Center for Low Carbon Society

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Institution Designing

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Designing economic and social systems for realizing a low carbon society

We will provide quantitative numerical projections on the long-term economical effects of various low carbon measures. We will propose ways to achieve low carbon without having to sacrifice affluence and comfort. We will also consider the feasibility of popularizing next-generation vehicles and the potential effect of this on reducing greenhouse gas emissions.

Socio-economic effects of a low carbon society

  • To construct a dynamic general equilibrium model (in which the utility function reflects the subjective discount rate for each grade).
  • To develop benchmark scenarios (basic economic structures in 2020 and 2050) using the dynamic model.
  • To evaluate the influence of device leasing systems and independent government bonds, using the improved utility function.
Research outline

The objective of this research is to propose policy designs for achieving a vigorous economy and comfortable lifestyle by transitioning to a low carbon society. To do this, we will take into account bounded rationality to propose strategies to promote the spread of low carbon devices (energy-saving electrical appliances and energy generating devices) without reducing household utility. We will then make quantitative evaluations of economic effects using our general equilibrium model.


  • To identify consumer selection criteria in purchasing automobiles and predict the increase in sales of next-generation vehicles.
  • To indicate the effects of subsidies and tax breaks for the purchase of eco-friendly cars and other policies for promoting the spread of low carbon vehicles.
  • To estimate the potential reduction of greenhouse gas emissions in the automobile sector.
Research outline

In order to reduce carbon emissions in the transportation sector, the Basic Energy Plan calls for the promotion of eco-friendly vehicles.
One of the policies enacted towards this goal was to provide subsidies and tax breaks when purchasing eco-friendly cars. Introduced in 2009, this policy helped to boost the sales of next-generation vehicles and state-of-the-art eco-friendly vehicles. Based on the number of newly registered private cars (standard sized, compact and light four-wheelers) in 2009 and available data on each model, we created a database for developing a model that showed consumer selection criteria in purchasing automobiles. Using this model, we conducted simulations to estimate the effects of eco-car subsidies in reducing CO2 emissions and demonstrate their effectiveness in mitigating global warming. We also designed a system in which automobile taxes were reduced in proportion to fuel efficiency and estimated its effectiveness in reducing CO2 emissions.