Japan needs to buy an estimated 100 million tonnes of credits between 2008 and 2012 in order to cut emissions to 1.19 billion tonnes, the figure that represents 6% below 1990 levels.
The deal will cost Japan an estimated US$3.7 billion using the current European carbon emissions futures prices of $36.55 a tonne.
This is the third such deal for Japan, having already reached similar agreements with Hungary and Ukraine.
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