This paper analyses the development of the Japanese Climate Policy since the Rio summit, including climate policy instruments implemented to date and the recent change of position regarding the introduction of a mandatory emissions trading scheme (ETS) in Japan. Several proposals to introduce a mandatory ETS have been published at both the national and regional levels in the last months. This paper first assesses the existing voluntary ETS (JVETS), then outlines the proposed voluntary test-phase ETS scheduled to start in October 2008, and finally analyses different approaches currently being discussed for a mandatory Japanese ETS regarding their ability for linkages to other trading schemes.