TOKYO, July 2 (Reuters Point Carbon) - Vietnam has become the sixth country to sign up to a scheme that allows Japanese companies to earn cheap carbon credits by helping developing nations cut CO2 and other greenhouse gas emissions, the Japanese government announced on Tuesday.
The Southeast Asian nation followed Bangladesh, Ethiopia, Kenya, Maldives and Mongolia in hoping to attract Japanese investments by signing up to the scheme, according to the Ministry of Economy, Trade and Industry.
Under the scheme a committee of officials from the two nations will approve projects and issue offset credits that Japanese firms can use towards meeting domestic CO2 targets.
The country has made an international pledge to cut greenhouse gas emissions to 25 percent below 1990 levels by 2020 and wants international recognition that emission cuts made abroad will count towards that target.
The Japanese government has in recent years funded efforts to map the potential of achieving emission cuts in Vietnam by making cement plants more efficient and installing hydro power facilities.
Japan prefers the bilateral approach to generating carbon credits, known as the Joint Crediting Mechanism, to the U.N.’s Clean Development Mechanism, which it considers too cumbersome and unpredictable.
Tokyo hopes to finalise deals with other developing nations such as Indonesia and India to add to the potential supply of the credits.
The government has earmarked $100 million in this year’s budget to promote the new mechanism, although it has been controversial among environmentalists who have claimed that the lack of multinational oversight means there is no guarantee the offset credits represent real emission cuts.