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’s Third National Communication Under the Framework Convention on

The 2002 Contents

Executive Summary

Chapter 1: National Circumstances Relevant to Emissions and Removals………………………………………... 1 1.1 National Land Use …………………………………………………………….. 1 1.2 Climate …………………………………………………….……………………. 2 1.3 Population and Households ………………………………………………….. 3 1.4 Houses and Commercial Facilities ………………………………………….. 6 1.5 Japan’s Industry and Economy ……………………………………………… 8 1.6 Transport ………………………………………………………………………... 12 1.7 Energy …………………………………………………………………………… 18 1.8 Waste …………………………………………………………………………….. 24 1.9 Agriculture ……………………………………………………………………… 26 1.10 Forestry …………………………………..……………………………………. 27 1.11 Information and Telecommunications …………………………………….. 29 1.12 Government Administration and Finances ………………………………. 29

Chapter 2: Greenhouse Gas Inventory Information ………………………... 34 2.1 Outline …………………………………………………………………………... 34 2.2 Carbon Dioxide (CO2) …………………………………………………………. 37 2.3 Methane (CH4) …………………………………………………………………. 44 2.4 Nitrous Oxide (N2O) …………………………………………………………… 47 2.5 Hydrofluorocarbons (HFCs) ………………………………………………….. 50 2.6 Perfluorocarbons (PFCs) ……………………………………………………… 52 2.7 Sulfur Hexafluoride (SF6) …………………………………………………….. 54 2.8 Nitrogen Oxide (NOx) …………………………………………………………. 56 2.9 Carbon Monoxide (CO) ………………………………………………………... 58 2.10 Non-Methane Volatile Organic Compounds (NMVOC) ………………… 61 2.11 Sulfur Dioxide (SO2) …………………………………………………………. 64 Chapter 3: Policies and Measures …………………………………………… 70 3.1 Background and Significance of Review of Guideline for Measures to Prevent Global Warming …………………………………………………….. 70 3.2 Basic Policies for Measures to Prevent Global Warming ……………...… 74 3.3 Policies Aimed at Achieving the Commitment to a 6% Reduction ……... 76 3.4 Promotion of Measures to Prevent Global Warming for Achievement of 6% Reduction Commitment …………………………………………………. 77

Chapter 4: Projections and the Total Effect of Policies and Measures …… 132 4.1 Basic approach …………………………………………………………………. 132 4.2 Future Outlook ………………………………………………………………… 133 4.3 Estimation methods …………………………………………………………… 145 4.4 Future outlook for CO2 emissions from international bunker fuel sold in Japan ………………………………………………………………………… 148

Chapter 5: Vulnerability Assessment, Climate Change Impacts and Adaptation Measures…………………………………………….. 151 5.1 Impacts on Japan’s Climate ………………………………………………….. 152 5.2 Impacts on Agriculture, Forestry and Fisheries ………………………….. 153 5.3 Impacts on Hydrological Conditions and Water Resources ……………... 155 5.4 Impacts on Social Infrastructure and Economy …………………………... 155 5.5 Impacts on Nature …………………………………………………………….. 157 5.6 Impacts on Human Health …………………………………………………… 160 5.7 Adaptive Measures …………………………………………………………….. 161

Chapter 6: Financial Resources and Transfer of Technology……………… 163 6.1 Measures Concerning New and Additional Financial Resources pursuant to Article 4.3 of the Convention ………………………………… 164 6.2 Assistance for Developing Countries that are Particularly Vulnerable to Adverse Effects of Climate Change ……………………………………... 164 6.3 Financial Resources related to the implementation of the Convention . 167 6.4 Measures Related to Transfer of Technologies ……………………………. 167 6.5 Promoting International Cooperation in the Private Sector ……………. 175 6.6 Other …………………………………………………………………………….. 176

Chapter 7: Research and Systematic Observation ………………………… 192 7.1 Comprehensive Government Policies and Fundraising for Research and Systematic Observation ………………………………….…………….. 192 7.2 Research ……………………………………………………………………...…. 193 7.3 Systematic Observations ……………………………………………………... 197

Chapter 8: Education, Training, and Public Awareness ………………….... 203 8.1 Approaches to Policies and Measures ………………………………………. 203 8.2 Promotion of Environmental Education and Study ……………………… 203 8.3 Activities for Promoting the Prevention of Global Warming ……………. 205 8.4 Support for Environment NGOs …………………………………………….. 208 34#56+7'#$86**.(9

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AO Chapter 3 Policies and Measures

In Japan, the Global Warming Prevention Headquarters was established in December 1997 by order of the Cabinet to implement specific and effective countermeasures against global warming in reaction to the Third Session of the Conference of the Parties to the UNFCCC (COP3, also known as the “Kyoto Conference on Global Warming Prevention”). The “Guideline for Measures to Prevent Global Warming” was drawn up in June 1998 by these headquarters. Subsequently, new “Guideline for Measures to Prevent Global Warming” was concluded on 19th March 2002, as additional measures need to be promoted to achieve the commitment stipulated in the as emissions continue to increase. This chapter is based on Chapters 1 through 4 of this new Guideline.*

3.1 Background and Significance of Review of Guideline for Measures to Prevent Global Warming 3.1.1 Basic understanding of global warming

The global warming issue refers to the adverse effect on both human being and the natural ecosystem, from the increase in global surface and atmospheric temperature due to the increase of greenhouse gases concentrations by human activities. It is certainly the most important environmental issue for human life in terms of the scale and severity of its estimated impact. According to the Intergovernmental Panel on Climate Change (IPCC), global mean surface temperature has increased by 0.6 M0.2 °C between 1861 and the present, and global mean sea level has risen by 10 to 20 centimeters within the 20th century. It also mentions that regional climate changes have impacted on a variety of physical and biological systems in many areas of the world, as evidenced by the recession of mountain glaciers and the melting of permafrost. Furthermore, it describes new and more reliable evidence that most of warming observed over the last 50 years has been caused mainly by the human activities. In terms of future projection, the global mean surface temperature is projected to increase by 1.4 to 5.8°C over the period 1990-2100, with global mean sea level rising by between 9 and 88 centimeters due mainly to the thermal expansion of sea water. It is reckoned that the impact on human society will include increases in the number of flood victims and infectious diseases such as malaria, further damage to the ecosystem, as well as the increase of extreme weather events. It also mentions that while any increase in temperature will cause net economic losses in developing countries, temperature increases of more than a few degrees centigrade will incur net economic losses in developed countries, thus widening the gap between the north and south will be further exacerbated.

3.1.2 Measures for international society (1) Adoption and implementation of the Framework Convention on Climate Change

The “United Nations Framework Convention on Climate Change” was adopted in May 1992 by international society to resolve global warming-related issues. Japan signed the “Framework Convention on Climate Change” at the UN Conference on Environment and Development in June 1992, and accepted it in May 1993. The “Framework Convention on Climate Change” came into effect in March 1994. The ultimate objective of the “Framework Convention on Climate Change” is to achieve

* In the Greenhouse Gas Emission/Removal Inventory submitted in 2001 and Chapter 2, total in the base year (1990 levels for CO2, CH4 and N2O; 1995 levels for HFC, PFC and SF6) and total emissions in 1999 were 1,223.8 million tons and 1,300.7 million tons respectively, but revised statistics are used here as it was discovered in the latest emission studies that the amounts of waste incineration and cement production were under-calculated, thus leading to new Guideline.

70 stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climatic system. The “Framework Convention on Climate Change” states that such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner. The “Framework Convention on Climate Change” also stipulates that, based on a concept of “common but differentiated responsibilities” of the Parties, it is recognized that the return by the end of the decade 1990-1999 to earlier levels of emissions of greenhouse gases would contribute to the modification of long-term trends in emissions, and that the developed country Parties shall communicate detailed information on its policies and measures to limit its emissions of greenhouse gases and to protect and enhance its greenhouse gas sinks, and reservoirs as well as on its resulting projected greenhouse gas emissions and removals for the decade with the aim of returning these emissions to their 1990 level. The “Framework Convention on Climate Change” thus makes it clear that the developed country Parties should take the lead in combating climate change ahead of developing countries. On the other hand, it stipulates the basic responsibilities of developing country Parties, such as estimation of the emission amounts in each country and its reporting to the Convention secretariat, while also clarifying the obligation of developed country Parties to support their implementation.

(2) Measures for the implementation of the Kyoto Protocol in 2002

As a first step towards long-term and continued reductions in emissions, the Kyoto Protocol – which provide a legally binding commitment to reduce greenhouse gas emissions by developed countries – was adopted at the Third Conference of the Parties (COP3) for the “Framework Convention on Climate Change” held in Kyoto in December 1997. Under the Kyoto Protocol, the greenhouse gases subject to the quantified emission limitation and reduction commitments are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). A legally binding quantified commitment has been established for each country with a view to reducing the developed countries’ overall emissions of these greenhouse gases by at least 5 per cent below 1990 levels in the first commitment period from 2008 to 2012. The quantified commitment for Japan is a 6% reduction, while those for the USA and EU are 7% and 8% respectively. The Kyoto Protocol introduces the so- called ‘Kyoto mechanisms’ (a mechanism stipulated in Article 6 of the Kyoto Protocol (so-called, and hereafter, referred to as, ‘Joint Implementation (JI)’), a clean development mechanism (CDM) under Article 12, and emission trading under Article 17) as an international system to promote cost-effective measures to achieve such commitments. Since then, international negotiations have been pursued to decide the operational details for the implementation of the Kyoto Protocol, and the decisions elaborating these details (so-called “the Marrakesh Accords” ) were adopted at COP7 held in Marrakech in October and November 2001. While the USA, which is the largest greenhouse gas emittor of the world, has made clear its position not to become a party to the Kyoto Protocol, the EU and other developed countries have already begun preparations towards the conclusion of the Kyoto Protocol following the decision reached at COP7, so as to enable its entry into force in 2002. Japan, which chaired COP3 (The Kyoto Conference) at which the Kyoto Protocol was adopted, convened a Global Warming Prevention Headquarters meeting on February 13th 2002, and decided to make every effort to obtain the Diet’s approval for its conclusion of the Kyoto Protocol and to complete legislative process for the adoption of the necessary domestic laws, taking into account the holding of the World Summit on Sustainable Development (The Johannesburg Summit) from late August into September. It was also decided at the meeting to review the ‘Guideline of Measures to Prevent Global Warming’ (Global Warming Prevention Headquarters decision, June 1998: hereafter referred to as the ‘old Guideline’) and establish a new Guideline. At the same time, Japan continues to make every effort to establish common rules in which all countries participate.

71 3.1.3 Measures to date, and the challenge of achieving the 6% reduction commitment stipulated in the Kyoto Protocol

Japan established an “Action Program to Arrest Global Warming” at the “Council of Ministers for Global Environmental Conservation” in October 1990, and took various measures to reduce and stabilize CO2 emissions at 1990 levels from 2000 onward. This target value was also mentioned in the Framework Convention on Climate Change as well, but it is thought that this target was not achieved in 2000. Taking into account the adoption of the Kyoto Protocol in December 1997, the Global Warming Prevention Headquarters drew up its “Guideline of Measures to Prevent Global Warming” in June 1998, covering those measures against global warming needing to be urgently promoted with the target year 2010 in view. Furthermore, Japan has fixed a basic framework to promote measures to prevent global warming in Japan by establishing the “Law Concerning the Promotion of the Measures to Cope with Global Warming” (1998 law No. 117; hereafter ‘Law to Promote Global Warming Countermeasures’), and established basic policies based on it. Japan has also implemented various domestic measures, such as revision of the “Law Concerning the Rational Use of Energy” (1979 law No. 49; hereafter ‘Law for Energy Conservation’). However, greenhouse gas emissions are still increasing. Emissions of greenhouse gases from Japan increased by around 6.9% in fiscal 1999 compared to the base year (1990 for CO2, CH4, and N2O, while 1995 for HFCs, PFCs, and SF6. Thereafter same). It has been estimated that greenhouse gas emissions will increase in 2010 by around 7% compared to the base year assuming existing measures and policies, so further measures are required to achieve the Kyoto Protocol commitment. Japan plans to conclude the Kyoto Protocol as soon as the requisite approval is granted by the Diet. However, it will not be easy for Japan to achieve the 6% reduction commitment stipulated for it in the Kyoto Protocol (hereafter ‘6% reduction commitment’) since its energy efficiency is already of the highest standard in the world, and accordingly close cooperation of the government, local authorities, businesses and citizens will be required to meet the challenge of achieving the commitment. On the basis of the above, the revised “Guideline of Measures to Prevent Global Warming” which the Government of Japan elaborated prior to its conclusion of the Kyoto Protocol provides an overview of the specific measures to achieve the 6% reduction commitment which strongly promote combined efforts of the government, local authorities, businesses and citizens. Additionally, targets and measures to address each of the greenhouse gases and other categories, as well as the schedule for implementation of such measures are described, indicating for each measure the target amount of its introduction in the whole country, its resulting emission reduction estimated and policies to promote it.

3.2 Basic Policies for Measures to Prevent Global Warming 3.2.1 Direction for global warming prevention to aim in

As a measure to prevent global warming from now on, firstly, we must try to reverse the trend for ever- increasing total amounts of greenhouse gas emissions to a reducing basis at an early stage, and link such reductions to the achievement of the 6% reduction commitment stipulated in the Kyoto Protocol, leading also to a longer term and continued emission reduction.

(1) Achievement of the 6% reduction commitment stipulated under the Kyoto Protocol

Japan positively promotes measures to prevent global warming as required to achieve the 6% reduction commitment stipulated in the Kyoto Protocol, namely the commitment to reduce its overall emissions of greenhouse gases by 6% below 1990 levels in the first commitment period from 2008 to 2012. If measures are introduced later, larger reductions will be required in a shorter period to achieve the 6% reduction commitment, so we are immediately implementing such measures as can be carried out now to prevent global warming, will reverse the rising trend to a falling trend at the earliest possible stage, and thus achieve the 6% reduction commitment.

(2) Long-term and continued reductions in greenhouse gas emissions

We plan to achieve the 6% reduction commitment stipulated in the Kyoto Protocol and head towards longer-term and continued emission reductions. In order to do so, we are implementing each measure

72 very carefully, and at the same time, striving to build a society in which a system to reduce greenhouse gas emissions is incorporated while trying to maintain consistency between each area of the overall policy and with due consideration for Japanese socioeconomic trends in the 21st century.

3.2.2 Basic concept for establishment and implementation of measures to prevent global warming (1) Preparation and establishment of a system for contribution to both the environment and economy

We are endeavoring to prepare and establish a mechanism to ensure contribution to both the environment and economy by make the best use of technological innovation and innovative ideas in economic circles to link the various measures aimed at achieving the 6% reduction commitment called for in the Kyoto Protocol and to create labor opportunities by stimulating the economy in Japan.

(2) Step-by-step approach

We have segmented the term from 2002 to the end of the first commitment period, and define the term from 2002 to 2004 as the ‘1st step’, from 2005 to 2007 as the ‘2nd step’, with the first commitment period (2008 ~ 2012) as the ‘3rd step’. We will steadily quantify how to achieve the 6% reduction commitment stipulated in the Kyoto Protocol in the first commitment period, evaluate the progress of such measures, policies and emission statuses before the 2nd and 3rd steps, and adopt a step-by-step approach by implementing any additional requisite measures and policies. In carrying out the above, we shall include in this guideline any targets for each of greenhouse gases and other segments, Japan’s overall implementation target amount for each measure, the estimated emission reduction amount, and policies to promote such measures to evaluate and review based on objective factors.

(3) Promotion of measures through cooperation between government, local authorities, businesses, and citizens

In order to promote measures to prevent global warming, cooperation between all parties is indispensable, by having the government, local authorities, businesses, and citizens each playing their roles. Also, local authorities shall establish comprehensive and considered policies to control greenhouse gas emissions in accordance with the natural and social conditions in each area while bearing in mind the basic concept of the above (1) and (2).

(4) Ensuring international cooperation for measures to prevent global warming

As the causes and effects of global warming are worldwide, it is necessary for all countries to work hard to reduce greenhouse gases in order to ensure the effectiveness of action against global warming, while, in addition to the efforts of each country, further efforts under international cooperation is indispensable. Thus, Japan continues its maximum efforts for the establishment of a common rule in which all countries including the USA and developing countries participate. It is estimated that CO2 emissions will increase rapidly in line with an increased global population and economic growth, so Japan intends to play a leading role drawing up global measures through international cooperation using its preeminent technological strengths and accumulated environmental conservation experience.

3.3 Policies Aimed at Achieving the Commitment to a 6% Reduction 3.3.1 Current status and future prospects of greenhouse gas emissions

73 Japanese aggregate anthropogenic carbon dioxide equivalent emissions of greenhouse gases listed in Annex A of Kyoto Protocol (hereafter, ‘total greenhouse gas emissions’) is 1,314 million tons of CO2 in 1999. When the old Guideline was established, it was estimated that greenhouse gas emissions would increase significantly if no special measures were taken. As a result of promoting various measures based on the old Guideline, total greenhouse gas emissions in 2010 (assuming existing measures) is estimated at about 1,320 million tons of CO2, and it is expected to be reduced to about a 7% increase compared to the base year. On the other hand, our total greenhouse gas emissions in the base year is 1,229 million tons of CO2. In order to achieve the 6% reduction commitment for Japan stipulated in the Kyoto Protocol, a reduction to 1,155 million tons of CO2 (6% off the above value) is required. Thus, in order to achieve the 6% reduction commitment, we must also strive to reduce emissions by about 13% (approximately 165 million tons of CO2) over and above existing measures.

3.3.2 Targets for each of greenhouse gases and other segments

We shall try to achieve the 6% reduction commitment stipulated in the Kyoto Protocol based on the following targets for the time being. Even if adequate progress is expected for targets ①-⑤ within the first commitment period, further emission reductions shall be promoted as well as continuously and steadily promoting earlier measures without allowing any complacency. Furthermore, Japan shall study the utilization of the Kyoto mechanisms while taking account of international situation and bearing in mind the commitment achievement responsibility and the general rule that Kyoto mechanisms stipulated in the Kyoto Protocol are supplementary to domestic measures.

1 We shall try to reduce carbon dioxide emissions from energy sources to the same level as fiscal 1990 within the first commitment period.

2 We shall try to reduce carbon dioxide emissions from non-energy sources, methane, and nitrous oxide by 0.5% compared to the total greenhouse gas emissions in the base year from the fiscal 1990 level within the first commitment period.

3 We shall try to achieve a 2% reduction compared to the total greenhouse gas emissions in the base year from the fiscal 1990 level within the first commitment period by innovative technological development and promotion of further activities to prevent global warming involving various sectors and layers of the public.

4 In terms of emissions of hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6), we shall try to contain the impact to within about +2% compared to the total greenhouse gas emissions in the base year from 1995 within the first commitment period.

5 For general targeted forests stipulated in Article 3.3 and 3.4 of the Kyoto Protocol, we shall try to ensure removals of about 13 million tons of carbon (47.67 million tons of CO2; about 3.9% compared to the total greenhouse gas emissions in the base year) as agreed at COP7 through sink activities in Japan.

3.3.3 Targets for each measure

In order to show an overview of the measures with specific evidence to achieve the 6% reduction commitment stipulated in the Kyoto Protocol, this Guideline stipulates implementation target amounts, and estimated emission reduction amounts for each measure in order to achieve the target for each of greenhouse gases and other segments, and policies to promote such measures. Details are shown in the tables per field (see Tables 3.1-3.11) in the following section 3.4. We shall also make the utmost effort for steady implementation towards further reduction of emissions for measures whose setup of target amounts and estimated emission reduction amounts is difficult.

74 Implementation target amounts and estimated amounts for emission reduction for the whole of Japan shall be decided as an expected standard for introduction and practice from the technological and economic viewpoint in order to achieve the target for each of greenhouse gases and other segments.

3.4 Promotion of Measures to Prevent Global Warming for Achievement of 6% Reduction Commitment 3.4.1 Comprehensive and systematic promotion of measures to prevent global warming

We are making enormous effort to conclude a “Bill for revising a part of the Law Concerning the Promotion of Measures to Cope with Global Warming” stipulating the establishment of a Kyoto Protocol target achievement plan, legal stipulation of the Global Warming Prevention Headquarters, and strengthening measures carried out by citizens. At the same time, we shall quickly establish a Kyoto Protocol Target Achievement Plan in accordance with the law based on this Guideline, and promote comprehensive and systematic measures to achieve the 6% reduction commitment stipulated in the Kyoto Protocol. We shall also consider the opinions of the members at the Joint Meeting of Councils Relating to Domestic Measures to Arrest Global Warming Issue (held on August 22nd 1997 in line with the Prime Minister’s decision) for the establishment of the Kyoto Protocol Target Achievement Plan. We have just established this Guideline bearing in mind public comments and the deliberation results of the Relevant Advisory Councils. In order to establish the Kyoto Protocol Target Achievement Plan based on this Guideline, we shall listen to the various opinions from various sectors and layers of the public.

3.4.2 Promotion of a reduction in Carbon Dioxide Emissions focused on measures related to energy supply and demand

Approximately 90% of greenhouse gas emissions in Japan are generated from energy sources, such as from using oil, coal, and natural gas. Following the experience of the last two oil crises, energy conservation has progressed on the demand side thanks to various energy policies and efforts made at every level by the general public. In terms of the supply side, the ratios of and natural gas-derived energy have steadily been increasing as substitutes for oil. As a result, energy consumption in relation to GDP and carbon dioxide emissions are generally lower than both Europe and America, and Japan has been one of the most noteworthy countries in terms of measures to prevent global warming and energy conservation. On the other hand, energy is indispensable for public life and economic activity. Despite the tough economic situation we faced in the nineties, energy consumption has continued to increase. As a result, carbon dioxide emissions from energy sources in fiscal 2000 increased by around 10% (preliminary values) compared to fiscal 1990. In order to achieve the 6% reduction commitment stipulated in the Kyoto Protocol, Japan is trying to reduce carbon dioxide emissions from energy sources to the fiscal 1990 level by fiscal 2010.

<Reduction in Carbon Dioxide Emissions from Energy Sources>

In the Guideline of Measures to Prevent Global Warming (the old Guideline) of 1998, it has been estimated that carbon dioxide emissions from energy sources in fiscal 2010 will represent a 20% increase on fiscal 1990 levels if the measures mentioned in the old Guideline were not implemented. Since 1998, we have been actively promoting measures related to energy supply and demand based on the old Guideline, but even though the framework of the existing policies will be maintained, it is estimated that carbon dioxide emissions from energy sources in fiscal 2010 will be approximately 1,126 million tons of CO2, which is approximately 73 million tons more than fiscal 1990 (about 1,053 million tons of CO2). The reason on the demand side is that energy demand mainly in the residential/commercial and transportation (passenger vehicle) sectors have increased significantly compared to fiscal 1990. The reason on the supply side is that the introduction of non-fossil energy such as nuclear power has not progressed as much as anticipated when the old Guideline was established, and use of coal – which relatively cheap – is expected to increase significantly.

75 Thus, Japan implements further energy conservation measures, new energy-related measures and other new measures such as fuel switching , as well as continuing to implement the measures stated in the old Guideline to reduce carbon dioxide emissions from energy sources in fiscal 2010 to the fiscal 1990 level. Japan also continues to promote its nuclear policy with giving priority to safety. Through such additional measures, the emission reduction amount for fiscal 2010 will be approximately 22 million tons of CO2 through emission control measures at the demand side (energy conservation measure), approximately 34 million tons of CO2 through new energy measures, and approximately 18 million tons of CO2 through fuel switching. Estimated emissions for fiscal 2010 per sector when these measures will be implemented will be 462 million tons of CO2 (-7%) from the industrial sector, 260 million tons of CO2 from the residential and commercial sector (-2%), and 250 million tons of CO2 from the transportation sector (+17%). (Percentages in parentheses show the reduction ratios from fiscal 1990 emissions per sector.) The reduction amount through each additional measure and emission reduction per sector are defined as the target for achieving the commitment stipulated in the Kyoto Protocol in this Guideline. Emission reduction target amount per sector shall be set up as achievable standards when expected effects are made through measures implemented by the energy supply side, such as promotion of nuclear power with giving priority to safety is ensured, introduction of new energy, and fuel switching, and also through measures implemented by each sector on the energy demand side, while our economy grows at its potential growth ratio.

Global warming issues are closely related to energy issues, and accordingly, Japan is going to further strengthen various measures for both energy supply and demand sides to achieve the 6% reduction commitment stipulated in the Kyoto Protocol while striving for contribution to both the environment and economy, and construct an environment-conscious energy supply and demand structure. Utilization of the Kyoto mechanisms for businesses is an effective way of ensuring a reduction in carbon dioxide emissions from energy sources. In terms of reducing carbon dioxide emissions at the energy supply and demand side, values are estimated as the effects of the measures concerned resulting from the effects of all supply and demand side measures included in this Guideline, rather than achieving this emission reduction only by implementing the relevant measures. From this viewpoint, it is appropriate to evaluate measures with a certain degree of flexibility from an overall viewpoint for the energy supply and demand structure while adopting the reduction and implementation target amounts.

<Promotion of energy demand side measures to reduce Carbon Dioxide Emissions (energy conservation measure)>

Striving for maximum energy conservation with minimum detriment to the national economy is one of the most effective ways of preventing global warming. There are various parties who need energy, so effective handling to reduce carbon dioxide emissions cannot be achieved without their own action, such as generation of ideas by each energy consumer. Based on the above, Japan implements energy demand side measures focused on independent action carried out by the industrial sector, promotion of technological development and implementation of energy conservation type equipment and systems in the residential and commercial sector, as well as preparation of the environment required for them. Through such actions, new economic growth can be expected through the development of advanced energy-saving equipment and investment in energy-saving facilities, while maintaining the current economic welfare standards for the general public’s lifestyle, and aiming for contribution to both the environment and economy is considered possible. Especially in the residential/commercial and transportation (passenger vehicle) sectors whose energy consumption has significantly increased compared to fiscal 1990 despite the economic depression in the nineties, minimizing increase in carbon dioxide emissions from these sectors is an urgent task. Energy demand for the residential and commercial sector has steadily increased even after the oil crisis. Within this sector, in the residential sub-sector, the reasons for the increase in demand are the increased amount of equipment retained and modification of use duration and conditions in accordance with the popularization of new equipment and the demands of citizens that requests an ever more comfortable lifestyle. In terms of the commercial sub-sector, the main reason of its increase is greater floor space in office buildings and commercial facilities in line with changes in the industrial structure. Thus, Japan shall strengthen measures by increasing equipment efficiency, carrying out thorough energy

76 management, and improving the energy-saving performance of housing and buildings in the residential and commercial sector. In terms of the transportation sector, from fiscal 1990 to 1995, carbon dioxide emission increased significantly in line with energy consumption to 17% more than that in fiscal 1990. Since 1995, carbon dioxide emissions have been stable except emissions from passenger vehicles, which were 11% more in fiscal 1999 than those in fiscal 1995. Total carbon dioxide emissions from the transport sector in fiscal 1999 were 5.6% more than those in fiscal 1995. However, carbon dioxide emissions from the transportation sector are still higher than those in fiscal 1990, so the government shall continue to implement various measures, such as traffic measures, improving logistical efficiency and modal shift, and promoting increased use of public transport. Through implementation of such demand side measures, in terms of the expected effect for fiscal 2010, about 50 million kiloliters reduction is expected through existing measures, with a further 7 million kiloliters reduction through additional measures in crude oil equivalent. In terms of the reduction in carbon dioxide emissions, about 22 million tons of CO2 is expected to be cut through such additional measures.

(1) Steady implementation of voluntary action plans and follow-up

The Keidanren Voluntary Action Plan on the Environment developed by the Japan Federation of Economic Organizations (Keidanren) was established by industry as subjective measures for global warming issues, action has been taken on that basis, and significant results have been achieved so far. The voluntary action plan is one of the core components of this Guideline with the aim of achieving contribution to both the environment and economy whereby optimal methods can be selected through the subjective and wide ranging participation of individual entities and the use of their own ideas, while flexible and quick action is possible in response to any change in status. In particular, the expected amount of energy savings through such voluntary action plans and so on account for about a third of the energy conservation measures stated in this Guideline, and it is a core plan for future energy conservation measures as well. The further establishment of volunteer action plans and their steady implementation is expected in both the residential and commercial sector and the transportation sector, which expect to see a continued and significant increase in energy consumption in the future. Japan is also trying to enhance follow-up measures for them.

[Current measures] The Keidanren Voluntary Action Plan on the Environment was established in June 1997, with the expressed intent of reducing carbon dioxide emissions for 2010 to no more than those of 1990. Voluntary action plans have also been established by various other industries as well as the Keidanren Voluntary Action Plan on the Environment. We are checking the progress of the action plans that have already been established by industry for energy conservation and reduction of carbon dioxide emissions, and ensure their effectiveness through the Relevant Advisory Councils. We also encourage industries that have not established such action plans to quickly do so with numeric targets.

[Additional measures] Keidanren is currently studying how to implement a third-party authentication and registration system. The government will provide the required support and promote its smooth implementation to engender transparency and reliability of the voluntary action plan that has been established by Keidanren and so on. Furthermore, we will follow up the progress of the energy conservation measures through voluntary action plans based on the mid- and long-term plans and periodical reports submitted annually to the government in accordance with the Law Concerning the Rational Use of Energy. In terms of the implementation of comprehensive checks per business type that began this fiscal year, we shall continuously try to increase the effectiveness of such voluntary measures while utilizing their advantages by carrying out priority checks with industries that have not established voluntary action plans and industries whose progress in terms of energy conservation measures lags behind the targets set in the voluntary action plan in the event that such action plans are established.

77 At the same time, we shall provide priority support for measures in accordance with the voluntary action plans and so on per company and industry for assistance systems to implement corporate energy conservation facilities.

(2) Comprehensive energy management

Appropriate management is important to promote energy conservation wherever energy is consumed. Thus, we strive for on-site energy management by promoting appropriate energy management at private residences and office buildings through the utilization of IT, as well as establishing a system for energy management at factories and business sites by focusing on measures based on the Law Concerning the Rational Use of Energy.

[Current measures] ① Measures for factories and business sites based on the Law Concerning the Rational Use of Energy In terms of energy conservation for factories and business sites, we are implementing measures to establish energy management systems assuming implementation of voluntary measures by companies, such as the establishment of energy manager systems / energy management staff systems and energy conservation plans in factories and business sites that consume large amounts of energy, in line with the Law Concerning the Rational Use of Energy.

[Additional measures] ① Implementation of comprehensive factory checkups Since fiscal 2001, we have been implementing a new comprehensive checkup scheme concerning the compliance status using standards based on the Law Concerning the Rational Use of Energy for factories that consume large amounts of energy. As a result, we have actuated measures based on the Law Concerning the Rational Use of Energy such as instructing the creation of a rationalization plan for factories that have not implemented sufficient measures for rationalization of energy use, with the threat of publication if they do not adhere to such instructions. In terms of comprehensive checkups, we will try to increase the effectiveness of the voluntary action plan by following up on the progress status of the energy conservation measures stated in the voluntary action plan based on the mid- and long-term plans and periodical reports submitted annually to the government in accordance with the Law Concerning the Rational Use of Energy, and intensify our comprehensive factory checkups for any businesses whose progress in terms of energy conservation measures significantly lags behind the targets stated in the voluntary action plan, or for businesses that have not established such voluntary action plans.

② Promotion of energy demand side management for commercial sector In order to strengthen energy demand side management measures at large business sites with large energy consumption, we propose a revision of the Law Concerning the Rational Use of Energy, and are trying to establish a system that conforms to those energy management measures that have already been implemented for large-scale factories while bearing in mind actual commercial demand. We also promote energy management by establishing support measures such as assistance systems for Building Energy Management System (BEMS) to enable smooth and appropriate energy management at commercial buildings through the utilization of the latest IT. Furthermore, we are trying to create an environment that promotes the active use of Energy Service Company (ESCO) businesses that comprehensively promotes energy conservation for businesses as an agent for parties who established the facility.

③ Development and distribution of the Home Energy Management System (HEMS) In order to manage energy at home smoothly and appropriately, we are trying to develop and popularize the Home Energy Management System (HEMS) that can increase public awareness of the cost of energy and provide optimal control of the major domestic appliances by displaying energy usage in cost terms and displaying the data visually in real-time through the utilization of IT.

78 (3) Further improving appliance efficiency

Measures to improve appliance efficiency are reliable ways to promote energy conservation with minimal adverse effects for countless consumers. Based on the above, we are utilizing a labeling system and so on for vehicles, household electrical products and office appliances, etc., for which an energy conservation standard has been specified based on the Top Runner Approach as introduced in the Revised Law Concerning the Rational Use of Energy in 1998. Also, we continue to extend the range of targets for energy conservation standards based on the Top Runner Approach concept as well as trying to promote the introduction of products that have achieved the relevant standard on the market. Furthermore, we support the smooth introduction of efficient water supply systems to the water supply field where improvements in terms of energy efficiency have not progressed sufficiently. In terms of transportation equipment, improvement of energy efficiency of railways, ships, and aircraft, as well as motor vehicles should be pursued.

[Current measures] ① Introduction of Top Runner Approach in line with the Law Concerning the Rational Use of Energy We have just adopted the ‘Top Runner Approach’ concept with the aim of raising the standards for maximum energy conservation performance or higher concerning standards of motor vehicles and energy conservation standards for household electrical products and office appliances, etc., from among applicable commercial products through revision of the Law Concerning the Rational Use of Energy in 1998. The smooth introduction of products to the market that have achieved the relevant standards by accelerating the development and dissemination of such products, including the government’s procurement of low-emission vehicles as official cars.

② Promoting the use of hybrid and natural gas vehicles The government should promote the smooth introduction of hybrid vehicles and natural gas trucks and buses, which have high energy conservation performance, in to the market with supportive measures including subsidies and tax concessions, bearing in mind their cost differences.

③ Improving the energy efficiency of railways, ships, and aircraft The introduction of trains, ships and aircraft with better energy efficiency characteristics.

[Additional measures] ① Expansion of appliances targeted for Top Runner standard application Gas and oil consuming appliances, vending machines, and transformers that have not been targeted under regulations in the Law Concerning the Rational Use of Energy are to be targeted for energy conservation standards based on the concept of the Top Runner Approach.

② Accelerated introduction of vehicles that meet Top Runner standards Based on the Top Runner Approach concept stipulated under the Law Concerning the Rational Use of Energy, the Top Runner standards on vehicles should be achieved precedently through industry’s voluntary measures by reducing Automobile Acquisition Tax and the green automobile taxation for vehicles whose fuel efficiency standards are provided to be achieved by fiscal 2010.

③ Development and distribution of revolutionary domestic vessels (Super Eco-Ships) The development and distribution of Super Eco-Ships should be promoted that are expected to reduce the impact on the environment through increased transport efficiency with the high efficiency propulsion system and improved ship shape.

④ Promoting the spread of high efficacy water heater In order to promote energy conservation in the water supply field, where the energy demand ratio is large, within the residential and commercial sector, we are establishing support measures such as assistance systems for equipment with superior energy conservation performance compared to the

79 existing system, i.e., carbon dioxide refrigerant heat pump water heater, and high efficiency water heater with latent heat exchanger.

⑤ Reduction of standby power consumption We are trying to reduce the amount of electricity consumed while domestic electrical appliances and suchlike are on standby, which wastes electricity as they are not actually being used. In order to do so, we have created an environment in which the industries concerned can strive for reductions with major domestic electrical appliances through voluntary measures to achieve a target of 1W or less for equipment requiring energy consumption when on standby, such as for timer functions, or to reduce it as close to zero as possible in all other cases.

⑥ Promotion of the number of vehicular models of hybrid vehicles Supportive measures should be conducted such as subsidies to introduce and popularize low emission vehicles such as hybrid vehicles.

⑦ Promoting the introduction of high performance industrial furnaces As a result of field tests that were carried out after completion of technological development, considerable energy saving results were seen. We implement support measures such as assistance systems to introduce energy saving facilities to companies to promote the introduction of high performance industrial furnaces from which greater energy saving is expected.

(4) Increased energy conservation performance in housing and buildings

The energy conservation performance of housing and building has long had a large effect on energy consumption within the residential and commercial sector, so the implementation of reliable measures is required. Thus, we publicize judgment criteria for construction parties in line with the Law Concerning the Rational Use of Energy, and implement reliable energy conservation measures through assistance, construction instruction, and providing information to consumers. We also try to take the lead in implementing energy conservation measures in public housing and buildings.

[Current measures] ① Promoting the spread of housing and buildings with superior energy conservation performance We are trying to promote the spread of housing and buildings with superior energy conservation performance by providing incentives such as through the Housing Loan Corporation, instruction in line with the Law Concerning the Rational Use of Energy, adoption of energy conservation-related performance display system, development of engineers, and the promotion of voluntary measures carried out by the industries concerned.

② Measures for public housing and buildings We implement energy conservation measures for public housing and promote the establishment of environment-friendly government building facilities (Green Government Buildings).

[Additional measures] ① Strengthening incentives for housing We try to provide incentives for environment-friendly housing by strengthening standards concerning energy conservation performance for the Housing Loan Corporation.

② Strengthening energy conservation measures for buildings We propose a revision to the Law Concerning the Rational Use of Energy, and obligate the notification of energy conservation measures at the time of construction or expansion of office

80 buildings and commercial facilities. We also try to promote green assessment and renovation of existing government building facilities.

(5) Vehicle traffic measure

Regarding measures on the road transportation, which are the mainstay in the transportation sector, it is important to give further environmental consideration on business vehicles, as well as developing and distributing low emission vehicles and highly fuel-efficient vehicles including clean energy vehicles aiming at improved efficiency as mentioned above. Furthermore, measures to control traffic flow and manage traffic demand should be continued. In order to facilitate smooth traffic flow, the trunk route network should be extended by developing circular roads and preparing crossings and flyovers.

[Current measures] Measures should be implemented to promote alternatives to transportation by utilizing information communications techniques such as tele-working while existing measures such as management of vehicular traffic demand, promotion of the Intelligent Transport Systems (ITS), implementation of measures to prevent illegal parking, reduction of engineering work on roads, and the establishment of traffic safety facilities are to be implemented.

[Additional measures] Great emphasis should be put on business vehicles’ driving style with regard to the environment by promoting eco-driving through distribution of idling prevention systems on buses and trucks, and controlling the maximum speed of large trucks by obliging the installation of speed limiting device. Measures for environment-friendly traffic management should be conducted such as utilization of results of Traffic Demand Management (TDM) proof tests, and developing a comprehensive urban traffic management project that controls traffic signals and provides information based on environmental data, In addition, further studies on traffic regulations and around crossings.

(6) Construction of a traffic system with minimal environmental impact

In the transportation sector, it is necessary to implement measures to ensure a transportation system with little carbon dioxide emissions and low environmental impact for passenger and freight transportation, in addition to measures on road transportation. To this end, it is important to implement deliberate and steady measures to shift transportation modes towards alternative ones with better energy consumption and improved efficiency of freight transportation. A shift from private passenger vehicles to public transportation or passenger transportation should be continued through development of public transportation and improvements in their services and convenience.

[Current measures] Measures to promote domestic sea freight transportation by ship and rail and to improve efficiency of freight transportation should be conducted to curb emissions of carbon dioxide. Promotion of the use of public transportation should be carried out by constructing new railways and modified personal rapid transit system in urban areas, and improving existing services and convenience.

[Additional measures] Transportation modes should be shifted towards marine transport and the competitiveness of domestic sea transport should be strengthened by introducing new technologies, such as the development of Super Eco-Ships that increased energy consumption efficiency, reviewing regulations, and developing a marine highway network. At the same time, a modal shift to rail transport should be promoted by

81 improving the convenience of railways such as by increasing their capacity. Furthermore, measures to further improve logistical efficiency should be strengthened by reviewing regulations, improving convenience, and developing transportation structure such as a multipurpose international. Measures to promote the use of public transportation services should be strengthened as well.

(7) Development and diffusion of new energy-saving technologies

It is important to continuously promote the development and distribution of new energy-saving technologies, as significant improvements in energy efficiency are highly likely through such breakthroughs. Thus, we promote the introduction of highly efficient boilers and lasers whose effects are expected by 2010, and highly efficient lighting using light emitting diodes at this stage. In the transportation sector, the development and distribution of next generation low-emission vehicles including clean energy vehicles as well as next-generation energy-saving transportation.

82 Table 3.1 Demand Side Measures for the Industrial Sector Current measures and their Additional measures and their Measures of the government and so reduction amounts reduction amounts on;(Current○, Additional◎) ○Steady implementation and ○Since fiscal 2001, a new follow-up of the voluntary comprehensive check scheme has action plan (Target of the been implemented to assess standard Keidanren Voluntary Action compliance based on the Law Plan on the Environment is to Concerning the Rational Use of reduce CO2 emissions for 2010 Energy. Legal action will be initiated to no more than 1990 levels.) based on the Law Concerning the ○Factory measures based on the Rational Use of Energy as required. Law Concerning the Rational The government also follows up the Use of Energy progress of the energy conservation measures through the voluntary action Energy conservation effects: plan based on reports submitted to the Approx. 20.1 million kl government in accordance with the Approx. 60.5 million t-CO2 Law Concerning the Rational Use of Energy, and implements priority checks based on the same law for industries that have not established voluntary action plans or whose progress towards such energy conservation measures lags far behind the target.

○Promoting the introduction of ◎Extensive support is provided for high performance industrial such measures in line with the furnaces voluntary action plans and so on of companies and industries with regard Energy conservation effects: to assistance systems for companies to Approx. 400,000 kl introduce energy saving facilities. Approx. 1.1 million t-CO2

○Technological development and diffusion of its results ◎Until fiscal 2001, support has been ・Highly efficient boilers provided for the technological ・Highly efficient lasers development of highly efficient lasers and so on. Energy conservation effects: Approx. 500,000 kl Approx. 1.5 million t-CO2

・Additional measures refer to extra measures established as of this Guideline review, or measures whose details have been completely reviewed and strengthened, while current measures cover all other existing measures. ・Reduction amount indicates approximate estimated amount contributing to CO2 emissions as of 2010 when the relevant measures are implemented. ・The unit of Energy conservation effects, "kl" means kiloliter of crude oil equivalent. ・The same definitions apply for descriptions in all tables below.

Table 3.2 Demand Side Measures for the Residential and Commercial Sector Current measures and their Additional measures and their Measures of the government and so on; reduction amount reduction amount (Current○, Additional◎) ●Measures to improve efficiency of equipment ○Strengthening to improve ○Through revision of the Law efficiency of equipment Concerning the Rational Use of Energy

83 <Target amount> in 1998, the Top Runner Approach has Energy conservation effects: been adopted for domestic electric Approx. 5.4 million kl appliances and OA equipment (i.e. air (Assumed to achieve standard conditioners, TVs, VTRs, fluorescent value of all targeted lights, copiers, computers, hard disc manufacturers as of the target drive, refrigerators, freezers). year per equipment) ■Air conditioners ・Target year 2007 refrigeration year (partially 2004 refrigeration year) ・Energy conservation effects*: Approx. 63% (for both coolers and heaters) ・Energy conservation effects*: Approx. 14% (only coolers) ◎Gas/oil equipment, and commercial ■TVs equipment, etc. that were not ・Target year: Fiscal 2003 ○Expansion of equipment to which previously targeted are added based on ・Energy conservation Top Runner Approach applies the Top Runner Approach. effects: Approx. 16% ■VTRs Energy conservation effects: ・Target year: Fiscal 2003 Approx. 1.2 million kl ・Energy conservation Approx. 2.9 million t-CO2 effect*s: Approx. 59% ■Fluorescent lights ・Target year: Fiscal 2005 ・Energy conservation effects*: Approx. 17% ■Copiers ◎Assistance system to promote its ・Target year: Fiscal 2006 spread has been established. ・Energy conservation ○Promotion of distribution of high effects*: Approx. 30% efficiency water heater ■Computers ・Target year: Fiscal 2005 Energy conservation effects: ・Energy conservation Approx. 500,000 kl effects*: Approx. 83% (Expected to distribute about 4 ■Hard disc drive million units by fiscal 2010) ・Target year: Fiscal 2005 Approx. 1.1 million t-CO2 ・Energy conservation effects*: Approx. 78% ■Refrigerators/freezers ・Target year: Fiscal 2004 ◎A system enabling consumers to ・Energy conservation identify products with minimal effects*: Approx. 30% ○Reduction of standby power electricity consumption during standby (* About 20% more energy consumption will be established in the near future. conservation effects overall are anticipated by adopting the top- Energy conservation effects: runner approach compared to Approx. 400,000 kl the original estimates set up Approx. 1.1 million t-CO2 under the old Guideline) ◎Support is provided for technological Approx. 30.4 million t-CO2 development of highly efficient lighting, etc. ○Technological development and result distribution ・ High efficiency lighting

84 Energy conservation effects: Approx. 500,000 kl Approx. 1.8 million t-CO2 ●Increasing energy conservation efficiency for housing and buildings ○Increasing energy [Increasing energy conservation conservation efficiency for efficiency for housing] housing and buildings ○Under the Law Concerning the Rational Use of Energy, responsibility Energy conservation effects: for such efforts lies with the parties Approx. 8.6 million kl requesting construction. “Design and ■New housing Construction Guidelines on the ・Target year: Fiscal 2008 Rationalization of Energy Use for : 50% achieve current Houses” have been drawn up and standards published as detailed specifications ■New buildings and standards to assist parties (non- residence, 2,000m2 requesting construction to make or more) decisions (revised and strengthened in ・Target year: Fiscal 2006 March 1999). : 80% achieve current standards ◎Strengthening standards for energy Approx. 35.6 million t-CO2 saving housing by providing incentives through financing by the Housing Loan Corporation

○Implementing energy conservation measures in public housing and assistance for housing in towns that comply with energy conservation standards

○Promoting the distribution of systems showing clear housing efficiencies including energy conservation efficiency (Housing Performance Indication System)

[Increasing energy conservation efficiency for buildings (non- residential)] ○Responsibility for efforts on parties requesting construction based on the Law Concerning the Rational Use of Energy. Decision standards for parties requesting construction are drawn up and published. (Revised and strengthened in March 1999) ◎Responsibility for notifying energy conservation measures when building special new buildings and their refurbishment or addition (Revision of the Law Concerning the Rational Use of Energy)

○Providing incentives through financing and tax system of the Development Bank of Japan

○Promoting the establishment of environment-friendly government

85 building facilities (Green Government Buildings)

◎Endeavors to promote green assessment and renovation of existing government building facilities

[Improving energy conservation efficiency for both housing and buildings] ○Development of engineers to handle design and construction through training courses

○Promotion of voluntary measures for the relevant industries involved in housing and buildings ●Strengthening energy demand side management ○Promoting distribution of the ◎Implementation of support for field Home Energy Management System tests (HEMS) Energy conservation effects: Approx. 900,000kl (Expected distribution to about 30% of total households by fiscal 2010) Approx. 2.9 million t-CO2

○Promotion of energy demand side ◎Energy management system that management for commercial sector applies to large-scale factories is adopted for large-scale office [BEMS] buildings through revision of the Law Energy conservation effects: Concerning the Rational Use of Approx. 1.6 million kl Energy. (Expected distribution to about 30% of total commercial floor space by ◎Assistance system for promoting fiscal 2010) distribution of the Building Energy Approx. 7.7 million t-CO2 Management System (BEMS) is established.

◎Support measures such as assistance systems and low interest loan systems will be established for further utilization of Energy Service Company (ESCO). Table3.3 Demand-side Measures in the Transportation Sector Current measures and their Additional measures and their Measures of the government and so on; reduction amount reduction amount (Current○, Additional◎) ■Measures on road transportation ●Development/ dissemination of low emission vehicles including clean energy vehicles and highly fuel efficient vehicles, and environmental considerations of the driving style of business vehicles ・Development and distribution of low emission vehicles including clean energy vehicles and highly fuel efficient vehicles ○Strengthening measures to ○Rapid introduction of vehicles ○Following revision of the Law improve motor vehicle fuel that meet Top Runner Approach, Concerning the Rational Use of Energy efficiency the green automobile taxation and in 1998, the Top Runner Approach has (Estimated emission automobile acquisition tax been applied to motor vehicles. reduction) reduction, and accelerating the ◎Introduction of green automobile

86 Approx. 13.9 million t-CO2 development and distribution of taxation low emission vehicles through the ◎Extension of reduction of automobile Energy conservation effects: procurement of low emission acquisition tax Approx. 5.4 million kl official vehicles by the ◎Establishment of fuel measuring (Expect to achieve standard government. methods to consider fuel efficiency values for all targeted (Estimated emission reduction) standards of freight vehicles 2.5t or manufacturers by the target year Approx. 2.6 million t-CO2 more of GVW per gasoline vehicle and diesel ◎Promotion of measures to replace vehicle)) Energy conservation effects: general low emission official vehicles ■Passenger vehicle Approx. 1.0 million kl within about three years following (gasoline) fiscal 2002 ・Target year: Fiscal 2010 ◎Promotion of technological ・Energy conservation (Note) In the case that the Guideline development and practical proof effects*: Approx. 23% is, the measures shall be testing for the earliest possible use of ■Passenger vehicle (diesel) revised so that the latest fuel-cell vehicles ・Target year: Fiscal 2005 progress, such as the green ◎Promoting development of next ・Energy conservation automobile taxation generation low emission vehicles effects*: Approx. 15% established in April 2001 and (including clean energy vehicles) ■Freight vehicle (gasoline) reducing automobile ◎Development of an IT network to ・Target year: Fiscal 2010 acquisition tax, and the promote widespread the distribution ・Energy conservation procurement of low emission of low emission vehicles, including effects*: Approx. 13% official vehicles by the clean energy vehicles ■Freight vehicle (diesel) government is well reflected. ◎Provision of assistance for low ・Target year: Fiscal 2005 emission vehicles, including clean ・Energy conservation energy vehicles effects*: Approx. 7% ○Support for practical use of electric (* Overall energy conservation vehicle joint-use system of about 20% is anticipated by ◎Promotion of assistance to establish adopting the Top Runner an enhanced fuel supply Approach compared to the infrastructure (eco stations) original estimates set up in the ◎Measures on motor vehicle fuel old Guideline) quality to ensure sufficient functioning of the emission post- processing system (Reduction of ○Promoting dissemination of sulfur content from 500 ppm to 50 clean energy vehicles ppm by the end of 2004 for diesel (Estimated emission fuel. Further improvements such as reduction) reducing sulfur from gasoline should Approx. 2.2 million t-CO2 be pursued.) Energy conservation effects: Approx. 800,000 kl ・Environmental consideration of the driving style of business vehicles

87 ○Review and promotion of existing ◎Promotion of green management by measures to promote eco drive of motor vehicle transportation buses and trucks, etc. companies from fiscal 2002 ○Promotion of measures to reduce ◎Mandatory installation of speed impact on the environment through limiting device on large trucks consideration of driving style of (Production vehicles: September 2003 business vehicles, etc. onward; Vehicles in use: Step by step ・Distribution of vehicles from September 2003 onward) featuring idling prevention systems (Estimated emission reduction) Approx. 1.1 million t-CO2 Energy conservation effects: Approx. 400,000 kl (Expected installation on about 30% of replaced buses and trucks)

・Installation of speed limiting device on large trucks (Estimated emission reduction) Approx. 800,000 t-CO2 Energy conservation effects: Approx. 300,000 kl

●Measures on the traffic flow ○Car traffic demand ○Review and steady promotion of ○Promotion of Traffic Demand management existing measures Management (TDM) (Estimated emission ◎Utilization of Traffic Demand reduction) Management (TDM) proof tests Approx. 700,000 t-CO2 established in fiscal 2001 to establish comprehensive plans for smooth Energy conservation effects: urban transportation Approx. 200,000 kl ○Promoting the preparation of a bicycle-friendly environment by improving cycle routes and parking areas. ○Implementation of social tests to contribute to promoting the use of bicycles ○Preparing the Electric Toll ○Promotion of Intelligent Collection (ETC) System, and Transport Systems (ITS) improving services by increasing the (Estimated emission number of toll gates to 900 reduction) nationwide by the end of fiscal 2002. Approx. 3.7 million t-CO2 ○Improving traffic information collection services through Energy conservation effects: preparation of infrared beacons, etc. Approx. 1.4 million kl ○Promotion of VICS (Vehicle Information and Communications System) (Service to be launched nationwide within fiscal 2002) ○Improving the central processing system and traffic control center system by introducing a new signal controlling system (MODERATO) ○Promotion of the Environment

88 Protection Management Systems (EPMS), and suchlike ○Preparation of the Mobile Operation Control System (MOCS) for business vehicles ◎Promotion of environment-friendly traffic management project ◎Development and standardization of Internet ITS and probe information system ○Development of a safety support system and comfortable driving by providing information and warnings to drivers ○Positively promoting the introduction and distribution of ETC- enabled vehicles and triple-media VICS-enabled vehicles based on the Green Purchasing Law by the government, etc. ○Centralized signal control ◎Promoting the provision of accurate and appropriate road traffic information by road traffic data providers through revision of the Road traffic law in 2001 ◎Appropriate operation of the traffic information verification system ○Promotion of road traffic ◎Promoting the preparation of a information provision business database on traffic regulation information

○Implementation of appropriate car parking regulations ○Establishment of a system to minimize illegal car parking and a car parking indication system, etc. ○Promoting patrols to counter illegal car park

○Measures to prevent illegal parking and stopping on roads

89 ○Reduction in amount of ○Improvement of public drains, engineering work on roads promotion of intensive engineering (Estimated emission work and joint implementation, reduction) appropriate operation of road use Approx. 400,000 t-CO2 permission Energy conservation effects: Approx. 100,000 kl ○Establishment, systemization, and ○Preparation of traffic safety improvement in signal induction facilities Approx. 700,000 t-CO2 ○Increasing efficiency of traffic control Energy conservation effects: ○Promoting measures to counter Approx. 200,000 kl bottlenecks by preparing traffic indications and rail crossing signals ○Promoting the change of signal lights to LEDs

○Improving data communication environment in companies, tax- ○Promotion of commuting related measures and financial alternatives using data support to contribute to introducing communications such as tele- teleworking and support for SOHO. working ◎Providing information and diffusion (Estimated emission promotion to promote teleworking reduction) and SOHO. Approx. 3.4 million t-CO2 Energy conservation effects: Approx. 1.3 million kl (assuming that the number of tele-workers in 2010 represent about a quarter of all workers (16.3 million people))

■Establishment of a transportation system with minimum impact on the environment ●Modal shift and improving freight efficiency ○Promotion of domestic sea ○Review and steady promotion of freight and rail freight current measures. (Estimated emission ○Studying institutional ◎Studying institutional arrangements reduction) arrangements to promote a including legislation to support Approx. 1.5 million t-CO2 distribution system with reduced improved efficiency of trunk line impacts on the environment distribution Energy conservation effects: ◎Promotion of Traffic Demand Approx. 500,000 kl Management (TDM) proof tests contributing to improved efficiency of urban freight services ◎Conducting proof tests to reduce environmental impact of trunk line from fiscal 2002

90 ◎Submission of proposal to the ordinary session of the Diet in 2002 to revise the law on freight transportation business to relax regulations on participation and pricing

○Promotion of modal shift to ◎Increasing the share of domestic shipping by reviewing shipping to 44% or more by regulations, strengthening strengthening its competitiveness by: competitiveness through ・Developing a plan for next- introduction of new technologies, generation domestic shipping by and improving transport the end of fiscal 2001 efficiency ・Reviewing regulations, such as (Estimated emission reduction) relaxing regulations on Approx. 2.6 million t-CO2 participation ・Reviewing social regulations such Energy conservation effects: as those on crew rotation Approx. 1.0 million kl ・Completing proof testing of Super (assuming an increase in the share Eco-Ships by fiscal 2005, aiming of domestic shipping to 44%) at practical use from fiscal 2006 ◎Development of a marine highway network by establishing domestic trade terminals required for consistent integrated transport, non-stop coastal shipping service to reduce coastal shipping operations ・Completion of the Bay passage preparation project by 2007 ・Strengthening shipping control and support functions based on the Vessel Traffic Advisory Service Center utilizing Automatic Identification System (AIS) in the Tokyo Bay by fiscal 2006

○Increasing rail freight transportation capacity ◎Submitting a proposal to the ordinary session of the Diet in 2002 to revise ○Increased rail convenience by the Law for Railway Business strengthening transport capacity Enterprise to relax fare and (Estimated emission reduction) participation regulations Approx. 300,000 t-CO2 ◎Preparation of a cold chain system of foods by rail Energy conservation effects: Approx. 100,000 kl (assuming an increase in rail container traffic of 3.6%)

91 ○Improving efficiency of ○Reviewingcurrent measures and ◎Submitting proposal to the ordinary freight services effects and promoting measures as session of the Diet in 2002 to revise (Estimated emission follows. the law for freight vehicle reduction) ・Improving efficiency of transportation business to activate Approx. 4.7 million t-CO2 transportation by truck freight services through deregulation (Estimated emission reduction) ○Promoting the use of large vehicles Energy conservation effects: Approx. 2.9 million t-CO2 and trailers Approx. 1.8 million kl ○Strengthening bridges in line with Energy conservation effects: the increase in the vehicle size Approx. 1.1 million kl ○Development of international marine (assuming an increase in the container terminals in main and core ownership of trailers by about international harbors 15,000, and the ownership of 25- ◎Development of multipurpose ton category vehicles by about international terminals 70,000 from fiscal 1996 and ◎Preparation of joint delivery facilities 2010) of fresh foods, etc. ○Establishing, upgrading, and central ・Reduction in overland control of signals transportation of international freight (Estimated emission reduction) Approx. 1.8 million t-CO2 Energy conservation effects: Approx. 700,000 kl (assuming a reduction in overland transportation by about 9,300 million ton-km

●Promoting use of public transportation ○Promoting use of public ○Review and steady promotion of ○Promoting the establishment of new transportation current measures railways in urban areas (new services ○Steady promotion of new of about 310km are planned to start (Estimated emission reduction railways and modified personal between 1995 and 2010) amount) rapid transit system preparation in ○Promoting the preparation of the Approx. 5.2 million t-CO2 urban areas modified personal rapid transit ○Promoting the use of public system such as new traffic system in Energy conservation effects: transport by further improving urban area (new services of about Approx. 2 million kl services and convenience 100km planned to start between 1995 (assuming a reduction in and 2010) passenger vehicle about 80 ○Construction of Authorized million vehicles-km) Shinkansen lines ○Promoting the use of public transport by improving services and convenience such as introduction of IC cards and improvements in connections ◎Utilization of Traffic Demand Management (TDM) proof text established in fiscal 2001 to develop comprehensive plans for smooth urban transportation ◎Promoting the use of public transportation through national campaigns ○Development of traffic junctions such as squares in front of stations ○Implementation of social experiments that contribute to the

92 promotion of public transportation ○Promoting the preparation of Public Transportation Priority Systems (PTPS) by establishing dedicated/priority bus lanes, and priority bus signal controls ●Increasing energy consumption efficiency for other transport *Except effects through “improvements in shipping energy consumption efficiency” ○Increasing energy ○Promoting the development of ○Promoting the introduction of new consumption efficiency of new technologies rail carriages and aircraft materials railway transportation ・Measures carried out by companies (Estimated emission to introduce energy-saving reduction) carriages and aircraft materials Approx. 400,000 t-CO2 ・Updating carriages and aircraft materials through supportive Energy conservation effects: measures to introduce new Approx. 100,000 kl carriages and aircraft materials (assuming improved energy ◎Supporting the development of new consumption of around 7%) technologies such as Super Eco-Ships ◎Research and development of new- generation energy-saving transportation

○Increasing aeronautical energy consumption efficiency (Estimated emission reduction) Approx. 1.1 million t-CO2 Energy conservation effects: Approx. 400,000 kl (assuming improved energy consumption of around 7%)

93 〈Promotion of energy supply side Carbon Dioxide Emission reduction〉

Our energy supply has been diversified by increasing the ratio derived from nuclear power and natural gas under the oil alternative energy policy following the experience of the last two oil crises. On the other hand, dependence on cheap coal fuel has increased following recent deregulation in the energy sector and the request for further efficiency increases, and it cannot be denied that this has been one of the causes behind the increased carbon dioxide emissions. Under the circumstances in which carbon dioxide emissions from energy sources account for about 90% of total emissions, promoting the further introduction of non-fossil energy such as nuclear power and new energies will be required to ensure a steady supply and harmony with global warming countermeasures. We continue to promote a shift in fuels between fossil energies that represent the core of our energy supply, and will strive to establish an energy supply structure in harmony with the environment while still satisfying demand for improved efficiency.

(1) New energy measures

The adoption of new energy sources is one way to maintain steady supplies, and also enables rationalization of fossil energy use while reducing the environmental impact and minimizing additional carbon dioxide emissions from energy generating process. As a result, it contributes to ways to prevent global warming by reducing carbon dioxide emissions, so it needs to be introduced positively. Currently, the ratio of new energy on the supply side out of the total primary energy supply is less than 2%. If we consider the possibility of future technological progress and expectations of an improved economical efficiency, we must adopt new energy enthusiastically to play a major role as energy sources in Japan for the long term. New energy sources will also contribute significantly to creating labor opportunities and stimulating the economy through creation of new markets and development of new technologies. We will actively promote the following policies concerning new energy measures. 1) Support at the introduction stage 2) Support at the stages of technological development and demonstration 3) Preparation of environment and awareness campaign, etc. 4) Introduction of measures to expand new markets for the electricity sector (proposing the establishment of the Bill Concerning the Use of New Energy by Electric Utilities) As the usage formats for new energy are dispersed-types, measures must be implemented while considering important actions carried out by local authorities and businesses such as introducing wind power generation, waste power generation, and biomass energy, etc. while actions in terms of housing carried out by individuals are important in such as introducing photovoltaic power generation and solar thermal utilization. As waste power generation effectively uses surplus energy from the waste that must be burned, it shall be promoted while keeping consistency with the philosophy of the "The Basic Law for Establishing a Recycling-Based Society" and the "National targets in waste management policy" stated in the "Waste Management and Public Cleansing Law". By actively implementing these measures, we shall try to produce 19.1 million kl worth of new energy by fiscal 2010 as a new energy on the supply side measure. Through this, we expect a reduction of approximately 34 million tons of CO2 through additional measures. In terms of new energy on the demand side measures, by fiscal 2010, the introduction of new energy with 3.48 million clean-energy vehicles, 4.64 million kW natural gas co-generation systems, and 2.2 million kW fuel cells* is expected.

*) These energy conservation effects are handled on the energy demand side.

(Current measures) ① Support at the introduction stage ・Promotion of introduction support for local authorities and businesses, etc. ・Promotion of introduction support for photovoltaic power generation, etc. ・Support with regard to taxation or financing

94 ② Support at the stages of technological development and demonstration ・Promotion of technological developments and demonstration tests for fuel cells and photovoltaic power generation ③ Preparation of environment and awareness campaign, etc. ・Preparation of regulations and systems ・Promotion of awareness campaign, etc.

(Additional measures) ① Support at the introduction stage ・Placement biomass energy and snow ice cryogenic energy in the Law Concerning Promotion of the Use of New Energy ・Promotion of introduction support for local authorities and companies, etc. ・Promotion of introduction support for photovoltaic power generation, and solar thermal utilization, etc. ・Promotion of green purchases and procurement ② Support at the stages of technological development and demonstration ・Strengthening the support for technological developments and demonstration tests, etc. concerning fuel cells, photovoltaic power generation, and biomass energy, etc. ③ Preparation of environment and awareness campaign, etc. ・Studying grid-connection system measures ・Strengthening awareness campaign, etc. ④ Measure to expand new markets in the electricity sector ・Proposal to establish the Bill Concerning the Use of New Energy by Electric Utilities

Table 3.4 New Energy Measures Current measures and their Additional measures and their Measures of the government and so on; reduction amount reduction amount (Current○, Additional◎) ○Current new energy measures 【Support at introduction stage】 New energy measure completed ○Promotion of introduction support in 1998 aimed at introducing for local authorities and businesses, 19.1 million kl worth of new etc. energy by fiscal 2010 ○Promotion of introduction support for photovoltaic power generation, etc. 【Support at the stages of technological development and demonstration】 ○Promotion of technological developments and demonstration tests for fuel cells and photovoltaic power generation 【Preparation of environment and awareness campaign, etc.】 ○Preparation of regulations and systems ○Promotion of awareness campaign, etc. ○Additional new energy measures 【Support at the introduction stage】 Additional new energy measure ◎Placement biomass energy and snow completed in 2001 aimed at ice cryogenic energy in the Law introducing 19.1 million kl worth Concerning Promotion of the Use of of new energy by fiscal 2010 New Energy (Estimated emission reduction) ◎Promotion of introduction support Approx. 34 million t-CO2 for local authorities and companies, etc. [targeted introduction amount in ◎Promotion of introduction support fiscal 2010: 19.1 million kl] for photovoltaic power generation, and

95 (Breakdown is as follows.) solar thermal utilization, etc. Photovoltaic power generation: ◎Promotion of green purchases and 4.82 million kW procurement (including photovoltaic power 【Support at the stages of generation for housing: estimated technological development and approx. 1 million units) demonstration】 Wind power generation: ◎Strengthening the support for 3 million kW technological developments and Waste power generation: demonstration tests, etc. concerning 4.17 million kW fuel cells, photovoltaic power Biomass power generation: generation, and biomass energy, etc. 330,000 kW ◎Promotion of technological development and so on bearing in Solar thermal utilization: mind regional characteristics 4.39 million kl 【Preparation of environment and (including solar thermal utilization awareness campaign, etc.】 for housing: Estimated approx. 9 ◎Studying grid-connection system million units) measures Unutilized energy: ◎Promoting the establishment of a 580,000 kl software infrastructure for practical use Thermal utilization of waste: of fuel cells 140,000 kl ◎Strengthening awareness campaign, Thermal utilization of biomass: etc. 670,000 kl Black liquor, refused wood, etc.: 【Measures to expand new markets in 4.94 million kl the electricity sector】 ◎Proposal to establish the Bill Concerning the Use of New Energy by Electric Utilities

(2) Fuel switching, etc.

Currently, it is estimated that fossil fuels which account for about 83% of the total primary energy supply will continue to be the main energy supply in 2010 and later. Thus, converting the supply structure to a more environmentally friendly type with minimum carbon dioxide emissions while maintaining a steady supply is a very important issue from the viewpoint of handling global warming issues over the long term as well. Even with the implementation of the above energy conservation and new energy measures through fiscal 2010, a further reduction of approximately 18 million tons of carbon dioxide emissions from energy sources is required to bring back to the same level as fiscal 1990. Thus, the implementation of fuel switching is required with a focus on the power generation field, in which increased use of such fuel as coal is expected. Specifically, we are promoting the conversion of industrial coal-fired boilers to natural gas as well as promoting the conversion of the now old coal-fired power generations that have long been used to highly efficient natural gas combined cycle power generation. We also promote improvements in the pipeline infrastructure through a low-interest financing system, and seek to expand the introduction of natural gas. Through the comprehensive implementation of the above measures, a reduction of approximately 18 million tons of CO2 emissions is expected. We continue to promote measures of load-leveling in power demand to reduce carbon dioxide emissions by promoting the distribution of heat storage systems.

(Additional measures) ① Support of promoting Fuel switching ・Subsidies to offset the costs of converting old coal-fired thermal power generations to natural gas, and for converting facilities that consume large amounts of energy to natural gas ② Environment preparation ・Preparation of safety standards for natural gas pipelines

96 ・Low interest financing for domestic natural gas development projects (developing wells and linked pipelines, etc.)

Table 3.5 Fuel switching, etc. Current measures and their Additional measures and their Measures of the government and so on; reduction amount reduction amount (Current○, Additional◎) ○Additional measures for fuel ◎Subsidization towards part of the cost of switching, etc. such as electricity converting old coal fired power generations to natural gas power (Estimated emission reduction) generations Approx. 18 million t-CO2 ◎Subsidization towards part of the cost of fuel switching such as industrial boilers expected to downsize or cut CO2 emissions

◎Preparation of safety standards for natural gas pipelines

○Low interest financing for domestic natural gas development projects (developing wells and linked pipelines, etc.)

(3) Promotion of nuclear power

Nuclear power generation which was introduced with the intention of assuring a steady energy supply in Japan does not emit carbon dioxide during the power generation process, so can be considered an important source of electricity in view of measures against global warming perspective as well. The effective reduction in carbon dioxide emissions per 1.35 million kW class nuclear power plant as an alternative to coal-derived power is significant and equivalent to about 0.7% of the total carbon dioxide emissions from energy sources in fiscal 1990. In order to achieve our reduction target while satisfying the ever-increasing demand for energy, the establishment of new nuclear power plants is indispensable. Thus, promoting nuclear power generation with giving priority to safety has been defined as an important issue from a standpoint for measures against global warming as well as from the energy policy perspective, and thus the construction of new nuclear power plants is required with the aim of increasing nuclear-generated electricity by around 30% by fiscal 2010 compared to fiscal 2000.

In order to promote nuclear use, measures must be taken to secure nationwide agreement, including in places where electricity is consumed as well as in the vicinity of nuclear facilities with giving priority to safety. Also, an environment needs to be prepared to promote the provision of education to enable each citizen to deepen their understanding, consider by themselves, and can decide of energy issues, including the use of nuclear power. Various regional promotion activities concerning the siting of nuclear power plants and the like have been e taken in accordance with the “Three Electric Power-Source Siting Laws” and “Law on Special Measures concerning Promotion of the Development of Nuclear Power Site Regions” with full consideration for disaster prevention factors. We continue to push for steady and further promotion of these activities, and implement cooperative measures by the central government with cooperation from the various government offices concerned in order to promote the siting of nuclear facilities.

We also steadily promote nuclear fuel cycle, including research and development in Japan to ensure the continued long-term operational reliability of nuclear power plants, as well as to make effective use of our limited uranium resources. Furthermore, we continue to work for the siting of final disposal facilities for high-level radioactive waste, which is an important issue in terms of nuclear power generation.

97 (Current measures) ① Implementing measures to gain nationwide agreement including in electricity consumption areas as well as in the vicinity of nuclear facilities with giving priority to safety ② Steady promotion of measures in accordance with the “Three Electric Power-Source Siting Laws” and “Law on Special Measures concerning Promotion of the Development of Nuclear PowerSite Regions” ③ Measures to establish nuclear fuel cycle in Japan such as research and development of nuclear fuel cycles, appropriate technological transfer of their results, and steady promotion of the MOX utilization in LWRs.

(Additional measures) ① Promotion of the Power Sited Regions Promotion Measures related to location of nuclear fuel cycle facilities (addition of MOX fuel fabrication facilities and final disposal facilities for high- level radioactive waste and the like as facilities subject to grant initial measure subsidies such as locating power plants) ② Drastic strengthening of “public hearings and PR activities” to acquire nationwide agreement concerning the nuclear power policy ③ Creation of environment to promote education related to energy and nuclear power

98 Matrix Table (Refer to the attachment)

99 3.4.3 Promoting measures for reducing emissions of Carbon Dioxide from non- energy sources , Methane, and Nitrous Oxide

As measures for limitation of carbon dioxide emission from non-energy sources, reduction of waste incineration volume by promoting reducing, reusing and recycling waste, and effective use of recyclable wood that can limit the amount of fossil fuels used as raw materials or as a biomass energy source. As a means of reducing methane (CH4) emissions, we have been conducting technological studies concerning reduction in direct landfill disposal of waste, improvement of farmland management, and livestock management. We have also been promoting the reduction of nitrous oxide (N2O) emissions during the industrial process, and increasing incineration temperatures at incineration plants for municipal solid waste and wastewater sludge. Carbon dioxide emitted in industrial processes through the processing of limestone, production of ammonia, and so on for fiscal 1999 (54 million tons of CO2) was reduced by 12.8% compared to the emissions in fiscal 1990. The primary reason is a 12.4% reduction in cement production for fiscal 1999 compared to fiscal 1990. Carbon dioxide emissions through incineration of waste originating from fossil fuels (waste oil and waste plastics, etc.) only accounts for about 2% of total carbon dioxide emissions, but a comparison of fiscal 1999 emissions (23 million tons of CO2) against the emissions for fiscal 1990 shows an increase of about 1.5 times. On the other hand, both methane and nitrous oxide emissions in fiscal 1999 (25 million tons of CO2 and 18 million tons of CO2 respectively) fell by 12.4% and 21.1% respectively compared to fiscal 1990. The primary reason for the cut in methane is the reduction in the agricultural sector resulting from the decrease in paddy field area, while the main reason for the reduction in nitrous oxide is the introduction of a decomposition equipment during the manufacture of synthetic fiber materials. It is expected that emissions of carbon dioxide from non-energy sources, methane, and nitrous oxide emissions in these fields will be reduced by 2.8% in 2010 compared to 1990 (0.29% compared to total greenhouse gas emissions in the base year) through current actions and measures, and will be reduced by 4.8% compared to 1990 (0.5% compared to total greenhouse gas emissions in the base year) with the implementation of additional measures.

100 Table 3.6 Promotion of Measures to Reduce Emissions of Carbon Dioxide from Non-Energy Sources, Methane, and Nitrous Oxide Current measures and their Additional measures and their Measures of the government and so reduction amount reduction amount on;(Current○,Additional◎) ○ Measures to reduce CO2 ○ Promotion of Law for emissions from industrial Promotion of Procurement of processes Recycled Products by the ・ Increased use of National Organizations and emissions

2 mixed cement with less Local Authorities on its own CO2 emissions during the Initiative CO f production process ○ Promotion of measures to ○ A reduction of ○ Setting up National targets in reduce CO2 emissions approximately 3 million tons waste management policy caused by waste of CO2 is steadily being based on the Waste incineration implemented by setting up Management and Public (approx. 3 million t-CO2) reduction targets based on Cleansing Law, and ・ Reducing waste the Basic Guideline for the implementation of measures generation and restricting Promotion of Measures based on related individual waste generation, and against Dioxins (September recycling laws for containers increasing recycling ratio 1999), constitution of The and packaging, and through appropriate Basic Law for Establishing a construction and demolition sorting of waste, Recycling-Based Society, waste, etc. implementation of revision of the Waste separated collection and Management and Public reusing, and establishment Cleansing Law, of relevant facilities establishment of related [municipal solid waste: individual recycling approx. 24%, industrial regulations (June 2000), and waste: approx. 47%] the setting up National ・ Promoting the use of targets in waste management recycled resources and policy (May 2001) in line products by promoting with the Waste Management green purchasing and Public Cleansing Law.

○ Substitution of fossil fuel ○ Development of biomass origin products technology such as ・Promoting the development biodegradable materials, and and introduction of biomass supporting their introduction to technology business

○ Promoting the effective use ○Expansion of the utilization ○ Improvement of technologies of of timber resources of timber and wood timber and wood materials materials processing, expansion of wood ・Current status of supply and demand, and awareness utilization of forest products ・Target for pertaining to the campaigns for its long-term use, through the Basic Plan on supply and utilization of etc. Forest and Forestry forest products stated in the ○Expansion of demand for wood Basic Plan on Forest and in housing, for which the ratio [Wood supply and use] Forestry of wood demand is large, and 20 million m3 [Wood supply and use] promotion of its long-term use 25 million m3

101 ○Expanding wood demand through public awareness campaigns, and extending its use such as in public facilities, and promotion of its long-term and multi-stage use.

○ Promoting a reduction in ◎ Promotion of compost emissions of CO2 from deoxidization and green manure farmland (including pastures) cultivation in farmland soil ○ Promoting the preparation and ・ Reduction of CO2 preservation management of emissions from farmland grassland soil by appropriately supplying organic substances through compost deoxidization and green manure cultivation in farmland [140,000 ha (estimated area for farmland where organic substances will newly be supplied appropriately)] (approx. 420,000 t-CO2)

(Measures to reduce CH4 emissions) ○ Widespread use of suitable ○ Promoting a reduction in strategies in the production and waste generation and cooking processes based on recycling waste, and trying Food Recycling Law, and to halve the volume of promoting a reduction in the waste disposed of in generation of food waste by landfills by only improving distributional incinerating waste that efficiency cannot be reduced through ○Establishment of recycling other measures facilities to prepare compost [Municipal solid waste: 6.4 and feed

4 million tons, industrial waste: 30

CH million tons] (Approx. 1.2 million t-CO2) ○Improvement of farmland ○Development of technologies ○ Improvements in farmland management to reduce emission of management greenhouse gases from ○ Development of technologies to agricultural sector reduce greenhouse gas emissions from the agricultural sector ○Establishment of emission reduction technologies such as livestock feeding management skills

(Measures to reduce N2O emission) ○Establishment of N2O ○ It has been already O

2 emission suppressing implemented voluntarily in the N equipment in adipic acid plant production process (Approx. 8.74 million t-CO2)

102 ○ Sophistication of ○ Thorough awareness of the combustion in incineration “Guideline to establish global facilities for wastewater warming prevention plans for sludge sewerage” (Approx. 1.4 million t-CO2) ◎Introduction of high-temperature ○ Sophistication of combustion in all Fluidized bed combustion in incineration incinerators of the sludge with facilities for municipal solid polyelectrolyte flocculant, by waste clarifying the appropriate (Approx. 50,000 t-CO2) incineration temperature management stated in the “sewerage facility plan and design guideline” ○ Setting up maintenance management standards and structure standards for waste incineration facilities

○ Improving drainage ○ Promoting the preparation of treatment in line with sewage and combined wider use of sewage and household treatment systems combined household (johkasou) treatment systems (johkasou), etc. (approx. 700,000 t-CO2) ○ Development of technologies ○ Promoting the provision of to reduce greenhouse gas appropriate manuring emissions from the ○ Development of technologies agricultural sector to reduce greenhouse gas emissions from the agricultural sector Emission reduction through Emission reduction through current measures: additional measures: total approx. 15.09 million approx. 3.02 million t-CO2 t-CO2 (about ▲0.25% compared to total (about ▲1.23% compared to greenhouse gas emissions in the total greenhouse gas emissions base year) in the base year) Note 1) A total reduction of about 2.6 million tons of carbon dioxide or more shall be achieved through measures not showing reduced amounts such as the increased use of mixed cement. Note 2) Emission of carbon dioxide from farmland will be included in the inventory of emissions and removals in line with the Marrakesh Accords, and efforts to reduce emissions will be made.

Emission outlook for 2010 Approx. 122 million t-CO2 (about ▲0.5% compared to total greenhouse gas emissions in the base year)

3.4.4 Promoting measures to Containment of emissions of Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), and Sulfur Hexafluoride (SF6)

(1) Existing measures

The ratio of hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) emissions out of total greenhouse gas emissions is only about 3% (fiscal 1999 carbon dioxide equivalent basis), but how to limit their increase is the issue as they are main alternatives to ozone depleting substances, whose production and consumption are being phased out in accordance with the Montreal Protocol. Thus, the following have been implemented as current measures to reduce approximately 34 million tons of CO2 from a business as usual basis.

103 ① Promotion of implementation of voluntary action plans of industries The industrial sectors established voluntary action plans in April 1998 based on the “Guidelines for measures to limit emissions of HFCs, PFCs, and SF6 by industry” (issued by the Ministry of the Economy, Trade and Industry) in February 1998. Since then, the Industrial Structure Council has annually followed up progress of the industry action plans. (Currently, 19 business organizations in 10 sectors have adopted the action plan.) Measures to support those organizations’ emission limitation actions have also been implemented.

② Development of alternative substances Research and development of new alternative substances, and development of technologies to recover and destroy HFCs have been implemented.

As a result of these measures, actual emissions in 2000 has been reduced by 26.2% compared to 1995, and satisfactory results are seen.

(2) Future measures and policies

It is estimated that such emissions will increase in line with a full-scale conversion from ozone depleting substances. We are trying to ensure a reduction of about 34 million tons of CO2 by implementing additional measures in conjunction with effective and specific measures, as well as continuing to promote the current measures.

① Promotion of implementation of voluntary action plans of industries The Industrial Structure Council continuously follows up on the progress of the industry action plans, and also tries to improve the transparency and accountability of the action plans, as well as to improve the effectiveness to achieve the target. Furthermore, industrial associations those which have not yet established voluntary action plans will continue to be encouraged to establish ones, and support measures for emission limitation actions of companies shall be implemented.

② Research and Development of alternative substances, alternative technologies, and recovery and destruction technologies Research and development of new alternatives to hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6), their alternative technologies, and recovery/destruction technologies should be carried out. More specifically, new substitutes for refrigerants, cleaners, and foaming agents should be developed; substitute gases and systems and substitute processes for etching gas (PFCs) used in the production process for electronic devices should continue to be developed; and research should continue into cleaning process systems for electronic device production using substitutes for PFCs and sulfur hexafluoride (SF6). In addition, energy-saving synthetic technologies for new fluorocarbon substitutes should be developed; inexpensive and compact fluorocarbon recycling and destruction technologies should be developed; and technologies for highly efficient insulating construction materials should be developed without using fluorocarbons.

③ Promoting the use of products using substitute substances With all due consideration for safety, economy, and energy efficiency, information provision and awareness campaigns for products using substitute substances or products using hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) with less impact on global warming should be promoted.

④ Recovery of HFCs refrigerants from equipment as required by law In order to recover and destroy HFCs , a recovery and destruction system has been prepared through voluntary measures by industries as well as local communities . Since April 2001, the “Law for Recycling of Specified Kinds of Home Appliances (Home Appliance Recycling Law)” has been enforced. In 2002, the “Law for ensuring the Implementation of Recovery and Destruction of Fluorocarbons concerning Specified Products (the Fluorocarbon Recovery and Destruction Law) is enforced from April for commercial air-conditioners, refrigerators and chillers, and later, other

104 provision of this law for mobile air conditioners will come into effect. Recovery and destruction of HFCs used as refrigerants shall be ensured through the appropriate enforcement of these laws.

105 Table 3.7 Implementation of Measures to Limit Emissions of Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), and Sulfur Hexafluoride (SF6) Current measures and their Additional measures and their Measures of the government and so reduction amounts reduction amounts on;(Current○, Additional◎) ○Promotion of implementation of ○The Industrial Structure Council voluntary action plans of continuously follows up progress of the industries action plans of the industries. 19 business organizations in 10 ◎Efforts to improve transparency and sectors have established action accountability of the action plans, and plans to limit emissions, and have to increase effectiveness to achieve the steadily been implementing them. target. Furthermore, those business The Industrial Structure Council associations that have not yet has been following up on the established their own, shall be action plans annually. encouraged to do so.

○Research and development of ○Research and development ○Current research and development of substitutes, etc. of substitutes, etc. alternative substances, alternative Research and development of technologies, and so on should new alternative substances, continue. alternative technologies, and ◎New technological development recovery/destruction technologies should be carried out as ・Development of new follows. alternative substances ・Development of energy-saving synthetic technologies for ・Development of substitute fluorocarbon substitutes gases systems, and substitute ・Development of inexpensive and processes for etching gas compact fluorocarbon recycling and (PFC) used in production of destruction technologies electronic devices ・Development of technologies for ・Research into production and highly efficient insulating cleaning process system for construction materials without using electronic device production fluorocarbons using substitutes for SF6 and PFCs

・Development of technologies to destroy HFC 23 generated as a by-product of the industrial process ○Promoting use of products using alternative substances ◎With all due consideration for safety, economy, and energy efficiency, information provision and awareness campaigns for products using substitute substances or products using HFCs, ○Recovery of HFC PFCs, SF6 with less impact on global refrigerants from equipment warming should be promoted as required by law ◎Appropriate enforcement of Home Appliance Recycling Law and Fluorocarbon Recovery and Destruction Law

106 Reduction of approx. 34 million t- Increasing prospects for CO2 reduction of approx. 34 million t-CO2

Emission outlook for 2010 Approx. 73 million t-CO2 (*) (About +2% compared to total greenhouse gas emissions in the base year) ※ Increase amount will be controlled to +2% of total GHG emissions in the base year, from +5% of total GHG emissions in the base year on business as usual case (Total amounts of emissions on business as usual case: approx. 107 million tons of CO2)

3.4.5 Strengthening research and development of advanced and innovative energy- and environment-related technologies

Global warming is an issue that must be addressed throughout the 21st century. In order to tackle this issue, breakthroughs are required by promoting technological innovations that reach beyond existing assumptions as well as implementing measures by applying actions that can be undertaken at this stage. In terms of innovative technological development, we aim for a 2% emission reduction compared to total greenhouse gas emissions in the base year, as well as further promoting activities to prevent global warming through efforts made by various sectors and layers of the public within the first commitment period. Thus far, we have been strongly promoting innovative technological development beyond the current technological standards such as ultra-efficient photovoltaic power generation, energy conservation- related technology in the energy use sector such as technologies using supercritical fluids as innovative environmental energy technology for 2010. We have also been deliberately implementing research and development of ultra-steels and super heat-resistant materials to improve energy use efficiency, development of technologies for carbon dioxide storage and fixation, and innovative hydrogen production techniques that are expected to prevent global warming, all of which are to strongly promote measures for an ultimate solution to global warming issues. An effective reduction in greenhouse gases is expected in the future through innovative environmental and energy technology, but it is still only at the research and development stage, so such technology must be established at the earliest point. Thus, in order to ensure maximum effectiveness as we head towards 2010, we are strongly promoting the establishment of technologies with good prospects at the earliest stage. More specifically, we are trying to strengthen technological developments further concerning technology aimed at innovative energy conversion, basic technology significantly increasing energy efficiency during product use, and innovative processes and system technology aimed at significant energy savings in the production process, etc. In addition, we are comprehensively implementing measures to introduce and distribute active publication of the technological development results as well. On the other hand, measures to prevent global warming must be implemented by strategically combining short- and long-term technological development with a long-term view. Therefore, we are working hard on technologies even if their technological development results will be long in coming if they appear to have good prospects. In order to promote development of these innovative energy- and environment-related technologies, we are conducting research and development concerning technologies for global warming prevention measures in accordance with the “Science and Technology Basic Plan” (decided by the Government of Japan in March 2001), and are also seeking comprehensive promotion under the global warming research initiative of the Council for Science and Technology Policy.

Table 3.8 Strengthening Research and Development of Advanced and Innovative Energy- and Environment-Related Technologies Current measures and their reduction Additional measures and their Measures of the government and so amount reduction amount on;(Current○, Additional◎)

107 ○ Promoting development of ○ Strengthening promotion of ◎ Strengthening measures as the innovative technologies beyond innovative technological priority field under the Science current technological standards development beyond current and Technology Basic Plan technological standards ◎ Comprehensive promotion (approx. 7.44 million t-CO2) under the global warming research initiative of the Council ・ Development of energy ・ Innovative energy for Science and Technology conservation-related technology conversion technology for Policy such as technology using storing energy and reducing ◎ Implementation of support for supercritical fluids losses during electricity new technological development ・ Development of technology for distribution ○Support measures for ultra high efficient photovoltaic development of prospective power generation ・ Fundamental technology technologies whose results will ・ Development of innovative that significantly improves take a long time to see hydrogen production energy efficiency of ○Further studying of research and technology products, such as electronic development themes ・ Development of technology for equipment and transport CO2 storage and fixation equipment ・ Development of technologies for ultra-steel and super heat- ・ Innovative process system resistant materials, etc. to technology aimed at improve energy use efficiency significant energy savings ○ Promotion of study to create for industries that consume strategy for global warming large amounts of energy countermeasures and basic studies aimed at construction of mechanism to promote study into resource cycling, and consumption limitation, and the efficient use of energy ○ Promotion of basic studies aimed at construction of mechanism to promote study into creation of strategy for global warming countermeasures, resource cycling, and consumption limitation, and the efficient use of energy

Emission reduction through measures: total about 7.44 million t-CO2 (approx. ▲0.6% compared to total greenhouse gas emissions in the base year)

3.4.6 Further Activities to prevent Global Warming carried out by various sectors and layers of the public

The current socioeconomic system and living/working styles, as well as people’s sense of values, are closely tied in to the emission of greenhouse gases. The implementation of global warming prevention measures is also changing the current socioeconomic system. Thus, an awareness campaign and provision of information to seek the better understanding, action and cooperation of various sectors and layers of the public must be promoted strongly in cooperation between them while fully utilizing the existing mechanisms, such as the various media channels. In this Guideline, these measures, which can be realized by special efforts made by various sectors and layers of the public, are to be promoted through an awareness campaign by providing information,

108 education and PR activities mainly by the government, and are defined as “Further Activities to prevent Global Warming carried out by various sectors and layers of the public”, with the aim of a 2% emission reduction compared to the total greenhouse gas emissions in the base year as well as innovative technological development within the first commitment term by implementing those measures. For example, if various sectors and layers of the public implement the measures stipulated in the attached table as further global warming prevention activities, an emission reduction of up to about 1.8% is possible compared to total greenhouse gas emissions in the base year. However, according to the “public opinion survey concerning global warming prevention and lifestyles” carried out by the Cabinet Office in July 2001, insufficient measures have been implemented so far despite the public’s positive intentions towards such measures. The reasons are thought to be as follows. 1) The awareness campaign and information provision concerning global warming prevention activities to various sectors and layers of the public have not been sufficient. 2) Most measures are temporary, and a system to continuously provide an awareness campaign and information has not been sufficiently established. In particular, the basis for promoting partnership measures involving the government, various businesses, and the public has not been sufficiently prepared at the regional level. 3) The requisite information and advice for implementing specific measures to prevent global warming when purchasing and using products have not adequately been provided to each family. Various awareness campaign activities have been carried out by the Japan Center for Climate Change Actions, Prefectural Centers for Climate Change Actions, global warming prevention activities advisors, and through implementation of national resource and energy conservation campaign in accordance with the Law for the Promotion of Measures to Cope with Global Warming. In addition to those measures, “global warming prevention measures diagnosis” that provides instruction and advice by inspecting measures implemented by each family shall be carried out for the following purposes. 1) Nationwide implementation of a campaign to create a lifestyle suited to the global environment era by holding the Conference on “Wa-no-kuni-Kurashi”, which means the lifestyles emphasizing simplicity, quality and sustainability, and so on. 2) Establishment of the basis for implementing regional measures 3) Implementation of measures for creating economic benefit Furthermore, an awareness campaign for global warming prevention activities should be promoted while utilizing the promotion and support system for measures implemented by each family, preparing the basis for promoting regional measures, and developing a national campaign.

(1) Establishment of the basis for promoting global warming prevention activities

① Implementation of a national campaign to create a lifestyle suited to the global environment era As part of the measures reviewing individual lifestyles, the Conference on “Wa-no-kuni-Kurashi” is to be held to encourage everyone to voluntarily undertake measures and to submit messages of encouragement. At the same time, studies into effective methods to be promoted in the future should be carried out for lifestyle innovation (lifestyle action) through cooperation between the government and each sector and layer of the public.

② Strengthening the basis for promoting regional measures In order to establish the system and basis for regional measures, conditions specified for Prefectural Centers for Climate Change Action (hereafter, Prefectural Centers) should be expanded to specified non-profit corporations as well as for public service corporations, and promote the nationwide development of Prefectural Centers. At the same time, regional partnership measures through the establishment of a Global Warming Prevention Regional Council comprising of local authorities, Prefectural Centers, global warming prevention activities advisors, businesses, and the public should be promoted.

③ Promotion of measures implemented by individual families A global warming prevention measures diagnosis that provides instruction and advice on cost- effective ways with minimum greenhouse gas emissions should be promoted by inspecting the efficiency of houses and buildings, such as their thermal insulation, lighting, kitchens, air

109 conditioners, and water heaters, as well as economic evaluations by global warming prevention activities advisors. Furthermore, the Japan Center for Climate Change Action should be actively utilized as well as encouraging the development and selection of products with minimal greenhouse gas emissions to businesses and the public through labeling, and suchlike, and information concerning each product’s greenhouse gas emissions should be recovered and provided. In addition, we promote studies of the evaluation methods into the effects of global warming measures, such as lifecycle assessments.

(2) Promotion of awareness campaigns for global warming prevention activities

1 National debate on the introduction of a daylight saving time system is being attempted while taking into account the “Citizen's Conference report to think about the Global Environment and Daylight Saving Time” (May 1999) in order to gain a consensus. 2 Awareness campaign to promote teleworking, etc. 3 Awareness campaign to promote bicycle use. 4 General subjects and “general studies” measures at school should be supported to further environmental and energy-related education and study, with efforts made to achieve substantiality. Furthermore, preparation of regional environmental study programs and information provision should be promoted to support various measures implemented by each organization, with efforts made to achieve substantiality. In addition, “environment-friendly school facilities (eco schools)” should be established. 5 Public involvement awareness campaigns should be implemented as well as continuously carrying out PR using the full media range. 6 In order to carry out extensive awareness campaigns to introduce the importance of greenery as a means of removing carbon dioxide, a greening campaign should be implemented with public involvement, by implementing national greening campaigns such as developing a Greenery Week, and City Greening Month, and the promotion of greening activities and afforestation carried out by the public using green feather fund movement and urban green space development fund. 7 Awareness campaign to promote comprehensive measures to prevent heat islands. 8 Environmental information concerning housing/buildings, residential and commercial equipment, and vehicles including greenhouse gas emissions should be provided continuously. 9 The government should take the lead in implementing global warming prevention measures such as promoting the purchase of recycled goods in line with the Law for Promotion of Procurement of Recycled Products by the National Organizations and Local Authorities on its own Initiative, and also will continuously implement model projects geared towards social system innovation.

Table 3.9 Promotion of further global warming prevention activities by various sectors and layers of the public Current measures and their Additional measures and their Measures of the government and so reduction amount reduction amount on;(Current○, Additional◎) Ⅰ.Measures implemented by the general public

110 ○ Raising air conditioners ○ Positive purchase and use of ◎ Information provision taking into temperatures to 28°C, products with smaller energy account proposals at the and lowering heater consumption for equipment other Conference on "Wa-no-kuni- temperatures to 20°C or than those specified by the Law Kurashi", and promotion of lower [30%] Concerning the Rational Use of model projects, etc. (approx. 440,000 ~ Energy ◎ Implementation of “global 850,000 t-CO2) (3.54 ~ 4.12 million t-CO2) warming prevention measures diagnosis” ・Changing incandescent lamps ◎ Information provision by the to fluorescent lighting [60%] Japan Center for Climate Change (740,000 ~ 1.41 million t-CO2) Actions and Prefectural Centers ・Purchase of microwaves with for Climate Change Actions lower electrical consumption ◎ Promotion of regional measures [30%] (350,000 ~ 680,000 t- through the “Global Warming CO2) Measures Regional Council” ・Introduction of dish washers ◎ Carrying out PR and information (reduction in hot water provision, etc. through various consumption) [40%] (1.6 ~ 1.18 regional organizations million t-CO2) ○Establishment of a system for ・Introduction of water-saving education, awareness campaign shower head [30%] (850,000 t- and information provision CO2) ○Distribution of environment and energy conservation household account books Residential and commercial sector ○Strengthening PR ○Provision of information concerning residential and commercial equipment ○Preparation, analysis, and provision of environmental information for products

111 ○Implementation of global warming prevention lifestyle [30%] (approx. 6.76 ~ 9.37 million t-CO2) ・ 20% reduction in use of heaters and lighting by family members spending more time in the same room (3.41 ~ 4.67 million t-CO2) ・ More selective TV viewing and reducing time spent watching TV by one hour a day (190,000 ~ 350,000 t-CO2) ・ Reducing shower use by one minute a day with all of family (930,000 t-CO2) ・ Efficient use of refrigerator (150,000 ~ 280,000 t-CO2) ・ Using bathwater to wash clothes (240,000 ~ 460,000 t- CO2) ・ Eliminating the use of electric thermostat in pots and rice cookers (440,000 ~ 850,000 t- CO2) ・ Using one’s own shopping bags, and selecting vegetables with minimum packaging, etc. (830,000 t-CO2) ・ Distribution of eco cooking (100,000 t-CO2) ・ Water-saving measures while washing (stop water running while cleaning teeth and washing face) (90,000 ~ 170,000 t-CO2) ,etc.

○ Restraint in vehicle use ○ Implementation of eco drive ◎ Information provision taking into [20 ~ 40%] (approx. 810,000 ~ account proposals at the ○ Promoting ‘No idling’ 1.62 million t-CO2) Conference on “Wa-no-kuni- while cars are stopped or ・ Raising vehicle cooler Kurashi”, and promotion of parked: 20 ~ 40% temperatures by 1 degree model projects, etc. (140,000 ~ 280,000 t- ・ Part-filling gasoline tanks ◎ Implementation of “global CO2) ・ Smooth (non-aggressive) warming prevention measures acceleration diagnosis” ・ Elimination of unnecessary ◎ Information provision by the loads on vehicles Japan Center for Climate Change ・ Thoughtful driving Actions and Prefectural Centers ・ Appropriate control of tire for Climate Change Actions pressure ◎ Promotion of regional measures ,etc. through the “Global Warming Measures Regional Council”

112 ◎ Carrying out PR and information provision, etc. through various regional organizations ○ Establishment of a system for education, awareness campaigns, lectures and information provision ○ Strengthening PR ◎Efficiency evaluation of

Transportation sector ○ Introduction of goods environmentally friendly goods contributing to reduced and distribution of information environmental impact (approx. provision are implemented from 20,000 ~ 30,000 t-CO2) fiscal 2002. ・ Installation of solar-proofing ○Awareness campaign for bicycle film on vehicles without use reducing driver’s view [20 ~ 40%] ・ Installing/featuring other parts and goods that contribute to reduced CO2 emissions while driving ,etc.

Ⅱ.Measures implemented by companies ○ Raising air conditioners ○ Positive purchase and use of ◎ Information provision taking into temperatures to 28°C, products with smaller energy account proposals at the and lowering heater consumption for equipment Conference on “Wa-no-kuni- temperatures to 20°C or other than those specified by Kurashi”, and promotion of lower [40%] (Estimated the Law Concerning the model projects, etc. emission reduction is Rational Use of Energy ◎ Information provision by the included in the same (Estimated reduction is the Japan Center for Climate Change type of measures figure included in the same Actions and Prefectural Centers implemented by the type of measures implemented for Climate Change Actions general public as shown by the general public as shown ◎ Promotion of regional measures before) before + approx. 830,000 ~ through the “Global Warming 1.56 million t-CO2) Measures Regional Council” ・Changing incandescent lamps ◎ Carrying out PR and information to fluorescent lighting [60%] provision, etc. through various (640,000 ~ 1.22 million t-CO2) regional organizations ・ 50% reduction in upwards ○Establishment of a system for luminous lux of outdoor education, awareness campaign, lighting in the evening as a lectures and information Commercial sector measure to prevent light provision pollution [50%] (170,000 ~ ○ Strengthening PR 320,000 t-CO2) ○ Promotion of information ・Use of energy-efficient cookers provision [20%] (20,000 t-CO2) ○ Wider use of environment management systems, etc. ○Establishment of global warming preventing work style [30%] (approx. 230,000 ~ 410,000 t- CO2)

113 ・Temporarily turning off lights in offices (at lunchtime, etc.) (180,000 ~ 310,000 t-CO2) ・ Reduction in wasteful copies (10,000 ~ 30,000 t-CO2) ・ Switching off PCs at lunchtime (40,000 ~ 70,000 t- CO2) ,etc.

n Promotion of eco drive for company cars, etc. [20 ~ 40%] r (Estimated reduction is included in implementation of secto eco drive as shown before) Transportatio

Ⅲ.Measures implemented by the government and local authorities ○ Implementation of ○ Introduction of energy-saving ○ Obligating the establishment of measures to reduce facilities (figures included in execution plan for clerical works greenhouse gas the current measures and projects of government and emissions with regard to implemented by the local authorities based on the clerical work and government, prefectures, Law Concerning the Promotion projects of government cities/towns/villages) of the Measures to Cope with (approx. 150,000 t-CO2) ・For example, inverter- control Global Warming motors for water supply facilities ○ Implementation of ○ Promotion of green purchasing measures to reduce such as environmentally friendly greenhouse gas goods with minimum greenhouse emissions with regard to gas emissions based on the Law clerical work and for Promotion of Procurement of projects of prefectures Recycled Products by the (approx. 600,000 t-CO2) National Organizations and Local Authorities on its own ○ Implementation of Initiative measures to reduce greenhouse gas emission ○ Promoting establishment of

Commercial sector and Transportation sector and Transportation sector Commercial with regard to clerical environmentally friendly school work and projects of facilities (eco school) city, town, and village (approx. 2 million t- CO2)

Introduction of daylight saving time ○Establishing national debate on the system (approx. 250,000 ~ 1.23 introduction of a daylight saving million t-CO2) time system, and gaining tt consensus. Cross-sector

Emission reduction through Emission reduction through current measures: additional measures: total about 3.18 ~ 3.88 total about 12.44 ~ 18.34 million t- million t-CO2 (0.3%) CO2 (1.0 ~ 1.5%) 3.4.7 Promotion of Measures Involving sinks of greenhouse gas

114 (1) Promotion of forests and forestry measures

The Basic Plan on Forest and Forestry was set as a Cabinet decision, in October 2001, based on the Basic Law on Forest and Forestry. It is approximately estimated that if the targets set forth in this plan to fulfil the multiple functions forests have and the targets pertaining to the supply and utilization of forestry products are achieved as per the plan, it is possible to ensure removals around the upper limit (3.9 percent of total greenhouse gas emissions in the base year, 47.67 million tons of CO2) of the obtainable removals through forest management across the forests under Article 3, 3 and 4 of the Kyoto Protocol. Since the above is an estimate based on accomplishment of the Basic Plan on Forest and Forestry, further scrutiny and examination of the calculation method is required. Also, there is a concern that if forest management, timber supply and utilization continues at current levels, the removals will fall below 3.9 percent of total greenhouse gas emissions in the base year. Ensuring the removals is a matter in the public’s interest and utmost efforts need to be made by all of those involved including the government, forest owners, operators of forestry and timber products businesses, as well as local authorities and organizations involved in forests and forestry. Moreover, it is essential to steadily and comprehensively implement the forest management, timber supply and efficient utilization of timber, etc. required to achieve the targets of the Basic Plan on Forest and Forestry. In order to ensure the necessary removals, Japan must strongly promote the measures described below as well as try to enhance the removals reporting and verification systems for the removals.

① Sound forest management a) Rolling out of a variety of forest management measures including establishment of multi- storeyed forest, introduction of broad-leaved tree species and so on according to the functional classification of the forest b) Promotion of the necessary human intervention in forests where it is necessary to implement tending practices such as urgent thinning c) Promotion of re-establishment (re-planting) and weeding after felling d) Promotion of afforestation and tending in non-forested areas, waste land, forests that have been hit by natural disaster, and abandoned agricultural land

② Appropriate management of protected forests a) Promotion of forest management through systematic designation of forests as protected forests and ensuring forest permanency through regulations on the alternate use of forests and felling regulations under the protected forests system b) Appropriate implementation of erosion control in protected forests with declining functionality c) Prevention of damage caused by diseases and pests d) The use of systems, based on the Nature Parks Law and the Nature Conservation Law, for forests where management of the forest and natural environment that makes up an impressive natural landscape is particularly necessary

③ Promotion of forest related activities with citizen participation a) Promotion of forest management activities through direct participation from a broad group of the community b) Promotion of education about forest environments

④ Promotion of utilization of timber and wood biomass a) Proactive utilization of timber in order to reduce the usage of fossil fuels and to contribute to reducing carbon dioxide emissions. Measures include the promotion of education of the citizens to popularize the efficient use of timbers as renewable resource, promotion of the use of timbers in wooden housing and public facilities, and improvement of timber and wooden material utilization and processing technology b) Use of woody biomass, such as logging residues and saw mill residues, as energy source

115 Table 3.10 Promotion of Measures for Forests and Forestry

Current measures and their Additional measures and their Measures of the government and so reduction amount reduction amount on;(Current○, Additional◎) Setting forth targets for ○Roll out of measures based on the demonstrating the multiple functions Basic Law on Forest and Forestry forests have including preventing and the Basic Plan on Forest and global warming and for the supply Forestry and utilization of forestry products as well as establishing a plan (the Basic Plan on Forest and Forestry) promoting comprehensive and systematic measures pertaining to forests and forestry.

・Targets pertaining to fulfiling the ・Current state of demonstration of multiple functions forests have the multiple functions forests (by 2010) have (as at 2000) <Forest area> <Forest area> Managed single-storied forest 10.2 Managed single- storied forest million ha ◎Strong and systematic promotion of 10.3 million ha Managed multi-storied forest 1.4 forest management based on the Managed multi-storied forest million ha Basic Plan, over the decade from 0.9 million ha Natural regeneration forest 13.5 2003 through to the final year of Natural forest 13.9 million ha million ha the first commitment period, which Total 25.1 million hectares Total 25.1 million hectares is up to 2012. Further < Total growing stock> ( Total growing stock) enhancement of the reporting and 3,930 million m3 4,410 million m3 verification systems on the ・Current state of the supply and ・Targets pertaining to the supply removals (Roll out of the 10-year utilization of forestry products and utilization of forestry Forest Sink Measures to Prevent <Timber supply and utilized products Global Warming) volume> <Timber supply and utilized 20 million m3 volume> 25 million m3 ○Sound forest management ○Sound forest management ◎Promotion of forest management in accordance with the important Implementation of afforestation, functional classification (water and and the necessary tending and Implementation of the forest land conservation forests, symbiosis thinning (track record for the 3 management required to achieve the of forest and people, forests for the years from 1998 to 2000) targets of the Basic Plan on Forest cyclical use of resources) and Forestry ○Implementation of 5-year urgent ・Planting 40,000 ha per year thinning measures ・Weeding 300,000 ha per year ○Implementation of long-term ・Thinning 315,000 ha per year cyclical forest management ・Guided felling into multiple- ◎Upgrading and expanding of public layered forest -- management of forests ・Improvement of natural forest ○Promotion of thinning measures 25,000 ha per year ◎Acceleration of guided felling into ・Road network operations multi-storied forests 2,500 km per year ◎Implementation of special “Re- greening” measures

116 ○Promotion of appropriate ○Promotion of systematic designation management of protected forests of forests as protected forests ○Promotion of conservation measures in protected forests ○Prevention of damage caused by diseases and pests

◎Promotion of urgent upgrading measures for protected forests with declining functionality ◎Management of disaster prevention information in mountain villages and enhancement of disaster prevention systems

○Promotion of forest related ○Promotion of forest related ○Promotion of forest management activities with citizen activities with citizen participation and conservation activities with participation participation by citizens ◎Enhanced participation and coordination between diverse groups such as community residents, NPOs, etc. ○Promotion of forest environment education

○Promotion of the efficient use of ○Promotion of utilization of timber ○Developing new demand for forestry timber resources and wood biomass products ○Promotion of the use of timber in ・Targets pertaining to the supply construction and facilities ・Current state of supply and and utilization of forestry products ○Promotion of comprehensive utilization of forest products <Timber supply and usage measures to promote the utilization volume> of timber <Timber supply and utilized 25 million m3 ◎Putting in place model facilities volume> using local timbers, such as school 20 million m3 ・Promotion of the utilization of interiors and school-related unutilized timber resources facilities ○Use of wood biomass energy ◎Putting in place model facilities using wood biomass energy If forest management, timber If the targets set out in the Basic Plan supply, utilization, etc. continued at on Forest and Forestry, of the same level as it is currently demonstrating the multiple functions (average of the actual figures for forests have and for the supply and 1998 to 2000) the forest removal utilization of forestry products, were amount would be approx. 35.5 achieved as set out in the plan, the million t-CO2 removal amount in forests would be approx. 47.7 million t-CO2

(2) Promotion of Urban Greening

Urban greening is to be promoted continuously based on comprehensive action plans, pertaining to the creation and conservation of green areas by the government and local authorities, such as the “Green Policy Guidelines” and “Basic Plan of Green” set by cities, towns, and villages. Under these plans, urban greening, such as upgrading urban parks, the greening along roadways, rivers, and erosion

117 prevention areas etc., the conservation of existing privately-owned green spaces, the creation of new green areas on building rooftops and sides of walls etc., and so on will be pro-actively promoted. In addition, the greening etc. of ports and harbors etc. will continue to be promoted through the “Eco Port Policy.” If these measures are implemented as planned, it is estimated that removals equivalent to around 0.02 percent of the total greenhouse gas emissions in the base year (280,000 tons of CO2) will be secured on an annual average in the first commitment period. These are estimates based on the plans for planting of arboreal vegetation in urban greening and future scrutiny and examination of the target activities that are counted in the removals and the calculation method etc. is required.

Table 3.11 Promotion Urban Greening

Current measures and their Additional measures and their Measures of the government and so on; reduction amount reduction amount (Current○, Additional◎) ○Greening of public facilities ○Promotion of greening based on the Planting of arboreal vegetation “Green Policy Guidelines” etc. along public facilities such as ○Promotion of the greening of ports urban parks, roadways, and and harbors based on the “Eco Port rivers Policy” popularize the creation of greenery (Forecast reduction in emissions and promotion of greening by a (removals)) 280,000 t-CO2 broad range of groups such as (Ratio of the total greenhouse gas residents, companies, NPOs, etc. emissions in the base year around 0.02%)

3.4.8 Making use of the Kyoto mechanisms (1) Basic philosophy

The Kyoto Protocol permits the use of the Kyoto mechanisms (Joint Implementation (JI), clean development mechanism (CDM), and ), which enable Parties to the Protocol to use a part of the emissions reductions in other Parties or a part of the other Parties’ assigned amount (the assigned amount is an emission “quota” allocated to each Party), as flexibility measures, to achieve their commitments. In light of such functions of the Kyoto mechanisms, it is necessary to use them appropriately in order to achieve the commitment of the Kyoto Protocol in a cost-effective manner, while keeping in mind that the use of the Kyoto mechanisms shall be supplemental to domestic actions.

(2) Measures necessary to make use of the Kyoto mechanisms

① Implementation of immediately necessary measures Joint Implementation (JI) is one of the Kyoto mechanisms based on the Article 6 of the Kyoto Protocol. It allows an Annex I Party to acquire from another Annex I Party, as “emission reduction unit”, the emissions reduction or the removals resulting from emissions reduction projects or sink projects. The clean development mechanism (CDM) is provided in the Article 12 of the Protocol. It

118 allows an Annex I Party to acquire from an non-Annex I Party, as “certified reduction emissions”, the emissions reduction or the removals resulting from an emissions reduction project or an afforestation or project in the non-Annex I Party. Furthermore, emissions trading is a mechanism, based on the provisions of Article 17 of the Protocol, which allows trading of a part of the assigned amounts between Annex B Parties. The Kyoto mechanisms also allow the participation of private sectors. Therefore, it is expected that these mechanisms will be used by them to achieve their own emission reduction target more cost- effectively. However, when private sectors carry out JI or CDM and obtain “emission reduction units” or “certified emission reductions” (credits), it is necessary to be approved by the Parties involved, based on the provisions of Article 6.1 and Article 12.5 (a) of the Protocol. Moreover, these credits need to be verified after the project has commenced by an internationally accredited organization which has no conflict of interest with its other functions in proceeding to the verification. (For JI projects, verification by the host country is also possible.) Projects starting as of the year 2000 are eligible as the JI or CDM projects. In addition, with regard to the CDM, “certified emission reductions” pertaining to the reduction of emission realized since the year 2000 can be obtained. Therefore, the systems to enable the utilization of these two mechanisms should be promptly put into place. Also, in order to meet the eligibility requirements to use the Kyoto mechanisms from the beginning of the first commitment period, Japan will put in place national systems to calculate Japan’s greenhouse gas emissions and removals, and will establish the national registry to track and record its assigned amount, “emission reduction units” and “certified emission reductions” (credits) that arise from JI and CDM projects respectively, and will report to the secretariat by the summer of 2006, at the latest, giving an overview of these systems. To this end, following measures will be taken shortly. a) Putting in place a project approval system for approving the JI and CDM projects When project participants conduct a JI or CDM project, and wish to obtain “emission reduction units” or “certified emission reductions”, it is necessary to obtain approval on these projects from the Parties involved based on the provisions of Article 6.1 (a) and Article 12.5 (a) of the Protocol. Therefore, the government organizations concerned will jointly and promptly establish the systems for accepting and checking the applications for the approval of projects pertaining to the JI or CDM. b) Setting up the national registry etc. Japan will promptly set up the national registry to track and record its assigned amount, the “emission reduction units” and “certified emission reductions” that arise from JI and CDM projects in accordance with the results of the COP8. In addition, Japan will also put in place national systems to calculate greenhouse gas emissions and removals. c) Other measures Japan will implement following measures with a view to achieve the smooth operation of the Kyoto mechanisms. 1) Assistance for the use of Kyoto mechanisms by private sector etc. ・Strengthening of project finding, feasibility study and other related project preparation functions for JI or CDM projects, and provision of relevant information to private sector etc; ・Assistance on negotiations with the other governments involved in the project and their human resources development in order to promote initiatives by private sector in JI and CDM; ・Assistance with the training in the private sectors so that Japanese private sector companies be designated as operational entities under the CDM or independent entity under the JI; ・Establishment of advisory offices for private sector’ queries and requests relating to the Kyoto mechanisms; ・Elaboration and dissemination of the guides on how to use the Kyoto mechanisms in order to ensure the smooth use of the Kyoto mechanisms by private sectors, which will be regularly updated in accordance with the development of relevant domestic and/or international rules; 2) Initiatives to promote the understanding of governments of the countries involved in projects

119 ・Improvement of the understanding about the Kyoto mechanisms of the governments of the key partner countries where JI and CDM projects will be conducted, through intergovernmental consultations and the implementation of projects, as well as encouragement for such key partner countries to establish transparent systems to domestic project approval procedures etc.; ・Capacity building assistance for the potential key partner countries in JI and emissions trading so that they satisfy the participation requirements of the Kyoto mechanisms; 3) Contributing to the elaboration of international rules Given that a member from Japan has been appointed to the CDM Executive Board, Japan will pro-actively contribute to the elaboration of international rules so that they will be economically rational and ensure environmental integrity.

② Examination of the systems in view of the full operation of the mechanisms after 2008 In principle, the full operation of the Kyoto mechanisms such as transfer of credits under the emissions trading will commence from 2008. Some of the technical rules are referred to future international negotiation, and real knowledge and experience obtained with regard to the mechanisms are not sufficient. Therefore, in the meantime the measures described in ① above will be implemented, and we will work to accumulate knowledge and experience about the actual conditions of relevant policies and initiatives in other countries and international negotiation on the rules of the Kyoto mechanisms with a view to preparing for the full use of the mechanisms from 2008 onwards. Also, given this situation, we will continue examination of how the systems necessary for the utilization of the Kyoto mechanisms should be, and consider the necessary measures based on the results of such examination.

3.4.9 Others

(1) Promotion of understanding and publicly announcing the volume and per unit production of greenhouse gas emissions involved in project activities

Businesses conduct a variety of business activities from the manufacture, through the use, to the disposal of products, and each and every one of those activities is an emission source of greenhouse gases. In order to ensure that all businesses devise the most technologically and economically effective measures for each of these various emission sources, it is important to that the operators grasp an understanding of the current state of emissions (emission volume and per unit production) related to their business activities. Furthermore, businesses are a social presence and will be encouraged to voluntarily make public information pertaining to the current state of their emissions (emission volume and per unit production).

(2) Promotion of understanding the volume of greenhouse gas emissions involved in household energy consumption

In order for households to grasp an understanding of their own emission volumes and promote people taking concrete actions relating to these, we will promote activities such as environment and energy conservation household account books as well as examine a broad range of various types of methods to gain an understanding of what levels of greenhouse gases emissions are involved in their energy consumption, and stimulate further initiatives in households.

120 (3) Use of policy mix

A policy mix is one approach in order to effectively and efficiently reduce greenhouse gas emissions, by organically combining and making use of the characteristics of all of the policy measures, such as voluntary methods, regulatory methods, and economic methods. So-called economic methods used to achieve highly cost effective reductions include guiding actions along the lines of economic rationalism by various groups through the granting of economic incentives based on market mechanism premises. However, economic methods, such as taxes and levies, should be compared to other methods and afforded continued comprehensive examination in a variety of forums while continuing to consider international cooperation to ensure that global environmental conservation results are secured appropriately from the focal points of their effectiveness in terms of environmental conservation, and of the effects on the domestic economy, such as macro economics and industrial competitiveness, and the current state of initiatives in other foreign countries.

121 Measures to reduce CO2 emissions from energy sources If the framework of the existing policies will be maintained, CO2 emissions from energy sources in fiscal 2010 will be (million t-CO2) approximately 1,126 million tons of CO2, which is 73 million tons more than fiscal 1990 (about 1,053 million tons of 1250 When the current measures are implemented CO2). (Major reasons) Targets ・Demand side:Energy demand mainly in the residential/commercial and transportation (passenger vehicle) 1200 sectors Actual figure in fiscal 2000: +74 million t-CO2 1,160 million t-CO :+7% have increased significantly. 2 1,126 million t-CO2 ・Supply side:The introduction of non-fossil energy such as nuclear power has not progressed as much as 1150 anticipated when the old Guideline were established, and use of cheap coal is increased significantly. 1100 additional measures emissions from energy Japan shall implement further energy conservation measures, new energy measures and other new measures such 2 1050 CO as fuel switching, as well as continuing to implement the measures stated in the old Guideline to reduce CO2 sources Actual figure in fiscal 1990: +107 million t-CO2 : about +10% 1,052 million t-CO2 emissions from energy sources in fiscal 2010 to the fiscal 1990 level. Japan also continues to promote its nuclear 1,053 million t-CO2 power policy. 1000 1990 1995 2000 2005 2010 (fiscal year) Demand side measures Industrial Sector Residential and Commercial Sector Transportation Sector

●Strengthening to improve efficiency of equipment Approx. 5.4 million kl Approx. 30.4 million t-CO ●Motor vehicle traffic demand management ○Promotion of domestic sea freight and rail 2 ○Through revision of the Law Concerning the Rational Use of Energy Approx. 200,000 kl freight ●Strengthening measures to improve Approx. 500,000 kl in 1998, the Top Runner Approach has been adopted for domestic Approx. 700,000 t-CO2 car fuel efficiency ○Promotion of Traffic Demand Management Approx. 1.5 million t-CO2 electric appliances and OA equipment (i.e. air conditioners, TVs, Approx. 5.4 million kl (TDM) ◆Review and steady promotion of current VTRs, fluorescent lights, copiers, computers, magnetic disc systems, Approx. 13.9 million t-CO ◎Utilization of Traffic Demand Management measures. refrigerators, freezers). 2 (TDM) proof tests established in FY 2001 ◆Studying institutional arrangements to ●Promoting distribution of clean to establish comprehensive plans for promote freight systems with reduced ●Steady implementation and follow-up of the energy vehicles smooth urban transportation impacts on the environment voluntary action plan Approx. 800,000 kl ○Promoting the preparation of a bicycle- ◎Studying institutional arrangements including Approx. 2.2 million t-CO friendly environment by improving cycle legislation to support improved efficiency (Target of the Keidanren Voluntary Action Plan on 2 routes and parking areas. of urban freight services ◆Rapid introduction of vehicles that the Environment is to reduce CO2 emissions for ◆Expansion of equipment to which Top Runner Approach applies ○Implementation of social tests to contribute to ◎Promotion of Traffic Demand Management Approx. 1.2 million kl Approx. 2.9 million t-CO meet Top Runner Approach promoting the use of bicycles (TDM) proof tests that contribute to 2 2010 to no more than 1990 levels.) ◎Gas/oil equipment, and commercial equipment, etc. that were not through the green automobile improved efficiency of urban freight taxation and automobile ●Promotion of Intelligent Transport Systems services previously targeted are added based on the Top Runner Approach. (ITS) ◎Conducting proof tests to reduce acquisition tax reduction, and Approx. 1.4 million kl environmental impact of trunk line from FY accelerating the development and Approx. 3.7 million t-CO 2002 ●Factory measures based on the Law Concerning 2 distribution of low emission ○Preparing the Electric Toll Collection (ETC) ◎Submission of proposal to the ordinary the Rational Use of Energy vehicles through the procurement System, and improving services by session of the Diet in 2002 to revise the law ◆Promotion of distribution of high efficiency water heater increasing the number of toll gates to 900 on freight transportation business to relax Approx. 20.1 million kl Approx. 500,000 kl Approx. 1.1 million t-CO of low emission official vehicles nationwide by the end of fiscal 2002. regulations on participation and pricing 2 by the government ○Improving traffic information collection ◆Promotion of modal shift to shipping by Approx. 60.5 million t-CO2 ◎Assistance system to promote its spread has been established. Approx. 1 million kl services through preparation of infrared reviewing regulations, strengthening competitiveness through introduction of Approx. 2.6 million t-CO beacons, etc. ○ 2 ○Promotion of VICS (Vehicle Information and new technologies and improving transport Since fiscal 2001, a new comprehensive check ○ ◆Reduction of standby power consumption Following revision of the Law Communications System) (Service to be efficiency scheme has been implemented to assess standard Approx. 1 million kl Approx. 400,000 kl Approx. 1.1 million t-CO Concerning the Rational Use of launched nationwide within fiscal 2002) compliance based on the Law Concerning the 2 Energy in 1998, the Top Runner ○Improving the central processing system and Approx. 2.6 million t-CO2 ◎A system enabling consumers to identify products with minimal traffic control center system by introducing ◎Increasing the share of domestic shipping to Rational Use of Energy. Legal action will be electricity consumption during standby will be established in the Approach has been applied to a new signal controlling system 44% or more by strengthening its initiated based on the Law Concerning the Rational near future. vehicles. (MODERATO) competitiveness ◎Introduction of green automobile ○Promotion of the Environment Protection ◎Development of a marine highway network to Use of Energy as required. The government also taxation Management Systems (EPMS), and reduce time for domestic shipping follows up the progress of the energy conservation suchlike operations through non-stop coastal ◎Extension of reduction of ○Preparation of the Mobile Operation Control shipping services measures through the voluntary action plan based on ◆Technological development and result distribution automobile acquisition tax System (MOCS) for commercial vehicles ◆Increasing rail convenience by increasing reports submitted to the government in accordance ・High efficiency lighting ◎Establishment of fuel measuring ◎Promotion of environment-friendly traffic transport capacity Approx. 500,000 kl Approx. 1.8 million t-CO methods to consider fuel standards management project Approx. 100,000 kl with the Law Concerning the Rational Use of 2 ◎Development and standardization of Internet Approx. 300,000 t-CO ◎Support is provided for technological development of highly efficient of freight vehicles weighing 2.5t or 2 Energy, and implements priority checks based on the ITS and probe information system ○Increasing rail freight transportation capacity lighting, etc. more ○Development of a safety support system and ◎Submitting a proposal to the ordinary session same law for industries that have not established ◎Promotion of measures to replace comfortable driving by providing of the Diet in 2002 to revise the law on rail general low emission official information and warnings to drivers business to relax regulations on fare and voluntary action plans or whose progress towards ○Positively promoting the introduction and participation such energy conservation measures lags far behind vehicles within about three years distribution of ETC-enabled vehicles and ◎Preparation of a cold chain system of foods by the target. following FY 2002 triple-media VICS-enabled vehicles based rail, etc. ●Increasing energy conservation efficiency for housing and ◎Promotion of technological on the Green Purchasing Law by the ◆Improving efficiency of freight services buildings development and practical proof government, etc. Approx. 8.6 million kl Approx. 35.6 million t-CO ○Centralized signal control Approx. 1.8 million kl 2 testing for the earliest possible use ◆Promotion of road traffic information Approx. 4.7 million t-CO2 [Increasing energy conservation efficiency for housing] of fuel-cell vehicles provision business ○Reviewing current measures and effects and ○Under the Law Concerning the Rational Use of Energy, ◎Promoting development of next ◎Promoting the provision of accurate and promoting measures as follows. appropriate road traffic information by road ・Improving efficiency of transportation by responsibility for such efforts lies with the parties requesting generation low emission vehicles construction. “Design and Construction Guidelines on the traffic data providers through revision of truck (including clean energy vehicles) the law on road traffic in 2001 Approx. 1.1 million kl Rationalization of Energy Use for Houses” have been drawn ◎Development of an IT network to ◎Appropriate operation of the traffic Approx. 2.9 million t-CO2 up and published as detailed specifications and standards to promote the distribution of low information verification system ・Reduction in overland transportation of assist parties requesting construction to make decisions ◎Promoting the preparation of a database on international freight emission vehicles, including clean Approx. 700,000 kl About 22 (revised and strengthened in March 1999). traffic regulation information energy vehicles Approx. 1.8 million t-CO2 ◎Strengthening standards for energy saving housing by ◎Provision of assistance for low ●Measures to prevent illegal parking and ◎Submitting proposal to the ordinary session of million providing incentives through financing by the Housing Loan emission vehicles, including clean stopping on roads the Diet in 2002 to revise the law for freight Corporation ○Implementation of appropriate car parking vehicle transportation business to activate t-CO2 Energy energy vehicles freight services through deregulation ○ regulations Implementing energy conservation measures in public ○Support for practical use of electric ○Establishment of a system to minimize illegal ○Promoting the use of large vehicles and through conservation ◆Promoting the introduction of high performance housing and assistance for housing in towns that comply vehicle joint-use system car parking and a car parking indication trailers with energy conservation standards ◎ system, etc. ○Strengthening bridges in line with the increase additional industrial furnaces Promotion of assistance to establish ○ in the vehicle size measures ○Promoting the distribution of systems showing clear housing Promoting patrols to counter illegal car park Approx. 400,000 kl enhanced fuel supply infrastructure ○Constructing international marine container measures efficiencies including energy conservation efficiency (eco stations) ●Reduction in amount of engineering work on terminals in main and core international

Approx. 1.1 million t-CO2 (Housing Performance Indication System) ◎Measures on car fuel quality to roads harbors ◎Development of multipurpose international 【Increasing energy conservation efficiency for buildings (non- ensure sufficient functioning of the Approx. 100,000 kl residential)】 Approx. 400,000 t-CO2 terminals ◎Extensive support is provided for such measures in emissions post-processing system ○Improvement of public drains, promotion of ◎Preparation of joint delivery facilities of fresh ○Responsibility for efforts on parties requesting construction line with the voluntary action plans and so on of (Reduction of sulfur content from intensive engineering work and joint foods, etc. based on the Law Concerning the Rational Use of Energy. 500 ppm to 50 ppm by the end of implementation, appropriate operation of ○Establishing, upgrading, and central control of companies and industries with regard to assistance road use permission signals Decision standards for parties requesting construction are 2004 for light oil. Further drawn up and published. (Revised and strengthened in systems for companies to introduce energy saving improvements such as reducing ●Preparation of traffic safety facilities Energy facilities. March 1999) sulfur from gasoline should be Approx. 200,000 kl ◎Responsibility for notifying energy conservation measures pursued.) Approx. 700,000 t-CO2 conservation when building special new buildings and their refurbishment ○Establishment, systemization, and improvement in signal induction or addition (Revision of the Law Concerning the Rational ○Increasing efficiency of traffic control Use of Energy) ○ effect Promoting measures to counter bottlenecks by ○Promoting use of public transportation preparing traffic indications and rail ○Providing incentives through financing and tax system of the Approx. 5.2 million t-CO ◆Review and promotion of existing crossing signals 2 Development Bank of Japan Approx. 2 million kl ○Promoting the change of signal lights to LEDs ○Promoting the establishment of environment-friendly measures to promote eco drive of buses and trucks, etc. ◆Review and steady promotion of current government building facilities (Green Government ● current ◆ Promotion of commuting alternatives using measures Buildings) Promotion of measures to reduce data communications such as teleworking impact on the environment through ◆Steady promotion of new railways and ◆Technological development and diffusion of its ◎Endeavors to promote green assessment and renovation of Approx. 1.3 million kl modified personal rapid transit system measures: Approx. 3.4 million t-CO consideration of driving style of 2 preparation in urban areas results existing government building facilities ○Improving data communication environment business vehicles, etc. ◆Promoting the use of public transport by About 50 ・ [Improving energy conservation efficiency for both housing and in companies, tax-related measures and highly efficient boilers ・Distribution of vehicles featuring further improving services and convenience buildings] financial support to contribute to ○ ・highly efficient lasers idling prevention systems Promoting the establishment of new railways ○Development of engineers to handle design and construction introducing teleworking and support for in urban areas (new services of about million kl SOHO. Approx. 500,000 kl Approx. 400,000 kl 310km are planned to start between 1995 through training courses ◎Providing information and diffusion Approx. 1.1 million t-CO and 2010) Approx. 1.5 million t-CO ○Promotion of voluntary measures for the relevant industries 2 promotion to promote teleworking and 2 ・ ○Promoting the preparation of the modified involved in housing and buildings Installation of Speed limiting SOHO. device on large trucks personal rapid transit system such as new additional ◎Until fiscal 2001, support has been provided for traffic system in urban area (new services of Approx. 300,000 kl about 100km are planned to start between the technological development of highly efficient Approx. 800,000 t-CO 1995 and 2010) measures: 2 lasers and so on. ◆Promoting distribution of the Home Energy ◎Promotion of green management ○Construction of Authorized Shinkansen lines ○Promoting the use of public transport by promotion by car transportation About 7 Management System (HEMS) improving services and convenience such as Approx. 900,000kl Approx. 2.9 million t-CO companies from FY 2002 introduction of IC cards and improvements 2 ◎Mandatory installation of speed in connections million kl ◎Implementation of support for field tests ○Increasing energy consumption efficiency of limiting device on large trucks ( ◎Utilization of Traffic Demand Management railway transportation (TDM) proof text established in FY 2001 to Production vehicles: from Approx. 100,000 kl ○ develop comprehensive plans for smooth Promotion of energy demand side management for September 2003 onward; Existing Approx. 400,000 t-CO2 urban transportation commercial sector ○Increasing aeronautical energy consumption ◎Promoting the use of public transportation vehicles in use: from September efficiency 2003 onward) through national campaigns Approx. 1.6 million kl Approx. 7.7 million t-CO2 Approx. 400,000 kl ○Development of traffic junctions such as ◎ Approx. 1.1 million t-CO2 squares in front of stations Energy management system that applies to large- ◆ Promoting the development of new ○Implementation of social experiments that scale factories is adopted for large-scale office technologies contribute to the promotion of public ○ buildings through revision of the Law Concerning the Promoting the introduction of new rail transportation carriages and aircraft materials ○Promoting the preparation of Public ◎ Rational Use of Energy. Supporting the development of new Transportation Priority Systems (PTPS) by ◎Assistance system for promoting distribution of the technologies such as Super Eco-Ships establishing dedicated/priority bus lanes, ◎Research and development of new-generation and priority bus signal controls Building Energy Management System (BEMS) is energy-saving transportation established. ◎Support measures such as assistance systems and low interest loan systems will be established for further utilization of Energy Service Company (ESCO).

●Current new energy measures New energy measure completed in 1998 aimed at introducing 19.1 million kl worth of new energy by fiscal 2010 [Estimated introduction amount in fiscal 2010: 8.78 million kl] New energy 【Support at introduction stage】○Promotion of introduction support for local authorities and businesses, etc.○Promotion of introduction support for photovoltaic power generation, etc.○Support with regard to taxation or financing measures 【Support at the stages of technological development and demonstration 】○Promotion of technological developments and demonstration tests for fuel cells and photovoltaic power generation 【Preparation of environment and awareness campaign, etc.】 ○Preparation of regulations and systems ○Promotion of awareness campaign, etc. ◆Additional new energy measures About 34

Additional new energy measure completed in 2001 aimed at introducing 19.1 million kl worth of new energy by fiscal 2010 (Estimated emission reduction) Approx. 34 million t-CO2 million [Targeted introduction amount in fiscal 2010: 19.1 million kl] t-CO Photovoltaic power generation: 4.82 million kW (including photovoltaic power generation for housing: estimated approx. 1 million units), Wind power generation: 3 million kW, 2 Introduction Waste power generation: 4.17 million kW, Biomass power generation: 330,000 kW, Solar thermal utilization: 4.39 million kl (including solar thermal utilization for housing: Estimated approx. 9 million units) through amount in Unutilized energy: 580,000 kl, Thermal utilization of waste: 140,000 kl, Thermal utilization of biomass: 670,000 kl, Black liquor , refused wood, etc.: 4.94 million kl additional 【Support at the introduction stage】 ◎Placement biomass energy and snow ice cryogenic energy in the Law Concerning Promotion of the Use of New Energy ◎Promotion of introduction support for local authorities and companies, etc. measures fiscal 2010: ◎Promotion of introduction support for photovoltaic power generation , and solar thermal utilization, etc. ◎Promotion of green purchases and procurement 19.1 million kl 【Support at the stages of technological development and demonstration】 ◎Strengthening the support for technological developments and demonstration tests, etc. concerning fuel cells, photovoltaic power generation, and biomass energy, etc. ◎Promotion of technological development and so on bearing in mind regional characteristics 【Preparation of environment and awareness campaign, etc.】 ◎Studying grid-connection system measures ◎Promoting the establishment of a software infrastructure for practical use of fuel cells, ◎Strengthening awareness campaign, etc. 【Measures to expand new markets in the electricity sector】 ◎Proposal to establish the Bill Concerning the Use of New Energy by Electric Utilities

Nuclear ●Promotion of nuclear power generation(increasing nuclear-generated electricity by around 30% by fiscal 2010 compared to fiscal 2000 ) About 18 power, million ◆Additional measures for fuel switching, etc. such as electricity Approx. 18 million t-CO Supply side measuresSupply 2 t-CO Fuel ◎ 2 Subsidization towards part of the cost of converting old coal fired power generations to natural gas power generations through switching, ◎Subsidization towards part of the cost of fuel switching such as industrial boilers expected to downsize or cut CO emissions 2 additional etc. ◎Preparation of safety standards for natural gas pipelines ○Low interest financing for domestic natural gas development projects (developing wells and linked pipelines, etc.) measures

Emission and consumptions outlook 462 million t-CO2 260 million t-CO2 250 million t-CO2 for 2010 in each sector Approx. 185 million kl Approx. 120 million kl Approx. 94 million kl

(Note) 1. Energy conversion sector is included with total emissions. 2. ●= Current measures, ◆= Additional measures , ○= Current governmental measures , ◎= Additional Governmental measures Total emissions 1,052 3. kl: Energy conservation effect or introduction amount of new energy, t-CO2: amounts of CO2 emission reductions 4. Additional measures refers to extra measures established as of this Guideline review, or measures whose details have been completely reviewed and strengthened, while current measures covers all other existing measures. million t-CO2 5. Reduction amount indicates approximate estimated amount contributing to CO2 emissions as of 2010 by energy conservation effects or introduction amount of new energy when the relevant measures are implemented. X"./+#($@ K+/Z64.*/$&'"$,'.)6'(/."0'=DD64.'/D K/0*4*6&'"$,'N6"&3+6&

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