By Michio Nakayama and Shigeru Sato
Nov. 18 (Bloomberg) -- The Japan Electric Power Exchange traded its first United Nations emissions credit contract today, marking the expansion of the carbon market in the world's fourth- biggest polluting nation.
A single contract for 10,000 metric tons of certified emission reduction credits, or CERs, changed hands at between 1,870 yen ($19.38) and 1,880 yen a ton today, said a person with direct knowledge of the transaction who declined to be named before a formal announcement.
Japan's trade ministry in February directed the 40-member exchange to launch carbon trading as part of efforts to reduce emissions of gases blamed for global warming. The price of today's trade compares with the 15.30 euros ($19.30) a ton paid in the latest transaction on the European Climate Exchange.
``It's quite significant for Japan that the value of carbon is going to be set by transparent trading,'' Satoshi Hashimoto, chief researcher in emissions trading at Mitsubishi Research Institute Inc. in Tokyo, said before the deal. ``There's uncertainty about how much the liquidity of these exchange-traded emissions will increase.''
Japan is encouraging businesses to take part in carbon trading to help achieve a target set under the Kyoto Protocol to cut emissions by 6 percent from the 1990 level by 2012. Emissions increased 8.7 percent from the 1990 level last fiscal year.
The exchange's 40 members include nine regional power companies led by Tokyo Electric Power Co. The utilities emitted 417 million tons of carbon dioxide in the financial year ended March, accounting for about 30 percent of Japan's total greenhouse gases.
To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Michio Nakayama in Tokyo at mnakayama4@bloomberg.net.
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