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A policy analysis of forest carbon offset system alternatives for Japan Takahashi, Shingo

Abstract

Forest resources provide us with various kinds of environmental benefits^ water purification, biodiversity, and carbon sequestration among others. Enhancing sustainable forest management and avoiding deforestation have become increasingly important in the context of global warming issues. The Kyoto Protocol (KP) was established for abatement of climate change in 1997, and came into effect in February 2005. Annex I countries will have to reduce their Greenhouse gas (GHG) emissions to meet their assigned targets. Japan will also have to reduce its GHG emissions by 6% below the 1990 levels by 2010. In order to meet the Kyoto target, additional policy countermeasures need to be implemented in Japan. Under the KP, Japan is allowed to figure in a 3.9% emission reduction (l3Mton-C: 47.7Mton-C02e) for a potential increase in the carbon storage (carbon sink) associated with forests, which is achievable through changes in forest management. Hence, increasing carbon storage through forest management has become an increasingly important issue in Japan. Forest degradation is another important issue in the Japanese forest sector. The Japanese forest sector has been in a long-term slump since the 1970s. The domestic timber prices have remained low because of the massive supply of low-price imported timber. It is obvious that additional policy measures need to be implemented for the forest sector to recover from the long slump. Creating a carbon offset system is considered one potential policy countermeasure to address both these issues. In this research, based on three case study results, a policy analysis regarding the introduction of a forest carbon offset system in Japan is conducted. Policy variables associated with the introduction of a carbon offset system are identified, and possible policy alternatives are discussed. Finally, the best policy option suggested for Japan is one that starts with the "Rigid and conservative" strategy, estabhshing a rigid system at the initial stage, and that gradually adds flexible mechanisms to provide economic incentives to stakeholders. In conclusion, several policy recommendations for introducing a carbon offset system in Japan are discussed.

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