Allocation of Greenhouse Gas emission allowance for Japanese Electric Utility industry under Kyoto Protocol by Grandfathering/Benchmarking Rule Approach

Kyoto Protocol has helped Japanese electric utility industry to establish its own Greenhouse Gas (GHG) emission reduction target. However, Kyoto Protocol does not specify the allocation of the GHG emission reduction target to each power company in the industry. In this research, it began with the analysis of the Japanese power system structure and its generation performance on GHG emission. Based on these analyses, allocated the target emission allowance to each General Electric Utilities (GEUs) in Japan under the Kyoto Protocol period based on two allocation approaches, namely Grandfathering Approach and Benchmark Rule Approach. Under the Grandfathering Approach, Chuden; Chugoku and Rikuden are on track to the allocation cap under the Kyoto Protocol. However, this is not the case when Benchmarking Approach is used for calculation. Chuden and Chugoku would be required to take significant reduction exercise now in order to keep their emission level within the allocation cap under both Grandfathering and Benchmarking Rule Approach. 311 Earthquake in northeast coast of Japan has resulted in a massive destruction of nuclear power station. Consequently, more thermal power is expected to fill out the nuclear lost. Therefore, the emission generated from electricity generation is expected to increase significantly. According to the calculation, if Japanese electric utility industry would like to achieve its emission reduction target under Kyoto Protocol even after taking the 311 Earthquake into consideration, it would need to further reduce an average of 122.1 million metric tons of GHG emission in the final two year of the Kyoto Protocol period.