Japan is currently facing difficulties in achieving its Kyoto target of reducing emissions 6 percent below the 1990 level. As of 2002, its greenhouse gas (GHG) emissions have increased by 7,6 percent compared to 1990, so that it has to reduce emissions by about 13,6 percent - corresponding to 168,232 million tonnes of carbon dioxide equivalent (Mt CO2e) per year - in order to achieve its target.

In recognition of this situation, the Japanese government decided in its Kyoto Target Achievement Plan to procure certificates corresponding to 1,6 percent of its 1990 emissions by utilising the Kyoto mechanisms, which can be broken down into three distinct options:

• Purchasing emission reduction units (ERUs) generated by joint implementation (JI) projects in
  a) the Central and Eastern European EU member states and EU accession countries, and
  b) in other industrialised countries;
• Purchasing certified emission reductions (CERs) generated by Clean Development Mechanism (CDM) projects;
• Purchasing assigned amount units (AAUs) according to article 17 of the Kyoto Protocol.

Moreover, since the adoption of the protocol, the following two novel options for acquiring certificates have been developed:

• Establishing green investment schemes (GIS);
• Establishing a domestic emissions trading system in Japan and linking it with other national emissions trading systems, particularly the EU Emissions Trading Scheme (EU ETS).

The project evaluated these options with respect to five criteria (environmental integrity, cost (price and transaction cost), political acceptability, size of potential and long-term impact) and investigates the most appropriate methods for Japan to acquire certificates from abroad.
The project was commissioned by the Japanese Ministry of the Environment and was conducted by the Institute for Global Environmental Strategies (IGES), Japan, in collaboration with the Wuppertal Institute.