Carbon Markets in Japan: Recent Experiences from CO<subscript>2</subscript> Cap-and-Trade at the National and Local Level.

Japan ranks amongst the biggest emitters of greenhouses gases in the world, but still lacks convincing policies to reach its climate targets. However, since 2005, Japan has been experimenting with cap-and-trade. By applying established environmental economics methods, this paper analyzes the most important programs, the national Japan Voluntary Emissions Trading Scheme (JVETS) and the local Tokyo Metropolitan Government Emissions Trading Scheme (TMG ETS). By doing so, the paper shows that in comparison JVETS can only be considered a pilot program with limited success, whereas the TMG ETS is more promising in design. [ABSTRACT FROM AUTHOR]