Japanese Trade Union Confederation (RENGO)

Statement: Ministry of the Environment proposes environment taxation

1. The Ministry of the Environment unveiled an environment tax, an additional measure to prevent global warming, on 5 November.
   
   Processors would have to pay 2,400 yen per ton of carbon and consumers are expected to pay 1.5 yen per litter of gasoline and 0.25 yen per a kwh of electricity that make up 250 yen per month. Annual revenues of 490 billion yen would be used for anti-global warming measures, as well as to offset corporate costs, including insurance fees for employees.



2. Kyoto Protocol is expected to enter into effect in February 2005 due to the recent ratification by Russia. Having already ratified the Kyoto Protocol and with a view to assuming its role in the international community, Japan has an unambiguous commitment to the 6% gas emissions reduction.
   
   The Protocol requires Japan to reduce gas emissions to the level 6% below that of 1990 from 2008 throughout 2012. Japan is now in the review process of the New Guideline for Measures to Prevent Global Warming towards its Second Step.
   
   However, it would be difficult to achieve the 6% reduction until the measures are drastically enhanced, as its emissions in fiscal 2002 were 7.6% higher than 1990 levels.



3. RENGO finalised in May this year its basic position concerning an environment tax, in which we recognised a sever situation that there was little progress in implementing national measures, although global warming was a challenge the entire global community had to struggle. We concluded that, while effective, additional measures should be made clear, economic measures, including taxations, should be considered as effective to overcome global warming.
   
   RENGO listed 7 items to be studied sufficiently: 1) effectiveness to control emission of greenhouse gases, 2) a system to transfer taxes, 3) coordination with existing taxes, 4) reduction and exemption of taxes taking into account international competitiveness 5) uses of revenues and level of taxes, 6) decision on whether the source of general revenue or a special fund, and 7) supporting incentives for industries and enterprises.



4. An environment tax is now being examined by the subcommittee of the Central Environment Council.
   
   It was too hasty and careless that a concrete proposal for an environment tax was unveiled at the moment, although the Ministry tried to reflect the proposal into governmental Tax System Council’s discussions.
   
   RENGO will urge, based on its basic position on global warming measures, for nation-wide discussion, including those of relevant Councils, to respond to the environment tax proposal, particularly on the above 7 items.