The Japanese government decided to buy quotas for roughly 30 million metric tons of greenhouse gas emissions from Ukraine for around Y30 billion, in order to achieve a goal set by the Kyoto Protocol, the Nikkei reported in its Monday evening edition.
This is Japan's first purchase of emission quotas from another nation, and the two governments are likely to reach agreement by the end of this month.
To achieve the targets of the environmental agreement signed in Kyoto, the Japanese government is looking overseas to acquire emission quotas for 100 million tons by the end of fiscal 2012. It will be able to meet 30% of its plan through this unprecedented agreement with Ukraine.
The government decided that the current trading prices of emission quotas provide an opportunity to buy a large volume of quotas at a low price. Prices have declined to about one-third of the level they traded at six months ago because greenhouse gas emissions have declined globally as a result of the economic downturn.
Ukraine holds a large volume of emission quotas that it can sell to other nations. Its own greenhouse gas emissions declined sharply as its economy stagnated after the collapse of the Soviet Union.
The Japanese government began negotiating in 2008 to acquire part of Ukraine's emission quotas. Thirty million tons of greenhouse gas emission amount to 2% of Japan's annual emissions of climate warming gases.