In 2022, Japan hopes to have a market price for carbon. The government wants to launch a new exchange that will trade carbon credits issued locally and overseas, creating a public and liquid price mechanism for CO2.

The impact could be immense. As well as setting a price on pollution in the world’s fifth largest CO2 emitting nation, it should provide a market mechanism to define the value of green investments in energy, recycling and other spheres. This could unlock a range of clean energy projects that to date have struggled to justify initial high costs. It will also motivate companies to pursue a more pro-active energy strategy, either through higher efficiency or a switch to green technologies.

The government says the new exchange, and its inherent discount/premium valuation tool, will trigger a boom for the green economy rather than acting as another tax on emitters.

If the recent interest in the EU’s carbon trading platform is any indicator, Japan’s new CO2 market place could quickly become a hot commodity.


Faith in volunteerism
The Ministry of Economy, Trade and Industry (METI) made a low-key announcement of the new carbon trading market in late August, saying only that trial operations will begin after April 2022 (FY2022). The exchange will offer transactions in four types of credits ….