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Energy Scenario Development toward a Low-Carbon Society
Yuhji MATSUO* and Kokichi ITO
The Institute of Energy Economics, Japan
1-13-1, Kachidoki, Chuo-ku, Tokyo 104-0054, Japan*e-mail: matsuo@edmc.ieej.or.jp

Abstract
In this paper the authors analyze the long-term energy supply and demand perspective for Asia and theworld up to 2050, taking into account recent policy changes after the Fukushima Daiichi Nuclear Power Plant
accident. In the Reference Scenario, which yields the normative future evolution of energy demand and supply,
the world primary energy demand and CO2 emissions in 2050 will represent 1.9-fold and 1.7-fold increases,
respectively, from 2009 values, indicating that this is not a sustainable scenario from the viewpoint of either
the environment or energy security.
In the Advanced Technology Scenario (ATS), which assumes that accelerated RD&D encourages global
deployment of advanced technologies, CO2 emissions in 2050 decrease by 33% from the current level. Evenin the Low Nuclear Scenario (LNS), where nuclear power generation development is assumed to stagnate due
to policy changes after the Fukushima accident, Asia’s and the global nuclear capacity will continue toincrease, but this scenario leads to much larger CO2 emissions and higher power generating costs than the ATS.
The total cumulative investment up to 2050 for the ATS is larger by $13 trillion than that for the Reference
Scenario, but the benefit from reduced fossil fuel consumption is much larger than the cost increase, which
demonstrates the economic viability of the ATS, although there remain considerable challenges to overcome.
Not even the ATS can achieve the target of “halving CO2 emission by 2050,” thus long-sustained efforts toaccelerate RD&D of more innovative technologies will be needed.
Key words: CO2 reduction, econometric modelling, energy outlook, investment, low-carbon society, nuclear

1. Introduction
Global energy demand has continued to expand very
fast over the past decades. World primary energy demand
increased from 5 gigatons of oil equivalent (Gtoe) in1971 to 11.2 Gtoe in 2009, more than doubling in 38
years. Energy demand in Asia has shown especially steep
growth, accounting for more than 70% of the increasesince 2000 in world primary energy consumption. In linewith the rapid industrialization and economic growth of
China, India and ASEAN countries, energy demand in
Asia is expected to keep growing over the long term.
Thus, future changes in energy supply and demand
structures will be a key issue for establishing a lowcarbon society in Asia.
The Fukushima Daiichi Nuclear Power Plant accident
which took place in March 2011 in Japan has had a great
impact on the energy policies of many countries all over
the world. In Asia, although nuclear promoting countries
such as China, India and Korea have not drasticallychanged their nuclear policies, a considerable delay innuclear power expansion is expected in these countries aswell as the ASEAN countries where the introduction of
nuclear power has been under discussion. Taking these
Global Environmental Research
17/2013: 89-97
printed in Japanlatest factors into account, this paper examines thelong-term perspective of energy supply and demand in
Asia and the world up to 2050, and analyzes quantitatively the effect of low-carbon technologies such as
nuclear power, renewable energy, and energy saving
measures in the demand side sectors. It also analyzes
investment cost requirements and benefits from energy
saving, in order to provide a rough estimate of theeconomic viability of the scenario.

2. Methodology and Assumptions
2.1 Basic framework
The energy model developed for this study wasmathematically formulated with an econometric method
on a country-by-country basis. Figure 1 illustrates theschematic diagram of the model structure. The model
makes use of the historical energy balance data of IEA(2011a, b), and is composed of a macroeconomic submodel and an energy supply-demand sub-model, thestructural specifications of which are roughly explained
as follows.
The macroeconomic sub-model was developed
mainly to identify the economic indicators influencing©2013 AIRIES90Y. MATSUO and K. ITO

Fig. 1 Structure of the energy projection model.

energy supply-demand balances. In this sub-model,
numerous indicators relating to crude oil prices, population, fiscal policy, world trade and exchange rates are
assumed as exogenous variables. Endogenous variables,
implicitly determined through the model, incorporate
macroeconomic parameters such as the demand forgoods, services, etc.; industrial activity indicators such as
the production of steel, cement and other energyintensive products, vehicle ownership, passengerkilometers, freight ton-kilometers, etc; and price indicators such as deflators for GDP and its components,
WPI (Wholesale Price Index), CPI (Consumer Price
Index) and secondary energy price indexes.
The energy supply-demand sub-model, playing acentral role for energy projection, allows us to specify theenergy flow from final energy consumption to primaryenergy supply in a consistent way, following which step
anthropogenic CO2 emissions are subsequently calculated. In the first step, final energy demand is identified
by sector and by energy source, on the basis of economic
activity indicators and price indicators, the majority ofwhich are obtained from the macroeconomic sub-model.
The economic activity indicators mainly determine thedemand by sector, and the price indicators, by energy
source. The computational process in the energy conversion sector calculates the required energy input for the
output of transformed energy carriers such as electricity
and oil products. Finally, primary energy consumption
can be derived by aggregating the energy requirementsfrom the end use sectors and the transformation sector.
Regarding geographical disaggregation, the developed model is basically formulated on a country-bycountry basis, where the whole world is geopoliticallydivided into 41 countries or regions. Although there havebeen scores of attempts to simulate world energy
projections such as EIA (2011), IEA (2011c) and OPEC
(2011), the Asian region in this model is disaggregatedinto fourteen countries or regions, a more elaborate

division than other energy outlooks, in order to implement an in-depth analysis of Asia and provide a detailed
portrait of its energy demand and supply.
After calculating energy demand and supply for eachscenario, we estimated the total cumulative investment
up to 2050 based on the methodologies developed by Doi
et al. (2011), McNeil et al. (2008) and Suehiro et al.
(2009). This includes investments for both the supply
side and the demand side. The supply side estimation
includes investments required in power plant construction and other infrastructure development projects, inorder to meet the estimated electricity demand andprimary energy demand. The demand side estimation
only takes into account the additional cost increase in the
Advanced Technology Scenario as compared with theReference Scenario, i.e., in the case of automobile technologies, for example, we only estimated the cost difference between conventional vehicles and “cleaner”
vehicles, such as hybrid vehicles, electric vehicles andfuel cell vehicles.
2.2 World population and economic growth
The analysis incorporates the latest world population
forecast from the United Nations (2010) which suggeststhat the world population will continue to grow at about
one percent per year, from 6.8 billion in 2009 to
9.3 billion by 2050 (Fig. 2). Asia’s population is expected
to increase from 3.7 billion in 2009 to 4.6 billion in 2050
at a lower annual average growth rate than the nonOECD average, primarily because the population ofChina, currently the world’s largest populated country,
will begin to decrease after 2030. The population of India
is projected to experience a much faster annual averageincrease and will surpass China by 2020, reaching an
estimated 1.7 billion by 2050.
The GDP growth assumptions for this study werebased on forecasts provided by such international organizations as the Asian Development Bank (2011) and theEnergy Scenario Development toward a Low-Carbon SocietyInternational Monetary Fund (2012), and on economic
development plans released by governments. The world
economy experienced a crisis triggered by the so-called
Lehman Shock in the autumn of 2008, but it has passed
the worst phase thanks to large-scale economic stimulus
packages and unusual monetary policy measures introduced in various countries. The long-term perspective forthe world economic growth is likely to remain strong andsteady (Fig. 2). Driven by the Asian economy, as in the
recent past, the global economy is expected to grow at amoderate annual rate of some 2.7% through to 2050.
2.3 Energy prices
Prices for West Texas Intermediate (WTI) crude oil
hit a record high of $ 147/barrel in July, 2008, before
plummeting toward the end of that year to $30 dollars/barrel as the impact on the world economy triggered by
the U.S. Lehman Shock caused a short-term decline in oil
demand. In the future, as production is anticipated to shift
from large oil fields to smaller ones or deepwater oilfields with much higher production costs in order to meetstrongly growing energy demand, fossil fuel prices are
expected to increase further, in spite of increased oil andnatural gas production from unconventional resources,
such as shale gas, oil shale and oil sands. In this study,
crude oil prices (Japan’s Cost, Insurance and Freight(CIF) crude price: 2010 real price) are assumed to rise
gradually in line with oil production costs over the longterm, reaching $120/bbl in 2035 and $125/bbl in 2050.
Natural gas and coal prices are assumed to rise in linewith crude oil prices despite their abundance, due to therapidly increasing demand all over the world.
2.4 Scenarios for estimation
In this study, a Reference Scenario and an Advanced
Technology Scenario were set for estimation. The Reference Scenario reflects past trends and the energy andenvironmental policies adopted so far. In this scenario,
countries are assumed to implement no additional energy
conservation or low-carbon measures.
The Advanced Technology Scenario assumes thatcountries implement a series of energy and environmental policies and measures aimed at securing a stableenergy supply and mitigating global warming, and accelerate the development and introduction of innovativetechnologies (Table 1). In this scenario, nuclear and renewable energy power generation will be promoted substantially in response to firm growth in global electricity
demand and the enhancement of global warming
measures. For basic assumptions on the demand side andsupply side technologies, we followed a previous study(Matsuo et al., 2011), but made a major change in nuclear

Fig. 2 Population and Economic growth projection by region.
Table 1 Assumptions for the Advanced Technology Scenario.
Demand Side Technologies■Industry
Best available technology on industrial
processes will be deployed internationally(steel making, cement, paper, oil refinery, etc.)■Transport
Clean energy vehicles will be globally utilized(highly efficient, hybrid, plug‐in hybrid,electric and fuel cell vehicles).
■Building
All available efficient technologies will be widelyin use. (electric appliances, water‐heating system,
air conditioning system, lighting, andinsulation technologies)

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Supply Side Technologies■Renewables
Accelerated penetration of wind, PV,concentrated Solar Power, biomass power
generation, and biofuels■NuclearFurther expantion of nuclear power plants,
and enhancement of operating ratio■Highly Efficient Power Plants
For coal‐fired power plant (USC, IGCC,IGFC),
For natural gas plants (More Advanced
Combined Cycle)■CCS
Introduction in fossil fuel‐fired power plants
as well as in some industrial sectors

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Y. MATSUO and K. ITO

power assumptions and some minor changes in or updates on other technologies.
The Fukushima Daiichi Nuclear Power Plant accident
greatly affected the world’s perception of nuclear power.
Some countries have vowed to eliminate nuclear power
generation or have revised construction plans for new
ones. To reflect as much as possible such policy changes,
nuclear power generation development is assumed tostagnate in a third scenario (Low Nuclear Scenario),
where other technologies are assumed to be promoted asstrongly as in the Advanced Technology Scenario.
2.5 Nuclear power after the Fukushima Daiichi NPP
accident
The Fukushima Daiichi nuclear power plant accident
has directly affected nuclear energy policies in many
countries including some European nations, as well asJapan, prompting these countries to depart from dependence on nuclear energy. Germany decided to decommission its nuclear reactors, phasing out the remaining
nuclear reactors from 2013 to 2021. In Italy, which halted
all nuclear reactors and later began to consider constructing new nuclear plants, more than 90% of voters
voted against nuclear plant construction in a nationalreferendum in June 2011, making it impossible for the
Italian government to revive nuclear power generation.
As indicated by the different nuclear energy policies
of Germany and its neighbor France, nuclear policies caneasily differ from country to country. Countries can bedivided into four groups based on their nuclear policies
and positions (Murakami, 2011; Matsuo et al., 2012).
The first group, including the United States, France,
Russia and South Korea, proactively promotes nuclear
power generation over the long term. Russia and South
Korea have not changed their plans to construct many
new nuclear power plants even in the wake of the
Fukushima accident. In France, where nuclear power
generation has reached saturation, nuclear energy utilization is expected to continue. This may be because thesecountries aim not only to achieve stable domestic energy
supply and reduced GHG emissions but also to maintainand enhance their international competitiveness to increase their presence in the world market where massive
new plants may be constructed.
The second group covers China, India and otheremerging countries. At the beginning of 2011, before the
Fukushima accident, thirteen nuclear reactors with a total
capacity of 10.85 GW in China were in operation with 30
others under construction for a total capacity of 33 GW,
three times as large as the existing capacity. Just after theaccident, Premier Wen Jiabao convened a meeting of theState Council Standing Committee, deciding to conduct
emergency safety checks on all nuclear power plants inoperation and freeze new nuclear plant construction projects until a new nuclear safety program was developed.
As a result, the plan to build nuclear reactors with a total
capacity of 70-80 GW by 2020 is expected to be set back.
Nevertheless, earlier approved nuclear plant construction
projects have continued to be implemented steadily. In

August 2011, the No. 2 reactor (with a capacity of 1.08
GW) for the second phase program at the Ling Ao
Nuclear Power Plant started commercial operation. The
current freeze on new nuclear reactor construction
approvals is expected to be lifted in the near future.
Similarly, India has made no change to its nuclear plant
construction program. It has sought to promote its
thorium cycle development and introduce massive
light-water reactors from abroad. In July 2011, India
launched construction of the No. 7 and 8 reactors at its
Rajasthan Atomic Power Station and has made nochanges to its nuclear plant construction program even in
the wake of the Fukushima accident.
The third group covers countries that do not currently
operate nuclear power plants but plan to do so, including
ASEAN members such as Vietnam and Indonesia, andMiddle Eastern countries such as the United ArabEmirates and Saudi Arabia. Of these countries, the UAE
and Vietnam have taken actions to build nuclear plants
and attested to their policy of promoting their plans as in
the past. In June 2011, Saudi Arabia announced a newplan to construct sixteen nuclear reactors. These countries have made no revisions to their nuclear plant construction plans while indicating their interest in improving nuclear plant safety based on the Fukushima accident.
But fears have grown about nuclear plant safety in such
ASEAN members as Indonesia and the Philippines thatare as prone to earthquakes as Japan. These countries
could revise their construction plans, delaying the construction substantially. Future outlooks for this group
may differ from country to country.
The fourth group covers denuclearization policy
countries including Belgium, Switzerland and Germany,
as mentioned above.
While nuclear energy policies greatly differ fromcountry to country, most existing nuclear power plants
are in the first and second groups. As the two groups
proceed with their earlier nuclear energy generation plans,
the global nuclear power generation capacity is expected
to continue increasing (IAEA, 2011).
In this study, taking into account these latest policychanges, we surveyed the energy policies and nuclear
development plans of all countries that are now making
use of nuclear power or have plans to do so, and made a
projection of nuclear capacity in each country. Then wesummed up the figures to estimate the future growth of
the world’s nuclear power generation. In the wake of the
Fukushima accident, it is highly probable that concern for
nuclear safety will make additional measures desireable,
resulting in higher initial investments. In the case ofJapan, however, the cost increase caused by additionalsafety measures after the Fukushima accident is estimated to be only 0.2 yen/kWh (Costs Verification Committee, 2011). We assumed that even after the Fukushima
accident the cost competitiveness of nuclear power
generation has not changed significantly, although it
must be noted that if one more severe accident takes
place in the near future somewhere in the world, it could
greatly change the picture.

Energy Scenario Development toward a Low-Carbon Society

3. Results and Discussion
3.1 Nuclear power generating capacity outlook
The global nuclear power generation capacity is projected to rise by 332 GW from 392 GW in 2010 to 724
GW in 2035 in the Reference Scenario (Fig. 3). As Asian
countries including China, India and South Korea
account for 66% (219 GW) of the increase, Asia can beviewed as the future nuclear investment and development
center. China, in particular, will expand its nuclear power
generation capacity by 141 GW from 9 GW in 2010 to
150 GW in 2055 and the share of nuclear power
generation in its total electricity generation will increase
from about 2% in 2009 to about 11% in 2050. China willthus post the largest growth in nuclear power generation
capacity, followed by India which is expected to increase
its capacity from 4 GW to 57 GW with the share of

Fig. 3 World nuclear power generation capacity.

Reference Scenario

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nuclear energy in its total power generation output
growing from about 2% in 2009 to about 6% in 2035.
In the Advanced Technology Scenario, nuclear power
generation capacity will increase even further, mainly in
Asia, reaching 1,140 GW in 2050. Even in the Low
Nuclear Scenario where nuclear energy development
posts maximum stagnation, global nuclear power generation capacity will continue increasing, reaching 551 GW
in 2050. Asia’s share in global nuclear capacity will risefrom 22% in 2010 to 40%, 42% and 49% in 2050 in
the Low Nuclear Scenario, Reference Scenario andAdvanced Technology Scenario, respectively.
3.2 Primary energy demand outlook
The world’s primary energy demand will increase atan annual rate of 1.5% from 2009 to 2050 from 11.2 Gt of
oil equivalent in 2009 to 20.6 Gt (Fig. 4). Non-OECD
countries, including developing nations, will account for
about 92% of the increase in the world’s energy demand.
Asia will account for about 59% of the increase with
China alone responsible for about 25%.
Non-OECD countries’ share of the world’s primaryenergy demand will expand from 52% in 2009 to 71% in
2050, due to their population and economic growth.
Asia’s share will rise from 36% in 2009 to 47% in 2050.
Supported by steady economic growth, China and India
will account for 32% of the world’s primary energy demand by 2035.
In the Advanced Technology Scenario, world’s total
primary energy in 2050 will be reduced by 23% from theReference Scenario. Asia will account for more than halfof the global energy saving, indicating the importance ofenergy saving technology diffusion in this region.
In the Reference Scenario, total primary energy consumption in Asia will grow from 3,900 Mtoe in 2009 to

Advanced Technology Scenario

Fig. 4 World primary energy demand by region.

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Y. MATSUO and K. ITO

9,400 in 2050, showing a 2.4-fold increase. Coal consumption, which will grow, especially in the power
generation sector of developing countries, will maintainthe dominant share up to 2050. Fossil fuels (coal, oil andnatural gas) will account for more than 80% of the energy
demand increase (Fig. 5).
In the Advanced Technology Scenario, coal, oil andnatural gas consumption in 2050 will be reduced by 51%,
36% and 30%, respectively. Coal and oil demand will
peak before 2040 and begin to decrease, although natural
gas demand will continue to grow even in this scenario.
3.3 Electricity generation
Electricity demand will grow at a higher rate than
total primary energy demand, because of rapid electrification in both developing and developed countries.
Electricity generation in Asia will increase at an annual

average rate of 3.0% from 7,200 TWh in 2009 to
24,000 TWh in 2050, accounting for 57% of global
electricity demand growth (Fig. 6).
Coal-fired power generation accounted for the largest
share, at 61%, of global electricity output in 2009,
followed by natural gas, hydro, nuclear and oil-fired
generation. In the Reference Scenario, high dependence
on coal and natural gas will continue until 2050, while in
the Advanced Technology Scenario the share of coal will
decline to 27%.
In order to build a low-carbon society, it is indispensable to reduce CO2 intensity in the power sector to almost
zero in 2050, and then promote electrification as much as
possible. In the Advanced Technology Scenario, nuclear
and renewables will account for 54% of total electricity
generation, and the remaining will be generated by fossil
fuel with CCS (Carbon Capture and Storage).

Fig. 5 Primary energy demand for Asia and the world.

Fig. 6 World and Asian electricity mix.

Energy Scenario Development toward a Low-Carbon Society

3.4 CO2 emissions
As fossil fuels account for the largest part of energy
demand increase through to 2050, CO2 emissions will
increase 2.2-fold from 2009 to 2050 in Asia, and 1.7-foldworldwide in the Reference Scenario. In the Advanced
Technology Scenario, CO2 emissions will be reduced by
15 Gt from the Reference Scenario (9% from 2009) in
Asia, and by 30 Gt (33% from 2009) worldwide (Fig. 7).
The CO2 emissions reduction in Asia will account for
48% of the global reduction. This supports the argumentthat promoting climate change measures in Asia will bevery important. China alone will account for 23% of the
global reduction potential at 7.1 Gt.
A breakdown of the global CO2 emissions reduction
potential by technology category indicates that thepromotion of energy savings technologies will make thegreatest contribution, accounting for 50% of the global
potential. Fuel switching from coal and oil to natural gas,
nuclear or renewables (accounting for 30% of the global
potential) and the CCS (accounting for 19%) will also
play key roles in achieving reductions, and we should say
there is no single or simple means of effectively reducing

95

CO2 emissions.
In order to cut CO2 emissions further to reach 50% of
the current level by 2050, the world will require
additional measures, including such long-term measures
as innovative technology development and environmentfriendly urban development.
3.5 Cumulative investment through 2050
Figure 8 shows the estimated cumulative investment
through 2050 for the two scenarios. The energy supply
side’s cumulative investment in Asia is estimated at $20
trillion for the Reference Scenario. In the Advanced
Technology Scenario, investment in fossil-fuel-fired
power plant construction and upstream infrastructuredevelopment will be less, while additional investments inrenewable energy will be required. As a result, the energy
supply side’s investments in this scenario are estimatedas slightly smaller than in the Reference Scenario. But
the energy demand side in the Advanced Technology
Scenario will require additional investment to support
energy conservation efforts in each energy demand sector.
The total cumulative investment in this scenario thus

Fig. 7 Global CO2 emissions reduction.

Fig. 8 Cumulative investment through 2050.

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Y. MATSUO and K. ITO

comes to about $33 trillion.
In the Advanced Technology Scenario, fossil fuelconsumption saving leads to a great benefit. This
amounts to $24.4 trillion, so the net cost of this scenario
becomes $8.6 trillion. This shows the Advanced Technology Scenario is “economically viable,” although there
remain many hurdles to overcome such as fund raising,lack of consumer awareness, policy barriers, etc., specificto each technology.
3.6 Implications of the Low Nuclear Scenario
If nuclear power generation falls from the Advanced
Technology Scenario level to the Low Nuclear Scenario
level, the additional fossil fuel-fired power generation
required to cover the fall would increase Asia’s CO2
emissions in 2050 by about 1.5 Gt or 14% (Fig. 9). Coal
demand would expand by about 480 Mt (or 335 Mtoe),oil demand by about 0.2 million b/d (or 10 Mtoe) andnatural gas by about 74 bcm (or 67 Mtoe, almost the samelevel as Indonesia’s annual gas production). Such demand expansion would greatly affect the fossil fuelsupply/demand balance.
If the decline in nuclear power generation is assumed
to be replaced by fossil-fuel-fired generation, invest-

ments in new power generation facilities may decreaseby $0.5 trillion but additional investments in the fossil
fuel supply would be required, resulting in $2.2 trillion in
cumulative costs (Fig. 10). Fuel costs are estimated toaccount for more than 70% of fossil-fuel fired electricity
generating costs (Matsuo, Nagatomi & Murakami, 2011),
thus excessive depencence on thermal power generation
has some risk in terms of energy security.
If the decline is covered by renewable energy power
generation (wind, PV, etc.), cumulative investments atcurrent costs in new power generation facilities may
increase by $4.2 trillion. Massive deployment of renewable energy power generation could destabilize electricity grids, resulting in some additional grid improvement
costs.

4. Concluding Remarks
The Fukushima Daiichi Nuclear Power Plant accident
in Japan has raised the global issue of safety regarding
nuclear power generation. As a result, various countries
in the world, including in Asia, have reviewed and revised their national nuclear energy policies. Amid suchgrowing fears about accident risks, some countries have

Fig. 9 Implications of the low nuclear scenario.

Fig. 10 Cumulative investment through 2050 (low nuclear case).

Energy Scenario Development toward a Low-Carbon Society

decided to phase out or reduce nuclear power generationand others have set back their nuclear plant constructionplans. On the whole, however, nuclear power generation
will be maintained or expanded in order to achieve the“three E’s” – energy security, environmental protectionand economic growth – over the medium to long term.
The nuclear power plant capacity in Asia is projected to
expand three- to six-fold from now to 2050. Thus, theenhancement of nuclear plant safety will be indispensable.
Another major challenge is to secure alternative electricity sources covering electricity generation capacity
losses arising from delays or setbacks in nuclear power
generation plans. For the immediate future, natural gas
and other fossil fuel power generation will cover suchlosses, with consideration given to costs. Over the medium to long term, however, it will be important to reduce
costs for more diffusion of renewable energy power
generation free from CO2 emissions.
Energy demand, particularly fossil fuel demand, willcontinue expanding in line with economic growth,
mainly in Asia, thus the importance of reducing fossil
fuel consumption and realizing a low-carbon society in
Asia will increase in the future. There is no single means
to resolve all the challenges and all possible means must
be mobilized, including further energy conservation on
the demand side, as well as safer nuclear plants, cleaner
fossil fuel consumption and lower renewable energy
costs on the supply side. In particular, the diffusion ofenergy conservation technologies will be the most important issue. Also, in order to reduce CO2 emissions
greatly from the current level, it will be necessary to
reduce the CO2 intensity in the power sector to almost
zero making use of low-carbon technologies such as
nuclear, renewables and CCS.
Even in the Advanced Technology Scenario where all
the currently available technologies will be deployed asmuch as possible, including nuclear power generation, it
will be very difficult to achieve the target of halving
global CO2 emissions by 2050. Long-sustained efforts toaccelerate RD&D of more innovative technologies will
be needed to achieve the target.

Acknowledgements
This study has been partially supported by theEnvironment Research and Technology Development
Fund (S-6-1) of the Ministry of the Environment, Japan.
We would like to offer our deepest appreciation to the
Ministry.
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Yuhji MATSUO
Yuhji MATSUO is a Senior Researcher at theInstitute of Energy Economics, Japan (IEEJ). He
received his Master of Science degree from the
Graduate School of Science at the University ofTokyo. From 1997 to 2007, he worked as a researcher at the Institute of Research and Innovation, and from 2006, as a lecturer at Edogawa
University. Since joining the IEEJ in 2007, he has been in charge of
research in the fields of energy modeling and forecasting, energy
economics and nuclear policies.

Kokichi ITO
Kokichi ITO is a Research Advisor at the Instituteof Energy Economics, Japan (IEEJ). He received
his B.A. in Foreign Languages and Economics
from Sophia University and worked as a researcher at Century Research Center Corp. from1970 to 1984, as a consultant (energy modeler)
for the United Nations DTCD from 1984 to 1985,
as a Visiting Professor at Hosei University and the Nagoya University ofTechnology Graduate School from 1995 onward and as a researcher,director, managing director and board member of the IEEJ from 1985
onward. His research is focused on econometric modeling and energy
economics.

(Received 1 June 2012, Accepted 5 October 2012)