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Causal effects of the Tokyo emissions trading scheme on energy consumption and economic performance

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  • Abe, Tatsuya
  • Arimura, Toshi H.

Abstract

The Tokyo emissions trading scheme (ETS) is the first regional ETS in Japan, where a national ETS has not been introduced. In this study, we estimate the policy impacts of the Tokyo ETS on energy usage and economic activities during the scheme’s first phase (2010–2014) and the first four years of its second phase (2015–2018) using business establishment-level panel data from 2007 to 2018. From the matching-based difference-in-differences (DID) estimation results, we find that while regulated business establishments reduced their energy usage beyond their reduction targets set by ETS regulation, the unregulated business establishments chosen by the matching strategy as a comparison group also decreased their energy usage to the same extent. Additionally, the Tokyo ETS did not have a negative impact on the economic activities of regulated business establishments during phases I and II. These results suggest that the emissions cap levels in each phase may not have been sufficiently demanding to induce regulated business establishments to implement additional energy use reduction practices.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:enepol:v:168:y:2022:i:c:s0301421522003767
    DOI: 10.1016/j.enpol.2022.113151
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    References listed on IDEAS

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    Cited by:

    1. Ying Zhang & Yingli Huang, 2023. "Killing Two Birds with One Stone or Missing One of Them? The Synergistic Governance Effect of China’s Carbon Emissions Trading Scheme on Pollution Control and Carbon Emission Reduction," Sustainability, MDPI, vol. 15(13), pages 1-25, June.
    2. Jia, Xiao & Takeuchi, Kenji, 2024. "Induced innovation in power generation technologies: Evidence from the Tokyo–Saitama Emissions Trading System," Energy Economics, Elsevier, vol. 129(C).

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    More about this item

    Keywords

    Emissions trading; Policy evaluation; Energy consumption; Employment; Difference-in-differences; Matching;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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