Germany's Experience with the Introduction of the EU Emissions Trading Scheme: Lessons for Japan,

This paper examines the process to lead the adoption of the EU directive on establishing a scheme for greenhouse gas emission allowance trading within the Community, in order to identify the reasons for Germany to agree on the adoption, despite of the expected friction caused by the shift from its existing national measures, especially voluntary declaration, to the EU wide emissions trading scheme. Through the examination, the institutional and political factors at the EU level, including the adoption procedure of environmental directives and the supports expressed by other member states to the introduction of emission trading, were identified as main reasons for the German agreement on the adoption of the directive. Since Japan does not face the regional pressures as Germany did, it could face much more difficulty with introducing domestic emissions trading. However, the EU emissions trading scheme itself could pressure Japan to establish its own emissions trading scheme in order to exert influence on the design of the international one. Furthermore, Germany’s experience highlights the risk that Japan could be forced to agree on a scheme that does not reflect its interests, if it does not form a unified position on a workable emissions trading scheme with stakeholders as soon as possible. As a result of this research, the most crucial lesson to be learned from Germany’s experience, for Japan, is the importance of launching a multi-stakeholder dialogue as the first step in considering the establishment of its own domestic emissions trading scheme, while preparing for international emissions trading at the same time.

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IGES-CP Working Paper 2004