April 14, 2014 / 9:04 AM / 6 years ago

Japan, Cambodia sign carbon market deal

April 14 (Reuters) - Japan and Cambodia have signed a deal for Japanese companies to earn carbon credits by paying for greenhouse gas emission cuts in Cambodia, in Japan’s eleventh two-way programme of this type.

The programme, known as the Joint Crediting Mechanism (JCM), lets Japan use cheap international emissions cuts to satisfy domestic targets, despite spurning an opportunity to sign up for new binding targets under the U.N. Kyoto Protocol.

Japan has been increasingly relying on fossil fuels to generate electricity after idling all 48 of its nuclear plants in the aftermath of the 2011 Fukushima disaster, and has found it hard to rein in carbon emissions.

In November, the government adjusted its 2020 emissions target, saying it would allow carbon emissions to grow 3 percent from 1990 levels by the end of the decade, against an earlier goal of cutting emissions by a quarter in that time.

Bilateral offset carbon deals let Japan meet a share of its target by paying for emissions in developing countries, where emission cuts are usually less costly.

“Both sides mutually recognize that verified reductions or removals from the mitigation projects, including the forestry sector under the JCM, can be used as part of Japan’s internationally pledged greenhouse gas mitigation efforts and Cambodia’s nationally appropriate mitigation actions,” the two sides said in the pact they signed.

As in previous JCM deals, the agreement does not initially allow Japanese firms to trade the offset credits in a secondary market, but this may be possible at a later stage.

Japan’s previous JCM partners include Costa Rica, Ethiopia, Indonesia, Kenya and Mongolia. (Reporting by Stian Reklev; Editing by Clarence Fernandez)

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