TOKYO - Japan is expected to report as early as this week that its greenhouse gas emissions sank last year, the first year of its Kyoto Protocol obligations.

But the fall is not the good news it may appear to be, as it is mostly due to a recession that has cut the money firms have to spend on green initiatives, and also forced the government to focus more on economic stimulus than its green agenda.

This could make it harder for the world's 5th-biggest polluter to prepare for ambitious targets beyond 2012 when Kyoto's first period ends.

Preliminary government data showed carbon dioxide emissions from burning fuel fell 6.7 percent to 1.14 billion tonnes in the fiscal year to March 2009, marking the steepest fall on record as the economy shrank 3.2 percent.

CO2 created by burning fuel accounts for about 90 percent of Japan's total greenhouse gas emissions.

The figure for total emissions last year, to be announced soon, is estimated at 1.27 billion tonnes, below the record 1.37 billion tonnes of the previous year and approaching the Kyoto goal of 1.19 billion tonnes a year, given that spending on emission cuts elsewhere should offset 68 million tonnes a year.

For a graphic of Japan's CO2 emissions since 1990:

here

With the Bank of Japan forecasting deflation until March 2012, a year before the country's Kyoto obligations end, there seems little risk of the country not meeting its goals.

CO2 emissions are likely to be curbed in coming years given a basically positive link we've found between them and GDP, said Itsuho Haruta, executive officer at Natsource Japan Co, a joint venture of a New York-based carbon trader, Mitsubishi Corp. and Tokyo Tanshi Co.

Buying of Kyoto offsets by power companies and others has been steadily on the rise. Japan thus has a much lowered hurdle to meet its goals, although some risks remain, he said.

In the past year, an economic slump limited new private spending on energy efficiency, but power firms bound to voluntary emission-cut targets have become even more aggressive about buying emissions rights from abroad.

The power sector, accounting for 30 percent of greenhouse gas emissions, is under pressure to quickly deal with interruptions in power supply from nuclear plants, which are carbon-free.

Tokyo Electric Power Co halted operations of its Kashiwazaki-Kariwa nuclear plant, the world's biggest, for checks after a 2007 earthquake, forcing it to run thermal plants harder and boosting its emissions by 30 million tonnes a year.

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