Fukuda, who will host a meeting of the leaders of the Group of Eight developed countries in Japan next month, said he hopes to use that summit to help create an international consensus about measures to deal with greenhouse gas reduction.
Japan, which Fukuda said is already a leader in the worldwide effort to reduce greenhouse gases, is willing to take difficult measures to set an example for others.
"All nations of the world, including our own, must participate in this effort to make it work," he said in a policy speech. "We can bolster Japan's standing in international society and strengthen our economy further by taking a leading role in the CO2 reduction revolution."
To show its resolve, Fukuda said Japan will reduce its carbon dioxide emissions by 60-80 percent by 2050 as part of what he has dubbed Japan's "Cool Earth Initiative." He also called on the nations of the world to strive to cut by half the global carbon dioxide output by 2050. G-8 summit leaders voiced support for that last year.
Fukuda acknowledged that is a tall order.
"This will involve extreme effort," he said.
Japan is struggling to meet obligations under the Kyoto global warming pact to cut emissions of greenhouse gases by 6 percent below 1990 levels by 2012.
Fukuda said that although Japan's carbon dioxide emissions have been rising slightly in recent years, they are expected to peak soon. He said a reduction of 14 percent from current levels is possible by Japan over the next 12 years.
European nations support a U.N. scientific finding that emissions cuts of between 25 percent to 40 percent by 2020 are needed to stop global temperatures from rising so high they trigger widespread environmental damage.
Realistically, however, Fukuda said the EU nations are looking at a reduction of about 14 percent from current levels, a target he said Japan can match. The EU's higher numbers are based on reductions from 1990 levels -- the baseline used in the Kyoto talks.
While saying a 14 percent reduction was possible, Fukuda stopped short of formally setting a 2020 target, saying he would do that later.
The United States, which has refused to set similar targets, considers such cuts beyond reach. Developing nations, meanwhile, are clamoring for commitments by rich countries before they discuss what poorer countries should do.
On the controversial topic of emissions trading, Fukuda said Japan will take a more supportive role in establishing rules and a framework that can be agreed upon internationally.
"It is important to create a market that is based on healthy, real demand, not on a money game," he said.
Emissions trading involves the setting of caps and credits on greenhouse gas production. Any company or nation emitting levels higher than those allotted would have to buy credits from those emitting lower levels.
Fukuda said Japan would use a broad range of strategies to reduce its emissions, including investment in new technologies, stiff construction standards to create energy efficient buildings, an array of tax incentives and a public awareness campaign.