Environment, social, and governance (ESG) reporting guidelines are institutional rules that can enhance the credibility of firms' publicly disclosed information related to ESG. Reporting is often voluntary and global ESG reporting guidelines typically rely on process-focused third party verification. However, in developing its reporting guidelines, the Japanese government gave firms the unusual option of pursuing either process- or content-focused verification. This paper draws on the unique Japanese setting to examine whether firms that use ESG reporting guidelines increase their quantity of disclosed sustainability information. Furthermore, it assesses whether, given the option, (1) firms tend to pursue process- or content-focused verification, and (2) which type of verification leads to greater information disclosure. We show that firms that follow ESG guidelines disclose 39% more sustainability information compared to firms that publish sustainability reports but do not follow ESG reporting guidelines. Content-focused verification leads to greater information disclosure than process-focused verification in that firms publish 23% more text in their sustainability reports. Moreover, given the option, firms prefer to use content- over process-focused verification. However, most global ESG reporting guidelines endorse process-focused verification and this verification is less effective than content-focused verification at encouraging firms' information disclosure. Our findings raise a timely and relevant question about the movement by global ESG standard developers to promote process- rather than content-focused verification. They also suggest that firms that wish to create sustainability distinction by way of ESG reporting may benefit by advocating for more robust forms of verification.

<title>Abstract</title>To reduce their environmental impacts, a growing number of organizations worldwide have implemented environmental management systems (EMSs). In these organizations, energy conservation activities become usual behaviors for employees; thus, we hypothesize that employees continue such energy saving behaviors at home. This hypothesis is supported by data from surveys of individuals in Japan. Specifically, we find that the probability of engaging in energy saving practices at home is higher and that expenditures on electricity use are lower for individuals who work in organizations that implement EMSs than for individuals who do not work in organizations with EMSs. Our results suggest that beyond the original purpose of helping organizations reduce their environmental impacts, EMSs work as an intervention to promote household energy saving.

In this study, we analyzed the external effects of wind turbines, which are often considered detrimental to the promotion of wind power generation. Understanding these externalities is essential to reaching a consensus with residents who live near the site of a planned wind turbine. Our research objective was to determine the relationship between wind turbines and people’s well-being in areas where they have been installed for a long time. We hypothesized that wind turbines would have a negative impact on people’s well-being. We conducted a survey by postal mail in Chōshi City, Chiba Prefecture, Japan, to examine the external effects of wind turbines, adopting a subjective well-being index to measure respondents’ well-being. Regression analysis suggests that having a view of wind power turbines has a positive effect on the subjective well-being of local residents. Moreover, the results indicate that such well-being increases with increasing distance from the turbines. Except for scenic elements, we found that wind turbines are not always considered desirable by residents. Therefore, it is important to further clarify the external influence of wind turbines and other facilities in local communities.

<title>Abstract</title>The Japanese government plans to reduce greenhouse gas emissions by 80% by 2050. However, it is not yet clear which policy measures the government will adopt to achieve this goal. In this regard, environmental tax reform, which is the combination of carbon regulation and the reduction of existing distortionary taxes, has attracted much attention. This paper examines the effects of an environmental tax reform in Japan. Using a dynamic computable general equilibrium (CGE) model, we analyze the quantitative impacts of an environmental tax reform and clarify which types of environmental tax reform are the most desirable. In the simulation, we introduce a carbon tax and consider the following four scenarios for the use of the carbon tax revenue: (1) a lump-sum rebate to the household, (2) a cut in income taxes, (3) a cut in corporate taxes and (4) a cut in consumption taxes. The first scenario is a pure carbon tax, and the other three scenarios are types of environmental tax reform. Our CGE simulation shows that (1) environmental tax reform tends to generate more desirable impacts than the pure carbon tax and that (2) the strong double dividend is obtained in some cases. In particular, we show that a cut in corporate taxes leads to the most desirable policy in terms of GDP and national income.

Many studies have empirically examined to what extent energy efficiency improvement causes rebound effects for various products. Energy efficiency improvement potentially induces behavioral changes resulting in a rebound effect. However, a limited number of studies have addressed what kind of behavioral changes the energy efficiency improvement of appliances can cause. For example, the energy efficiency improvement of air conditioners can induce a change in the room temperature setting. This paper examines whether the energy efficiency improvement of air conditioners impedes energy-saving behaviors. Specifically, using a Japanese household survey, we examined the energy-saving behaviors related to air conditioner usage: (1) setting the room temperature at 28 °C or higher in summer, (2) reducing unnecessary power consumption, and (3) cleaning the filters. We found that energy efficiency improvements reduce the probability of the behavior of setting air conditioner temperatures at 28 °C or more by approximately 25–45% during summer, while they have no impacts on the reduction of unnecessary air conditioner usage or filter cleaning. This finding implies that energy efficiency improvements may counteract the energy-saving behaviors of the temperature setting, resulting in a rebound effect. Thus, we clarified a mechanism of the rebound effect in the case of air conditioners.

The aim of this paper is to identify (1) the categories in which it is easier or more difficult for local municipalities to implement green purchasing and (2) the role and extent of green purchasing policy (GPP) in promoting green purchasing. To characterize the green purchasing potential of different categories, we examine the green purchasing rate, or the ratio of green products/services to total products/services purchased, of 21 categories of items. We employ data from a unique survey conducted by the Japanese Ministry of the Environment, which provides data on green procurement in municipalities. We observe that air conditioners suffer from low green purchasing rates, whereas most municipalities purchase green products in the paper products and stationery categories. We also examine the relationship between green purchasing rates and GPPs to identify the role and extent of GPPs. Our regression analyses reveal that the presence of a GPP is associated with higher implementation and measurement rates of green purchasing. This pattern is particularly evident for the categories in which many municipalities without GPPs purchase green products but, in most cases, do not measure their green purchasing rate.

<title>Abstract</title>
Carbon pricing is difficult to introduce in many countries because it is not easy to obtain public support for carbon pricing due to the burden associated with it. One way to overcome this difficulty is to rely on the double dividend of a carbon tax. If a government uses revenue from a carbon tax to reduce existing distorting taxes, such as corporate taxes or labor taxes, a carbon tax can improve economic efficiency while reducing greenhouse gas (GHG) emissions. This chapter examines the net burden of a carbon tax with revenue recycling (RR) for two types of stakeholders: firms and households. Using dynamiccomputable general equilibrium (CGE) modeling, we examine the carbon prices needed to achieve the emission targets set for 2030 and 2050. Then, we simulate two types of RR: corporate tax reduction and a reduction in social security payments. We compare the benefit of the tax reduction to the increase in the burden from the carbon tax in scenarios for 2030/2050. In the scenario of corporate tax reduction, by selecting firms from the land transportation sector and power sector, we examine how profit changes due to the carbon tax. We find that the tax burden for a firm in the land transportation sector can be eased greatly with the corporate tax reduction. In the scenario of the social security payment reduction, we find that some households are better off under carbon pricing despite expenditure increases due to the carbon tax. Thus, we show that RR can increase support for the carbon tax.

© 2021, The Author(s). This chapter estimated the impact of the Tokyo emissions trading scheme (ETS) and Saitama ETS on energy consumption in the manufacturing sector using a facility-level panel data set compiled from the Current Survey of Energy Consumption, a nationwide survey on energy consumption conducted by the Agency for Natural Resources and Energy in Japan. To our knowledge, no study has used this rich data set to perform sophisticated econometric analyses. We found that the Tokyo ETS reduced electricity consumption by 16%. On the other hand, we did not find evidences of switching from dirty fossil fuel to cleaner fuel associated with the introduction of the Tokyo ETS. The impact of the Saitama ETS on energy consumption was not statistically confirmed based on our samples. Additional studies are needed to identify the different impacts of the ETSs between Tokyo and Saitama. We also found that Japan has been experiencing long-term decreasing trends in the number of manufacturing facilities and the volume of fossil fuel consumption, which may reduce Japanese CO2 emissions in the long run.

<title>Abstract</title>
The Tokyo Emissions Trading Scheme (ETS) is the first cap -and-trade program of CO₂ emissions in Asia, and it is unique in regulating commercial and service sectors. We examine the impacts of the Tokyo ETS on CO₂ emissions and energy consumption by universities in the first phase. Focusing on universities allows us to estimate the effects of the Tokyo ETS separately from the economic stagnation Japan experienced after the Great East Japan Earthquake in 2011 because universities are less likely to be affected by economic fluctuations compared to other sectors. In addition to the ETS, other factors may have achieved CO₂ emissions reductions in Tokyo in this phase due to the influence of the earthquake. To deal with the shortage of electricity supply after the Fukushima disaster, several measures were undertaken, such as rolling blackouts and power-saving orders, particularly in the Tokyo Electricity Power Company’s jurisdiction. To capture the characteristics for each university at the campus level and their experience with being regulation targets of the policies mentioned above, we conducted a mail survey for universities in Japan and obtained panel data that contain information about both regulated and unregulated universities over 5 years (2009–2013). The difference-in-differences approach reveals that the Tokyo ETS caused regulated universities to reduce their CO₂ emissions and energy consumption by approximately 3–5% relative to unregulated universities in the first phase. In addition, we find that the quantitative regulations, such as rolling blackouts and power-saving orders, also had an impact on the universities’ behavior.

<title>Abstract</title>
In Japan, the government has set a target for a reduction in greenhouse gas (GHG) emissions by 26% from 2013 levels by 2030. The commercial sector has the highest reduction target—39.8%—among all Japanese sectors. This chapter first presents the current GHG situation in Japan and Japanese climate policy in the commercial sector. Second, we introduce a nationwide survey that we conducted on the implementation of energy efficiency measures (EEMs) in office buildings with large-scale emissions in Japan. The survey results show that energy-saving technology adoption is more advanced in Tokyo than in other prefectures and that there is more space for the adoption of energy-efficient technologies nationwide. To accelerate EEM adoption to achieve the 2030 target, regulatory agencies must improve the way they promote energy audits and subsidies and provide information on energy savings.

<title>Abstract</title>Tokyo ETS is the first emissions 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 electricity 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 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.

To attain cleaner air, it is important that authorities make informed decisions when selecting a strategy. Concentrations of particulate matter with an aerodynamic diameter of less than or equal to 2.5 mu m (PM 2.5) are high in the Tokyo metropolitan area, even though concentrations of particulate matter with an aerodynamic diameter of less than or equal to 10 mu m (PM10) have dropped dramatically since the implementation of the NOx-PM Act. Currently, monitored concentration levels continue to exceed the designated ambient air quality standard set by the Japanese Ministry of the Environment. To our knowledge, no study has investigated a cost-efficient strategy for reducing PM 2.5 concentration levels in the Tokyo metropolitan area. This is the first study to examine a proper control strategy for Japan by developing an integrated model that includes both aerosol and economic models. The simulation results show that prefectures in the Tokyo metropolitan area cannot achieve the standards by relying on their own efforts to reduce PM 2.5. That is, prefectural governments in the Tokyo metropolitan areas need to cooperate with prefectures outside of the area to improve their PM 2.5 concentration levels. Thus, we simulated policies under the assumption that emissions from other sources are reduced to levels such that the PM 2.5 concentration declines by approximately 18 mu g/m(3). We first simulated an efficient policy, i. e., the implementation of a pollution tax. We found that the total abatement cost to meet the air quality standard using the cost-efficient strategy is approximately 142.7 billion yen.

The reduction of emissions from developing countries is essential in tackling climate change. The Clean Development Mechanism is effective in reducing greenhouse emissions but criticized by various parties. In response, the Japanese government has proposed the Joint Crediting Mechanism (JCM). Using the 2010 Japanese domestic and the 2005 Asian international input–output tables, we disaggregate the automobile industry and other electrical devices and parts industry to capture hybrid vehicles and solar panels. Moreover, we add the wind turbine industry and the geothermal turbine industry in our analysis. In evaluating the JCM, we find that the multiplier impacts of hybrid vehicles, wind turbines and air conditioners are high, whereas boilers and solar panels produce smaller effects. In contrast, the results for the employment effects show that the coke dry quenching plants and lighting equipment create more jobs. We also estimate the emission reduction from the JCM. Taking into account the lifetime of each product/technology and country-specific emission coefficients, we find that lighting equipment’s emission reductions are the greatest, whereas washing machines’ reductions are the least. Thus, it is important to choose the technologies/items suitable for the JCM by balancing their economic and reduction effects. The government must assess various technologies/items before determining the eligibility of each technology/item.

This research empirically estimates abatement costs under the Clean Development Mechanism (CDM) in India, using project-level data for 830 projects that had been registered as of April 2014. Emphasis lies on assessing the impact of international technology transfer on abatement costs and on testing whether CDM projects in India have experienced a “low-hanging fruits” problem or have benefitted from learning effects. The results suggest that projects that include technology transfer have higher abatement costs. However, this does not appear to be universally applicable when assessing technology transfer by project type. Second, no conclusive evidence is found to support a “low-hanging fruits” problem, both empirically and based on the finding that most Indian projects are conducted unilaterally. On the contrary, some project types showed that abatement costs decrease as more projects are implemented. Finally, results suggest increasing returns to scale as well as economies of time in terms of project duration.

Using the Internet survey data from 6500 individuals, this study examines the determinants for supporting the restart of nuclear power plants operation in Japan. The variable of interest is the level of support that is measured as a categorical and ordered variable, for which ordered logit or probit is commonly estimated. This study departs from the literature using Bayesian ordinal quantile regression (Rahman 2015, Bayesian Anal. doi:10.1214/15-BA939) to address whether covariates have differential effects at various conditional quantiles of the latent response variable. This approach allows us to explore, for example, whether three otherwise identical individuals, the first with an average unobserved preference for the restart, the second with a low unobserved preference, and the third with a high unobserved preference, respond similarly or differently to a change in a covariate. The results show that for most of the covariates examined, including concerns about meltdowns and concerns about global warming, the effects differ across conditional quantiles of the latent response variable. In other words, the covariate effects depend crucially on individuals’ unobserved preferences for the restart (conditional on observables). The results also show that there are considerable gender differences in response to changes in covariates.

<p>In evaluating the value of the natural environment, subjective well-being index has gained attention. Using the subjective well-being index, we examined the value of natural capital in Japan. Specifically, we classified capital into four types: natural capital, physical capital, human capital and social capital. We constructed a micro data set on subjective well-being and other individual attributes by an internet survey from all over Japan. We matched natural capital and physical capital data at municipality level to the individual micro data. Regression analysis revealed that natural capital such as open water or plantation areas have a positive effect on the subjective well-being of local residents who are living near these areas. In order to improve the subjective well-being of the local residents, governments should adopt policies to preserve open water areas or plantations that provide the eco-system service for the use of the public.</p>

<p>Indoor air pollution from the combustion of traditional cooking fuels causes millions of annual premature deaths in the developing world. This study examines the socio-economic and demographic factors that affect household choices of cooking fuels used in India. Survey data collected from 68 households in the rural areas of West Bengal were analyzed. The results of the regression analyses show that the location of the kitchen and the availability of free fuel affect the choice of clean cooking fuels. Furthermore, household income, age and education level of the household head are positively associated with clean fuel choices, while household size and distance to the nearest market are negatively associated with clean fuel choices.</p>

<p>Recently, Japanese local governments have promoted climate policies. Notably, numerous provincial governments have adopted "Greenhouse Gas (GHG) Emission Reduction Program (ERP)". ERP requires facilities with a certain amount of GHG emission or more to make a plan to reduce GHG emission. Moreover, ERP mandates such facilities to report their GHG emissions annually. ERP, however, lacks of penalty for facilities failing to reduce GHG emissions. Thus, some criticize ERP due to the lack of the enforcement mechanism. This study empirically examines whether the introduction of ERP reduces GHG emission. Specifically, we collected GHG emission from 1990 to 2013 at provincial level together with the timing of ERP adoption for each provincial government. We conducted a panel data analysis and found that GHG emission per worker was reduced from 8 to 10 percent in the manufacturing sector. The estimation results hinted that ERP is effective in reducing GHG emissions in the manufacturing sector.</p>

From 1997 to 2012, 114 Japanese industry associations implemented voluntary action plans, which are not enforced by laws or regulations, to reduce carbon emissions. This paper investigates whether the establishment of these voluntary action plans by industry associations contributed to the adoption of a carbon emissions target at the firm level within the associations. Using a survey of approximately 1000 firms in Japan, this paper finds that small and medium-sized firms in sectors with voluntary action plans were 2-4 times more likely to establish their own carbon emissions targets than were firms belonging to industry associations without voluntary action plans. In contrast, the paper finds that voluntary action plans did not affect the establishment of emissions targets among firms with more than 3000 employees. This result is consistent with the survey responses, which found that periodic follow-ups under a voluntary action plan helped small firms to obtain important pieces of information and that industry associations played an important role in this process. In general, small firms have relatively large potential for energy saving, but the lack of information prevents its realization. The results, confirm the importance of voluntary action plans in removing the information barriers of relatively small firms and encouraging them to implement carbon emissions targets. (C) 2015 Elsevier Ltd. All rights reserved.

Using a household survey conducted in a suburb of Tokyo, we examine whether individuals properly perceive the benefits of energy-saving actions. A bivariate regression shows that, on average, individuals overestimate the benefits. The tendency to overestimate is robust to controlling for individual and home characteristics. Our results are contrary to those of Attari et al. (2011), who found that individuals in the U.S. tended to underestimate the benefits of energy-saving activities. The difference in our results suggests that the provision of information about the benefits of energy saving may be an effective policy to address global warming issues in one country but not necessarily in all countries. We also find that the magnitude of overestimation is greatest among young single males, whereas the benefits perceived by older married females are the smallest. This result suggests that the provision of tailored information (i.e., highly personalized and specific information) can be an effective intervention even in Japan. (C) 2014 International Energy Initiative. Published by Elsevier Inc. All rights reserved.

Recently, it is pointed out that environmental practices of SME are not carried out compared to large enterprises. This difference results from the fact that SMEs are exempt from environmental regulations. Thus it is necessary for SMEs to deal with environmental problem voluntary. In this study, we focus on ISO14001, which is a type of voluntary environmental practices recognized around the globe. We analyze if there are different incentives for acquiring ISO14001 certification and compare the improvements in environmental performance, between SME and large enterprises.<BR>We find that the main region of sales does not affect ISO14001 certification for large enterprises, although SMEs main region of sales affect ISO 14001 certification. In addition, SMEs have lower incentives to adopt ISO14001 certification than large enterprises. However, there is no difference in environmental performance between SMEs and large enterprises. The results also implied that support from the local governments for adopting ISO14001 is an effective measure that facilitates SMEs' voluntary environmental practices, which improves their environmental performance.

Recently, it is pointed out that environmental practices of SME are not carried out compared to large enterprises. This difference results from the fact that SMEs are exempt from environmental regulations. Thus it is necessary for SMEs to deal with environmental problem voluntary. In this study, we focus on ISO14001, which is a type of voluntary environmental practices recognized around the globe. We analyze if there are different incentives for acquiring ISO14001 certification and compare the improvements in environmental performance, between SME and large enterprises.<BR>We find that the main region of sales does not affect ISO14001 certification for large enterprises, although SMEs main region of sales affect ISO 14001 certification. In addition, SMEs have lower incentives to adopt ISO14001 certification than large enterprises. However, there is no difference in environmental performance between SMEs and large enterprises. The results also implied that support from the local governments for adopting ISO14001 is an effective measure that facilitates SMEs' voluntary environmental practices, which improves their environmental performance.

The adoption of domestic emissions trading schemes (ETS) can impose a heavy burden on energy-intensive industries. Particularly, energy-intensive industries competing with foreign competitors could lose their international edge. Although the abatement of CO2 emissions in industrialized countries entails the reduction of their energy-intensive production, a corresponding increase in the production of energy-intensive goods in countries without CO2 regulations may lead to carbon "leakage." This paper examines the effects of various allocation methods of emissions permits in the Japanese ETS on the economy and CO2 emissions using a multiregional and multisector computable general equilibrium model. Specifically, we apply the Fischer and Fox (Land Econ 83(4):575-599, 2007) model to the Japanese economy to address carbon leakage and competitiveness issues. We compare auction schemes, grandfathering schemes, and output-based allocation (OBA) schemes. We further extend the model by examining a combination of auctions and OBA. Though the auction scheme is found to be the best in terms of macroeconomic impacts, the leakage rate is high and the harm to energy-intensive sectors can be significant. OBA causes less leakage and damage to energy-intensive sectors, but the macroeconomic impact is undesirable. Considering all three effects-leakage, competitiveness, and macroeconomics-we find that combinations of auctions and OBA are desirable. © 2013 Springer Japan.

To address the climate change issue, developed nations have considered introducing carbon pricing mechanisms in the form of a carbon tax or an emissions trading scheme (ETS). Despite the small number of programmes actually in operation, these mechanisms remain under active discussion in a number of countries, including Japan. Using an input-output model of the Japanese economy, this article analyses the effects of carbon pricing on Japan's industrial sector. We also examine the impact of a rebate programme of the type proposed for energy-intensive trade-exposed (EITE) industries in U.S. legislation, the Waxman-Markey Bill (H.R. 2454), and in the European Union's ETS. We find that a carbon pricing scheme would impose a disproportionate burden on a limited number of sectors - namely, pig iron, crude steel (converters), cement and other EITE industries. Out of 401 industries, 23 would be eligible for rebates according to the Waxman-Markey-type programme, whereas 122 industries would be eligible for rebates according to the E.U.-type programme, if adopted in Japan. Overall, despite the differences in coverage, we find that the Waxman-Markey and E.U. rebate programmes have roughly similar impacts in reducing the average burden on EITE industries. (C) 2013 Elsevier Ltd. All rights reserved.

Technological innovation has recently become more essential than ever. To examine the factors that might induce environmental technological innovation, we focus on ISO 14001, a voluntary approach to environmental management, and scrutinise how the proficiency or maturity level of ISO 14001 in facilities influences environment-related research and development (R&D) expenditures that promote environmental technological innovation. We measure the maturity level based on the length of time since a given facility adopted ISO 14001. Using Japanese facility-level data from "Environmental Policy Tools and Firm-Level Management and Practices: An International Survey" (OECD Survey), we estimate two Tobit models by addressing an endogeneity issue in ISO 14001. The estimation results provide empirical evidence that as the ISO 14001 is improved in facilities, those facilities are likely to spend more on environmental R&D. The facility age and market concentration also positively affect environmental R&D. These findings suggest that the maturity level of ISO 14001 is an important factor influencing the investment in environmental R&D. (C) 2013 Elsevier B.V. All rights reserved.

Using a multi-region and multi-sector computable general equilibrium model, this paper evaluates the border adjustment policies of carbon regulations in Japan. We consider five types of border adjustments and examine their effects on the welfare, carbon leakage, and competitiveness of the Japanese energy-intensive trade-exposed (EITE) sectors.

Our analysis shows that no single border adjustment policy is superior to the other policies in terms of simultaneously solving three primary issues: Welfare degradation, carbon leakage, and a loss of competitiveness in the EITE sectors. In addition, we show that export border adjustments are effective at restoring the competitiveness of Japanese exporters and reducing leakage. Our analysis also reveals that border adjustment in Japan significantly affects carbon leakage to China and the competitiveness of the iron and steel sectors. Finally, we show that border adjustments with and without consideration of indirect emissions have similar impacts, which indicates that the information regarding direct emissions is sufficient for implementing border adjustment in Japan.

We analyze the cost-effectiveness of electric utility ratepayer funded programs to promote demand-side management (DSM) and energy efficiency (EE) investments. We specify a model that relates electricity demand to previous EE DSM spending, energy prices, income, weather, and other demand factors. In contrast to previous studies, we allow EE DSM spending to have a potential long-term demand effect and explicitly address possible endogeneity in spending. We find that current period EE DSM expenditures reduce electricity demand and that this effect persists for a number of years. Our findings suggest that ratepayer funded DSM expenditures between 1992 and 2006 produced a central estimate of 0.9 percent savings in electricity consumption over that time period and a 1.8 percent savings over all years. These energy savings came at an expected average cost to utilities of roughly 5 cents per kWh saved when future savings are discounted at a 5 percent rate.

This paper examines whether voluntary actions can lead to manufacturing sector investment that reduces environmental impact. Our approach relies on unique firm-level panel data. First, we investigate the effects of the Keidanren's (Japanese Business Federation) voluntary action plans (VAP) on investment in energy efficiency and environmental preservation. We also consider the type of VAP used by a firm, whether absolute or relative targets. We conclude that firms with absolute targets are more likely to invest in energy-efficiency processes than those with relative targets. Our simulation confirms that the use of absolute targets can increase investment in energy efficiency by 7%. Hence, we confirmed that voluntary action plans with absolute targets are effective in increasing investment related to energy efficiency. Second, we examine whether VAP promotes investment in low-emission processes at the expense of productive investment. We conclude that VAP promotes investment in energy efficiency and protecting the environment by reducing productive investment. Finally, our results did not verify the existence of a liquidity constraint for emission reduction investment for large firms. © 2011 Springer.

Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices. Facilities with environmental management systems (EMS) certified to ISO 14001 are 40% more likely to assess their suppliers&apos; environmental performance and 50% more likely to require that their suppliers undertake specific environmental practices. Further, government programs that encourage voluntary EMS adoption indirectly promote GSCM practices. These programs increase the probabilities that facilities will assess their suppliers&apos; environmental performance and require suppliers to undertake specific environmental practices by 7% and 8%, respectively. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion of voluntary action. (C) 2010 Elsevier Inc. All rights reserved.

This paper examines the vehicle type regulation that was introduced under the Automobile Nitrogen Oxides-Particulate Matter Law to mitigate air pollution in Japanese metropolitan areas. The vehicle type regulation effectively sets the timing for vehicle retirement by initial registration year and type. However, there was no consideration of cost or efficiency in choosing the timing of retirement. We solve an optimal problem to maximize the social net benefit under the current framework of the vehicle type regulation. The analysis finds that the net benefit can more than double if the optimal retirement timing is chosen. Further, we find that even a simple alteration of the retirement timing can increase the social net benefit by 13%. (C) 2008 Elsevier Ltd. All rights reserved.

Using Japanese facility-level data from an OECD survey, we estimate the effects of implementation of ISO14001 and publication of environmental reports on the facilities' environmental performance. While most previous studies focused on an index of emissions toxicity, this study examines three areas of impacts, none of which have been explored in the literature: natural resource use, solid waste generation, and wastewater effluent. The study is also unique in that the effectiveness of ISO14001 is considered in relation to environmental regulations. Our findings are summarized as follows. First, both ISO14001 and report publication help reduce all three impacts; the former appears more effective in all areas except wastewater. Second, environmental regulations do not weaken the effect of ISO14001. Third, assistance programs offered by local governments-a voluntary approach-promote facilities' adoption of ISO14001. These findings suggest that governments can use command-and-control and voluntary approaches concurrently. (C) 2008 Elsevier Inc. All rights reserved.

This paper investigates the impacts of environmental regulations on technological innovation using a unique data set of Japanese firm-level environmental R & D expenditure. First, from descriptive statistics, we find that environmental R & D increased from 1991 to 2001. The two sources of the expansion are confirmed: 1) more firms investing in environmental R & D and 2) increase in the average environmental R & D expenditure per firm. Second, we empirically test the "weak version" of the Porter Hypothesis, defined by Jaffe and Palmer (1997). We find that environmental regulation, measured by environmental conservation investment, increases the probability of investing in general R & D and environmental R & D. In contrast, the expenditures of R & D and environmental R & D, standardized by sales, are not found to be affected by environmental regulations. The stringent environmental regulation, however, increases the ratio of environmental R & D to general R & D expenditures. Thus, we find a supporting evidence of the "weak version" of the Porter Hypothesis.

This paper investigates electric utility behavior under the SO2 allowance market in Phase I. The probit model shows that cost recovery rules promoted high sulfur coal usage for utilities located in states with coal mines. A simulation shows that protecting these local coal industry increased high sulfur coal usage by 50%. Another finding is that the uncertainty of PUC regulations pushed utilities from the allowance market toward fuel switching/blending. Since the second effect was stronger than the first, the overall PUC regulations contributed to an unexpectedly low allowance price at the beginning of Phase I. (C) 2002 Eisevier Science (USA).