Japan Inc. balks at 25% carbon reduction target

Posted by: Ian Rowley on September 8, 2009

No one can doubt the green credentials of Japan’s new government. Just days after defeating the Liberal Democratic Party in an Aug. 30 election, Yukio Hatoyama, leader of the Democratic Party of Japan and soon-to-be new Prime Minister, has reiterated a pre-election pledge that Japan will cut greenhouse gas emissions by 25% by 2020, compared with 1990 levels.

Putting that into perspective, Nippon Keidanren, Japan’s biggest business lobby favors a 4% reduction. The outgoing LDP government had proposed an 8% cut. “It will require strong determination because sacrifice by all Japanese people will likely be needed,” Economy, Trade and Industry Vice Minister Harufumi Mochizuki said at a news conference.

But while Greenpeace and other environmental groups broadly backed Hatoyama for showing leadership, Japan Inc. is unimpressed. Takanobu Ito, CEO of Honda, which has cultivated a green image selling gas-sippers and hybrids, doubts the tough target can be met. “The target is beyond the reach of our conventional business plans. I think it will be extremely hard for us to find ways to attain it,” reported the Nikkei. Speaking last week, one Toyota executive said that everything possible should be done to stop Hatoyama and the DPJ repeating their pre-election C02 pledge.

Hatoyama has at least left a little room for back-pedaling. He said Japan’s plan for a 25% cut in greenhouse gases will depend on other major economies agreeing to concerted actions. In the U.S., the House of Representatives has approved a bill which would cut emissions by 17% from 2005 levels by 2020. However, given that its output of greenhouse gases increased an estimated 15% between 1990 and 2005, the U.S. measures are way behind what Japan is now proposing. The European Union has agreed to a 20% reduction from 1990 levels by 2020.

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