Country Paper Presentation for the 4 th Seminar on Environmental Auditing

1. Country Paper Presentation for the 4th Seminar on Environmental Auditing Yujiro Ichikawa Deputy Director, Office of International Affairs, Research and International Division Board of Audit of Japan

2. Environmental Conservation Policy Environmental conservation policies of Japan • Basic Environment Act (1993) • Basic Environment Plan (fourth version) “Climate change” is dealt with as a topic relevant to the “efforts for global warming issues” in the Basic Environmental Plan. The Plan describes that avoiding global warming and adapting to it are common challenges to human kind and it is our responsibility to grapple with such common challenges.

3. Environmental Conservation Expenses Initial Budget for FY2012

4. Environmental Audit of Japan Since 1999, the Board of Audit has been annually formulating and publicizing the Basic Policy on Audit to ensure that relevant and appropriate audits are carried out. Environmental conservation has been continuously stipulated as one of the policy areas for the Board to focus its audit activities on since 1999. Audit on Environmental Conservation

5. Environmental Audit of Japan Results of Environmental Audit (2008~2010JFY) 4 cases: related to energy saving 6 cases: related to CO2 emission control

6. Environmental Audit of Japan Audit Case: “Regarding subsidized projects to reduce CO2 emissions, the Board presented opinions that the Ministry should efficiently and effectively implement projects by, for example, setting up the target amount of emission control” (FY2010 Audit Report)

7. Environmental Audit of Japan Implementing projects to control and reduce energy origin CO2 emissions Ministry of the Environment Subsidy Subsidy Subsidy The Board audited 18 subsidy menus including 126 projects. (total project costs: approx. USD 284.2 million)

8. Environmental Audit of Japan Target amount for emission control when applying for subsidy Actual amount controlled by the project Comparison Audit Result (1): Setup of the target amount of emission control on energy origin CO2 To grasp the effect of subsidized projects properly

9. Environmental Audit of Japan Neither of the implementing entities was able to grasp the effect of subsidized projects appropriately. Documents relating to the subsidy delivery did not specify that the target amount should be set up. Audit Result (1): Setup of the target amount of emission control on energy origin CO2 The Audit revealedthat in 23 projects

10. Environmental Audit of Japan The audit revealed that in 103 projects with target amount: Audit Result (2):Achievement situation of the target amount of emission control on energy origin CO2 57 projects achieved the target amounts. 42 projects did not achieve the target amounts. Achievement was not confirmed for four projects.

11. Environmental Audit of Japan Six projects have schemes to purchase emission title. 42 projects did not achieve the target amounts. 36 projects have no such scheme. Audit Result (2):Achievement situation of the target amount of emission control on energy origin CO2 For 13 projectsamong 36 projects, the rates of the actual amounts against the target amounts were less than 50%.

12. Environmental Audit of Japan Considerable discrepancies in the amount of subsidies for the emission control on 1 ton of energy origin CO2 were observed Audit Result (3): Unit price of emission control on 1 ton of energy origin CO2 For 103 projects with target amount, the Board calculated the amount of subsidies for the emission control on 1 of energy origin CO2. 1 ton of CO2 1 ton of CO2

13. Environmental Audit of Japan The Board presented opinions to the Ministry of the Environment: • To set up appropriate target amounts for menus without target • To specify concrete measures to promote the achievement of the target amount • To consider appropriateness of the menus which requires much subsidies to reduce 1 ton of CO2 After the Ministry takes appropriate measures, the result will be reported in the Annual Audit Report.

14. Conclusion It is quite likely that many relevant projects will be implemented. • In the Environment Conservation Expenses, the conservation of global environment accounted for 37 percent: major part of the environmental policy of Japan. • The State and local governments have strived to implement measures and projects to reduce greenhouse gas emission continuously and considerably. It is essential for the Board to continue to conducts audits on “climate change”

15. Thank you!