Research article Topical Sections

What would be the effects of a carbon tax in Japan: an historic analysis of subsidies and fuel pricing on the iron & steel, chemical, and machinery industries

  • Received: 29 March 2016 Accepted: 14 June 2016 Published: 19 June 2016
  • This study examines how a carbon tax could affect industrial-related carbon dioxide (CO2) emissions in Japan. Rather than forecasting the effects of a tax, the paper employs a time-series autoregressive moving average (ARMA) model to determine how past subsidies and fuel price changes affected investments in energy and carbon intensity in Japan’s iron & steel, chemical, and machinery industries from 1993 to 2004. The results suggest the impacts varied greatly across industries. In the iron & steel industry, subsidies and price changes produced negligible effects on investments in energy and carbon intensity. This may be because existing iron & steel technologies have long lifetimes and substantial replacement costs. It may also be because the few large companies dominating the industry were relatively immune to subsidy provisions and pricing changes. In the chemical industry, subsidies and fuel prices gave rise to investments that improved carbon and energy intensity. This may be because the industry has relatively higher operation costs that could be cut easily given financial incentives. In the machinery industry, two of three fuel price changes (oil and gas), but not subsidy provisions, yielded improvements in carbon and energy intensity. This may reflect the heterogeneity of companies and products comprising the industry. Overall, the study underscores that policymakers need to tailor the rates and revenue recycling provisions of a carbon tax to an industry’s unique features to stimulate CO2 reductions.

    Citation: Takako Wakiyama, Eric Zusman. What would be the effects of a carbon tax in Japan: an historic analysis of subsidies and fuel pricing on the iron & steel, chemical, and machinery industries[J]. AIMS Energy, 2016, 4(4): 606-632. doi: 10.3934/energy.2016.4.606

    Related Papers:

  • This study examines how a carbon tax could affect industrial-related carbon dioxide (CO2) emissions in Japan. Rather than forecasting the effects of a tax, the paper employs a time-series autoregressive moving average (ARMA) model to determine how past subsidies and fuel price changes affected investments in energy and carbon intensity in Japan’s iron & steel, chemical, and machinery industries from 1993 to 2004. The results suggest the impacts varied greatly across industries. In the iron & steel industry, subsidies and price changes produced negligible effects on investments in energy and carbon intensity. This may be because existing iron & steel technologies have long lifetimes and substantial replacement costs. It may also be because the few large companies dominating the industry were relatively immune to subsidy provisions and pricing changes. In the chemical industry, subsidies and fuel prices gave rise to investments that improved carbon and energy intensity. This may be because the industry has relatively higher operation costs that could be cut easily given financial incentives. In the machinery industry, two of three fuel price changes (oil and gas), but not subsidy provisions, yielded improvements in carbon and energy intensity. This may reflect the heterogeneity of companies and products comprising the industry. Overall, the study underscores that policymakers need to tailor the rates and revenue recycling provisions of a carbon tax to an industry’s unique features to stimulate CO2 reductions.


    加载中
    [1] MOE (2012) Details on the carbon tax (Tax for climate change mitigation). Ministry of Enviornment. Available from: https://www.env.go.jp/en/policy/tax/env-tax/20121001a_dct.pdf
    [2] OECD (2015) Climate Change Mitigation: Policies and Progress. Lecture Notes in Energy Available from: http://www.scopus.com/inward/record.url?eid=2-s2.0-84883007033&partnerID=tZOtx3y1
    [3] OECD (2011) Environmental Taxation. Available from: https://www.oecd.org/env/tools-evaluation/48164926.pdf
    [4] Aldy JE, Stavins RN (2012) The Promise and Problems of Pricing Carbon: Theory and Experience. National Bureau of Economic Research.
    [5] OECD (2008) Promoting Sustainable Consumption Good Practices in OECD Countries. Available from: http://www.oecd.org/greengrowth/40317373.pdf
    [6] Sugiyama T (2009) Learning from Japan’s Experience in Energy Conservation. SERC Discussion Paper.
    [7] GIO. National Greenhouse Gas Inventory Report of Japan (Japanese). Minist Environ Japan Greenh Gas Invent Off Japan (GIO), CGER, NIES [Internet]. 2015; Available from: http://www-gio.nies.go.jp/aboutghg/nir/2015/NIR-JPN-2015-v3.0_web.pdf
    [8] CAO (2013) Gross domestic products by activity data (Japanese). Cabinet Office, Government of Japan (CAO). Available from: http://www.esri.cao.go.jp/jp/sna/data/data_list/kakuhou/files/h25/h25_kaku_top.html
    [9] Manning CP, Fruehan RJ (2001) Emerging Technologies for Iron and Steelmaking. J Miner Metal Mater Soc 53: 20–23.
    [10] METI (2014) Energy conservation measures in industrial sector (Japanese). Energy Conservation Subcommittee. Advisory Committee on Energy and Natural Resources General Meeting.
    [11] Raupach MR, Marland G, Ciais P, et al. (2007). Global and regional drivers of accelerating CO2 emissions. Proc Nat Acad Sci USA 104: 10288–10293. doi: 10.1073/pnas.0700609104
    [12] Kawase R, Matsuoka Y, Fujino J (2006) Decomposition analysis of CO2 emission in long-term climate stabilization scenarios. Energ Policy 34: 2113–22. doi: 10.1016/j.enpol.2005.02.005
    [13] Gillingham K, Newell RG, Palmer K (2009) Energy Efficiency Economics and Policy. Resources for the Future, Discussion papers.
    [14] Sun JW (1998) Changes in energy consumption and energy intensity: A complete decomposition model. Energ Economics 20: 85–100.
    [15] Miketa A (2001) Analysis of energy intensity developments in manufacturing sectors in industrialized and developing countries. Energ Policy 29: 769–75. doi: 10.1016/S0301-4215(01)00010-6
    [16] Hammond GP, Norman JB (2012) Decomposition analysis of energy-related carbon emissions from UK manufacturing. Energy 41: 220–7. doi: 10.1016/j.energy.2011.06.035
    [17] Paul S, Bhattacharya RN (2004) CO2 emission from energy use in India: a decomposition analysis. Energ Policy 32: 585–93. doi: 10.1016/S0301-4215(02)00311-7
    [18] Takase K, Suzuki T (2011) The Japanese energy sector: Current situation, and future paths. Energ Policy 39: 6731–44. doi: 10.1016/j.enpol.2010.01.036
    [19] Wu L, Kaneko S, Matsuoka S (2005) Driving forces behind the stagnancy of China’s energy-related CO2 emissions from 1996 to 1999: the relative importance of structural change, intensity change and scale change. Energ Policy 33: 319–35. doi: 10.1016/j.enpol.2003.08.003
    [20] Hunt LC, Ninomiya Y (2005) Primary energy demand in Japan: an empirical analysis of long-term trends and future CO2 emissions. Energ Policy 33: 1409–24. doi: 10.1016/j.enpol.2003.12.019
    [21] IPCC (2007) Energy Supply. Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change.
    [22] IPCC (2011) Introduction: Renewable Energy and Climate Change. IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation.
    [23] Kagawa S, Inamura H (2001) A Structural Decomposition of Energy Consumption Based on a Hybrid Rectangular Input-Output Framework: Japan’s Case. Econ Syst Res 13: 339–63.
    [24] Stijepovic MZ, Linke P (2011) Optimal waste heat recovery and reuse in industrial zones. Energy 36: 4019–31.
    [25] Worrell E, Bernstein L, Roy J, et al. (2008) Industrial energy efficiency and climate change mitigation. Energ Effic 2: 109–23.
    [26] METI (2007) Energy White paper (Japanese). Ministry of Economy, Trade and Industry. Available from: http://www.enecho.meti.go.jp/about/whitepaper/2007html/2-1-1.html
    [27] Crusoe EK (2013) Japan’s Energy Insecurities: What are the Implications on its Economic and Environmental Targets? CAR (CEPMLP Annual Review).
    [28] Iida T (2011) 21st century energy paradigm shifts (Japanese). Chem Factory. Vol 64–11.
    [29] Hayashi M, Hughes L (2013) The policy responses to the Fukushima nuclear accident and their effect on Japanese energy security. Energ Policy 59: 86–101. doi: 10.1016/j.enpol.2012.08.059
    [30] Sugiyama T, Noda F, Kimura O (2011) Energy conservation policy theory - the effectiveness of the Energy Conservation Law in factories and offices. (Japanese). Energy Forum.
    [31] IEA (2011) Energy Efficiency Policy & Carbon. Pricing. Energy Efficiency Series. Energy Available from: http://www.abhatoo.net.ma/index.php/fre/content/download/18421/330602/file/TRANSPORT_ENERGY_EFFICIENCY.pdf
    [32] Marron D, Toder E, Austin L (2015) Taxing Carbon: What, Why, and How. Tax Policy Center | Uurban Institute & Brooking Institution.
    [33] IEA (2008) Energy and Climate Change. World Energy Outlook Special Report. 2015.
    [34] UNEP. Reforming Energy Subsidies. United Nations Environment Programme, Division of Technology, Industry and Economics. Available from: http://www.unep.org/pdf/pressreleases/reforming_energy_subsidies.pdf
    [35] UNEP (2003) Energy Subsidies: Lessons Learned in Assessing their Impact and Designing Policy Reforms. United Nations Environment Programme, Division of Technology, Industry and Economics. Available from: http://www.unep.ch/etb/publication/energySubsidies/Energysubrep
    ort.pdf
    [36] OECD (2010) Analysis of the scope of energy subsidies and suggestions for the G20 initiative. IEA, OPEC, OECD, World Bank join report. Prepared for submission to the G-20 Summit Meeting, Toronto. Available from: https://www.oecd.org/env/45575666.pdf
    [37] Kemp R (2000) Technology and Environmental Policy — Innovation effects of past.
    [38] Bennear LS, Stavins RN (2007) Second-best theory and the use of multiple policy instruments. Environ Resour Econ 37: 111–129. doi: 10.1007/s10640-007-9110-y
    [39] Fullerton D, Mohr RD (2002) Suggested Subsidies are Sub-optimal Unless Combined with an Output Tax. NBER Working Paper.
    [40] MOF (2006) Comprehensive Handbook of Japanese Taxes. Ministry of Finance. Available from: http://www.mof.go.jp/english/tax_policy/publication/comprehensive_handbook_2006e/
    [41] MOF (2012) Guidebook of special account (Japanese). Ministry of Finance. Available from: http://www.mof.go.jp/budget/topics/special_account/fy2015/tokkai2712_00.pdf
    [42] Kilian L (2008) The Economie Effects of Energy Price Shocks. J Econ Liter - Am Econ Assoc 46: 871–909.
    [43] Bjørner TB, Jensen HH (2002) Interfuel Substitution within Industrial Companies: An Analysis Based on Panel Data at Company Level. Energy 23: 27–50.
    [44] Hoshino Y (2010) An estimation of price elasticity of energy demand in Japan -Considering the influence of asymmetry and energy demand trend (Japanese). CRIEPI Working Paper.
    [45] NIES (2008) Japan Scenarios and Actions towards Low-Carbon Societies (LCSs). Japan-UK Joint Research Project “a Sustain Low-Carbon Soc (LCS)” Glob Environ Res Fund (GERF/S-3-1) National Institute of Environmental Studies (NIES), Kyoto University, Ritsumeikan University, Mizuho Informationa Research Institute.
    [46] IAC (2007) Lighting the way Toward a sustainable energy future. Interacademy Council. 31(October).
    [47] IPCC (2014) Climate Change: Mitigation of Climate Change [Internet]. Working Group III Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change.
    [48] IPCC (2007) Mitigation of climate change: Contribution of working group III to the fourth assessment report of the Intergovernmental Panel on Climate Change. Intergovernmental Panel on Climate Change. 851 p.
    [49] Kimura O, Ofuji K (2013) Additionality and cost effectiveness of subsidy programs for energy efficiency - A case study of NEDO programs - (Japanese). Central Research Institute of the Electricity Power Industry (CRIEPI). Available from: http://criepi.denken.or.jp/jp/kenkikaku/
    report/download/LdJmc9HZn6yW5Id5sGrVWo6MCaDjMhWB/report.pdf
    [50] Droege S (2013) Carbon pricing and its future role for energy- intensive industries. Climate Strategies.
    [51] LCICG (2012) Technology Innovation Needs Assessment: Industrial Sector Summary Report. Low Carbon Innovation Co-ordination Group.
    [52] Monogan JE (2015) Political Analysis Using R. Springer.
    [53] Buelens C (2012) Inflation forecasting and the crisis: assessing the impact on the performance of different forecasting models and methods. European Commission Directorate-General for Economic and Financial Affairs.
    [54] Pan B, Wu DC, Song H (2012) Forecasting hotel room demand using search engine data. J Hospital Tour Technol 3: 196–210. doi: 10.1108/17579881211264486
    [55] Ocampo S, Rodríguez N (2012) An Introductory Review of a Structural VAR-X Estimation and Applications. Revista Colombiana de Estadística. Available from: http://www.scielo.org.co/
    scielo.php?pid=S0120-17512012000300009&script=sci_arttext&tlng=en
    [56] EDMC (2015) EDMC Handbook of Japan’s & World Energy & Economic Statistics. Energy Conserv Center.
    [57] R&I (2015) Iron and steel industry (Japanese). Rating and Investment Information, Inc. Available from: https://www.r-i.co.jp/jpn/body/cfp/topics_methodology_01/2015/08/topics_
    methodology_01_20150831_742507238_01.pdf
    [58] Uezono M (1997) Energy conservation measures in iron and steel industry triggered by oil crisis in Japan (Japanese). Society of Business Research , Osaka City University.
    [59] Adams W, Mueller H (1982) Industrial Energy Use: Steel industry. The structure of American industry.74–125.
    [60] Tihansky DP (1972) A Cost Analysis of Waste Management in the Steel Industry. J Air Pollut Control Assoc 22: 335–41. doi: 10.1080/00022470.1972.10469642
    [61] Keidanren (2014) Follow-up results of Voluntary Action Plan on the Environment FY2013 (Japanese). Japan Business Federation.
    [62] JCIA (2013) Chemical Industry of Japan. Japan Chemical Industry Association. Available from: https://www.nikkakyo.org/sites/default/files/nikkakyou_eng_ALL_0.pdf
    [63] FEPC (2014) Environmental action Plan in electricity sector 2014 (Japanese). Available from: https://www.fepc.or.jp/environment/warming/koudou_keikaku/pdf/2014.pdf
    [64] ICF (2015) Study on Energy Efficiency and Energy Saving Potential in Industry from possible Policy Mechanisms. ICF Consultant.
    [65] de Beer J (2000) Potential for Industrial Energy-Efficiency Improvement in the Long Term. Springer Science & Business Media.
    [66] Wakiyama T, Zusman E, Monogan JE (2014) Can a low-carbon-energy transition be sustained in post-Fukushima Japan? Assessing the varying impacts of exogenous shocks. Energ Policy 73: 654–66.
    [67] Dimitropoulos J, Hunt LC, Judge G (2004) Estimating Underlying Energy Demand Trends using UK Annual Data. Surrey Energy Economics Centre (SEEC) Department of Economics SEEDS.
    [68] Gelo T (2009) Causality between economic growth and energy consumption in Croatia. Zbornik Radova Ekonomskog Fakulteta U Rijeci.
    [69] Tiwari AK (2011) Energy consumption, co 2 emissions and economic growth: evidence from India. Appl Econ Int Develop 12: 85–122.
    [70] Sylvester A, Benedict A, Kingsley I (2015) A VAR Analysis of the Relationship between Energy Consumption and Economic Growth in Nigeria. J Econ Sustain Develop 6: 1–13.
  • Reader Comments
  • © 2016 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
通讯作者: 陈斌, bchen63@163.com
  • 1. 

    沈阳化工大学材料科学与工程学院 沈阳 110142

  1. 本站搜索
  2. 百度学术搜索
  3. 万方数据库搜索
  4. CNKI搜索

Metrics

Article views(4985) PDF downloads(1304) Cited by(7)

Article outline

Figures and Tables

Figures(2)  /  Tables(37)

Other Articles By Authors

/

DownLoad:  Full-Size Img  PowerPoint
Return
Return

Catalog