Japan expects to facilitate the development of high integrity carbon markets around the world. Such an approach could allow financing from wealthy nations to flow to decarbonizing technology and infrastructure in developing economies. The end result should be more funds for the latter and also a reduction in global GHG output. But there are several challenges to orchestrating this kind of exchange.
One of the countries with the most experience in international carbon transfer happens to be Japan. It has implemented the Joint Crediting Mechanism (JCM) for a decade, which is a program that promotes the deployment of decarbonizing technology and infrastructure by verifying credits for and funding projects conducted by Japanese firms to reduce GHG emissions in JCM Partner countries. The credit for the GHG emission reduction is allocated between the JCM Partner country where the project takes place and Japan.
This year, the topic of carbon credits will likely reach a whole new level: 2023 is the inaugural year for implementing the carbon market mechanism alignment according to the rules of Article 6 of the Paris Agreement. Japan NRG sat down with the Ministry of Environment’s Shigematsu Takayuki, the Planning Officer for JCM, to discuss the evolution of the mechanism and its expansion.
EXPANDING THE JCM PROGRAM
What’s exciting about 2023?
In 2023, the Paris Agreement Article 6 Implementation Partnership will start its activities. While the programs related to it will only just get started, Japan will celebrate a decade of operating the JCM. Under the JCM scheme, Japan is facilitating diffusion of leading decarbonizing technologies and infrastructure, etc. as well as implementation of mitigation actions in partner countries. The JCM contribute to the achievement of both countries’ NDCs while ensuring the avoidance of double counting through corresponding adjustments. Only Japan and Switzerland have experience with such international frameworks. Japan will be happy to help other countries understand the workings of an exchange mechanism and develop things further.