Does Tokyo and Saitama Emission Trading Scheme Induce Technological Innovation: Evidence from Japanese firms

2022 Fiscal Year Final Research Report

• Project/Area Number: 21K20134
• Research Category: Grant-in-Aid for Research Activity Start-up
• Allocation Type: Multi-year Fund
• Review Section: 0107:Economics, business administration, and related fields
• Research Institution: Waseda University
• Principal Investigator: Lu Guanyu 早稲田大学, 総合研究機構, 研究助手 (10901035)
• Project Period (FY): 2021-08-30 – 2023-03-31
• Keywords: Emissions trading scheme / Japan / Innovation / Carbon leakage / Outsourcing activity / DiD method

Outline of Final Research Achievements

By conducting the difference-in-difference method, this paper investigates the effect of Japan’s regional emissions trading scheme on firms' R&D and outsourcing. The analysis reveals that Japan's regional ETS promoted R&D during the first compliance period by targeted firms that had already conducted R&D before the ETS was introduced, while the ETS did not increase outsourcings by targeted firms overall. The result implies, by taken into consideration other studies showing that the Japan’s regional ETS did not induce carbon leakage within firms, that the ETS has promoted innovation without inducing carbon leakage. However, we find that targeted firms that did not actively engage in R&D increased outsourcing during the compliance period. The result suggests a possibility that the ETS may induce carbon leakage when the emission reduction target becomes too severe for targeted firms to achieve it through innovation.

Free Research Field

環境経済学

Academic Significance and Societal Importance of the Research Achievements

本研究は、排出量取引制度に着目する最初の企業を対象とする実証論文として、環境政策が企業の活動にどのような影響を明確に明らかにしている。さらに、分析結果に基づき、長期的な削減を実現する柱となる技術革新をどのように促進するかを述べた。なお、財政状況が比較的に厳しい中小企業がどのように技術革新を実現するかについて、政策提言を行っていた。そして、本研究は、企業が生産プロセスを外注してカーボンリーケージを引き起こしているかどうかを調査した。先行研究では、外注によるカーボンリーケージの分析がかなった。 最後に、本研究は、イノベーションしたことのあるETS対象企業を分析する最初の研究である。