the contrary, however, the reality is that negative impacts on economic growth and development can be minimized by launching countermeasures for climate change at an early stage and continuing for a long period, which in the long run could cause grave impacts on the global economy.

### 2. Clean Development Mechanism (CDM)

The Clean Development Mechanism (CDM) is a scheme introduced under the Kyoto Protocol that helps developing countries address global warming. While developed countries are given goals for reducing their GHG emissions under the Kyoto Protocol, the CDM has these countries contribute to the sustainable development of developing countries, as developing and developed countries work together on projects that contribute to cuts and absorption of GHG emissions in developing countries. By joining in these efforts, developed countries are eligible to receive credit (cap) that represents the amount of reduction/absorption achieved through the country's commitment. The CDM affords developing countries additional investment for development in energy and other sectors. Japan, which has the potential to gain credit under the CDM, intends to promote support for developing countries to advance the CDM and actively register its ODA projects in the CDM. At the same time, Japan will use the co-benefit approach as a base to promote anti-pollution measures in developing countries.

However, the current CDM is seen to have a tendency to allow more funds to flow into those countries that have already achieved certain levels of economic development and that have greater potential to reduce emissions. This issue should be reviewed in order to ensure unbiased distribution of funds to its member countries without regional gaps. The CDM must also provide incentives to advance developing countries' efforts for reducing emissions.

(Source: AFP=Jiji)

### Section 2. Cool Earth Partnership

### 1. Strengthening of Ties with Developing Countries

Japan, during its period of rapid economic growth, experienced both industrial development and serious degradation of the environment. The country sought to advance energy-saving technologies through the years of the oil crisis that followed the economic boom. These experiences have turned Japan into a leader in energy conservation commitments. In particular, Japan's experiences have made it a model for energy-saving efforts. For example, with regard to consumer appliances, the latest refrigerators consume 50% less power than those manufactured a decade ago. Given the widespread use of refrigerators, this represents major energy saving effects. Furthermore, if the level of efficiency proved by Japan's coal power generation were adopted by the United States, China, and India, it would reduce $ CO_{2} $ emissions by 1.3 billion tons, equivalent to the total amount emitted by Japan alone.

At the Davos Meeting in January 2008, then Prime Minister Yasuo Fukuda laid out the Cool Earth Partnership fund on the scale of 1.25 trillion yen (about US$10 billion) for a period of five years, as part of the Cool Earth Promotion Programme. Through this, he said, Japan would cooperate actively with developing countries' efforts to reduce emissions, such as efforts to enhance energy efficiency, while seeking economic growth, thereby contributing to climate stabilization.

Specifically, a total of about 250 billion yen in support over five years, starting from 2008, will be granted to developing countries which make efforts to both reduce GHG emissions and achieve economic growth in a compatible manner on the basis of policy consultations between Japan and those countries. These funds will be offered through grant aid, such as program grant aid for Environment and Climate Change, technical cooperation, and through international organizations such as UNDP. Japan has also established the Climate Change Japanese ODA Loan (Cool Earth Loan) which will be disbursed up to about 500 billion yen with special interest rates, for the purpose of supporting implementation of recipients' programs to address global warming. Furthermore, through capital contribution and guarantees by the Japan Bank for International Cooperation (JBIC), trade and investment insurance by the Nippon Export and Investment Insurance (NEXI), government subsidies, and private funds, up to 500 billion yen will be