Local governments, particularly cities, are key authorities for tackling climate change. Cities are heavy emitters of greenhouse gases, accounting for 40-70% of emissions worldwide, according to a study by U.N.-Habitat, a program focusing on sustainable human settlements.
Conversely, cities are also particularly vulnerable to the impact of climate change. The concentration of people and economic assets increases the costs of these impacts, and the built-up environment exacerbates these problems.
City governments, however, also oversee strategic sectors, such as energy, transport and waste management, where huge potential for mitigation and adaptation lies.
Up to now, the problem of climate change has been dealt with mostly at the global level. The 1992 U.N. Framework Convention on Climate Change and the 1997 Kyoto Protocol are the two main treaties upon which the international climate regime is built. However, they address central governments, while little has been suggested at the local level.
Japan is party to the UNFCCC and participated in the first commitment period of the Kyoto Protocol, the main purpose of which was to set greenhouse gas mitigation targets for industrialized countries. In compliance with the protocol, Japan was bound to reduce emissions by 6% by the end of 2012.
This target was challenging for Japan, which was already highly energy-efficient in 1990 and had strict environmental standards. To meet the target, it took advantage of flexible mechanisms which allowed it to buy emissions credits overseas.
The closure of nuclear power plants following the Fukushima disaster in 2011 led to increased use of fossil fuels. Against this backdrop, and also because major emitting countries such as the U.S. and China would not commit, Japan refused to participate in the second commitment phase of the Kyoto Protocol.
In the meantime, Japanese local governments have been active in combating climate change. The development of smart grids in several cities is testament to that commitment, but arguably the most innovative tool has been the Tokyo Metropolitan Government's emissions trading system.
The Tokyo authorities adopted an emission reduction program targeting around 1,000 commercial and industrial facilities in 2000. At first, it was voluntary for the facilities to sign up. From 2002 to 2004, participants had to report energy use and emissions data and were encouraged to adopt plans to reduce emissions. From 2005 to 2009, facilities were required to publish their data and the authorities rated them.
In 2007, the Tokyo government released a self-described 10-year plan "for a carbon-minus Tokyo," which set the ambitious goal of reducing greenhouse gas emissions by 25% between 2000 to 2020 and further to 50% below 2000 levels by 2050.
As part of the capital's strategy, the cap-and-trade system was launched in 2010. Heavy emitters, including industrial factories, office buildings, administrative institutions and commercial buildings, were required to sign up. Around 1,327 large-scale facilities, which accounted for about 20% of Tokyo's greenhouse gas emissions, were selected on the basis of their energy consumption.
Facilities were given a limited number of allowances, forming the cap that determines the quantity of emissions they can release. Facility tenants are charged with controlling their carbon dioxide emissions and adopting mitigation measures. Facilities that have surplus emissions credits can trade them with others who exceed their cap.
The credits were free but their number is fixed on the basis of past emissions. There are two compliance periods. The first, from 2010 to 2014, is estimated to have resulted in a 6% reduction in greenhouse gas emissions. The second, which runs to 2019, aims at a further reduction of 17%.
The first performance evaluation of the emissions trading system is due this year. So far, little has been traded and about 93% of facilities have met their targets. For those that failed to meet targets, authorities will impose fines and publicly name them.
As a way of battling climate change, the system is unique in several ways. It is the first city-level carbon trading scheme and an attempt to meet a global challenge with local action. It is the only mandatory emissions trading system with an absolute volume cap in Japan, and it is the only local trading system focusing on commercial activities and energy end-users.
The mandatory reporting of data to Tokyo authorities has been a key step. It allowed data-collection, familiarity and capacity-building for stakeholders involved in the program. The ecological reasons for the implementation of this innovative tool have also been absorbed as binding norms for the city.
This process could also inspire cities around the world, many of which have emission targets but lack concrete regulatory and mandatory measures to achieve them.
Magali Dreyfus is an AXA Research Fund postdoctoral fellow at the U.N. University in Tokyo and a researcher at France's National Center for Scientific Research.