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Success and Failure of the Voluntary Action Plan: Disaggregated Sector Decomposition Analysis of Energy-related CO2 Emissions in Japan

Author

Listed:
  • Guanyu Lu

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

  • Makoto Sugino

    (Faculty of Literature and Social Sciences, Yamagata University, 1-4-12 Kojirakawa-machi Yamagata-shi, Yamagata, 990-8560, Japan)

  • 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.)

  • Tetsuya Horie

    (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo 169-8050, Japan)

Abstract

To accomplish the goal of greenhouse gas (GHG) emissions reduction, the Japanese Business Federation (JBF) has implemented the voluntary action plan (VAP), a unique feature of which does not penalize industrial firms or organizations, even if they fail to meet the CO2 emissions or energy consumption reduction goals. This study evaluates the role of VAP in emission reduction by analyzing highly disaggregated data from 1980 to 2015 of approximately 400 sectors using the logarithmic mean Divisia index (LMDI) method. The results indicate that the increase in CO2 emissions among Japanese industries is mainly caused by the increase in indirect CO2 emissions. Moreover, the energy consumption structure has progressively shifted from fossil fuels to electricity. The decomposition analysis highlights two key points. (1) The VAP is ineffective in reducing emissions in sectors with low market concentration. (2) The energy intensity target of the VAP does not lead to a significant reduction in CO2 emissions. Thus, this study concludes that the contribution of the VAP in reducing CO2 emissions is limited. Evidence from our research suggests three directions for future policy design and implications.

Suggested Citation

  • Guanyu Lu & Makoto Sugino & Toshi H. Arimura & Tetsuya Horie, 2021. "Success and Failure of the Voluntary Action Plan: Disaggregated Sector Decomposition Analysis of Energy-related CO2 Emissions in Japan," RIEEM Discussion Paper Series 21021, Research Institute for Environmental Economics and Management, Waseda University.
    • Handle: RePEc:was:dpaper:21021
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    2. LU Guanyu & TANAKA Kenta & ARIMURA Toshi H., 2023. "The Impacts of the Tokyo and Saitama ETSs on the Energy Efficiency Performance of Manufacturing Facilities," Discussion papers 23007, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Voluntary action plan; Decomposition analysis; Japan;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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