Japan May Introduce Carbon Tax to Curb Emissions as Nuclear Reactors Shut

Japan may introduce a carbon tax to curb greenhouse gas emissions amid the increased use of fossil fuels to generate power as nuclear reactors remain shut following the Fukushima disaster, the government said.

Japan wants to start adding taxes on crude oil and petroleum products as early as April, Environment Minister Goshi Hosono said yesterday at the United Nations-led climate talks in Durban, South Africa, according to the text of his speech faxed by the ministry.

The government is preparing a tax-reform plan for the year ending March 2013, to be announced tomorrow. Officials are debating the inclusion of the carbon tax, Yusuke Inoue, a ministry official in charge of environmental policy, said by telephone today.

The government proposes to add taxes on coal, gaseous hydrocarbons, crude oil and petroleum products, Inoue said, adding that the proceeds will be used for renewable energy and energy-saving projects. It’s too early to comment on the rate of taxation, Inoue said.

Japan is the world’s third-biggest oil importer and the biggest importer of liquefied natural gas. A plan to start a carbon tax this year was delayed as lawmakers gave priority to legislation linked to the reconstruction of the areas hit by the March 11 earthquake and tsunami, Inoue said.

The disaster caused the meltdown of three reactors at Tokyo Electric Power Co.’s (9501) Fukushima Dai-Ichi station. As much as 85 percent of the country’s reactors were either damaged or idled for repairs and safety checks. Nuclear power provided about 30 percent of Japan’s energy before the quake.

“It’s become very tough for Japan to achieve the goal” of trimming emissions by 6 percent by 2012 under the Kyoto Protocol, given the status of the country’s nuclear reactors, Hosono said. “But we have been making extraordinary efforts and we believe it is not impossible.”

Negotiators from more than 190 countries have gathered in Durban to discuss steps to curb emissions after limits outlined in the Kyoto Protocol expire next year.

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.