The panel, chaired by former Bank of Japan Governor Toshihiko Fukui, will further study the options -- which also include a 7 percent reduction and a 15-16 percent decrease -- before the government sets a national midterm emissions reduction target by June.
A 2020 target is seen as crucial for Japan and other countries because it is a major focus of U.N. talks for a successor treaty to the Kyoto Protocol, which expires in 2012. The talks are scheduled to conclude at a key U.N. climate change conference in Copenhagen in December.
Of the options, the first two -- 4 percent growth and a 7 percent reduction -- are based on long-term energy demand the Ministry of Economy, Trade and Industry has estimated.
Additional options seek reductions of between zero to 3 percent for Japan if developed countries as a group were to slash emissions by 25 percent by 2020 with each spending the same to cut 1 ton of carbon dioxide.
The panel, however, has yet to draw up a specific figure on one option that calls for each developed country to spend the same amount of money in relation to gross domestic product to rein in emissions by 25 percent for industrial economies as a group.
Some options estimate possible economic impacts of CO2-reducing efforts.
The option of a 25 percent reduction would push down Japan's GDP by 3.2-6.0 percent on a cumulative basis by 2020, while the option of a 15-16 percent contraction would shrink GDP by 0.8-2.1 percent.
Japan, the world's fourth-largest emitter after the United States, China and Russia, has already pledged to slash its emissions 60 to 80 percent by 2050 from current levels.
Among other industrialized economies, the European Union is committed to cutting emissions by 30 percent by 2020 from 1990 levels on condition that other industrial economies ensure comparable reductions. Australia says it will rein in emissions by 5 percent in 2020 from 2000 levels.
U.S. President Barack Obama has pledged to slash emissions to 1990 levels by 2020 before reducing them a further 80 percent by 2050.
