July 27 (Bloomberg) -- The opposition Democratic Party of Japan, favored to win next month’s election, aims to lower the country’s greenhouse-gas emissions 25 percent by 2020 from 1990 levels, party leader Katsuya Okada said.

The DPJ’s target exceeds the 8 percent goal Prime Minister Taro Aso announced in June. Aso said at the time that pushing for bigger cuts in emissions such as carbon dioxide would hurt Japanese business competitiveness.

“Japanese people, especially in the business circle, say our target is tough,” Okada, 55, said in a July 24 interview at party headquarters in Tokyo. “But internationally speaking, our number is more in line with the trend as the European Union seeks a 20 percent cut and the Group of Eight countries agreed on an 80 percent cut by 2050.”

The DPJ is seeking to oust Aso’s ruling Liberal Democratic Party, which has governed Japan for all but 10 months since 1955. Okada said his party wants environmental policy to be a “pillar” of economic growth.

Okada said a DPJ government will push the 25 percent target in a new international climate change treaty. Almost 200 countries are seeking to meet a December deadline in Copenhagen for an accord to replace the Kyoto Protocol, which expires in 2012. Under the Kyoto agreement, Japan pledged to cut emissions by 6 percent from the 1990 level by 2012. Instead, they’ve risen 8.7 percent since then.

Business Opposition

Keidanren, Japan’s biggest business lobby, has said it opposes any cut bigger than 6 percent. The lobby group in May suggested a 4 percent increase from the 1990 level, calling it the “most rational goal” in terms of fairness, viability and the financial burden on consumers.

Aso’s proposal is an “extremely tough goal” for Japanese industries, Keidanren head Fujio Mitarai said in June.

Okada said the DPJ will seek legislation that would cap emissions and establish a trading system for pollution permits, along with promoting of alternative energy and a carbon tax. Such policies will give rise to new industries as Japan’s population declines and faces competitions from China and India.

“The LDP has been taking a lot of measures to create short-term demand,” Okada said. “But what’s important is investment for the future, and climate change provides a big opportunity to invite new investment and raise industries.”

Energy Efficiency

Japan already uses energy more efficiently than any other country, according to the International Energy Agency. The U.S. required twice as much energy to produce a unit of gross domestic product in 2006, China needed more than eight times, and Russia about 17 times, agency data show.

The DPJ wants to persuade the U.S., China and India to join the new framework to replace the Kyoto Protocol. Okada said he’s interested whether the U.S. Senate will approve President Barack Obama’s climate bill, which cleared the Congress in June.

Okada left the ruling party in 1993 to participate in the coalition government that briefly ousted the LDP later that year. He said the next general election will be an “historic event.”

It will be “virtually the first” transfer of power from one party to another, and “break the fixed connections of vested interests,” he said.

Forty-two percent of respondents said they’ll vote for the DPJ while 23 percent said they’ll choose the LDP at proportion representation ballot in the next election, according to a Yomiuri opinion survey published July 24.

To contact the reporter on this story: Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net.

Last Updated: July 27, 2009 01:29 EDT