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The Impact of the Tokyo Emissions Trading Scheme on Office Buildings: What factor contributed to the emission reduction?

Author

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  • Toshi H. Arimura

    (Faculty of Political Science and Economics & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.)

  • Tatsuya Abe

    (Graduate School of Economics, Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.)

Abstract

The Tokyo ETS is the first emission trading scheme to control GHG emissions from office buildings. Although the Tokyo government claimed that Tokyo ETS had been successful, some argued that the emission reduction under Tokyo ETS was actually the result of electric power price increases triggered by the Great East Japan Earthquake in 2011. Using a facility-level data set for Japanese office buildings, we conducted an econometric analysis to examine the impact of Tokyo ETS. We found that half of the emission reduction is a result of the ETS, while the rest of the reduction is due to the electricity power price increase. Another unique feature of Tokyo ETS is that an accurate permit price is not publicly available due to its design. Using our estimated model, we found that the price is approximately $50 per ton of CO2 in the early phase.

Suggested Citation

  • Toshi H. Arimura & Tatsuya Abe, 2019. "The Impact of the Tokyo Emissions Trading Scheme on Office Buildings: What factor contributed to the emission reduction?," RIEEM Discussion Paper Series 1908, Research Institute for Environmental Economics and Management, Waseda University.
    • Handle: RePEc:was:dpaper:1908
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    Cited by:

    1. Song, Xiangnan & Pan, Chuwen & Yuan, Hongping & Wang, Zeyu, 2024. "Does emission trading system (ETS) deserve further promotion in the building sector? Evidence from China," Renewable Energy, Elsevier, vol. 237(PB).
    2. Yuuki Yoshimoto & Koki Kishimoto & Kanchan Kumar Sen & Takako Fujiwara & Andrew Chapman, 2023. "Toward Economically Efficient Carbon Reduction: Contrasting Greening Plastic Supply Chains with Alternative Energy Policy Approaches," Sustainability, MDPI, vol. 15(17), pages 1-19, September.
    3. Dries Couckuyt & Toshi H. Arimura & Takuro Miyamoto & Naonari Yajima, 2023. "Green Policymaking in Japanese Municipalities: An Empirical Study on External and Internal Contextual Factors," Sustainability, MDPI, vol. 15(9), pages 1-26, April.
    4. Lurdes Jesus Ferreira & Luís Pereira Dias & Jieling Liu, 2022. "Adopting Carbon Pricing Tools at the Local Level: A City Case Study in Portugal," Sustainability, MDPI, vol. 14(3), pages 1-20, February.
    5. Mortha, Aline & Yajima, Naonari & Arimura, Toshi H., 2024. "Impact of the feed-in-tariff exemption on energy consumption in Japanese industrial plants," Japan and the World Economy, Elsevier, vol. 69(C).
    6. Shiro Takeda & Toshi H. Arimura, 2020. "A Computable General Equilibrium Analysis of Environmental Tax Reform in Japan," RIEEM Discussion Paper Series 2002, Research Institute for Environmental Economics and Management, Waseda University.
    7. Mitsutsugu Hamamoto, 2021. "Impact of the Saitama Prefecture Target-Setting Emissions Trading Program on the adoption of low-carbon technology," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(3), pages 501-515, July.
    8. Satoshi Nakano & Ayu Washizu, 2021. "Analysis of inter-regional effects caused by the wide-area operation of the power grid in Japan: an implication for carbon pricing schemes," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(3), pages 535-556, July.
    9. Dawei Huang & Gang Chen, 2022. "Can the Carbon Emissions Trading System Improve the Green Total Factor Productivity of the Pilot Cities?—A Spatial Difference-in-Differences Econometric Analysis in China," IJERPH, MDPI, vol. 19(3), pages 1-18, January.
    10. Lu, Guanyu & Sugino, Makoto & Arimura, Toshi H. & Horie, Tetsuya, 2022. "Success and failure of the voluntary action plan: Disaggregated sector decomposition analysis of energy-related CO2 emissions in Japan," Energy Policy, Elsevier, vol. 163(C).
    11. Sadayuki, Taisuke & Arimura, Toshi H., 2021. "Do regional emission trading schemes lead to carbon leakage within firms? Evidence from Japan," Energy Economics, Elsevier, vol. 104(C).
    12. An, Young-sub & Kim, Jong-kyu & Joo, Hong-Jin & Lee, Wang-Jae & Han, Gwang-woo & Kim, Haneul & Kim, Min-Hwi, 2023. "Experimental performance analysis of photovoltaic systems applied to an positive energy community based on building renovation," Renewable Energy, Elsevier, vol. 219(P1).
    13. Abe, Tatsuya & Arimura, Toshi H., 2022. "Causal effects of the Tokyo emissions trading scheme on energy consumption and economic performance," Energy Policy, Elsevier, vol. 168(C).
    14. Mitsutsugu Hamamoto, 2019. "Impact of the Saitama Prefecture Target-Setting Emissions Trading Program on the Adoption of Low-Carbon Technology," RIEEM Discussion Paper Series 1909, Research Institute for Environmental Economics and Management, Waseda University.
    15. Fernando Mata & Meirielly Santos Jesus & Concha Cano-Díaz & Maria Dos-Santos, 2023. "European Citizens’ Worries and Self-Responsibility towards Climate Change," Sustainability, MDPI, vol. 15(8), pages 1-13, April.
    16. Hwang, In Chang & Yi, Yoonhye & Lee, Hyun-jung & Baek, Jong-rak, 2025. "Implementing Seoul's greenhouse gas management in buildings: Insights from the SICE model," Energy Policy, Elsevier, vol. 198(C).

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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