Estimating CO2 Emission Reduction in Eco-Point Program for Green Home Appliances in Japan

Abstract

Greenhouse gas emission from residential sector is difficult to control since emission regulation cannot be implemented to individual household. Government should induce each household to have energy saving lifestyle in order to abate increasing CO2 emissions from household activities. The program to promote the spread of green home appliances by utilizing eco-points has been conducted in Japan since May 2009. Those who have purchased eco-friendly home appliances can apply for the issuance of eco-points and the exchange of issued points for various goods. It is necessary to know consumer preferences for home appliances, so as to verify the effect of CO2 emission reduction of eco-point program. We statistically estimated consumer's utility functions for choosing refrigerators, televisions and air conditioners based on the sales data of them. The utility functions have explanatory valuables such as price, electricity cost, issued eco-points, etc. of individual home appliance. The utility functions enable the simulation of expected effect of CO2 emission reduction under the changing rate of eco-points. While the direct effect of eco-point program was evaluated in this way, we considered the indirect and negative effect on CO2 emissions that derive from the exchange of issued points for goods. Questionnaire survey was conducted for those who have been issued eco-points after purchasing home appliances. As a result, total CO2 emission reduction was estimated as 170 million ton per year by the purchase of green home appliances. In addition, the emission reduction can be expected to increase by approximately 2.4 percent under the revised eco-point program that issues eco-points only to the top 20 percent of efficient home appliances.