Japanese Release Best Emissions Data in the World
by David Sassoon - Apr 9th, 2008
Activist investors in the US have pressed the Securities and Exchange commission to require companies to disclose their carbon emissions as a routine part of financial reporting. Now they can point to Japan and an emissions dataset just released by the Ministry of Economy, Trade and Industry (METI) as a model worthy of emulating.
It's the most detailed and comprehensive publicly-available dataset of its kind, providing facility-level greenhouse gas emissions of more than 14,000 sources. The data is specific enough that financial analysts at Innovest are incorporating it into their Carbon Beta platform for predicting carbon risk exposure of Japanese companies.
Hiroshi Minami, a New York-based analyst at the firm, points out that a comparable database of Canadian facility-level emissions lists less than 400 sources, and although the EU probably has very good emissions data driving its emissions trading system, that data is not public. Some detailed data on electric power installations are also available for the US, but nothing as detailed as the new Japanese dataset.
The release of the data on Japanese companies comes after a three year effort that began with 2005 legislation making emissions reporting mandatory using a standard methodology. Japanese ministries collected data on emissions covering the period from April 2006 to March 2007, and just last month made the dataset public for the first time.
A similar effort to compile an emissions inventory will be required in the US to make a cap-and-trade law function. The EPA does maintain and annually update a national GHG inventory. The Japanese also maintain a similar national aggregation. But the Japanese reporting system that produced this latest dataset allows for company-level analysis. The EPA inventory does not.
An Innovest analyst said that the EPA inventory is sufficient for the purposes of policy analysis, and is in line with international commitments, but the US will need better data at the installation level -- like the Japanese are now compiling -- to drive a cap-and-trade system.
The top three Japanese greenhouse gas emitters at a corporate level were Tokyo Electric Power Company (68.9 million tons-CO2), JFE Steel Corporation (60.7 million tons-CO2), and Nippon Steel Corporation (59.9 million tons-CO2).
At a facility level, the top three greenhouse gas emitters were the Hekinan Thermal Power Plant of Chibu Electric Power Company (24.1 million tons-CO2), the Haramachi Thermal Power Plant of Tohoku Electric Power Company (12.6 million tons-CO2), and the Matsuura Thermal Power Plant of the Electric Power development Company (11.1 million tons-CO2).
Let's see what the Japanese do about actually acting on all this good information. Innovest will see what the new carbon data could mean for investors. Meanwhile, investors in the US are still comparably in the dark about the carbon footprint of US companies.
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