If we proceed on the principle of coexistence between the economy and the environment, there is no way to sidestep the issue of nuclear power, despite the inevitable objections. The Asahi Shimbun

I agree that steps are needed to thoroughly curb emissions of greenhouse gases. Yet at the same time, I am opposed to introducing an environmental tax toward that end. There are three major reasons for this view.

First, I have doubts about the effectiveness of such a duty. Considering the consumer and transportation sectors, under the environmental tax proposed by a Liberal Democratic Party division last year, gasoline would be taxed at a rate of 1.9 yen per liter.

There has already been a surge in the price of gasoline at the pump of 15 to 20 yen per liter triggered by the steep rise in crude-oil prices since April. Yet, there has been no drop in consumption.

With the automobile having become so deeply entrenched in our daily lives, I see little hope of curtailing gasoline consumption through such price measures.

My second reason concerns the adverse effects of such a tax on internatioinal corporate competitiveness. In Europe, where environmental taxes have been introduced in several countries, intra-regional business transactions comprise some 70 percent of all trade.

This stands in stark contrast to Japan. It competes heavily with China, the United States, Asian nations and other countries that have chosen not to share the burden of reducing greenhouse gases by joining the Kyoto Protocol (to the U.N. Framework Convention on Climate Change).

The passage of an environmental tax would put Japan at a competitive disadvantage to such nations.

The electronics industry also consumes large amounts of energy as steel, petrochemical and other sectors do. There is a growing move to return production plants to Japan. Passing an environmental tax would put a damper on that trend as well. It would also threaten to renew the hollowing-out of domestic industry.

My third reason for opposing such taxation is that there has been no verification that the annual budget of more than 1.2 trillion yen already earmarked for global warming countermeasures has been effective in curbing emissions.

Under these circumstances, it is tough to justify collecting revenues through a new environmental tax, and then using those funds to further boost subsidies for emission-curbing measures. If funds are required to fight global warming, I feel it makes far more sense to first restructure the existing budget.

In the steel industry, energy-saving investment of some 1.4 trillion yen has been carried out from 1990, reducing carbon dioxide emissions by 6.4 percent. There has been progress made in physical distribution efficiency, the spread of energy-efficient household electrical appliances, co-generation systems, absorption of greenhouse gases in forests and checks on increases in chloro-fluorocarbon alternatives. By using the ``Kyoto mechanism'' of adding greenhouse-gas cuts achieved overseas to a country's domestic scorecard and other efforts, Japan is capable of achieving the greenhouse-gas-cutting targets for the nation as a whole.

Among these approaches, I submit that more industrious use should be made of this Kyoto mechanism.

As things stand now, target regions for this tally are limited to countries ratifying the Kyoto Protocol, with use of the mechanism itself requiring United Nations clearance for each specific project.

We need to appeal to the international community for a more flexible means of applying this system.

According to a proposal by the Ministry of the Environment, reducing greenhouse gases with an environmental tax in Japan, a coutnry where substantial investment in energy conservation is already under way, would require outlays of about 10,000 yen per ton (carbon conversion basis).

On the international emissions credit trading market, which includes developing countries, it would require less than 1,000 yen per ton to achieve the same results. It is quite clear which approach offers greater efficiency.

The United States generates some 24 percent of the world's greehouse gases, and China another 13 percent of those emissions. Furthermore, greenhouse gas discharged by China in 2003 are believed to have grown by more than 700 million tons. That increase alone is equivalent to over half the total emissions from Japanese sources.

To achieve meaningful reductions in greenhouse gases on a global scale will require the formation of a new framework. It should be engineered to better facilitate participation by these polluter nations.

Finally, if we proceed on the principle of coexistence between the economy and the environment, there is no way to sidestep the issue of nuclear power, despite the inevitable objections.

The government's current outline for promoting global warming countermeasures is rooted in the premise that four new nuclear power reactors will be constructed by fiscal year 2010.

Of course, the obvious requirement for such a step is safe operation of plant facilities. I believe, however, it is time for Japan, which has pursued the use of nuclear power solely for peaceful purposes over the years, to also consider transferring that knowhow overseas.

Both intellectuals and people in the government continue to tiptoe around this debate. Ultimately, however, I am confident that the pooling of our collective wisdom to truly resolve this problem can lead to greater prosperity for Japan. It can also lead to a more meaningful international contribution on such an increasingly critical front.

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Kazumoto Yamamoto is co-chairman of the Japan Business Federation (Nippon Keidanren) Committee on Environment and Safety. He is standing adviser (and former president) of Asahi Kasei Corp., and also a member of the Industrial Structure Council under the Ministry of Economy, Trade and Industry.(IHT/Asahi: January 26,2005)