JETRO Surveys Japanese Firms' Participation in Kyoto Mechanisms.

Tokyo, Japan, Mar 8, 2006 - (JCN Newswire) - The Japan External Trade Organization  (JETRO) released the results of its survey of Japanese companies' participation in the clean development mechanism (CDM) and joint implementation (JI), two "flexibility mechanisms" set forth under the Kyoto Protocol, which took effect in February 2005.

A total of 960 companies (or 29.9% of firms sent questionnaires) took part in the survey, which JETRO conducted in November and December 2005. Questionnaires were sent to Japanese firms in manufacturing, trading, finance, construction, transportation and other service sectors who conduct or have interests in international business.

According to the survey results, 13.8% of respondents have introduced/ will introduce CDM or JI projects in their business activities, 42.0% have an interest in doing so but have no concrete action plan, and 40.1% have no plans/ interest to introduce such mechanisms in the future.

Among firms that have introduced/ will introduce Kyoto mechanisms, 62.9% cited "corporate social responsibility for environmental conservation" as their reason for participating in the mechanisms, followed by "possibility of increased business opportunities (from selling/ brokering products and technologies for CDM/ JI projects)" (40.2%) and "need to achieve voluntary emissions targets set within a company or related industry organization" (33.3%). Asked about the nature of their participation in the Kyoto mechanisms, firms cited "sales of environment-related products/ technologies" (24.2%), "investments in CDM/ JI projects" (19.7%) and "sales or brokering of emissions credits" (7.6%). Small and medium-sized enterprises and environment technology consultants had strong involvement/ interest in technology sales and emissions trading, whereas manufacturers and electricity/ gas suppliers were keen on investing in CDM/ JI projects (electricity/ gas suppliers, who often have difficulty meeting their emission reduction targets, can earn credits through participating in such projects).

Survey results also showed that Japanese firms are keen on undertaking CDM/ JI projects in China and the rest of Asia. Firms that indicated they will introduce Kyoto mechanisms were asked which country/ region they would select for introducing such projects. China was the top pick (51.1%), followed by India (12.8%) and other Asian countries (20.2%).

Among the 30 respondents planning "investments for energy saving at production facilities", 66.7% of firms would make such investments in China, reflecting the fact that the country is home to a large number of Japanese manufacturers.

Asked about their main requirement for participating in the mechanisms, nearly half (49.3%) of respondents cited "dissemination of practical information, including governmental efforts/ supports and success stories by Japanese firms". Respondents also pointed to the necessity of improving legal frameworks and regulations both domestically and internationally, citing "revision in corporate accounting systems to provide tax benefits for firms involved with CDM/ JI projects" (42.6%), "making international consensus on a future framework for the post-Kyoto Protocol period starting in 2013" (21.1%), and "setting up regulations to impose emissions limits on individual company/ factory, penalties and additional taxes for violations" (20.0%).

About JETRO

The Japan External Trade Organization, or JETRO, is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximize their global export potential.

Source: JETRO

Contact:

Public Relations Division
Japan External Trade Organization (JETRO)
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