Skip Ribbon Commands
Skip to main content
Home | Support RFF | Join E-mail List | Contact
RFF Logo
Skip navigation links
RESEARCH TOPICS
CENTERS
PUBLICATIONS
NEWS
EVENTS
RESEARCHERS
ABOUT RFF
 

 

 
Join E-mail List
Please provide your e-mail address to receive periodic newsletters and invitations to public events
 
 
The Impact on Japanese Industry of Alternative Carbon Mitigation Policies
Makoto Sugino, Toshi Arimura, Richard D. Morgenstern
RFF Discussion Paper 12-17 | July 2012
RESEARCH TOPICS:
Abstract
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 programs 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 paper analyzes the effects of carbon pricing on Japan‘s industrial sector. We also examine the impact of a rebate program 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. We also find that the determinant of the increase in total cost differs among industries, depending on the relative inputs of directly combusted fossil fuel, electricity, or steam, as well as intermediate goods. Out of 401 industries, 23 would be eligible for rebates if a Waxman–Markey type of program were adopted in Japan. Specifically, the 85 percent rebate provided to eligible industries under H.R. 2454 would significantly reduce the cost of direct and indirect fossil fuel usage. The E.U. criteria identify 120 industries eligible for rebates. However, the E.U. program only covers direct emissions while the U.S. program includes indirect emissions as well. Overall, despite the differences in coverage, we find that the Waxman–Markey and E.U. rebate programs have roughly similar impacts in reducing the average burdens on EITE industries.
RFF Home | RFF Press: An Imprint of Routledge Terms of Use | Privacy Policy | Copyright Notice
1616 P St. NW, Washington, DC 20036 · 202.328.5000 Feedback | Contact Us