Reference 1-2

1. Purpose of the Su-committee
・	To take the following steps with regard to Japan's domestic system in order to achieve the 6% reduction goals agreed to in the Kyoto Protocol:
	1) Formulate several policy package proposals
	2) Study basic mechanisms

2. Matters Related to Policy Packages and Basic Mechanisms
- Basic mechanisms:	basic functions needed to smoothly and steadily implement the adopted policy package within the framework of the domestic system, as necessary to conclude the Kyoto Protocol.
	* Plans for reducing emissions and increasing CO2 sinks
	* Monitoring plan progress
	* Strengthening policies on the basis of monitored results
	* Ultimate adjustment mechanisms by the national government (using Kyoto mechanisms)

3. Structural Elements in Policy Package Models

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4. Description and Evaluation of Five Policy Packages

* The following five models are presented as typical policy package models that provide the starting point for more detailed discussion.

Summary of Policy Package Model	Sub-committee Evaluation (in terms of reliability of emissions control)
<Model 1:Priority placed on the Guideline of Measures to Prevent Global Warming - While implementing all of the measures specified in the Guideline of Measures to Prevent Global Warming conducting a full evaluative review of all policies by 2008. (A combination of elements [1], [9], and [10].)	Compared with other models, there is little to guarantee that the policies will actually be implemented, making this model the weakest candidate in terms of reliability of emissions control. It is expected that this model would result in a high dependence on the national government to perform final adjustments.
<Model 2: Strengthening autonomous initiatives> - In the industrial sector, creating a framework in which the government approves autonomously formulated plans, or in which business operators are required to formulate plans. - In the residential and transportation sectors, establishing compulsory energy conservation standards for large buildings and housing complexes, promoting green policies through automotive taxes, and otherwise further enhancing countermeasures. (A combination of elements [2] or [3], as well as [5], [9], and [10]).	Although the establishment of enforcement measures makes this model stronger than <Model 1> when it comes to the reliability of emissions control, it is still less reliable than models that incorporate environmental taxes or emissions transactions. It is expected that this model would result in a relatively high dependence on the national government to perform final adjustments.
<Model 3: Environmental tax> - Introduce an environmental tax that will promote the broad-based involvement of all entities that emit greenhouse gases. - Include mitigating measures to ease the impact on the mid- and long-term prospects for Japan's industrial structure, and on the everyday lives of citizens. - Measures in the residential and transportation sectors are the same as in <Model 2>. (A combination of elements [5], [7], [9], and [10]).	Although it's possible that this model will rely on the national government to perform final adjustments, the reliability of emissions control can be increased through the appropriate adjustment of tax rates.
<Model 4: Environmental tax and large-scale monitoring> - While promoting broad-based involvement through the introduction of an environmental tax, regulating overall emissions or introducing an emissions transaction system instead of a tax in industries or fields where greater reliability of emissions control is needed. - Measures in the residential and transportation sectors are the same as in <Model 2>. (A combination of elements [5], [8], [9], and [10]).	Because the reliability of emissions control is high in the specified fields where overall emissions are regulated or where a partial emissions transaction system is introduced, dependence on the national government to perform final adjustments would be lower than with <Model 3>.
<Model 5:Hybrid-type emissions transactions> - Introduce a hybrid emissions transaction system for importers and producers of fossil fuels as well as large-scale emitters, in order to steadily reduce emissions. - After 2008, link Japan's domestic emissions transaction system with the international system. - Measures in the residential and transportation sectors are the same as in <Model 2>. (A combination of elements [5], [6], [9], and [10]).	This model would reliably control the overall amount of CO2 emitted by Japan as a result of burning fossil fuels. This model would reliably control the overall amount of CO2 emitted by Japan as a result of burning fossil fuels.

5. Future Issues to Be Considered by the Central Environment Council
	The council will continue to study the domestic systems needed to obtain Diet approval of the Kyoto Protocol agreement.