The industrial community in Japan has not yet fully supported the idea of establishing a greenhouse gas emissions trading system (ETS). It is because they believe that there are at least three fundamental problems. First, the establishing the ETS dose not reduce the gas emissions. All it does is to create new financial products. Second, when emission credits become targets of money game, they might trigger another financial crisis. Third, since under the ETS the government usually sets an upper limit (cap) on each user (all the ETS participants), this controlled economy has a severe impact on the competitiveness of Japanese corporations.For the purpose of resolving those concerns, based upon experiences of the Reitaku Model,which is a virtual market established at a computer program at Reitaku University, we make the following proposals.1 )From the viewpoint of CDM business players, brokers and financial institutions, emission credits are assumed as inventory assets such as financial products. It is because for them credits are items to sell. But from the viewpoint of manufacturers, emission credits allocated by a government are considered to be key factors for business activities, which are different from financial products (and from non-tangible fixed assets).2 )Instead of financial products (or non-tangible fixed assets), we regard emission credits as inventory assets such as materials or stored items. Since those assets turn into expenses through production, marketing or managerial activities, it seems rational to treat emission credits as materials or stored items.3 )If we assume credits as materials or stored items, eventually we will be able to presume that emission credits become invalid within several years (like three years) after allocation. It is because inventory assets like materials are usually destined to deteriorate. For the sake of convenience, at the Reitaku Model we call the first year credits green, the second yellow, and the third red. If credits are not used within three years, then all the red credits will be transferred from holders' account to the clear-off account of the government.4 )Emission credits should not be allocated for free. Therefore, at this Model, users have to purchase them from the government at the beginning of each fiscal year. In addition, at the end of the year, users receive refunds from the government in proportion to how many substantial credits each user has purchased during the year.5 )Making credits allocated by the government inventory assets, steadily lowering the governmental refunds rate, and reducing the total size of emissions credits to offer, the Reitaku Model makes it possible to reduce the total size of greenhouse gas emissions, without imposing any upper limit (cap) on users.If those points are taken into account, three concerns of the industrial community could be resolved.If corporations come to comprehend actual gas emission expenses incurred, they will be able to control cost and thereby reducing gas emissions. For this purpose, credits should be sold to the users at the fired price, ard treated as inventory assets like materials or stored items by the users.If emission credits are set to lose its use value within three years, they could be excluded from money game targets. Based upon this understanding, and in order to calm down frantic money game over emission credits, we propose an idea of making credits invalid within three years after allocation.Third, when those conditions (fare-paying inventory assets with three year expiration) are jointly introduced, the government comes to a point where it does not need to set any upperlimit (cap) on each user. It is because each user will eventually find its own cap (properinventory level) and will continue to lower the upper limit so as to reduce cost. For this reason,those proposals make it possible for Japan to establish a new ETS avoiding the controlled economy.
産業界の視点から「排出権取引制度」を構想する:Non-Cap Approachの提唱
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