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参加者行動・期待の公的コーディネーション：
東京における低公害自動車導入の試み
PUBLIC COORDINATION OF PARTICIPANTS’ BEHAVIOR AND
EXPECTATIONS: AN ATTEMPT TO INTRODUCE LOW-EMISSION VEHICLESIN TOKYO
Masaru YARIME
Ph.D. (Economics of Technical Change), Research Associate, Research Center for Advanced Science andTechnology, University of Tokyo (E-mail: yarime@zzz.rcast.u-tokyo.ac.jp)

In developing a methodology of implementing sociotechnology, it would be a promising idea that the public
sector promotes the introduction of new technologies by supporting the proper functioning of the market mechanism,
rather than by replacing the market through direct regulation. In this paper, I examine the case of a recent attempt by
Tokyo Metropolitan Government to make a shift in automobile uses in Tokyo from diesel vehicles to low-emission
vehicles such as compressed natural gas vehicles. The new initiative encouraged car users, car makers, and fuelinfrastructure providers to participate in open dialogues, with an intention to coordinate the behavior and expectationof the relevant actors crucial for the introduction of clean vehicles. The results of the public coordination and theirimplications are discussed.

Key Words: public coordination, low-emission vehicles, technological lock-in

economies of scope is the use of common inputs,
including raw materials and knowledge.
While these two mechanisms are considered to workin a static framework, a dynamic mechanism causing
positive feedbacks is the so-called learning effect.
Learning by doing, a form of learning which takes placeat the manufacturing stage, consists of developing
increasing skill in production (Arrow, 1962). This has
the effect of reducing labor costs per unit of output, andthe significance of this effect has been widely observedin many industries. Learning by using, on the other hand,
generates gains as a result of subsequent use of products(Rosenberg, 1982). Particularly for complex new
technologies, there are essential aspects of learningwhich are a function not of the experience involved in
producing the product but of its utilization by the finaluser. As there types of learning accumulate, it becomes
more efficient to produce and use new technologies.
The fourth mechanism considered to produce positive
feedbacks is coordination failures. Coordination failures
could be induced when there are strong
complementarities among parts of a system (Milgrom
and Roberts, 1992). In a large-scale, complex system, theexistence of strong complementarities among different
individual’s decisions could give rise to a variety ofstable outcomes. This is particularly the case for theenergy and transportation sectors, in which a large
number of users and extensive establishment of
infrastructure are involved. The systemic character oftechnologies reinforces interdependence among different
parts and poses a significant degree of rigidity, making a

1. Introduction
In our attempt to solve various issues occurring in themodern society, innovation increasingly plays a role ofcritical importance. Innovation is a dynamic process, inwhich complex interactions are involved between
technological development, actors’ behavior, andinstitutional environment, and a careful understanding of
its nature is required in implementing public policies.
Uncertainty, diversity, and interdependence are among
the characteristics inherent in the process oftechnological change (Rosenberg, 1982, 1994). With theworking of positive feedbacks, they could contribute to
the emergence of “technological lock-in,” a phenomenon
which has been observed in many technological fields(Arthur, 1989; Cowan, 1990; Cowan and Gunby, 1996;
David, 1985; Islas, 1997; Yarime, 2003).
Several mechanisms are considered to generate
positive feedbacks. The first is economies of scale, orincreasing returns to scale. One of the reasons to expect acompany’s average production cost to decline, at least
initially, as its output expands is that fixed setup costs do
not vary with the level of output (Carlton and Perloff,
1994). Thus, as a company produces more outputs thanother companies, it gains more advantage over its
competitors. A similar source of positive feedbacks is
economies of scope, which mean that it is efficient toproduce two or more products together (Panzar andWillig, 1977). Among the possible factors contributing to39

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transition from one state to another extremely difficult.
In this way, coordination failures in the behavior andexpectations of relevant actors with diverse interests andcharacteristics could result in a state of technologicallock-in.
There could be possibilities of escaping lock-in after
a technology has achieved dominance in the market andhas been able to enhance its comparative advantages
over many decades. Cowan and Hulten consider the
possible impact of six factors whose existence orstrength could help the automobile market escape thelock-in of the gasoline car technology; namely, they arecrisis in the existing technology, regulation,technological breakthrough producing a real or imaginedcost breakthrough, changes in taste, niche markets, andscientific results (Cowan and Hulten, 1996). They argue
that if regulation could create enough niche markets sothat some self-reinforcing processes would become
possible, the electric vehicle might emerge as a visible
part of the automobile market.
In this paper, I conduct a case study of a recent
attempt by the Tokyo Metropolitan Government toreplace diesel vehicles by low-emission vehicles such ascompressed natural gas vehicles. The experience inTokyo illustrates the possibility and limits of escaping astate of technological lock-in by coordinating the
behavior and expectations of relevant actors. In thefollowing sections, I examine this case in detail andanalyze the results and revealed problems. Some policy
and institutional implications are discussed at the end of
this paper.

2000
1800

N u m b e r o f V e h ic le s

1600
1400
1200
CNG
LPG

1000
800
600
400
200
0
1995

1996

1997

1998

1999

Year

Figure 1 CNG and LPG Vehicles Used in Tokyo
Source: Tokyo Metropolitan Government (2000).

One of the reasons for this limited impact consideredby TMG as crucial was coordination failures between car
users, car makers, and fuel infrastructure providers. Car
users do not buy CNG vehicles because they are
expensive and it is not convenient to use these vehicles
when there are not a sufficient number of natural gas
fueling stations. Car makers, on the other hand, do not
produce many CNG vehicles because users do not buy
them, leaving the car prices high without economies ofscale in production. And fuel infrastructure providers do
not establish many natural gas fueling stations either,because there are not enough demands for natural gas
used by CNG vehicles. These behaviors of the car users,
car makers, and fuel infrastructure providers havecreated a vicious circle of lower demands and supplies,
discouraging the introduction of CNG vehicles at a large
scale.
Aiming at breaking the vicious circle, TMG started a
new initiative which involved the relevant actors, that is,
car users, car makers, and fuel infrastructure providers,to create a new market for CNG vehicles. In June 2000
the Bureau of the Environment of TMG invited major
companies, including 13 car users, four car
manufacturers, and four fuel infrastructure providers, toestablish the Strategic Council for the Creation of New
Markets to promote the introduction of CNG and LPG
vehicles to Tokyo. The number of the participatingcompanies was increased to 33 at the third meeting, withthe addition of seven manufacturers of vehicles,
including parts manufacturers, and five providers of fuelservices. The Council was concluded with the fourth
meeting held in November 2000 with the final
participation of more than 200 companies.
One of the traditional roles which the public sector
can play has been to provide public goods, which, atleast theoretically, the market cannot supply or maintain.
In this case, the intention of TMG was to support theproper functioning of the market mechanism, rather thanreplacing it (Figure 2).

2. An Attempt to Replace Diesel Vehicles
with Low-Emission Vehicles in Tokyo
Despite previous efforts to curb automobile emissions,the concentrations of nitrogen oxides (NOx) andsuspended particulate matters (PMs) have remained highin Tokyo. It is estimated that diesel vehicles are
responsible for about 70% of the NOx and almost all of
the PMs emitted by automobiles. Following a strong
political initiative of the Governor of Tokyo, the Tokyo
Metropolitan Government (TMG) started a “Campaign
for No Diesel Vehicles” in August 1999. The ultimate
goal of this campaign was to promote the conversion ofdiesel vehicles to low-emission vehicles such ascompressed natural gas (CNG) and liquid propane gas(LPG) vehicles.
The trends in the number of CNG and LPG vehicles
are shown in Figure 1. At the end of March 2000, thenumber of CNG vehicles used in Tokyo was 601, which
was just a tiny fraction of all the vehicles, compared with
447,000 diesel vehicles running in the same period(Yajima, 2000). Although these efforts have contributed
to raising the public awareness of the serious issue of air
pollution in Tokyo, they were not sufficiently effective inencouraging automobile users to switch from diesel
vehicles to less-polluting vehicles such as CNG vehicles
to a large extent.

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8000

Users
Little demand

MakersFewnatural gas
stations

6000
N u m b e r o f V e h ic le s

Fewvehicle types
Expensive vehicles

7000

Infrastructure

5000
CNG
LPG

4000
3000
2000

Coordinatoin failures between users,
makers, and infrastructure providers

1000
0
2000

Government as
Public Coordinator

2001

2002

2003

2004

2005

Year

Figure 3 Plan of the Use of CNG and LPG Vehicles in Tokyo

Provision of credibility

Source: Tokyo Metropolitan Government (2000).

Users
Many vehicle types
Inexpensive vehicles

Makers

Large demand

During the four meetings of the Council, thecoordination failures between the car makers, car users,and fuel infrastructure providers were addressed.
Effective measures were sought to overcome thecoordination failures were actively thought by making
the expectations and incentives of the relevant actors
open to each other and encouraging honest and candid
dialogues between the participants. At the end of the
fourth meeting, the Council finally adopted the Tokyo
Declaration for the Creation of New Markets, whichbasically said that car users will adopt more CNG
vehicles, that fuel service providers will increase natural
gas fueling stations, and that car makers will reduce theprice and increase the variety of CNG vehicles at thesame time. Effectively, the declaration made thesecommitments open to the public. Figure 3 gives thenumbers of CNG and LPG vehicles planned to be used inTokyo, based on the commitment which the participatingcompanies have made to be implemented by 2005. If
their commitments are to be implemented fully, morethan 5,000 CNG vehicles will be running in Tokyo in
2005, an increase to almost ten times of those used in
1999.

Many natural gas
stations

Infrastructure
Overcome of the coordination failureswith the government working as public
coordinator

Figure 2 Public Coordination between Car Users, Car Makers,
and Fuel Infrastructure Providers

The market could sustain two states, one in which
there are few CNG vehicles and one in which there aremany, because of the positive feedbacks between car
users, car makers, and fuel infrastructure providers. They
could be regarded as two equilibria, and the transition
from one to the other would be difficult to happen
spontaneously, hence reaching the state of technologicallock-in. By working as a public coordinator of the
expectations and behavior of car users, car makers, andfuel infrastructure providers, TMG intended to replace
the socially inferior equilibrium involving few CNG
vehicles with the socially superior one which canmaintain a large number of CNG vehicles. TMG
expected that the public sector would be able to provide
sufficient credibility for the coordination mechanisms
between the private actors, which is considered to be
crucial in escaping lock-in.

3. Actors Involved in Introducing Low
Emission Vehicles
In facilitating the introduction of CNG vehicles in Tokyo,
three types of relevant actors were identified at theStrategic Council for the Creation of New Markets,
namely, vehicle users, fuel infrastructure providers, andvehicle manufacturers. To investigate their behavior andexpectations, as well as incentives behind them in detail,I focus my analysis on major actors in each of the three
categories.

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120

3.1 Vehicle Users
The council asked vehicle users to increase theiradoption of CNG vehicles. I first look at the Tokyo
Municipal Bus, which is owned and operated by TMG,
as an important user of CNG vehicles in the public sector.
Then I examine Sagawa Express, one of the largest
private users of CNG vehicles in Tokyo.

N u m b e r o f V e h ic le s100

3.1.1 Tokyo Municipal Bus
Tokyo Municipal Bus has adopted various types ofmeasures for environmental protection since the early
1990s. Figure 4 gives the trends in the use of clean
vehicles by the Tokyo Municipal Bus, including CNG,
LPG, and hybrid vehicles, as well as diesel particulate
filters (DPFs) designed to be installed for emissions fromdiesel vehicles.
While diesel hybrid buses were mainly introduced at
the initial stage, the middle of the 1990s saw a shift inthe emphasis to CNG buses, which can reduce the NOx
emissions by 60 - 70 %, compared with diesel buses,
without producing any PMs. In January 1995 the Tokyo
Municipal Bus started to operate the first CNG bus. One
month later, a natural gas fueling station of its own wasestablished at the Fukagawa bus terminal, and two morebuses were introduced subsequently to evaluate thefeasibility of CNG buses. The second natural gas station
was built at the Rinkai bus terminal in March 1996,
followed by the third established at the Kita bus terminal
in March 1997. The introduction of CNG buses increased
steadily, reaching as many as 28 in 1998. Recently,
however, although the fourth natural gas station was built
just next to the building of TMG, the adoption of CNG
buses has declined to a low level, with only threevehicles purchased in 2000. Currently there are a little
more than 100 CNG buses, which account for less than
one tenth of the total of 1,591 buses operated by the
Tokyo Municipal Bus.
Several factors could be identified to explain therelatively limited extent of the introduction of CNG
buses by the Tokyo Municipal Bus. The first factor is thehigh price of CNG buses. Following the enactment of theBarrier-Free Law in November 2000, it has beenrequired that municipal buses should have low floors forpassengers with wheelchairs, effectively demanding the
adoption of buses which contain no steps. No-step CNG
buses are expensive, however, with their price of about
30 million yen, a price which is much higher than 22
million yen for ordinary CNG buses or 20 million yen
for no-step buses with diesel engines. As no-step CNG
buses, whose floor needs to be close to the ground, can
not have a fuel tank under the floor, it has to bepositioned on the top of the roof. That requires a special
type of fuel tank which has sufficient strength with alight weight, in effect increasing the production cost, andhence the price, of CNG buses.

80
CNG
LPG
Electric hybrid
Pressure hybrid
DPF

60

40

20

0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Year

Figure 4 Use of Clean Vehicles by Tokyo Municipal Bus
Source: Tokyo Metropolitan Government (2001).

The second factor concerns the costly operation andmaintenance of CNG buses. The reliability of various
parts used in CNG buses was not sufficiently highinitially, and there were many cases of malfunction,
which required frequent repair. This problem has been
improved to some extent since then through close
cooperation and information exchange with car makers.
And, as regulations concerning the safety of dealing withhigh-pressure gases were modified, the procedures forthe inspection of fuel tanks have become simplified,
reducing the maintenance cost of CNG buses. On theother hand, the natural gas fueling stations have beenused intensively, and with various parts of the equipment
worn out, the cost of maintaining the natural gas fuelingstations has been rising.
As TMG is in a process of reviewing the subsidies tothe Municipal Bus, it is now difficult to purchase as
many CNG buses as before and to continue to establish
and maintain natural gas fueling stations. This can beobserved clearly in 1999 and 2000, when the
introduction of CNG buses was particularly low,compared with the rapid increase in the previous years.
The adoption of CNG buses is not expected to increasesignificantly in the future. While TMG is encouraging
car users in the private sector to increase the adoption of
CNG vehicles through the commitment at the Strategic
Council for the Creation of New Markets, the extent of
its own adoption is not particularly high. That would
make TMG’s own political commitment to increase lowemission vehicles less credible to the participants in theCouncil.

3.1.2 Sagawa Express
Sagawa Express is a company which specialized indelivering goods to customers. The company started tooperate clean vehicles in March 1991, with five electricvehicles introduced in Osaka and five methanol vehicles
in Tokyo (Figure 5).

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700

6000

5000
N u m b e r o f C N G V e h ic le s

N u m b e r o f V e h ic le s

600
500Electric
MethanolHybrid
CNG

400
300
200

4000
Other 207 firms
Sagawa Express

3000

2000

1000

100
0
1991

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1992

1993

1994

1995

1996

1997

1998

1999

2000

0
2000

2001

Year

2001

2002

2003

2004

2005

Year

Figure 5 Use of Clean Vehicles by Sagawa Express

Figure 6 Plan of Using CNG Vehicles by Firms in Tokyo

Sources: Sagawa Express (2001; 2001).

Source: Tokyo Metropolitan Government (2000).

Although more methanol vehicles were adopted insubsequent years, the introduction of these two types ofclean vehicles was basically stopped, as the company
thought that the technical reliability of them was not
improved to a satisfactory level. The company adopted
18 CNG vehicles for the first time in 1997. That decision
was made by the company’s top management when the
Third Conference of the Parties to the United Nations
Framework
Convention
on
ClimateChange(COP3/UNFCCC) was held in Kyoto, the city where its
headquarters is located. Since then, CNG vehicles havebeen introduced at an increasing pace, and the total
number of CNG vehicles operated by the company
reached 623 in the fiscal year of 2001.
With other vehicle-operating companies which
participated in the Strategic Council for the Creation of
New Markets, Sagawa Express published its plan of
introducing CNG vehicles by 2005, as you can see in
Figure 6. CNG vehicles will be increasingly used by thecompany in the future. The total number of its CNG
vehicles running in Tokyo is expected to reach 1,800 in
2005, which represents more than 30 % of approximately
5,200 CNG vehicles to be introduced by all theparticipating companies. Since the company operates
approximately 3,400 vehicles in Tokyo, a little over halfof them will be CNG vehicles, a ratio which is muchhigher than that for the Tokyo Municipal Bus.
While Yamato Express, a rival company in the samebusiness, has basically decided to adopt LPG vehicles,
Sagawa Express has chosen CNG vehicles. That is
because the company considers that CNG vehicles emitmuch less carbon dioxide than LPG vehicles, which is an
important factor for the company to be regarded as a userof clean vehicles. An additional factor would be the factthat the number of the company’s distribution bases isrelatively small, concentrated in several areas within
Tokyo. That makes it easier and less costly for thecompany to utilize natural gas fueling stations in an
efficient way, compared with its rivals.

The running cost of CNG vehicles per kilometer isapproximately 14 to 18 Japanese yen. This is not
significantly different from that of diesel vehicles, except
for an increase in the cost of inspecting the fuel tank,which needs to withstand a pressure as high as 200 atm.
A major obstacle to the introduction of CNG vehicles,
however, is their high price, as is also mentioned in thecase of Tokyo Municipal Bus. As you can see in Table 1,
currently the cost necessary to convert a diesel vehicle toa CNG vehicle is estimated to be 1,460,000 yen for a
two-tonne truck. Financial support from various sources,
including public organizations such as TMG and New
Energy and Industrial Technology Development
Organization (NEDO) as well as those in the private
sector like Tokyo Gas Company, accounts for 1,280,000
yen, almost 90 % of the necessary cost. That allows thecompany to pay only 180,000 yen, which is a little morethan 10 % of the original cost. In this way, the purchaseof CNG vehicles is heavily dependent on the availabilityof subsidies.
Another obstacle is the lack of natural gas fuelingstations. Sagawa Express established its own natural gas
station for the first time in April 1994. This construction,
however, which cost 120 million yen, was only possible
by relying on subsidies provided by TMG and NEDO.
As this fueling station can supply natural gas to only 80
trucks a day, a tiny fraction of the CNG vehicles
operated by the company daily, the company needs more
fueling stations. That will require a significant amount ofinvestment, which would be a difficult task to implement
by a single private company. Although the total numberof natural gas fueling stations in Tokyo is rising, they
will not be sufficient to deal with more than 1,700 CNG
vehicles to be introduced by 2005. While the company
has established two natural gas stations by itself, thecompany emphasizes it is important that much morenatural gas stations should be established by fuelinfrastructure providers in order to increase the numberof CNG vehicles.

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40

Table 1 Composition of Payment for the Purchase of CNG
Vehicles
1,460,000 yenc

30

N u m b e r o f C N G S t a t io n s

Conversion Cost
from a Diesel to
CNG vehiclea
Subsidies

NEDOb
730,000 yen
Japan Trucking
200,000 yen
Association
TMG
300,000 yen
Purchase
Tokyo Gas
50,000 yen
Promotion
Company
Actual Payment
Sagawa Express
180,000 yen
a: The calculation is based on a 2-tonne truck produced by
Isuzu Motors.
b: New Energy and Industrial Technology Development
Organization. NEDO provides subsidies for just a half of thecost necessary for the purchase of CNG vehicles. The target set
by NEDO is to support the purchase of 5,000 CNG vehicles.
c: One US dollar is equal to approximately 120 Japanese yen insummer 2001.
Source: Sawaga Express (2001).

Tokyo Gas
Other Companies

20

10

0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year

Figure 7 Installation of CNG Stations in the Kanto Region
Data as of June 14, 2002.
Calculation based on Japan Gas Association (2000) and Tokyo
Gas (2001; 2002).

This point of the insufficient establishment of
infrastructure for natural gas would be a criticalbottleneck in introducing CNG vehicles. That would
increase the necessity of close coordination with regard
to investments to be made by vehicle users and fuelinfrastructure providers.

Requested by the council, Tokyo Gas presented its
plan of constructing natural gas stations in the future.
According to the plan, the company will continue to be
the main provider of CNG fueling stations, with its
steady, long-term commitment to construct at least fivenatural gas stations every year until 2005. On the other
hand, there are only a handful CNG fueling stations
which were planned to be installed in 2000-2001 byother energy companies such as Cosmo Petroleum andNichimen Energy. Tokyo Gas basically considers itself
as a company which specializes in providing natural gas,lacking sufficient knowledge and expertise on know-how
necessary to manage and operate fueling stations forautomobiles. It hopes that other companies will increase
their own constructions of CNG stations in the future.
A crucial problem in increasing the number of CNG
stations is the high cost of their establishment. Although
Tokyo Gas is willing to continue to make investments inthe fueling infrastructure, the cost of constructing a CNG
station is very large, ranging from 90 to 120 million yen.
Currently, generous subsides are provided by NEDO tosupport the so-called eco stations, which include thesupply of natural gas, together with electricity andmethanol for clean vehicles. Table 2 gives thecomposition of the subsidies for establishing eco stations.
Compared with approximately nine billion m3 of natural
gas which the company deals with annually, the amountof natural gas consumed for CNG vehicles is currently
less than 1 million m3, still far short of the scale
necessary to have any impacts on the corporate strategy.
As the sales of natural gas for CNG vehicles are still atiny fraction of the whole business, it would be difficult
for the company to maintain the construction of as man
CNG stations as the current level.

3.2 Fuel Infrastructure Providers
Fuel infrastructure providers were requested by theStrategic Council to increase the number of CNG
stations established in Tokyo. At the end of March 2000
there were only 20 CNG stations in Tokyo, among which
only 11 stations were open to the general public. I take aclose look at the case of Tokyo Gas, one of the leading
fuel infrastructure providers in the region.

3.2.1 Tokyo Gas
Tokyo Gas is the largest gas company, not only in Tokyo
but also in Japan. The company has been actively
promoting the use of CNG vehicles, which will increase
the demand for natural gas, the company’s main product.
A project team for CNG vehicles was established within
the company in 1991. The Japan Gas Association, which
includes Tokyo Gas as a member, also established its
CNG vehicle division one year later. Figure 7 indicatesthat the company has so far built 32 CNG stations in the
Kanto Region, which is the most populous region
containing Tokyo. While other companies, including
several gasoline suppliers, have started to construct CNG
stations recently, Tokyo Gas has remained the major
CNG-providing company, accounting for just less than ahalf of the total of 69 CNG stations located in the Kanto
Region.

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Table 2 Subsidies for the Establishment of Eco Stations
ObjectEstablishment

Amount90,000,000 yen

Operation

2,000,000 yen

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Table 3 Expected Reductions in the Price of CNG Vehicles

RemarkTarget of 30 eco
stations
For the initial threeyears

Car maker

Minimum
production
Nissan1,000
Dieselvehicles/year
Hino
4.19 M
1,000
yen (1.5)
vehicles/year
Toyota4.67 M
4.10 M
1,000
yen (1.7) yen (1.5)
vehicles/year
Mitsubishi
Small4.78 M
4.00 M
1,000
sized
yen
yen
vehiclestruck, 2 t(1.65)(1.38)/year
Isuzu
Long flat
4.80 M
4.00 M
5,000
truck, 2 tyen (1.6)
yenvehicles(1.35)/year
The numbers in parenthesis refer to the ratio of the price of
CNG vehicles to that of diesel vehicles of the same type.
Source: Tokyo Metropolitan Government (2000).

Conversion of 17,000,000 yen
facilities
Source: Japan Gas Association (2000).

Potentially, oil companies could contribute toincreasing facilities for providing natural gas byexpanding the gasoline stations they have alreadyestablished. That would be efficient in the sense that
economies of scope could be utilized. Currently,
however, although some companies, notably Cosmo
Petroleum, are engaged in establishing infrastructure fornatural gas, basically there is little inventive for other oilcompanies to make large investments in constructing
CNG stations. That is hardly surprising, considering thatnatural gas competes directly with the conventional
gasoline as the fuel for automobiles. It would be only
after they are convinced that there will be a large shift
from gasoline vehicles to CNG vehicles that they could
be expected to start to actively establish infrastructures
for providing natural gas. That, in turn, would depend on
how many CNG vehicles would be demanded by car
users.

Vehicletype
Mediumsizedtruck, 4 t
Short flatfloor
truck, 2 t
Standard
truck, 2 t

Current
price9.20 Myen(1.9)
4.47 Myen (1.6)

Targetprice7.50 Myen (1.5)

Table 3 shows some of the estimations made by the
major producers of CNG vehicles, concerning the pricereductions which could be expected when the productionlevel is increased. The table includes the data provided
by Nissan Diesel, Hino, Toyota, Mitsubishi as well as
Isuzu. As you can see, the current level of production is
far less than that required by these manufacturers to
reduce the cost of production. One of the factors
contributing to the high manufacturing cost is that CNG
vehicles require special parts such as fuel tank which canwithstand high pressure with a light weight. Since theseparts are produced only for a limited number of
specialized products, their demands are relatively small,which results in high prices. Potentially effective
measures to solve this problem would be thestandardization of the size and shape of various parts andjoint purchases from parts makers. It might be difficultthat these measures will be actually adopted by the car
manufacturers, as they are competing with one another inthe same market. Nevertheless, this point illustrates thepossibility of ameliorating a state of technological lockin through coordination of actors’ behavior.
Another important issue concerning the introductionof clean vehicles is that there are currently several typesof alternatives which could replace the currently
dominant gasoline vehicles. In addition to CNG vehicles,
they could be electric vehicles, methanol vehicles, hybrid
vehicles, hydrogen vehicles, and, sometime in the future,
fuel cell vehicles. Different companies would havedifferent corporate strategies regarding the type of clean
vehicles on which they focus. For example, Isuzu Motors
is not particularly interested in developing fuel cell
technologies at this moment, because the company
expects with sufficient confidence that diesel vehicles,with their economic and environmental performance
significantly improved, will be able to compete with fuelcell vehicles in the long run.
On the other hand, companies like Toyota and Honda
have been actively involved in conducting research anddevelopment (R&D) activities on hybrid vehicles and3.3 Vehicle Manufacturers
The Strategic Council has asked vehicle manufacturers to
reduce the prices of CNG vehicles, to increase thecruising range and the efficiency in fuel consumption,and to improve the maintenance and inspection systems
for CNG vehicles. To examine the behavior of the
manufacturers of CNG vehicles, we look at the case of
Isuzu Motors.

3.3.1 Isuzu Motors
Isuzu Motors is currently the largest maker of diesel
vehicles in Japan. Its corporate strategy is basically that
diesel vehicles will remain the company’s main type of
vehicles, coupled with further improvement in pollution
abatement technologies such as new catalysts, filters, andengines. As the air pollution issue is increasingly
becoming serious in large cities, however, the company
expects that CNG vehicles will play a role inameliorating the air quality in urban areas, while rural
areas will continue to depend on diesel vehicles, whose
thermal efficiency is very high, which could contribute to
reducing CO2 emissions.
As the scale of the CNG vehicle market is small, withan annual production of 700 vehicles in Japan, it isdifficult for car manufacturers to exploit the economies
of scale fully. Thus the production cost of CNG vehicles
remains high, compared with that of conventional diesel
vehicles widely used for buses and trucks.

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fuel cell vehicles, the extent of which could be observedby examining corporate strategies (Mytelka, 2003). In
particular, their hybrid vehicles have been marketed
aggressively and sold well not only in Japan, but also in
the United States and Europe (Shiroyama, 2001). Under
the presence of diversity of alternative technologies,
different types of clean vehicles could be pursued bydifferent companies. That in effect will induce divergent
demands for fuels among natural gas, methanol,hydrogen, and gasoline. Coupled with the establishmentof different types of fuel stations, the car manufacturers
cannot achieve the economies of scale in theirproductions, which would be crucial in reducing theprice of alternative vehicles.

• 2nd revision (4/1997)• 3rd revision (4/1998)
Gas Utility Industry
Law• 1st revision (3/1995)• 2nd revision (2/1996)

4. Regulatory Conditions

Fire Service Law• 1st revision (4/1995)

In addition to the behavior of the car users, carmanufacturers, and infrastructure providers, it isimportant to take into account other factors which would
influence the introduction CNG vehicles. Here I consider
the regulatory conditions influencing the behavior of therelevant actors. It is interesting to note that whileregulations on emissions from diesel vehicles have beentightened, other regulations concerning the use of CNG
vehicles have been relaxed.
On the one hand, a new regulation has been enacted
since October 2003, which specifies standards for PMs
emitted by new diesel vehicles as well as those currently
in use. That effectively requires the users of diesel
vehicles to install the DPFs approved by the governor ofTokyo. Furthermore, another regulations has been
introduced, by which large companies operating morethan 200 vehicles are required to adopt clean vehicles forat least 5 % of the total number of vehicles they use by
the end of March 2005 (Tokyo Metropolitan Government,
2002).
On the other hand, several regulations have beenrelaxed in order to remove obstacles for the introductionof CNG vehicles. Table 4 gives some of the revisions
and modifications of the regulations concerning thehandling of high pressure gases such as compressed
natural gas, the operation of CNG vehicles, and theestablishment of natural gas fueling stations. The High
Pressure Gas Safety Law, Gas Utility Industry Law, Fire
Service Law, and Road Transport Vehicles Law areamong those regulations which have been revised or
modified, making the construction of CNG stations andthe use of CNG vehicles less costly and, consequently,
easier.

• 2nd revision (3/1997)- Specified the vehicle refuelingappliance (VRA) as a gas
installation- Excluded VRA from theapplication of the High Pressure
Gas Safety Law- Abandoned the requirement for
permission for the sale of CNG- Enabled the construction of CNG
refueling stations together withgasoline stations- Established new standards forsetting up compressors
underground

Road Transport
Vehicles Law• Revision (12/1995)- Established new standards for
CNG vehicles- Enabled ownership by anyone asfor ordinary vehicles
Source: Japan Gas Association (1999).

Beyond those rather practical revisions andmodifications of specific regulations concerning CNG
vehicles, however, there is no clear plan for the future
use of natural gas in the transportation sector. That has
resulted in inadequate confidence among the relevant
actors to make large investments in CNG vehicles andfueling stations. This could be dealt with appropriately
by energy policies at the national government level.

5. Concluding Remarks
In an attempt to escape the state of technological lock-in,
TMG started a new initiative to create a large market for
low-emission vehicles. The initiative was intended toovercome coordination failures between car users, car
makers, and fuel infrastructure providers throughcommitments made by the actors with regard to the useof low-emission vehicles. To the extent that the numberof CNG vehicles used in Tokyo is expected to increase
from about 600 in 2000 to over 5,000 in 2005, it could beargued that this new type of public initiative has
succeeded in encouraging the introduction of CNG
vehicles in Tokyo.
Compared with 450,000 diesel vehicles currently
running in Tokyo, however, this level of CNG vehicles isstill low, which is equivalent to just one percent of thenumber of diesel vehicles. And the establishment ofTable 4 Revision of Regulations on the CNG Vehicles andRefueling Stations
Regulation
High Pressure Gas
Safety Law• 1st revision (3/1994)- Deregulated mobile standards
which restrict parking space, etc.
- Reduced the number of qualified
safety officers- Deregulated re-inspection forvehicle cylinders- Reduced safety distance atrefueling stations- Established new standards for allcomposite tanks

Revision- Established new standards for
CNG vehicles and their refuelingstations46

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progress of diverse technologies, including CNG
vehicles, electric vehicles, methanol vehicles, hybrid
vehicles, hydrogen vehicles as well as technologies forthe reduction of pollutants emitted from diesel vehicles
such as DPFs. Thus it might not be appropriate for the
public authority to pick up a particular type of clean
vehicles from the beginning. Information on theexperience and interest should be shared among thestakeholders, and they should be encouraged to be
actively engaged in an evolving process of learning at the
public arena for potential coordination. Although therecent attempt by TMG did not turn out to be aremarkable success, at least it could be regarded as a stepin the right direction.

natural gas fueling infrastructure remains very small,compared with the existing conventional gasoline
stations. Thus, TMG’s new initiative was not successfulin achieving a transition from the lower equilibrium with
few CNG vehicles to the higher equilibrium with a large
number of vehicles. More than five billion yen was spent
as subsidies for CNG vehicles in 2000, a half of which
was allocated to the purchase of vehicles and anotherhalf to the construction of fueling stations (Japan Gas
Association, 2000).
While the traditional roles of the public sector wereconsidered to be correcting market failures and providing
goods which market cannot support, this case shows thepossibility and limit of the role of public coordinator.
TMG attempted to provide credibility to the commitment
made by the participants, which was expected to function
to coordinate the expectations and behavior of therelevant actors towards introducing CNG vehicles. In
addition to the imposition of regulations on emissions
and provision of subsidies to R&D activities, the public
coordination of the behavior and expectations of private
actors could be a new role which the public sector
legitimately plays. By supporting the proper function of
the market mechanism, this new function could open apotential of going beyond the traditional division ofmarket failures and government failures.
TMG’s efforts to rectify the coordination failures,
however, could not succeed in escaping the state oftechnological lock-in. The planned use of clean vehicles
in the future was limited to a low level. As a majority of
the CNG vehicles would be introduced by a single
company, the commitment by other car uses, including
TMG itself, to introduce clean vehicles was simply not
sufficient. Automobile manufacturers could gain only avery small market for CNG vehicles they produce. Hencethe economies of scale could not be utilized to a full
extent. Also the scale of the establishment of natural gas
fueling stations remained negligible, as most of thegasoline suppliers are not interested in providing natural
gas at their existing stations. That diminished thepotential of the economies of scope in providing fuels.
In the end, the intended coordination of the behavior
and expectation of the relevant actors was not sufficient
to make it possible for the market to reach a scale onwhich its spontaneous evolution becomes feasible. That
could occur in the presence of technological uncertainty,
diversity, and interconnectedness. Car manufactures
would choose different corporate strategies, between
pursuing the existing technology of diesel vehicles with
pollution abatement equipment and developing new
clean technologies such as CNG vehicles, under large
uncertainty with regard to which technology will be thebest in the long term. Similarly, fuel suppliers would
decide on the type of fuels they provide, between theconventional gasoline and new fuels such as natural gas,methanol, or hydrogen, without knowing which one will
be demanded most. As expectations could be diverging,
it is crucial that the relevant actors are strongly
convinced that a specific type of clean vehicles will
become dominant for a robust coordination.
The extent of available knowledge and information
would be limited with regard to the characteristics andAcknowledgement
I would like to thank the following people for their kindcooperation to my interviews, which were conducted in
2001-2002 with Professor SHIROYAMA Hideaki of the
University of Tokyo:• Mr. SHIRATORI Kiyoshi, Head, Low Emission
Vehicle Group, Diffusion Section, Automotive
Pollution Countermeasures Division, Bureau of theEnvironment, Tokyo Metropolitan Government• Mr. KOYANO Shinji, Chief, Vehicle Management
Group, Vehicle Section, Bus Service Division,
Bureau of Transportation, Tokyo Metropolitan
Government• Mr. MUTA Masayuki, Manager, Operation
Management Division, Tokyo Branch, Sagawa
Express• Mr. SHIMA Osamu, General Manager, Natural Gas
Vehicle Department, Tokyo Gas• Mr. HIRASE Yusuke, Manager, NGV Planning
Section, Natural Gas Vehicle Department• Mr. MATSUBAYASHI Tsutomu, Executive Director,
Senior Executive, Member of the Board, Isuzu
Motors.
I also would like to express my appreciation toProfessor SUZUKI Tatsujiro, Professor SHIROYAMA
Hideaki, and Professor MATSUMOTO Miwao of the
University of Tokyo, and the other members of TCS
Research Group for stimulating discussions on the
introduction of new technologies. I appreciate very muchthe valuable comments made by the anonymous referees
on the earlier draft of this paper.

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参加者行動・期待の公的コーディネーション：東京における低公害自動車導入の試み
Public Coordination of Participants’ Behavior and Expectations:
An Attempt to Introduce Low-Emission Vehicles in Tokyo鎗目雅

Ph.D. (Economics of Technical Change) 東京大学先端科学技術研究センター助手(E-mail: yarime@zzz.rcast.u-tokyo.ac.jp)
社会技術を実践する方法論として、公的セクターの介入が、規制によって市場を代替するのではなく、むしろ市場機
能をサポートすることによって新技術の導入を促進することが有望と考えられる。本研究では、東京におけるディーゼ
ル車から低公害自動車への転換に関して、ユーザー・自動車メーカー・燃料提供者の間のコーディネーションの失敗を解消することを目指し、公的な場における各関係者間での情報交換・意思疎通を通じた相互の行動・期待のすり合わせによって新しい技術の市場を創造しようとする試みを取り上げ、その成果と課題を分析した。

キーワード：公的コーディネーション、低公害自動車、技術的ロックイン48