Contribution and Challenges Contribution and Challenges

of Kyoto Mechanismsof Kyoto Mechanisms

Contribution and Challenges Contribution and Challenges

of Kyoto Mechanismsof Kyoto Mechanisms

Shin OKAMOTO

Ministry of Economy, Trade and Industry

April 1, 2008

Kyoto MechanismsKyoto Mechanisms －－ OverviewOverviewKyoto MechanismsKyoto Mechanisms －－ OverviewOverview

Role of Kyoto Mechanisms: helps countries to achieve commitments under the

Protocol contributes to cost-effective global emission reduction

Clean Development Mechanisms (CDM): structured in earlier stages has been contributing through project formation,

validation, registration, and credit issuance ｓ

Japan’s Policy and ContributionsJapan’s Policy and ContributionsJapan’s Policy and ContributionsJapan’s Policy and Contributions

The Japanese government is going to acquire 100 million tons of credit in 5 years (2008-2012).

Japanese Industries also can utilize the Kyoto Mechanisms: the power and steel industries are planning to acquire 120 and 44 million tons of credit in 5 years, respectively.

279 out of 3,312 total government-approved CDM projects are Japan’s, the 2nd largest ranking following the UK.

All sectors will have to make every effort to achieve the Kyoto Protocol commitment on the basis of the domestic measures ･･･ These efforts notwithstanding, Japan will fall short of achieving its Kyoto Protocol commitment by 1.6% of the total emission volume of the base year. It will be necessary to make up this difference by utilizing the Kyoto Mechanisms while respecting the general rule that the Kyoto Mechanisms are supplementary to domestic measures.

The Kyoto Protocol Target Achievement Plan of Japan

Challenges of CDMChallenges of CDMChallenges of CDMChallenges of CDMThe current CDM needs fundamental review: Only for Parties which have committed to reduction of an

absolute amount of emission and Parties which have not Uneven geographical distribution of projects Non-eligibility of nuclear and CCS projects Low probability of achieving approval for energy efficiency

projectsImplementation of CDM projects by region and by technological field

Cement2%

Other2%

Biomass9%

OＮ２11%

Hydro Power15%

MethaneRecovery

14%

EnergyEfficiency

12%

HFC,ＰＦＣ20%

Renewable1% Reforestaion,

Afforestation0%

Wind Power7%

Fuel Switching7%China, 53.2％

India, 14.9％

Other Asia, 11.3％

Brazil, 6.8％

Other Latin America,4.7％

Mexico, 2.7％

Central and SouthAfrica, 2.6％

North Africa andMiddle East, 2.0％

Chile, 1.6％

Europe and CentralAsia, 0.7％

Source: UNEP “CDM pipeline overview” (March 1, 2008)

Share is measured by the amount of credit acquired

Improvement in Current OperationImprovement in Current OperationImprovement in Current OperationImprovement in Current Operation

Review process for registration. Effective management of the secretariat Sound market for DOEs Role of CDM as a policy instrument （ promotion of

CDM in fields such as Energy Efficiency) 　 “New approaches to “additionality” Small-Scale CDM

For the first commitment period, we should undertake the following improvements immediately, in order to build a sound CDM system.

Flexibility Mechanisms in the Flexibility Mechanisms in the Future FrameworkFuture FrameworkFlexibility Mechanisms in the Flexibility Mechanisms in the Future FrameworkFuture Framework

Future flexible mechanisms should be discussed in line with the discussion in AWGLCA.

The top priority of the discussion is to build a framework where all the major economies participate in a responsible way. The carbon trading system should be regarded as a flexible measure that is complementary to the overall system.

Introduction of emissions trading in countries and regions depends on the political decisions of each country, taking into account the differences in their social, economic and institutional situations.

Thank you for your Thank you for your attention.attention.

Thank you for your Thank you for your attention.attention.