduction, tax rate will be increased gradually to prevent sharp increase of burden, and tax exemptions and tax refunds shall be taken in certain necessary areas. In addition, various support measures shall be implemented, such as measures to cut costs for fuel production and distribution, stabilization of fuel supply, policies to save energy for logistics and transport, and to support the under-populated or cold areas.

that adding such economic incentives (motives) would lead to a shift toward low-carbon economic activities in a wide range of fields, such as the industrial, the residential / commercial, and the transport sector, and would help control $ CO_{2} $ emissions from energy use.

With this tax rate, the increase of residential expenses is estimated to be approximately 100 yen per month. This estimation is premised on the assumption that the types and volumes of goods and services consumed by

Figure 4-3-3 Tax Rates Per Ton of CO₂ Emissions under the "Special Taxation for Global Warming Countermeasures" (In the Case of Interim Measures of 3 1/2 Years)

Table 4-3-2 Tax Rates under the “Special Provision of Taxation for Global Warming Countermeasures”

Object to be taxed	Current tax rate	October 2011-March 2013	April 2013-March 2015	April 2015-
Crude oil/Oil products (per 1kt)	(JPY 2,040)	+ JPY 250 (JPY 2,290)	+ JPY 250 (JPY 2,540)	+ JPY 260 (JPY 2,800)
Gaseous hydrocarbon (per 1ton)	(JPY 1,080)	+ JPY 260 (JPY 1,340)	+ JPY 260 (JPY 1,600)	+ JPY 260 (JPY 1,860)
Coal (per 1ton)	(JPY 700)	+ JPY 220 (JPY 920)	+ JPY 220 (JPY 1,140)	+ JPY 230 (JPY 1,370)

households do not change. However, it is possible to reduce consumption of gasoline, electricity, and gas through eco-driving techniques such as idling stop, and power-saving and water-saving at home. Thus taxation, an economic incentive, is expected to be an effective global warming measure that changes the lifestyles of people and corporate activities to low-carbon oriented ones, and the additional burden on household expenses is expected to be less than the estimate.