May 23 (Bloomberg) -- Japan and South Korea agreed to exchange information on a proposed emissions-trading mechanism, the Japanese environment ministry said today in a statement.
Minister Sakihito Ozawa met South Korean counterpart Lee Maanee for bilateral discussions yesterday, ahead of today’s three-nation meeting with China, according to the statement.
The three countries today adopted a five-year plan that pledges cooperation on the environment, focusing on 10 areas including climate change and biodiversity conservation, the statement said.
A climate bill before the Japanese Diet calls for a so-called cap-and-trade mechanism to help cut greenhouse gases, and South Korea has said it’s also considering the system. Japan wants bilateral trading to reduce volatility in the carbon market and lower the risk of domestic companies shifting production overseas where regulations are more lax, Nikkei English News reported last week.
Under a cap-and-trade system, a ceiling is imposed on emissions, and companies that pollute too much must buy credits from companies that don’t exceed their limit.
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