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Establishing a Social Science Research Hub for the Environment and Energy in Asia

Research Institute for Environmental Economics and Management, the Organization for University Research Initiatives

Professor Toshihide Arimura, the Director of the Research Institute for Environmental Economics and Management

Approximately 20 years has passed since the third session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP3) in 1997, when an international agreement on greenhouse gas reduction targets was established based on the Kyoto Protocol. Yet, countermeasure approaches to global warming and sustainable economic growth have not always been successful. There were also varying degrees of progress among individual countries. Germany has been leading global achievements, for example, suppressing greenhouse gases and shifting to renewable energy, through positive environmental policies, including the introduction of an environmental tax. Until recently, the United States has displayed an extremely negative attitude, which can be exemplified by actions such has withdrawing its ratification of the Kyoto Protocol. However, during the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21), there was a major breakthrough when the US and China, the two biggest emitters of CO2, set reduction targets for CO2 emissions together in the Paris Agreement adopted during the Conference.

Japan has set a CO2 emission reduction target to be achieved by 2030. In spite of this, no specific path to achieve the target has been clarified. The European Union has already implemented a highly effective greenhouse gas emissions trading system, and the US is also considering a similar system. On the other hand, Japan has no clear plan of incorporating such a system at this point. What kind of emission reduction policy would be effective for Japan? Moreover, what kind of policy would be accepted by the stakeholders, such as companies and individuals, and what would be an effective policy design suitable for Japan?

Bringing together research capabilities for environmental economics, management and political science

With awareness on these issues, the Research Institute for Environmental Economics and Management was established within the Organization for University Research Initiatives, Waseda University in 2016. The Institute aims to organize research projects on environmental policies and actions from global perspectives and publish achieved results mainly in international scientific journals, as well as to suggest policies based on empirical data. Professor Toshihide Arimura of the Faculty of Political Science and Economics, who also serves as the director of the Institute, speaks about the Institute and its prospects.

As its name suggests, approximately 10 researchers, mainly form the fields of economics and business administration, have assembled from different faculties of Waseda University for the Institute. In addition, the Institute receives cooperation from about 10 joint researchers—not only within Japan but also overseas—and has started research projects under a wide variety of themes.

“The Research Institute for the Environment and Trade (RIET), the predecessor of the Institute, had been working on joint research that targeted the Joint Crediting Mechanism (JCM) and the barriers imposed on trade by international environmental regulations across boundaries between developed and developing countries. The new institute will conduct comprehensive studies on environmental actions and policies, with objectives expanded to every type of stakeholders, including companies and consumers. We are aspiring to establish our position as a base of social science for environmental and energy research in Asia, by bringing together Waseda University’s research capabilities in the fields of environmental economics and management, as well as political science.” (Professor Arimura)

Fig. 1: Five ongoing research projects and affiliated researchers

There are not many institutions in Japan that are conducting comprehensive empirical studies on environmental economics and management as their main objective. In the Research Institute for Environmental Economics and Management, five research projects: (1) energy conservation, (2) developing countries, (3) carbon pricing, (4) corporate actions, and (5) policy acceptance projects are being coordinated and carried out for comprehensive studies.

Investigating the process of consumers accepting environmental actions

In the energy conservation project, research is being conducted on topics concerning actions on saving energy in general households, such as what information promotes energy conservation and how saving energy are affected by a consumer’s surroundings, including relatives or acquaintances (so-called peer effects). This project will not only hand out questionnaire surveys targeting a large and unspecified number of people but also plan to study empirically the behavioral changes of residents in specific communities, housing complexes for example, through continuous observation while actually providing them with information on energy conservation.

“So far, through my joint research with Associate Professor Hajime Katayama of the Faculty of Commerce, I have obtained the result in which employees of companies that actively promote energy conservation by applying international rules for environmental management, such as ISO14001, have a tendency to positively save energy even at home (reference article). I am curious as to why do they behave this way. Is this behavior specific to Japanese people? We would like to conduct further studies on such topics taking approaches from behavioral economics, which is an interdisciplinary area between psychology and economics. We will also advance demonstration experiments in condominiums and other housing complexes, with the participation of Professor Hiroto Takaguchi from the Faculty of Science and Engineering, who specializes in architecture and urban environment. ” (Professor Arimura)

Meanwhile, in the developing countries project, research on energy selection behaviors in households is being conducted using approaches that are different from those used for traditional research on the impact of trade. In developing countries, firewood or cattle feces is burned indoors for cooking. From about 2006, the World Health Organization (WHO) has been warning these countries that indoor air contamination affects health negatively, and switching to kerosene or electricity has become an important task in energy policies.

“Exchange students from India have already been conducting preliminary surveys in the villages they are from, concerning subjects such as what types of fuels are used, the health and physical conditions of the people, what household budgets in these communities are like, if people have knowledge on indoor environmental contamination, whether people are inclined to use a different energy source, and if there are people among their relatives or neighbors who have changed their energy source. We are going to start the main survey and will do a continuous observation survey. We are planning to start a similar survey in Bhutan as well.” (Professor Arimura)

Observation survey in India

Why emissions trading is not progressing in Japan?

Ondanka Taisaku no Atarashii Haishutsu Sakugen Mekanizumu [New emissions mitigation mechanisms of global warming countermeasures], edited and written by Professor Arimura (Nippon Hyoron Sha Co., Ltd., March 2015). The book summarizes the new emission control policies that have been developed in recent years, focusing on the Joint Crediting Mechanism.

In the carbon pricing project and the corporate action project, research on manufacturing and commercial sectors is making progress. The carbon pricing project studies the impact of policies promoting CO2 emission reduction through a market mechanism. , which gives a price to CO2 and trades it based on market principles such as the aforementioned emissions trading scheme, on Japanese industries. In addition, the project aims to determine what kind of factors would advance or hinder policies, offering policy proposals to the Japanese government based on empirical studies and achieving results that contribute to system designs.

“Carbon pricing has garnered renewed attention in recent years; the implementation of carbon pricing has been expanding not only in the West but also in Asia. China has applied it in 10 cities and regions and is planning to expand it to the entire country in 2017. It has already been implemented in Korea as well. On the contrary, it’s hard to say that approaches to carbon pricing in Japan are active.” (Professor Arimura)

In Japan, there are oppositions by industries against environmental policies, including the emissions trading system. There is a deep-rooted opinion that even without governmental regulations, voluntary efforts of companies are sufficient enough. In addition, the Ministry of Economy, Trade and Industry and the Ministry of the Environment are both involved in emission control of industries, and there are differences between the views and policies of the two ministries.

“We are going to conduct research on the effects of policies concerning several local governments that have implemented the emissions trading system, including Tokyo. At the same time, we will investigate why the implementation of emissions trading is not being advanced in Japan as a whole and the effectiveness of voluntary efforts by companies, in association with the research for the corporate policy project.” (Prof. Arimura)

Moreover, in the corporate action project, an international joint study comparing Japan and the US on efforts for green procurement and purchasing is scheduled with Arizona State University. In industries, efforts not as a single company, but as an entire supply chain in all processes—including procurement, production, distribution, consumption, recycling and disposal—becomes the key factor. Companies are required to take responsibility during the entire life cycle of their products and promote effective reduction of environmental burdens in coordination with others. The project will also clarify how factors such as differences between the business practices in Japan and the US are affecting such efforts.

Effective and acceptable environmental policies

An Evaluation of Japanese Environmental Regulations: Quantitative Approaches from Environmental Economics (Springer, 2015), written jointly by Professor Arimura and Kazuyuki Iwata (Associate Professor at Takasaki City University of Economics), who is also an Adjunct Researcher of the Institute, is the first book to evaluate the Japanese environmental regulations using quantitative approaches.

The policy acceptance project is studying how policies or systems can be made more effective and acceptable, while taking into consideration the results achieved by the research projects above. International collaboration studies are to be organized with overseas academic cooperation bases, so as to conduct comparative studies between Japan, the US, and Europe concerning processes of policy formation and acceptance.

"In Japan, shifting to renewable energy through energy deregulation or changing from gasoline to hydrogen or electricity for automobiles is moving forward. As the entire society undergoes major changes to become more environmentally-conscious, it is necessary to find financial resources for replacing taxes which were obtained from activities placing burden on the environment, including the gasoline tax. While the increase of tax burdens on the nation is inevitable, there is a pressing need to design new policies and systems." (Professor Arimura)

What are environmental policies that can simultaneously achieve and support both environmental and economic sustainability? In order to find them, advancing research results of the Research Institute for Environmental Economics and Management are highly anticipated.

Fig. 2: Collaboration with domestic and overseas external organizations

Related links

Research Institute for Environmental Economics and Management
Organization for University Research Initiatives, Waseda University
Faculty of Political Science and Economics, Waseda University
Faculty of Commerce, Waseda University
Faculty of Social Sciences, Waseda University
Faculty of Science and Engineering, Waseda University