Tokyo backs CO2-cutting projects overseas

TOKYO - The Japanese Ministry of Economy, Trade and Industry will back up private-sector overseas projects to cut global-warming gas emissions through lending, investment and trade insurance to be provided by government-affiliated financial institutions, ministry sources said.

The move is intended to help Japan achieve its carbon-dioxide-reduction goal stated in the Kyoto Protocol, which allows countries engaged in such projects overseas to obtain carbon-dioxide emission rights from foreign governments.

The protocol obliges Japan to trim its carbon-dioxide (CO2) emissions in 2008-12 by 6 percent from the levels seen in 1990. In other words, CO2 emission rights obtained by Japanese companies involved in overseas energy-saving projects, such as renovating old power-generation plants and improving factory efficiency, will count as Japan's CO2 reduction under the protocol.

METI will make it easier for private firms involved in such overseas projects to obtain lending and investment by Development Bank of Japan and Japan Bank for International Cooperation (JBIC), the sources said.

By drumming up investment from private lenders, Development Bank will set up a 3 billion yen (US$25 million) fund to pump money into private firms' energy-saving projects abroad, into which the public lender will also contribute 500 million yen.

Development Bank and JBIC will also be encouraged to extend loans to private firms' environment protection-related and other projects overseas. METI will also encourage those public lenders to provide trade insurance to such private-sector companies to cover possible losses from unilateral contract violations by overseas countries in which they pursue energy-saving projects.

The ministry has secured 2.5 billion yen in its fiscal 2003 budget to reduce CO2 discharges. Last October, the ministry started procedures to award government hallmarks to private-sector firms seeking to use the Kyoto Protocol mechanism.

(Asia Pulse/Nikkei)
Jan 7, 2003


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