1. Country Paper Presentation for the 4 th 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 Field Expense USD (million) (%) (1)Conservation of global environment 6,83437.0 (2) Conservation of atmospheric environment 2,69014.5 (3) Conservation of water, soil, and ground environment 7574.1 (4) Waste and recycling measures 5,17228.0 (5) Chemical substance measures 820.4 (6) Conservation of natural environment and promotion of interaction with nature 1,6829.1 (7) Policies that form the foundation for respective policies 1,2776.9 Total 18,493100.0

4. Environmental Audit of Japan Audit on Environmental Conservation 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.

5. Environmental Audit of Japan Results of Environmental Audit (2008~2010JFY) Conservation of the global environment Conservation of natural environment Waste and recycling measures Total 101314 4 cases: related to energy saving 6 cases: related to CO 2 emission control

6. Environmental Audit of Japan Audit Case: “Regarding subsidized projects to reduce CO 2 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 Ministry of the Environment Implementing projects to control and reduce energy origin CO2 emissions Subsidy The Board audited 18 subsidy menus including 126 projects. (total project costs: approx. USD 284.2 million)

8. Environmental Audit of Japan Audit Result (1): Setup of the target amount of emission control on energy origin CO 2 Target amount for emission control when applying for subsidy Actual amount controlled by the project Comparison To grasp the effect of subsidized projects properly

9. Environmental Audit of Japan Audit Result (1): Setup of the target amount of emission control on energy origin CO 2 The Audit revealed that in 23 projects Documents relating to the subsidy delivery did not specify that the target amount should be set up. Neither of the implementing entities was able to grasp the effect of subsidized projects appropriately.

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

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

12. Environmental Audit of Japan Audit Result (3): Unit price of emission control on 1 ton of energy origin CO 2 For 103 projects with target amount, the Board calculated the amount of subsidies for the emission control on 1 of energy origin CO 2. 1 ton of CO 2 Considerable discrepancies in the amount of subsidies for the emission control on 1 ton of energy origin CO2 were observed

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 CO 2 After the Ministry takes appropriate measures, the result will be reported in the Annual Audit Report.

14. Conclusion  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 quite likely that many relevant projects will be implemented. It is essential for the Board to continue to conducts audits on “climate change”

15. Thank you!