The Impact of the Tokyo Emissions Trading Scheme on Office Buildings: What Factor Contributed to the Emission Reduction?
Research Institute for Environmental Economics and Management, Discussion Paper Series No. 1908
20 Pages Posted: 27 Nov 2019
Date Written: November 15, 2019
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.
Keywords: Emission Trading Scheme, Electricity, Micro Data, Office buildings, Climate Change
JEL Classification: Q54, Q41
Suggested Citation: Suggested Citation