Supply Constraint from Earthquakes in Japan in Input-Output Analysis.

Disasters often cause exogenous flow damage (i.e., the [hypothetical] difference in economic scale with and without a disaster in a certain period) to production ("supply constraint"). However, input-output (IO) analysis (IOA) cannot usually consider it, because the Leontief quantity model (LQM) assumes that production is endogenous; the Ghosh quantity model (GQM) is considered implausible; and the Leontief price model (LPM) and the Ghosh price model (GPM) assume that quantity is fixed. This study proposes to consider a supply constraint in the LPM, introducing the price elasticity of demand. This study uses the loss of social surplus (SS) as a damage estimation because production (sales) is less informative as a damage index than profit (margin); that is, production can be any amount if without considering profit, and it does not tell exactly how much profit is lost for each supplier (upstream sector) and buyer (downstream sector). As a model application, this study examines Japan's largest five earthquakes from 1995 to 2017 and the Great East Japan Earthquake (GEJE) in March 2011. The worst earthquake at the peak tends to increase price by 10-20% and decrease SS by 20-30%, when compared with the initial month's prices/production. The worst damage tends to last eight months at most, accumulating 0.5-month-production damage (i.e., the sum of [hypothetical] differences in SS with and without an earthquake [for eight months] is 50% of the initial month production). Meanwhile, the GEJE in the five prefectures had cumulatively, a 25-month-production damage until the temporal recovery at the 37th month.

Clarifying Demographic Impacts on Embodied and Materially Retained Carbon toward Climate Change Mitigation.

Modern lifestyles demand a number of products derived from petroleum-based sources that eventually cause carbon emissions. The quantification of lifestyle and household consumption impacts upon carbon emissions from both the embodied CO2 (EC) and materially retained carbon (MRC) viewpoints is critical to deriving amelioration policies and meeting emission reduction goals. This study, for the first time, details a methodology to estimate both EC and MRC for Japan, focusing on petrochemicals and woody products utilizing the time series input-output table, physical value tables and the national survey of family income and expenditure, leveraging time series input-output-based material flow analysis (IO-MFA), and structural decomposition analysis (SDA). Findings elucidated hot spots of deleterious consumption by age of householder and the critical factors which underpin them including intensity effects, pattern effects, and demographic shifts over time. Although demographic shifts associated with an aging, shrinking population in Japan decreased EC and MRC, the negative effect reduced in size over time during 1990-2005. Policy implications identify the potential to mitigate approximately 21% of required household emission reductions by 2030 through strategies including recycling initiatives and the recovery of carbon from products covered within current recycling laws and hot spot sectors which are not currently considered such as apparel.

Impacts of productive efficiency improvement in the global metal industry on CO2 emissions.

This study focused on 14 metal sectors of the 40 countries that are the largest CO2 emitters and developed a new analysis framework to estimate CO2 reduction potentials based on the Greenhouse Gas Protocol through efficiency improvement of the inefficient metal sector of these countries. The analysis framework was developed by combining a multi-regional input-output database with data envelopment analysis. We found that there were 20 inefficient countries in the basic iron and steel sector, which is the largest CO2 emitter among 14 metal sectors, and their efficiency improvements can contribute to reducing CO2 emissions by 354 Mt, accounting for 1.4% of the global CO2 emissions. We further proposed efficiency improvement schemes targeting the inefficient countries in order to help those countries to effectively reduce CO2 emissions according to their sectoral and national characteristics.

Environmental efficiency of energy, materials, and emissions.

This study estimates the environmental efficiency of international listed firms in 10 worldwide sectors from 2007 to 2013 by applying an order-m method, a non-parametric approach based on free disposal hull with subsampling bootstrapping. Using a conventional output of gross profit and two conventional inputs of labor and capital, this study examines the order-m environmental efficiency accounting for the presence of each of 10 undesirable inputs/outputs and measures the shadow prices of each undesirable input and output. The results show that there is greater potential for the reduction of undesirable inputs rather than bad outputs. On average, total energy, electricity, or water usage has the potential to be reduced by 50%. The median shadow prices of undesirable inputs, however, are much higher than the surveyed representative market prices. Approximately 10% of the firms in the sample appear to be potential sellers or production reducers in terms of undesirable inputs/outputs, which implies that the price of each item at the current level has little impact on most of the firms. Moreover, this study shows that the environmental, social, and governance activities of a firm do not considerably affect environmental efficiency.

Determinants of eco-efficiency in the Chinese industrial sector.

This study measures productive inefficiency within the context of multi-environmental pollution (eco-efficiency) in the Chinese industrial sector. The weighted Russell directional distance model is applied to measure eco-efficiency using production technology. The objective is to clarify how external factors affect eco-efficiency. The major findings are that both foreign direct investment and investment for pollution abatement improve eco-efficiency as measured by air pollutant substances. A levy system for wastewater discharge improves eco-efficiency as measured by wastewater pollutant substances. However, an air pollutant levy does not significantly affect eco-efficiency as measured by air pollutants.

Are firms' voluntary environmental management activities beneficial for the environment and business? An empirical study focusing on Japanese manufacturing firms.

In this paper, to clarify whether a firm's voluntary approach to environmental protection is beneficial for both the environment and business, we analyze whether a firm's voluntary implementation of an environmental management system (EMS) simultaneously reduces its environmental impacts and improves its productivity. Using data on Japanese manufacturing firms for 2002-2008, we find empirical support for the view that the implementation of an EMS simultaneously reduces environmental impacts and improves productivity, and that a reduction in environmental impacts also improves productivity. However, in the context of this relationship, the direct effect of implementing an EMS on productivity is conditional. If various other activities designed to improve productivity implemented in response to market discipline are also taken into account, the effect of implementing an EMS is hidden by the effects of these activities. This implies that voluntary environmental management activities are merely a minor component of these activities. Therefore, the relationship between the implementation of an EMS and productivity improvement is not strong, although implementing an EMS indirectly improves productivity by reducing environmental impacts.

Economic development and multiple air pollutant emissions from the industrial sector.

This study analyzed the relationship between economic growth and emissions of eight environmental air pollutants (carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), nitrogen oxide (NOx), sulfur oxide (SOx), carbon monoxide (CO), non-methane volatile organic compound (NMVOC), and ammonia (NH3)) in 39 countries from 1995 to 2009. We tested an environmental Kuznets curve (EKC) hypothesis for 16 individual industry sectors and for the total industrial sector. The results clarified that at least ten individual industries do not have an EKC relationship in eight air pollutants even though this relationship was observed in the country and total industrial sector level data. We found that the key industries that dictated the EKC relationship in the country and the total industrial sector existed in CO2, N2O, CO, and NMVOC emissions. Finally, the EKC turning point and the relationship between economic development and trends of air pollutant emissions differ among industries according to the pollution substances. These results suggest inducing new environmental policy design such as the sectoral crediting mechanism, which focuses on the industrial characteristics of emissions.

Decomposition approach of the nitrogen generation process: empirical study on the Shimabara Peninsula in Japan.

Groundwater nitrate pollution is one of the most prevalent water-related environmental problems worldwide. The objective of this study is to identify the determinants of nitrogen pollutant changes with a focus on the nitrogen generation process. The novelty of our research framework is to cost-effectively identify the factors involved in nitrogen pollutant generation using public data. This study focuses on three determinant factors: (1) nitrogen intensity changes, (2) structural changes, and (3) scale changes. This study empirically analyses three sectors, including crop production, farm animals, and the household, on the Shimabara Peninsula in Japan. Our results show that the nitrogen supply from crop production sectors has decreased because the production has been scaled down and shifted towards lower nitrogen intensive crops. In the farm animal sector, the nitrogen supply has also been successfully reduced due to scaling-down efforts. Households have decreased the nitrogen supply by diffusion of integrated septic tank and sewerage systems.

The true cost of greenhouse gas emissions: analysis of 1,000 global companies.

This study elucidated the shadow price of greenhouse gas (GHG) emissions for 1,024 international companies worldwide that were surveyed from 15 industries in 37 major countries. Our results indicate that the shadow price of GHG at the firm level is much higher than indicated in previous studies. The higher shadow price was found in this study as a result of the use of Scope 3 GHG emissions data. The results of this research indicate that a firm would carry a high cost of GHG emissions if Scope 3 GHG emissions were the focus of the discussion of corporate social responsibility. In addition, such shadow prices were determined to differ substantially among countries, among sectors, and within sectors. Although a number of studies have calculated the shadow price of GHG emissions, these studies have employed country-level or industry-level data or a small sample of firm-level data in one country. This new data from a worldwide firm analysis of the shadow price of GHG emissions can play an important role in developing climate policy and promoting sustainable development.