Anti-Global Warming Tax of 3,400 Yen per Ton of Carbon Seen Necessary

On 29 August, 2003, Japan's Ministry of the Environment released a detailed report that describes an environmental (anti-global warming) tax system. The report proposes to introduce the tax in fiscal 2005, with a view to reducing greenhouse gas emissions.

The tax would be levied on all fossil fuels, including petroleum, coal and natural gas, and the tax rates would vary depending on the amount of carbon contained in each type of fuel. The report also says that raising the price of fossil fuels will help discourage their consumption and contribute to the development of alternative energy sources and new environment-related technologies.

To achieve the emissions reduction target of six percent set under the Kyoto Protocol, the tax rate on carbon will have to be 3,400 yen (about U.S. $28, @ $1=120 yen) per ton, equivalent to a price increase of two yen (about 1.7 U.S. cents) per liter of gasoline. All of the carbon tax revenues will be earmarked for global warming prevention measures, such as promoting energy-saving appliances and houses and supporting forest management. The Ministry estimates that this will cut greenhouse gases by two percent.

If the proposed tax rate is introduced, an average household with a car will have to pay about 5,500 yen (about US $46) per year.

While the Ministry of the Environment has invited public comment on the report, it has already worked with businesses and other concerned government ministries and agencies to promote the new tax system. However, many businesses that would be forced to shoulder the new tax burden are raising their voices against the system, saying that it could harm the Japanese economy. The tax plan is thus expected to have a rough passage.



Posted: 2003/11/06 01:33:09 PM
Japanese version