Overview of the Voluntary Action Plan in Japan and Quantitative ...€¦ · 2 ♦ Japan achieved the Kyoto target which was -6% relative to 1990 for the period of 2008-2012, reaching

Overview of the Voluntary Action Plan in Japan and Quantitative Analyses on the

Emission Reduction Efforts

Technical Workshop on Policy Approaches for Industrial Sector in the Climate-Energy Interface

January 16, 2015

Keigo Akimoto, Kohko Tokushige, Junichiro Oda Fuminori Sano, Takashi Homma, Kenichi Wada Systems Analysis Group Research Institute of Innovative Technology for the Earth (RITE)

Introduction 2

♦ Japan achieved the Kyoto target which was -6% relative to 1990 for the period of 2008-2012, reaching -8.4%.

♦ The Keidanren Voluntary Action Plan (VAP) on the Environment which was introduced in 1997 made an important contribution to the achievement of Japan’s emission target for the KP.

♦ It will be important to make efforts of the same level to reduce GHG emissions across countries and industrial sectors while they have different condition. For example, the emission reduction efforts cannot be evaluated only by the emission reduction ratios relative to a reference year.

♦ GHG emission reductions for the first commitment period of the Kyoto Protocol in Japan were quantitatively evaluated by using several indicators focusing particularly on the Keidanren VAP.

3 History of VAP in Japan

Source: IEEJ

1996 Keidanren Environment Appeal (implementation policy for Action Plan on the Environment) released 1997 Keidanren Action Plan on the Environment released 1997 Kyoto Protocol adopted 1998 First follow-up on the Keidanren Action Plan both by the Keidanren and Japanese government (annual follow-ups thereafter) 2009 Keidanren Commitment to a Low Carbon Society (pledges of emission reduction efforts toward 2020) formulated and released 2013 Keidanren Commitment to a Low Carbon Society initiated

29

38

4755

59

72 73 76 78 79

89

103 105111 112

114 114

3 4 4 4 4 4 4 4 3 3 3 4 4 4 4 4 4

19

2431

3539 40 39 42 43 44 45

49 49 51 52 52 52

3

55

99

14 15 15 17 1724

32 3438 38 40 40

4

5

77

7

14 15 15 15 15

17

18 1818 18 18 18

0

20

40

60

80

100

120

140

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Total Energy conversion Industrial Business/ commercial Transportation

4

Establishment of the PDCA Cycle in the VAP of Keidanren

Source: Keidanren

Keidanren and Japanese government established the PDCA cycle in the VAP, which have review processes by the government, Keidanren, and each business association.

5 The Ratio of the VAP in the Total Emissions in Japan

- The emissions of the industry and energy conversion business associations participating in the Keidanren VAP accounted for about 80% of these sectors’ emissions and about 50% of total national emissions in 1990.

Source: IEEJ

as of June 30, 2014

Business / commercial sector （27,237）

Voluntary Action Plan 5,743 (21%)

Commitment to a Low Carbon Society 2,981 (11%)

Industrial and energy conversion sectors （50,535）



based on FY 2012 emissions data （10,000t-CO2）

Transportation sector （22,634）



1

3

1

15

7

20

22

21

8

5

9

7

8

7

4

0 10 20 30 40 50

Other targets

Energy intensitytarget

Energyconsumption target

CO2 intensity target

CO2 emissiontarget

Number of business association

Energy conversion Industry Commercial Transport

6

Number of Participant Business Associations and Their Targets of the VAP in Japan

- The VAP in Japan had several kinds of targets reflecting the characteristics of several kinds of business associations. - CO2 emission and CO2 intensity targets were adopted in relatively many of the industrial sectors, and energy intensity target was adopted in relatively many of the commercial sectors.

Source: IEEJ

0 5 10 15 20 25 30 35 40

below 50%

50%-100%

100%-110%

110%-150%

150%-300%

300% and moreU

nach

ieve

dAc

hiev

ed

Unachieved Achievedbelow50%

50%-100%

100%-110%

110%-150%

150%-300%

300% andmore

CO2 emission target 2 5 3 7 8 4CO2 intensity target 8 1 5 13 4 2Energy consumption target 1 2 1 2 3 1Energy intensity target 7 4 6 14 6 5

7 Achievement of the Targets of the VAP

- 84 business associations in 114 associations achieved their targets. - Most of the associations whose results were below 50% of their targets were energy or CO2 intensity targets.

Source: IEEJ

8

1. Evaluations of Japanese efforts including the Voluntary Action Plan based on comparative analysis with major countries

1) Comparative evaluation of energy intensity & CO2 intensity at macro-level => influenced by industrial structure 2) Comparative evaluation of improvement ratio of energy intensity at macro-level => Improvement rate tends to be low when large improvements had already been made, leaving little room for further improvements. Economies experiencing substantial economic growth tend to have large improvement rates of intensity, vice versa 3) Comparative evaluation of explanations of changes in energy intensity by changes in economic activity in order to see whether improvement measures are taken regardless of economic conditions => However, large uncertainties in evaluations 4) Comparative evaluation of energy efficiency in major sectors (e.g., electricity generation, iron and steel, cement) => Difficulties in evaluating large number of sectors 5) Evaluation of marginal abatement costs and the GDP impacts through model based analyses => Large uncertainties in analysis

Overview of the Ex-post Evaluation for the VAP (1/2)

9

2. Evaluation of the Voluntary Action Plan 1) Evaluation of rate of reduction from baseline estimated based on a kind of extrapolation => Given large uncertainties in baseline estimates, difficult to determine a common definition 2) Evaluation of improvement rate of energy intensity in each sector committed to Voluntary Action Plan => Improvement rate tends to be low when large improvements had already been made, leaving little room for further improvements. Economies experiencing substantial economic growth tend to have large improvement rates of intensity, vice versa 3) Evaluation of explanations of changes in economic activity by changes in energy intensity for the business associations committed to Voluntary Action Plan in order to evaluate the possibility of improvement measures taken regardless of economic indicators => However, large uncertainties in evaluations 4) Comparative analysis between committed and non-committed sectors to Voluntary Action Plan => Difficulties in analysis due to differences in types of data available for analysis. 5) Comparative evaluation with Tokyo Metropolitan Government’s emission trading scheme => Limitations in analysis as Tokyo scheme also yet to be evaluated and no trading of emissions 6) Assessment of costs involved with individual measures => few cases with adequate data for cost estimations

Overview of the Ex-post Evaluation for the VAP (2/2)

0 0.5 1 1.5 2

UkraineRussian …Bulgaria

RomaniaCzech …

PolandHungaryCanadaFinland

United StatesNew Zealand

AustraliaPortugal

FranceGermany

JapanSpain

AustriaNorway

LuxembourgItalyUK

TPES/GDP (toe/thousands 2005 US$)

2010

2005

2000

1990

Japan’s energy intensity level is very high but not the highest when it is calculated by using market exchange rate of 2005 US$.

Energy intensity per macroeconomic GDP is largely influenced by currency exchange rates and industrial structure; and therefore, requires careful evaluation.

10

Comparison of Energy Intensity among Annex I Countries

Market Exchange Rate of 2005 US$ US1$=JPY110=Euro0.80

Factor analysis of emissions trends (1990-2010) − Comparison of major economies −

1995

/199

0

2000

/199

5

2005

/200

0

2010

/200

5

2010

/199

0

英国-5

-4

-3

-2

-1

0

1

2

3

4

5

1995

/199

0

2000

/199

5

2005

/200

0

2010

/200

5

2010

/199

0

ΔPOP

ΔCO2

日本

(%/yr)

1995

/199

0

2000

/199

5

2005

/200

0

2010

/200

5

2010

/199

0

米国

1995

/199

0

2000

/199

5

2005

/200

0

2010

/200

5

2010

/199

0

ドイツ

Δ(CO2gross/TPES)

Δ(TPES/TFC)

Δ(TFC/GDP)

Δ(GDP/POP)

ΔPOP

ΔCO2

Japan US Germany UK

Positive GDP growth over past two decades in all 4 countries. Influenced by economic crisis in 2005-2010 (excluding Germany), CO2 emissions follow negative trend.

Overall improvements in energy intensity (excluding certain periods in Japan and Germany)

Relatively strong relationship of increase in GDP and decrease in CO2 intensity of GDP (CO2 per GDP) can be observed. That means, only improvement in CO2 intensity cannot indicate the CO2 reduction efforts.

11

Japan

Germany

UK

France

U.S.CanadaAustralia

Ukraine

Russia

ItalyNorway

Spain AustriaFinland

Portugal

Luxembourg

NZ

Romania

BulgariaCzech

Hungary

Poland

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70

Ener

gy in

tens

ity in

201

0 (1

990=

1)

Decision coefficient (R2) of ΔTotal primary energy supply/GDP and ΔGDP/POP (1990-2010)

Improvements

Deterioration

High explanationLow explanation

12

- Countries whose energy intensity changes are explained well by changes of per-capita GDP seem to have achieved their intensity improvements without a large efforts. - The amount of energy intensity improvement ratio alone cannot be an indicator of the efforts of energy intensity improvement.

Energy intensity improvement, and the explanations (R2) for annual improvement in energy intensity by annual increase in

economic growth between 1990 and 2010

23.1 23.5

25.9

28.3 27.7 28.128.9 29.1

30.0

33.134.5

22.923.8

25.726.8

27.7 28.2 28.3 28.3

30.331.1

33.2

10

15

20

25

30

35

Japan Korea Germany China France UK India Brazil US Russia Ukraine

Prim

ary

ener

gy co

nsum

ptio

n of

BO

F st

eel

(GJ/

ton

of c

rude

stee

l)

2005 2010

Comparison of Energy Efficiency in Major Energy-intensive Sectors (1/2) 13

Coal power

25

27

29

31

33

35

37

39

41

43

1990 1995 2000 2005 2010

Effic

ienc

y (%

)

China

US

India

Japan

Germany

South Africa

Korea

Russia

EU (27)

World

Source) RITE, 2014 based on IEA, 2013

Iron & steel (BOF steel)

Source) Oda et al. 2012; RITE, 2012

Comparisons by sector reveal that Japan has high energy efficiency levels in major sectors

4.2 4.03.5 3.7

3.1

4.2

3.3

5.4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

US UK France Germany Japan China India Russia

Ther

mal

ene

rgy c

onsu

mpt

ion

for

clin

ker p

rodu

ctio

n (G

J/to

n of

clin

ker)

Comparison of Energy Efficiency in Major Energy-intensive Sectors (2/2) 14

Cement

Source: estimate by RITE based on WBCSD/CSI, etc.

Source: IEA, ETP2012

Chemical / Petrochemical

2010 marginal abatement cost estimates using a technology-oriented bottom-up world energy model 15

57

30

38

15

37

00

10

20

30

40

50

60

70

日本米国カナダ EU27 ノルウェー豪州 NZ ロシア

CO

2限界

削減

費用

（$/

tCO

2）

Analysis using world energy technology model DNE21+ (2010)

Notes: 1) Analysis used national historical emissions as upper limits for emission in model. For EU27 the figure in graph represents country with highest cost (Germany). Estimates for UK:17$/tCO2; France:16$/tCO2; Italy: 8$/tCO2. 2) Solar power and wind power being introduced regardless of cost-effectiveness supported by FIT and other measures, analyzed separately under model constraint of introduced volume. Therefore, these marginal costs are excluded from those shown in graph.

A model-based cost analysis may provide results with relatively large uncertainties. However, can be judged from these results that Japanese measures required larger reduction efforts than those of other countries.

Emission reduction efforts cannot be easily evaluated using a single index due to the diversity of baselines defined by potential economic growth etc., historical energy efficiency efforts, and availability of energy resources including renewable energy among different countries. However, marginal abatement costs efficiently represent reduction efforts. Marginal abatement costs estimated from 2010 emissions for Annex I countries.

Marg

inal C

O2 ab

ateme

nt co

sts ($

/tCO2

)

Japan US Canada Norway EU27 Australia NZ Russia

Trajectory of Energy Intensity in Japan 16

Source: EDMC, 2013

The energy intensity of Japan had been improved drastically before year of 1997 when the Keidanren’s Voluntary Action Plan started.

900

1000

1100

1200

1300

1400

1500

1600

1975

1980

1985

1990

1995

2000

2005

2010

Tota

l prim

ary

ener

gy s

uppl

y pe

r GD

P (to

e/bi

llion

JPY)

Keidanren's Volantary Action Plan (1997-)

The energy conservation law (1978-)

17

Source: MOE, 2014

The emission from industry was reduced in 2008-2012 relative to 1990. The most of the emissions are covered by the Voluntary Action Plan.

Reference year (1990 or 1995)

FY2008 FY2009 FY2010 FY2011 FY2012 Average between FY2008 and FY2012

Energy CO2 1059 1138 1075 1123 1173 1208 1144 (+6.7%) Industry 482 419 388 421 417 418 413 (-5.5%) Transport 217 236 230 233 230 226 231 (+1.1%) Commercial 164 234 215 217 250 272 238 (+5.8%) Residential 127 171 162 172 189 203 179 (+4.1%) Energy conversion 68 79 80 81 88 88 83 (+1.2%) Non-energy CO2 85 75 66 68 68 68 69 (-1.3%) Other GHGs * 117 68 64 64 65 67 66 (-4.0%) Total 1261 1281 1206 1256 1307 1343 1278 (+1.4%) Sink (forestation etc.) – -46 -47 -49 -51 -53 -49 (-3.9%) KP emission credit – – – – – – -74 (-5.9%) KP target – – – – – – 1156 (-8.4%)

The Keidanren’s Voluntary Action Plan covers about 80% of total CO2 emissions from industry and energy conversion sectors in Japan.

GHG emissions between 2008 and 2012 in Japan

Analysis of reductions from estimated baseline 18

Energy intensity

Energy consumption

CO2 intensity CO2 emissions

Federation of Electric Power Companies of Japan (FEPC)

0.96

0.96

[0.91] 1.05(1.04)

1.05(1.04)

The Japan Iron and Steel Federation (JISF) 1.02

[0.85] 0.84

0.85(0.84)

0.85(0.84)

Japan Cement Association (JCA) [1.00] 1.00

1.00

1.03(1.02)

1.03(1.02)

Japan Chemical Industry Association (JCIA) [0.85] 0.90

0.90

0.90(0.87)

0.90(0.87)

Japan Automobile Manufacturers Association (JAMA) / Japan Auto-Body Industries Association (JABIA)

0.66

0.66

0.72(0.67)

[0.84] 0.72(0.67)

4 electrical and electronics associations 0.71

0.71

[0.83] 0.86(0.76)

0.86(0.76)

Japan Machine Tool Builders’ Association (JMBTA) [0.94] 1.11

[0.97] 1.11

1.23(1.11)

1.23(1.11)

Targets upper reduction values, and actual performance against baseline performance (=1.0) estimated by applying actual energy intensity and CO2 emission intensity performance data of 1997 for the following years using actual performance data for production (only selected business associations

- Targets in almost all sectors stricter than baseline performance values defined/estimated here. Actual performance worsened in some sectors compared to baseline performance, but improved in majority of sectors. - Difficult to actually estimate baselines, especially defining sector-specific and company-specific baselines, as detailed cost-related data required for that. Voluntary action plans are considered suitable and appropriate method since defining explicit baselines is difficult.

-14

-12

-10

-8

-6

-4

-2

0

2

4

-8 -6 -4 -2 0 2 4 6 8 10 12

Ener

gy in

tens

ity in

dex

(199

7-20

10, %

/yr)

Production activity index (1997-2010, %/yr)

(Japan Electric Wire and Cable Makers' Association (optical fiber)

[Japan Gas Association]

Changes in economic activity and energy intensity of business associations of the Voluntary Action Plan (1997-2010) (Cont’d) 19

Increased (Worsened) energy intensity

Increased energy consumption

NEXT SLIDE

Changes in economic activity and energy intensity of business associations of the Voluntary Action Plan (1997-2010) 20

Energy intensity and energy consumption in many business associations decreased during 1997-2010, but energy intensity and/or energy consumption in some associations increased.

-5

-4

-3

-2

-1

0

1

2

-6 -5 -4 -3 -2 -1 0 1 2 3 4 5

Ener

gy in

tens

ity in

dex

(199

7-20

10, %

/yr)

Production activity index (1997-2010, %/yr)

Brewers Association of Japan

Japan Association of Rolling Stock Industries

Japan Automobile Manufacturers Association, Japan Auto-body Industries Association

Japan Sanitary Equipment Industry Association

Japan Industry Vehicles Association

The Japan Rubber Manufacturers Association

Japan Federation of Housing Organizations

Japan Society of Industrial Machinery

The Federation of Pharmaceutical Manufacturers' Association of Japan, Japan Pharmaceutical Manufacturers Association

Japan Sugar Refiners' Association

[The four electrical/electronics-related groups]

[Japan Auto Parts Industries Association]

[The Japan Soft Drinks Association]

[Japan Bearing Industrial Association]

[Federation of Electric Power Companies]

[Japan Petroleum Development Association]

[Japan Federation of Construction Contractors]

[Flour Millers Association]

<(Japan Machine Tool Builders' Association)>

<Japan Electric Wire and Cable Makers Association (copper/aluminum)>

<Japan Iron and Steel Federation>

<Lime Manufacture Association>

<Flat Glass Association>

(Petroleum Association of Japan)

[(Japan Paper Association)]

(Japan Mining Industry Association)

(Japan Aluminum Association)

(Japan Brass Makers Association )

(Japan Chemical Industry Association)

(Japan Dairy Industry Association )

(Cement Association of Japan)

(Limestone Association of Japan)

◆: Energy intensity, ◇: Energy consumption, ◇: CO2 intensity, +: CO2 emission

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Ener

gy in

tens

ity in

201

0 (1

990=

1*)

Decision coefficient (R2) of ∆production activity index and ∆energy intensiry index (1997-2010)


[Japan Auto Parts Industries Association]

(Japan Electric Wire and Cable Makers' Association (optical fiber)


Japan Automobile Manufacturers Association, Japan Auto-body Industries Association



<(Japan Machine Tool Builders' Association)>

<Flat Glass Association>

[The Japan Soft Drinks Association]


(Petroleum Association of Japan)


[Japan Gas Association]

<Japan Electric Wire and Cable Makers Association (copper/aluminum)>

[Japan Bearing Industrial Association]

[(Japan Paper Association)](Japan Mining

Industry Association)


[Federation of Electric Power Companies]

[Japan Petroleum Development Association]

[The four electrical/electronics-related groups]

(Japan Aluminum Association)

<Japan Iron and Steel Federation>

(Japan Brass Makers Association )(Japan Chemical

Industry Association)

(Japan Dairy Industry Association )


(Cement Association of Japan)

(Limestone Association of Japan)

(The Shipbuilders' Association of Japan, The Cooperative Association of Japan Shipbuilders)

[Japan Federation of Construction Contractors]

[Flour Millers Association]

<Lime Manufacture Association>

Japan Sugar Refiners' Association

Deterioration

High explanation

Improvements

Low explanation

Improvements due to increased production activity!?

Improvements achieved through reduction efforts!?

Aggravation due to decreased production activity!?

Not enough effort!?

- Target-specific pattern (among energy consumption, energy intensity, CO2 emissions and CO2 intensity targets) cannot be observed from plotting of sectors. - Most sectors whose energy intensities worsened seemed to be affected by low production activities.

21

Energy intensity change in 2010 relative to 1990, and the explanations (R2) for annual improvement in energy intensity by annual increase in economic activity

between 1997 and 2010 across industrial associations participating in VAP

◆: Energy intensity, ◇: Energy consumption, ◇: CO2 intensity, +: CO2 emission

22

The associations with emission target which achieved their targets Business association Target Result Estimate

1 Japan Gas Association 0.26 0.24 0.24 2 Japan Iron and Steel Federation 0.90 0.893 0.93

3 Japan Automobile Manufacturers Association, Japan Auto-body Industries Association 0.75 0.60 0.61

4 Japan Auto Parts Industries Association 0.93 0.765 0.75

5 Lime Manufacture Association (energy) 0.90 0.718 0.82 (CO2) 0.90 0.691 0.78

6 The Japan Rubber Manufacturers Association 0.90 0.70 0.77

7 Flat Glass Association (energy) 0.79 0.62 0.67 (CO2) 0.78 0.63 0.66

8 Japan Electric Wire and Cable Makers Association (copper/aluminum) 0.71 0.62 0.64

9 Japan Society of Industrial Machinery Manufacturers 0.878 0.856 1.03 10 Japan Sanitary Equipment Industry Association 0.75 0.497 0.53 11 Japan Industry Vehicles Association 0.90 0.766 0.85

12 Japan Textile Finishers' Association (energy) 0.45 0.391 0.40 (CO2) 0.38 0.337 0.34

13 Japan Glass Bottle Association (energy) 0.70 0.585 0.57 (CO2) 0.60 0.466 0.45

14 Japan Foreign Trade Council 0.59 0.53 0.53

Business association Target Result Estimate 1 Japan Brass Makers Association 0.9095 1.0081 0.88

2 Japan Machine Tool Builders’ Association 0.94 0.99 0.73

3 Japan Franchise Association 0.77 0.782 0.75 4 Limestone Association of Japan 0.90 0.921 0.84

The associations with intensity target which did not achieved their targets

Note 1) Federation of Electric Power Companies is excluded for this analysis.

Note 2) The following estimates were conducted; Production activity modification: exploration of the activity by using the average change rate between1990 and 2006; Intensity modification: using the modified production activity and the regression analysis results between production activity change and intensity change. CO2 intensity of electricity is fixed at 305 gCO2/kWh excluding the impact of the Earthquake on the intensity of electricity.

- The 12 business associations of the associations with emission target which achieved their targets (14 associations) could have achieved their targets even if the activity reductions had not occurred between 2008 and 2012 due to economic recessions, the Great East Japan Earthquake etc. - All the business associations of the associations with intensity targets which did not achieve their targets (four associations) could have achieved their targets if the activity reductions had not occurred between 2008 and 2012

Impacts of Economic Recessions and the Earthquake on Emission Reduction Consequences (For 44 Associations under METI’s FU)

Conclusion (1/2) 23

♦ Japan was able to achieve the target of a 6% reduction in GHG emissions relative to the 1990 level in the first commitment period of the KP.

♦ The VAP made an important contribution to the achievement of Japan’s emission target for the KP through plural review processes within the PDCA cycle.

♦ It is not easy to judge whether emission reduction efforts have been conducted appropriately because each subject (e.g., country, industrial associations, company) has to take actions under very different conditions. This study tried a comprehensive evaluation using several analyses.

♦ According to the international comparison analyses for the emission reduction measures, the energy intensity relative to GDP in Japan is good but is not necessarily the best in the world, depending on the market exchange rate, industrial structures etc. However, when energy intensity level in major sectors across countries, marginal abatement costs etc. are evaluated together with the energy intensity of GDP, it is judged that large efforts have been made for emission reductions in Japan.

Conclusion (2/2) 24

♦ According to the quantitative analyses for emission reduction measures of industrial associations participating in the Voluntary Action Plan, the energy intensities of some of the associations increased (worsen), and the amount of energy consumption of some of the associations increased. However, according to the analysis result for explanations of between production activity changes and energy intensity changes, the worse in energy intensities can be largely explained by the worse in production activity.

♦ This study also indicates that emission reduction measures with considerable costs were conducted even under the Voluntary Action Plan, although the cost estimates are relatively high uncertain.

♦ The participating associations reported their actions and results to the Keidanren and the government and were annually reviewed by their respective committees. In addition, the peer review systems were considered to have worked well across the business associations within the Keidanren and across the member companies under each business association, with peer pressure having an effect on their efforts.

Appendix

0 0.5 1 1.5 2

UkraineRussian …Bulgaria

RomaniaCzech …

HungaryPolandCanada

New ZealandFinland

AustraliaUnited States

PortugalSpain

FranceNorway

GermanyLuxembourg

AustriaItalyUK

Japan

TPES/GDP (toe/thousands 2000 US$)

2010

2005

2000

1990

26

Comparison of Energy Intensity Measured by MER2000US$ among Annex I Countries

Market Exchange Rate of 2000 US$ US1$=JPY108=Euro1.09 Japan’s energy

intensity level is the highest when it is calculated by using market exchange rate of 2000 US$.

0 0.5 1 1.5 2

UkraineRussian …FinlandCanadaBulgaria

Czech …United StatesNew Zealand

PolandHungaryAustraliaRomania

NorwayFranceJapan

LuxembourgGermany

AustriaItaly

SpainPortugal

UK

TPES/GDP PPP (toe/thousands 2005 US$)

2010200520001990

27

Comparison of Energy Intensity Measured by PPP among Annex I Countries

PPP of 2005 US$

Energy Assessment Model: DNE21+ ♦ Linear programming model (minimizing world energy system cost)

♦ Evaluation time period: 2000-2050 ♦ World divided into 54 regions

♦ Bottom-up modeling for technologies both in energy supply and demand sides (200-300 specific technologies are modeled.)

♦ Primary energy: coal, oil, natural gas, hydro, geothermal, wind, photovoltaics, biomass, nuclear power, and ocean energy

♦ Electricity demand and supply are formulated for 4 time periods: instantaneous peak, peak, intermediate and off-peak periods

♦ Interregional trade: coal, crude oil, natural gas, ethanol, hydrogen, electricity and CO2

♦ Existing facility vintages are explicitly modeled.

Representative time points: 2000, 2005, 2010, 2015, 2020, 2025, 2030, 2040, 2050

Large area countries are further divided into 3-8 regions, and the world is divided into 77 regions.

28

The frame work of the DNE21+ model is similar to the IEA ETP model.

When any policy (e.g., emissions reduction targets, specific efficiency improvements goals, carbon taxes) are applied, the model finds out the energy systems whose costs are minimized.

29

Cement

Iron and Steel

Electricity emission intensity based on respective national data for 2010.

With high energy efficiency levels, marginal abatement costs are high for Japan’s iron & steel and cement sectors, and thus little room for further reductions.

0

20

40

60

80

100

120

140

0 2 4 6 8 10 12 14 CO2 reduction rate against baseline [%]

US EU27 Japan

China

India

World total

Mar

gina

l CO

2 ab

atem

ent c

osts

($/t

CO2)

0

100

200

300

400

500

600

700

0 5 10 15 20

CO2限

界削

減費用

[$/t

CO2]

ベースライン比CO2削減率 [%]

米国

EU27

日本

中国

インド

Mar

gina

l CO

2 ab

atem

ent c

osts

($/t

CO2)

CO2 reduction rate against baseline [%]

US

Japan China India

2010 marginal abatement cost estimates for major sectors using a technology-oriented bottom-up model

Energy-Economic Model: DEARS (Dynamic Energy-economic Analysis model with multi-Regions and multi-Sectors)

♦ Integration model of top-down-typed economic module and bottom-up-typed energy systems module

♦ Dynamic non-linear optimization model (Maximization of global consumption utility) ♦ Evaluation time period: up to middle of this century (10 years steps) ♦ World divided into 18 regions ♦ Non-energy sector into 18 sectors ♦ Energy：8 types of primary energy and 4 types of secondary energy ♦ Economic module that represents international economic structures based on input-

output tables of GTAP (Global Trade Analysis Project) database ♦ Simplified energy systems module

Bottom-up modeling for technologies in energy supply (e.g., power generation) and CCS (carbon capture and storage)

Primary energy (8 types): Coal, Crude oil, Natural gas, hydro&geothermal, wind, photovoltaics, Biomass and Nuclear

Top-down modeling for energy demand (Residential sector: price and income elasticities of demand for energy and income, Industrial and transport sectors: price elasticiy. Those are linked to economic module.)

Final energy (4 types): Solid, Liquid and Gaseous fuels and Electricity

30

- 1.72%

- 0.07%

0.17% 0.24% 0.34%

- 0.93%

0.19%

0.00%

- 2.0%

- 1.5%

- 1.0%

- 0.5%

0.0%

0.5%

US EU NAI

(1) GDP

losses

gains

31

Assessment of impact on entire economy with an energy-economic model

(2)Iron and steel sector (3)Cement and ceramics sector(cement)

Larger economic impacts are estimated for Japan in terms of GDP loss and sector-specific added-value loss. Analysis for international economic impact is complex as reduced consumption affects production in other countries, etc.

World energy-economic model DEARS-based analysis (2010)

Assessing world economic impacts by treating marginal abatement costs estimated by technology-model (DNE21+ model) as exogenous condition in energy-economic model DEARS

- 4.98%

- 0.83%

0.42% 0.08% 0.34%

- 0.05%

1.64%

- 0.04%

- 6.0% - 5.0% - 4.0% - 3.0% - 2.0% - 1.0% 0.0% 1.0% 2.0%

Japan US Canada EU Australia/NZ

former USSR

NAI World Total

GDP

cha

nges

by

sect

or

(com

pare

d to

refe

renc

e)

GDP

cha

nges

by

sect

or

(com

pare

d to

refe

renc

e)

Japan Canada Australia/NZ World Total

former USSR

- 0.39%

- 0.01% - 0.03% - 0.03%

0.05%

- 0.07%

0.02%

- 0.06%

- 0.5%

- 0.4%

- 0.3%

- 0.2%

- 0.1%

0.0%

0.1%

Japan

US Canada EU Australia/NZ Former

USSR NAI World total

GDP

chan

ges

(com

pare

d to

refe

renc

e)

32

The Participant Business Associations under the Follow-ups of Keidanren and Japanese Government

Commercial (14)

Energy Conversion & Industry (34)

Transport (13)

[6]

Commercial (12)

Energy Conversion & Industry (29)

Keidanren’s VAP - Follow-up (61)

Follow-up by METI’s committee (41)

Follow-up by the committees of several ministries (114)

[24]

Net CO2 emission reductions in 2012. ♦: emissions reduced from 1990 levels, ♦: emissions increased from 1990 levels

33

Energy intensity change in 2012 relative to 1990 and the explanations (R2) for annual improvement in energy intensity by annual increase in economic activity

between 1997 and 2012 across industrial associations participating in VAP

-Evaluations including periods after Great East Japan Earthquake need be carefully conducted as capacity utilization ratio drops and increased use of non-utility power generating facilities were induced by earthquake.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Ener

gy in

tens

ity in

201

0 (1

990=

1*)

Decision coefficient (R2) of ∆production activity index and ∆energy intensiry index (1997-2012)

Deterioration

High explanation

Improvements

Low explanation

Japan Electric Wire and Cable Makers' Association (optical fiber)



Japan Automobile Manufacturers Association, Japan Auto-body Industries Association[Japan Bearing

Industrial Association]

Japan Chemical Industry Association

Japan Iron and Steel Federation

Japan Electric Wire and Cable Makers Association (copper/aluminum)

Japan Dairy Industry Association Japan Sugar Refiners'

Association

Flour Millers Association

Japan Gas Association

The Japan Soft Drinks Association

Flat Glass Association



Japan Brass Makers Association

Japan Machine Tool Builders' Association


The four electrical/electronics-related groups

Japan Aluminum Association


Japan Mining Industry Association

The Shipbuilders' Association of Japan, The Cooperative Association of Japan Shipbuilders

Japan Petroleum Development Association


Japan Auto Parts Industries Association

Japan Federation of Construction Contractors

Japan Paper Association

Limestone Association of Japan

Lime Manufacture Association


Cement Association of Japan

Federation of Electric Power Companies

Petroleum Association of Japan

Comparison of Voluntary Action Plan and Tokyo Cap and Trade Program (Building Sector)

Items Voluntary Action Plan (RECAJ*)

Tokyo Cap and Trade (offices)

Major targets energy consumption per unit floor area

CO2 emission reduction from baseline

-8%/-6%

Index energy intensity energy-related CO2

Period 1997-2012 First phase:2010-2014 Second phase：2015-2019

Rate of change 2010=>2011

(energy intensity) -11.0%

(CO2 emissions) -11.5%

Compliance period annual five years

Participants industry groups business operators （facilities, under EUETS)

Credits Kyoto mechanism credits applicable domestic credits only

• VA involves many energy-intensive industries while Tokyo Cap and Trade mainly covers large buildings.

• Limitation in available and comparable data →Comparisons of measures taken by office sector

• Despite large differences in terms of approaches, comparison of actual measures implemented revealed similar level of efforts, including use of credits.

*RECAJ: The Real Estate Companies Association of Japan

34

Features of Tokyo Cap and Trade Program 35

0%

20%

40%

60%

80%

100%

-40,000 -20,000 0 20,000 40,000 60,000累

積確

率円/t-CO2

Cumulative distribution of measures by cost

Note: Costs for reduction measures varied, this study basically employed costs provided by reduction option in Evaluation of cost benefits (B/C) based on a consideration of costs incurred by low-carbonization in the household and office sector and non-energy benefits (NEB) (2009). For data deficiencies, additional data provided from Nishio et al (2011) Cost benefits and barriers to energy efficiency measures in the office sector and Tokyo Metropolitan Government Bureau of Environment (2013) Total emission reduction obligations and assessment of transaction prices under Tokyo Cap and Trade Program

Measures taken under Tokyo Cap and Trade (offices)

Driving

Others Emissions trading, etc. Cogeneration, new energy, 1%

Energy saving in buildings

Heat

Air conditioning

Hot water

Lighting, OA equipment

Cum

ulat

ive

prob

abili

ty

yen/t-CO2

-Measures under Tokyo Caps and Trade mostly require little cost, with measures less than 0 yen accounting for 98.1% of all measures. Caps and trades programs do not necessarily entail stringent measures. - Careful administrative action in order to remove barriers to energy efficiency; and hence, significant additional costs on the part of administrative and business operators. - Inactive emissions trading. Credit purchases centered on Tradable Green Certificates, purchased for CSR purposes.

Case studies of reduction costs for emission reduction measures (iron and steel) 36

Case 1. Replacement with combined cycle at joint thermal power plants

Replacement of existing steam-powered units with combined-cycle units despite uncertainties of future iron and steel demand forecasts

Compared with steam-powered units allowing highly flexible operation, combined-cycle units entail investment of 2700 yen/tCO2 (when five-years payout time is adopted)

Case 2. Charging waste plastics into

coke oven One of few options for CO2 reduction,

utilization of waste plastic rapidly increased in 2000

However, investments in waste plastic co-coking plants amounted to approx. 13000 yen/tCO2 (when five-years payout time is adopted)

Actual trends beyond 2005 reveal tendency to avoid investment in facilities using waste plastic co-coking technologies.

Under Voluntary Action Plan, certain costs have been accepted for efforts to reduce CO2 emissions. However, case studies imply that cost-inefficient investments are being avoided.

Documents

Overview of the Voluntary Action Plan in Japan and Quantitative ...€¦ · 2 ♦ Japan achieved the Kyoto target which was -6% relative to 1990 for the period of 2008-2012, reaching