Hungary to sell carbon credits to Japan

Dec 17, 2007, 13:58 GMT

Budapest - Hungary will Tuesday sign a framework agreement to sell carbon credits to Japan, Hungary's Environment Ministry said in a statement Tuesday.

Environment Minister Gabor Fodor and Japanese Ambassador to Hungary Shinichi Nabekura will sign the agreement, although it is not yet clear how many credits Japan will buy.

This is the first time Japan has bought credits and also the first time Hungary has sold them.

'From an international point of view this is a milestone,' the ministry said in a statement.

Without the credit purchase, Japan would fail to fulfil the Kyoto Protocol requirements of cutting its emissions of carbon dioxide and other greenhouse gases by six per cent from its 1990 levels by 2012.

Japan, which has one of the world's largest economies, saw its emissions actually rise 7.8 per cent in 2005 from 1990 levels.

Former communist countries such as Hungary have credits to spare as their emissions have dropped significantly since state-owned heavy industries closed with the break up of the Soviet Union between 1989 and 1991.

Hungary is also committed to reducing emissions by 6 per cent from the baseline under Kyoto.

However, as an economy in transition, it was free to choose its baseline and selected the period between 1985 and 1987, when its energy consumption was at a high.

By 1994, emissions had dropped by 18 per cent compared to the baseline and have not risen significantly since.

Critics of trading carbon credits say the system does not bring about any concrete reduction in emissions and simply allows major polluters to buy their way out of trouble.