10. Application of AIM/Enduse Model to Japan
Mikiko Kainuma1, Yuzuru Matsuoka2, Go Hibino3, Koji Shimada2, Hisaya Ishii3,
Shigekazu Matsui3 and Tsuneyuki Morita1
Summary. The AIM/Enduse model has been frequently applied to Japanesepolicy making processes. This chapter illustrates three of these applications. First,
the effects of carbon tax and subsidies to reduce CO2 emissions in Japan are
introduced. CO2 emissions through 2010 are estimated for four cases: reference
case, market case, carbon tax case, and carbon tax+subsidies case. It is shown thatthe subsidy scheme is a useful option to reduce CO2 emissions. Second, ancillary
benefits of CO2 reduction for regional environmental quality are presented. A
module to analyze ancillary benefits of CO2 reduction is added to the original
AIM/Enduse model. Emissions of CO2, NOx and PM in Aichi prefecture, Japan,
are estimated through 2010 and it is shown that countermeasures to reduce CO2
emissions can also reduce air pollutants. Third, CO2 emission scenarios in Japanare quantified based on the four narrative scenarios for Japanese society andeconomy by referring to IPCC SRES scenarios.

10.1 Introduction
The AIM/Enduse model has been applied extensively in Japan (Kainuma et al.
1999, 2000, 2001). As shown in Table 1, various stakeholders who belong tovarious organizations such as the national government, local governments, apublic corporation, private companies, and an NGO, have used AIM/Enduse
model to evaluate countermeasures to reduce CO2 emissions. The most recent
application for the national environmental policy is introduced in Section 2 as an
example of analyzing effects of introducing carbon tax and subsidies. Next, theancillary benefits of countermeasures to reduce CO2 emissions are presented in
Section 3 as an example for regional environmental quality control programs. A
module to estimate emissions of air pollutants such as NOx and PM is added to
AIM/Enduse model for analyzing ancillary benefits. This model was applied to
Aichi prefecture for estimating reduction of air pollutants as a consequence ofcountermeasures taken for reducing CO2 emissions. Finally Section 4 presents
future CO2 emission scenarios in Japan. Four narrative scenarios consistent with
the Special Report on Emissions Scenarios (SRES) of IPCC (IPCC 2000) aredeveloped. Based on these narrative scenarios, national energy consumption andCO2 emissions through 2020 are estimated by using AIM/Enduse model and the1

National Institute for Environmental Studies, Tsukuba 305-8506, Japan
Kyoto University, Kyoto 606-8501, Japan
3
Fuji Research Institute Corporation, Tokyo 101-8443, Japan
4
National Institute for Environmental Studies, Tsukuba 305-8506, Japan2

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Table 1. Application of AIM/Enduse model to Japan
Year
1994
1996
1996
1997

1998

1999

2000
2001

Application
Analysis of effects of carbon tax
Analysis of effects of carbon tax and subsidies
Simulation of long-term CO2 emissions
Development of scenarios for reducing CO2
emissions
Analysis of policy options concerning carbon tax
Analysis of effects of key technologies
Analysis of effects of countermeasures for
Fukushima and Chiba prefectures
Estimation of long-term energy demand
Analysis of effects of countermeasures for Aichi
prefecture
Analysis of ancillary benefits of regional climate
action plan for Nagoya city, Aichi Prefecture andthe whole country
Analysis of effects of carbon tax and subsidies
Analysis of countermeasures in Japan
Development of scenarios for reducing greenhouse gas emissions
Development of CO2 emission scenarios based on
IPCC SRES

Reference
JEA (1994)
JEA (1996a)
JEA (1996b)

JEA (1997)
Tsuchiya (1997)

Kouken Association (1999)
Shimada et al. (2000)
JEA (2000)
MOE (2001)
Tsuchiya (2001)
Hibino (2001)

causal relationships between national socio-economic development patterns andCO2 emissions are studied. For each narrative scenario, one reference emission
scenario and one countermeasure emission scenario were developed. In case of thereference scenarios, CO2 emissions increase by more than 10% in 2010 ascompared to 1990. CO2 emissions in three of the four countermeasure scenarios
decrease by 2-4% in 2010 as compared to 1990. Difference in CO2 emissions
between ‘global market-based’ scenario and other countermeasure scenarios
increases over time because of the difference of the basic assumptions.

10.2 Application to Analysis of the Effects of Carbon Tax
and Subsidies in Japan
10.2.1 Background
During these 10 years, the AIM/Enduse [Japan] model has been applied to thenational environmental policy making. Year by year, the focus of the study
moved, however, the main part of the argument is how to reduce the national
CO2 emission, which fulfills the Kyoto protocol. A feasible and concrete program
which suits the political situation is required. Economic instruments such ascarbon tax and subsidies on energy efficient devices were considered as one of the10. Application of AIM/Enduse Model to Japan

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possible options, and were often analyzed from the point of their effectivenessand economic feasibility.
10.2.2 Estimation of CO2 emissions using AIM/Enduse [Japan]
Simulation assumptions
The effects of carbon taxes and government subsidies have been analyzed.
Subsidies were introduced by using the carbon tax revenues to invest in energyconserving technologies. The assumptions of the simulation, such as GDP,
population, commodity production, and energy prices, were based on the
projections of the Japanese government. Future emissions were estimated for fourcases: (1) reference case, (2) market case, (3) carbon tax case, and (4) carbon tax +subsidies case.
It was assumed that current technologies will be used in the reference case.
There are several reasons that current technologies will be used even though there
are economic benefits in changing the technologies. For example, a lack of
economic understanding and social reasons may lead to preference for oldtechnologies. Market case assumed competition among technologies based on
economic criteira. No countermeasures such as carbon/energy taxes or subsidies
were assumed in the market case. Technology selection in this case is based solely
on a cost. A carbon tax of ¥30,000 per ton of carbon was introduced in the carbon
tax case. In the carbon tax + subsidies case, a carbon tax of ¥3,000 per ton ofcarbon was introduced and the tax revenues were used to subsidize energy-saving
technologies to lower total CO2 emissions.
Simulation results
In the reference case, total CO2 emissions in 2010 increase by 18% compared to1990, as shown in Table 2. The rates of increase in the residential, commercial,
and transportation sectors exceed 30%.
Table 3 shows comparisons of CO2 emissions in different scenarios in 2010.
Technology selection in market case reduces total CO2 emissions by 6.3% in
2010. In the carbon tax case, CO2 emissions decrease by 3% between 1990 and2010. An examination of sector-wise CO2 emissions shows that compared to thereference case, emissions decrease by 14.8% in the industrial sector, 34.1% in theresidential sector, 22.9% in the commercial sector, 11.5% in the transportation
sector, and 18.6% in the energy conversion sector. The carbon tax therefore
contributes the most to the reduction of CO2 emissions in the residential sector.
Table 2. CO2 emissions in reference caseSector
Total
Industrial
Residential

1990
287.3
141.0
37.7

2000
318.4
144.8
44.7

2010
340.4
147.3
49.5

(1990=100)
118
104
131

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Commercial
Transportation
Energy conversion
Unit: Mt-C

33.4
58.2
17.0

39.9
69.6
19.5

43.4
80.4
19.8

130
138
116

Table 3. Comparison of CO2 emissions to reference case in 2010
Reference
MarketCarbon tax
Carbon tax
case
case
case
+ subsidies case
Total
360.7
318.4
(-6.3)
278.9 (-18.6)
282.0 (-18.6)
Industrial
147.3
136.7
(-7.2)
125.5 (-14.8)
127.6 (-13.4)
Residential
49.5
44.1 (-11.0)
32.6 (-34.1)
33.3 (-32.8)
Commercial
43.4
39.5
(-9.0)
33.5 (-22.9)
33.9 (-22.0)
Transportation
80.4
79.6
(-1.0)
71.1 (-11.5)
71.1 (-11.5)
Energy conversion
19.8
18.6
(-6.3)
16.1 (-18.6)
16.1 (-18.6)
Unit: Mt-C (Figures in parenthesis indicate percentage change relative to reference case)
Table 4. Subsidized energy saving equipment
SectorIndustrial

Residential

Commercial

Transportation

Energy saving equipment
Waste plastic recycling for blast furnace, high-efficiency continuous
annealing line, high-performance naphtha cracking device, highperformance industrial furnace, regene boiler, repowering for electric
generation, combined cycle power plant
High-efficiency air conditioner, energy saving house, inverter type
fluorescent lighting device, high-efficiency refrigerator, high-efficiency
television, high-efficiency VCR, high-efficiency stereo, standby powersaving, latent heat recovery type water heater, water heater with CO2
refrigerantHigh-efficiency air conditioner, HF inverter lighting device, lightsystem with sensor, high-efficiency mainframe, high-efficiency
duplicator, high-efficiency personal computer, pumping power with
VAV control, standby power saving, latent heat recovery type water
heaterHigh-efficiency small private passenger car, high-efficiency regularprivate passenger car, high-efficiency commercial passenger car

In the carbon tax case + subsidies case, CO2 emissions decrease by 2% between
1990 and 2010. The effect is almost the same as that of the carbon tax of ¥30,000
per ton of carbon, in spite of the lower tax rate. The tax revenues are used tosubsidize the energy-saving equipment shown in Table 4.
10.2.3 Discussion
With a carbon tax-only policy, it is necessary to have a tax of ¥30,000 per ton ofcarbon to decrease CO2 emissions to 2% below the 1990 level by 2010. However,
if all carbon tax revenues are used to subsidize energy-saving equipment and10. Application of AIM/Enduse Model to Japan

159

technologies, the 2% reduction can be achieved at a tax rate of ¥3,000 per ton ofcarbon.
It is shown that the subsidy scheme is a useful option to reduce CO2 emissions.
However, the subsidy scheme may differ due to certain characteristics of reality.
One of these is the difficulty of distributing funds efficiently. The AIM model has
all the necessary information concerning energy equipment and can find the
optimal distribution of the tax revenues to lower CO2 emissions. In view of this, it
should be noted that a carbon tax rate of ¥3,000 per ton is roughly the lower limit
for attempting to cut CO2 emissions through national measures. Another point isthat the subsidy may not conform to the polluter-pays principle. Since thesubsidies proposed in this simulation are entirely funded by carbon tax revenues.
Hence the objections and disputes arising from non-conformance to the polluterpays principle are not considered.

10.3 Application of Analysis of Ancillary Benefits in
Prefectures
10.3.1 Background
Many of the countermeasures to prevent global warming have beneficial side
effects that improve air quality by reducing such pollutants as nitrogen oxides andother particulates. The costs of mitigating global warming are generally
considered to be high. Uncertainty in benefits of measures for mitigating global
warming adds to the reluctance against such investments. Since the improvements
in local air environment are easily measured and seen as high priority by local
communities, quantifying the ancillary benefits of global warming related
investments is important.
Additionally, in order for developing countries to retain incentives for the
implementation of global warming countermeasures, the countermeasures should
be compatible with their economic growth while still helping to resolve thedomestic problems–such as air and water pollution–that these developing
countries face. In other words, there is an opportunity to integrate theenvironmental and resource-related policies of developing countries into aninternational cooperative system for global warming countermeasures (Yang et al.
2001).
While bearing such domestic and international trends in mind, models toquantitatively estimate the effects of measures to prevent global warming on
regional air environments are being developed. These developments are likely toassist in comprehensive policy making process by integrating various
countermeasures to prevent global warming and preserve the air environment.

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10.3.2 Development of estimation model for ancillary benefits
Estimation model
We created an estimation model for the ancillary benefits of countermeasures toprevent global warming. Using the model, we estimated emissions of CO2, NOx,and PM, and analyzed the effects of global warming countermeasures in 2010.
The emissions were estimated in accordance with the flowchart shown in Fig. 1.
The possession rate by vintage of device indicates the rate of possession of energy
service technology by device type and operating years. The usage duration
expresses the number of usage hours per day and usage days per year. The service
demand, such as the amount of production and the volume of transportation, is thedriving force for energy consumption. The first point regarding the features of thismodel is that an average emission factor has been estimated by multiplying the
diffusion rate and the factor by device/year type. The second point is that aquestionnaire to residents and individual voluntary action plans by companies has
been reflected in the countermeasures to prevent global warming.

10. Application of AIM/Enduse Model to Japan

Questionnaire toresidents to
Questionnaire

Voluntary action plans
Voluntary action plans

residents
Fuel demand factor
NOx Fuel& PMemissionfactordemandfactorby &vintageof devicefactor
NOx
PM emission
by vintage of device

161

Countermeasures against
climate changeagainst
Countermeasures
climate change
Diffusion rateby vintage
of deviceDiffusion
rate
by vintage of device

Fuel demand factor
NOx Fuel& PMemissionfactordemandfactorNOx & PM emission factor
Usage duration
Usage duration
Service demandService demandNOx & PMemissions
NOx & PMemissions

Fuel consumption
Fuel consumption

EmissionfactorEmission

CO2 emissions

factorCO2 emissions
Evaluation ofcountermeasures
Evaluation ofcountermeasures

Fig.
Fig.1.2.Flowchart
Flowchartof
ofestimation
estimationmodel
modelforforancillaryancillarybenefits
benefits

The emissions were estimated in four sectors: the industrial (including energy
conversion sector), transportation, commercial, and residential sectors.
Furthermore, we classified the industrial sector into 28 types of business, thetransportation sector into 28 types, the residential sector into 45 types, and thecommercial sector into 23 types of energy service technologies. As a general rule,the years used for estimation in each sector were 1990 as the base year and 2010
as the target year.
Countermeasures against global warming
Major countermeasures that have been adopted are shown in Table 5. In terms of
the industrial sector, a reduction plan concerning energy consumption or CO2
emissions for 2010 was input based on responses from companies. For companies
on which research was not carried out, the Keidanren Voluntary Action Plans on
the Environment were adopted. For other companies to which these did not apply,
an estimate was made assuming a 1% annual energy consumption reduction inaccordance with the Energy Conservation Law.
With regard to the transportation sector, the standard values of the Energy
Conservation Law were used for improved fuel efficiency. Furthermore, theintroduction of advanced-technology vehicles was set up by referring to the target

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values of Aichi prefecture. For the residential and commercial sectors,
improvements in equipment efficiency were set up in accordance with the Energy
Conservation Law, and improvements in efficient equipment selection rates were
estimated in accordance with the prefectural plan. Furthermore, with reference tothe transportation sector, infrastructural improvements such as easing of traffic
congestion and promotion of modal shift for the countermeasure case wereconsidered based on the assumption of the estimated results for automotive usage
in the reference case. For the residential sector energy saving dwellings wereconsidered, while measures such as shift to energy saving buildings were also
considered for the commercial sector. Targeted numerical values for electricutilities in this area as of 2010 were used for the CO2 emissions factor forelectricity, which is common to all sectors.
Some of the countermeasures against global warming through lifestyle changesof the general public in the prefecture estimated for the countermeasure case areshown in Table 6. This was created based on responses from residents of theprefecture to questionnaires issued in October 1999. The number of valid
responses was 1,364 out of a total of 2,000 questionnaires distributed. The existing
implementation rate indicates the ratio that have already taken the actions
concerned, while the expected implementation rate indicates the ratio that intend
to carry out such actions among those who responded and includes thosepreviously listed under the existing implementation rate.

Table 5. Major countermeasures against global warming
SectorIndustrial

Residential

Commercial

Transportation

Countermeasures
Voluntary plan of chemical industry
Voluntary plan of transport machinery industry
Voluntary plan of steel industry
Improvement in efficiency of air conditioners
Improvement in efficiency of fluorescent lighting
Installation of solar hot water systems
Insulation with pair glass in existing houses
Strengthening the structure of insulation in newly built houses
Installation of synthetic energy-saving houses
Improvement in efficiency of air conditioners
Improvement in efficiency of personal computers
Improvement in efficiency of lighting systems
Installation of HF inverter lighting systems
Installation of high-efficiency emergency lights
Installation of synthetic energy-saving houses
Improvement in efficiency of privately owned gasoline cars
Improvement in efficiency of ordinary diesel freight vehicles
Introduction of privately owned gasoline hybrid cars
Modal shift from truck to rail

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163

10.3.3 Estimation results
Emissions by sector
Figure 2 shows CO2, NOx, and PM emissions in the reference and countermeasurecases in the base, latest, and target years.
CO2 emissions in the target year would be reduced by 7% from the base year by
establishing the countermeasures drawn up in the prefectural plan, while NOx
emissions would be reduced by 24% and PM emissions by 32%. As for NOx andPM emissions in the transportation sector, it was decided that the planned values
under the national regulations would be specified in both the reference andcountermeasure cases. Furthermore, emissions produced in the generation ofelectricity were allocated in the demand sector in accordance with the amount ofelectricity consumption.
The emission ratios for the countermeasure cases using 100% as the referencecase are shown in Fig. 3. When the total emissions of the sectors are compared
between the reference and countermeasure cases in the target years, the amount of
CO2 emissions is reduced by 23%, but at the same time, it can be seen that NOx
emissions fall by 11%, as do PM emissions. When the results are analyzed by
sector, NOx drops by 11% and PM by 8% in line with a 19% reduction in CO2
from the industrial sector. As for the transportation sector, CO2 falls by 21%,
although NOx is only reduced by 8% and PM by 5%. In terms of the residential
sector, CO2 is reduced by 33%, NOx by 30%, and PM by 38%. In the commercial
sector, NOx is reduced by 26% and PM by 31%, broadly in line with a 34% dropin CO2.

Table 6. Selected countermeasures against global warming through lifestyle changes
SectorTransportationCountermeasure
R1
Reduction of sudden acceleration from rest 10 times a day
37
Removal of any unnecessary luggage (10 kg) prior to driving
27
Reduced idling of cars by five minutes a day
33
Driving with appropriate tire pressure
40
Resident 1°C reduction in temperature setting of air conditioners
24
ial
1-hour reduction in heater use
0Reduction in use of lights
40
Reduction in shower running time (3 minutes a day)
26
Commer Changing heater temperature setting to more appropriate one
42
cial
Changing cooler temperature setting to more appropriate one
42
Turning off lights during lunch breaks
40
R1: Existing implementation rate (%), R2: Expected implementation rate (%)

R2
87
78
86
60
88
60
98
94
92
91
92

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140.0
Commercial
Residential
Transportation
Industrial

121
120.0

113
100

Emissions (1990 total emission = 100)

113

100

100
96

93

100.0

86
76

76

80.0

68

60.0

40.0

20.0

Base
year

Latestyear

Target
year

Base
year

Latestyear

Target
year

Base
year

NOx emissions

CO2 emission

Latest
year

Total
100%

Ref.
CO2
NOx
PM

100%
77%
89%
89%

Reference
CO2
CO2
NOx

80%

PM

60%
40%
Commercial
Ref.
CO2
NOx
PM

100%
66%
74%
69%

Ref.
CO2
NOx
PM

100%
67%
70%
62%

Industrial
20%
0%

Residential

Targetyear

PM emissions

Fig. 2. CO2, NOx, and PM emissions in Aichi prefecture

Ref.
CO2
NOx
PM

Transportation

Fig. 3. Comparison between reference and countermeasure cases

100%
81%
89%
92%

Ref.
CO2
NOx
PM

100%
79%
92%
95%

Countermeasure

Reference

Countermeasure

Reference

Countermeasure

Reference

0.010. Application of AIM/Enduse Model to Japan

165

Analysis of CO2, NOx, and PM reduction effects by countermeasure
type
Table 7 shows the CO2, NOx, and PM reduction contribution rates of eachcountermeasure type. The reduction contribution rate mentioned in this section
indicates the ratio of the amount of reduction for each action with respect toemission amounts in the reference case for the target year. The reduction effects
on each gas by global warming-related countermeasures against CO2, NOx, andPM are analyzed as follows.
Major reduction contribution rates for CO2 result from the voluntary plan of thesteel industry (6.3%), improved fuel efficiency for privately owned gasoline cars
(6.6%), and improved efficiency of domestic air conditioners (heaters) (3.2%).
Major reduction contribution rates for NOx result from the voluntary plan of thesteel sector (5.1%), modal shift promotion (2.4%), and installation of solar hot
water systems (6.4%). Major reduction contribution rates for PM result from thevoluntary plan of the chemical industry (3.4%), modal shift (2.6%), and improved
efficiency of domestic air conditioners (heaters) (5.4%). Furthermore, highreduction contributions are shown for a reduction in the emission factor ofelectricity in the residential and commercial sectors; that is, 5.1 to 5.9% for CO2,
3.2 to 3.7% for NOx, and 3.8 to 8.7% for PM.

Table 7. Contribution of each countermeasure to total reduction
SectorCountermeasure

CO2

Industrial Voluntary plan of chemistry industry
1.2%
Voluntary plan of steel industry
6.3%
Voluntary plan of transport machinery industry
1.5%
Reduction in emission factor of electricity
3.3%
Transport Improvement in efficiency of privately owned gasoline cars 6.6%
ation
Introduction of privately owned gasoline hybrid cars
1.7%
Reduction of sudden acceleration from rest 10 times a day
2.0%
Driving with appropriate tire pressure
1.4%
Modal shift from truck to rail
1.2%
Residenti Improvement in efficiency of air conditioners (heaters)
3.2%
alInstallation of solar hot water systems
3.0%
1-hour reduction in heater use
2.4%
Reduction in use of lights
2.2%
Reduction in shower running time (3 minutes a day)
3.0%
Reduction in emission factor of electricity
5.1%
Commer Improvement in efficiency of air conditioners
2.1%
cial
Improvement in efficiency of lighting systems
5.2%
Improvement in efficiency of personal computers
3.3%
Changing heater temperature setting to more appropriate one 2.5%
Installation of synthetic energy-saving houses
2.0%
Reduction in emission factor of electricity
5.9%

NOx

PM

2.4% 3.4%
5.1% 3.1%
0.4% -0.6%
0.8% 1.1%
0.0% 0.0%
0.9% 0.0%
1.1% 0.8%
0.8% 0.5%
2.4% 2.6%
2.0% 5.4%
6.4% 0.0%
1.8% 1.6%
1.4% 3.7%
5.5% 0.9%
3.2% 8.7%
1.3% 1.3%
3.3% 3.4%
2.1% 2.1%
4.2% 5.8%
3.0% 3.2%
3.7% 3.8%

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10.3.4 Discussion
In order to quantitatively understand the effects of countermeasures against global
warming on the regional air environment, we developed a model and conducted
estimates/analyses by applying this model to Aichi prefecture as a case study. The
results obtained are summarized as follows.
! When the reference case was compared to the countermeasure case in thetarget year after carrying out the measures specified in the prefecture’s
regional promotion plan for global warming-related countermeasures, NOx andPM emissions were both reduced by 11% against a 23% reduction in CO2emission.
! When the reference case was compared to the countermeasure case for thetarget year after implementing measures to reduce CO2 emissions, equivalentor higher percentages of NOx and PM reductions could be achieved in theresidential and commercial sectors. In the industrial and transportation sectors,
reductions in NOx and PM of between a quarter and a half of those for CO2
could be achieved.
! The contribution of each action to the amount of CO2 reduction in the
countermeasure case as compared to the reference case has also been analyzed.
In terms of CO2, the voluntary plan of the steel industry, improvement in theefficiency of gasoline engines in privately owned cars, and improvement in theefficiency of lighting systems demonstrate comparatively large reduction
contribution rates. As regards NOx, the voluntary plan of the steel industry,
reduced running of showers, and changing heater temperature settings in
offices to more appropriate ones produce comparatively high reduction
contribution rates. For PM, the voluntary plan of the chemical industry,
improvement in the efficiency of domestic air conditioners (heaters), andchanging heater temperature settings in offices to more appropriate ones offer
comparatively high reduction contribution rates. Furthermore, reductions in theemission factor of electricity in the residential and commercial sectors
significantly contribute to reductions in CO2, NOx, and PM emissions.
An ancillary-effects estimation model was developed and applied to Aichi
prefecture. Through this study of co-benefits, we also looked at the implication for
future environmental policies. Our observations are as follows.
! It has become possible to quantitatively understand air pollutant emission
reduction effects from countermeasures to prevent global warming by
developing a model that can simultaneously estimate greenhouse gases and air
pollutants. Its use allows comprehensive measures that functionally link global
warming and air preservation-related measures to be studied. For example, theimportance of the industrial and transportation sectors has been clarified interms of CO2, NOx, and PM emissions in the case of Aichi prefecture. It has
also been clarified that measures taken by the residential and commercial
sectors are important from the perspective of ancillary effects.

10. Application of AIM/Enduse Model to Japan167! CO2, NOx, and PM reduction characteristics by measure are shown
simultaneously, which could be useful in deciding the priority for measures inaccordance with the regional characteristics of local public organizations.
Through these estimates, the voluntary plan of the steel sector and reductionsin the emission factor of electricity may be seen as measures or areas in whichsignificant reductions in the amounts of NOx and PM emissions, as well as
CO2, can be realized. Understanding the correlations of these ancillary
reduction effects will be useful for determining future measures.
! Analysis of the effects of area separations required to study any
countermeasures against air pollution onsite will be possible by linking thisestimation tool to the geographical information system (GIS).
! As suggested by the Eco Policy Linkage that was proposed in Environment
Congress for Asia and the Pacific, this estimation model can be utilized indeveloping countries as a tool to promote global warming countermeasures.
Developing countries need an approach in which the effects ofcountermeasures against local pollutants such as sulfur oxide on greenhousegas emission reductions are analyzed. This model can also be used for thispurpose.

10.4 Development of CO2 Emission Scenarios in Japan
10.4.1 Background
With the Kyoto Protocol due to come into effect soon, specific measures to ensure
its compliance are a matter of urgency in Japan. Furthermore, as a preliminary
step for the next and future negotiations, we are at a stage where we need tothoroughly discuss issues ranging from emission forecasts to the effectiveness ofthe measures for the second commitment period starting in 2013. In order toestimate future greenhouse gas emissions–a prerequisite for such discussions–wefirst require social and economic scenarios as a basis of these estimates for future
greenhouse gas emissions. However, since many aspects concerning the future
course of society and the economy are unclear, it is thought desirable to holddiscussions using data on future emissions derived from simulations under various
possible scenarios, rather than a single scenario. Four alternative scenario families
of future emissions and their driving forces have been assumed by IPCC (IPCC
2000). Accordingly, the Working Group to Draw up Japanese Emissions
Scenarios organized by the Ministry of the Environment has presented four
narrative scenarios. The authors also estimated Japan’s future CO2 emissions foreach narrative scenario using the AIM/Enduse [Japan] model. From these results,
consideration was given to the causal relationship between Japan’s growth pattern
and the significance of measures to control greenhouse gases.

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10.4.2 Japan’s narrative scenarios and synopses
The Working Group to Draw up Japanese Emissions Scenarios presented four
alternative scenarios for Japan, with due consideration for consistency with theemissions scenarios formulated by IPCC (Fuji Research Institute Corporation
2001) . An outline of each is given below.
A1 scenario (global market-based scenario)
In the A1 scenario, the Japanese economy shifts toward a market-based economic
system that attaches greater importance to the economic rationale for survival
under a global market economy. Investments are targeted to increase productivity,with the aim of fueling economic growth. Also, employment opportunities will
increase for the elderly, women, and foreign nationals—in other words, there will
be more equal opportunities—indicating a shift toward merit-based employment
regardless of age or gender in such a competitive business world.
In terms of lifestyles, active consumer spending based on high purchasing
power will be brought about. Time saved by outsourcing housekeeping tasks
resulting from a focus on economic efficiency will be spent on recreation andeducation.
Moreover, the population and capital will be centralized into a megalopolis.
Transportation networks will be developed featuring railways and automobiles in
the central area, and automobiles in the suburbs.
In the energy industry, price competition will intensify in line with reductions in
the cost of electricity following deregulation. As a result, demand for electricity
derived from fossil fuels (mainly coal and oil) will increase.
A2 scenario (scenario featuring regions and traditions)
In the A2 scenario, economic development follows the same trends as the existingsocial and economic systems, instead of altering these systems rapidly.
Accordingly, the economy will remain relatively depressed, and society will be
inwardly stable without social and economic structural reform.
In terms of employment, thanks to the retention of the orthodox Japanesemanagement system, employment levels will be maintained despite the stagnant
economy. However, there will be no significant increase in employment
opportunities for the elderly, women, or foreign nationals. Furthermore, theworking hours per person will be longer than those of any other scenario because
there is no material enhancement in labor productivity.
In terms of lifestyle, consumption will remain at current levels. In terms ofurban structure, the population and capital will be more diversified across anumber of core cities. Thus, automobiles will be the main form of transportation
for both cargo and passenger services across a road network connecting thesecities, and also owing to active public investment in rural areas.
In terms of energy, electricity will become heavily reliant on nuclear power
under an expansion of the former energy security policy.

10. Application of AIM/Enduse Model to Japan169

B1 scenario (environmental-technology-led scenario)
This is a highly technology-oriented scenario that tends to favor both economic
development and dematerialization through technological innovation. Investment
in environmental preservation is preferred, and thus dematerialization will beadvanced. Moreover, the economic growth rate will rise (though not as much as in
the A1 scenario), led by the environmental industry and environment-related
investments.
Employment opportunities for women and the elderly will increase. In this
scenario, women’s employment will rise, supported by outsourcing of child-careand nursing, in line with the growth of a welfare industry suited to an aging
society with a declining birthrate, due to a focus not only on environmental
preservation but also on welfare.
In terms of housing and transportation, an environmentally harmonious society
will be built without any reduction in service demand, through resource
optimization led by technological development. Items such as super heat pumps,
fuel cells, etc., will become more popular, as well as long-life houses andadvances in insulation through technological development. Also, inner-citytransportation will be created using light rail transit (LRT) and urban monorails as
cities will become more compact and diversified across the nation, rather thanbeing congregated into a megalopolis. Fuel cells will become more popular not
only in housing but also in automobiles.
In terms of energy, natural gas will be the main source following the adoptionof natural gas thermal power stations and fuel cells.
B2 scenario (new independent areas scenario)
B2 is a scenario in which regions coexist symbiotically with independent andsustainable production areas for each. City structures will be very compact, inwhich communities will be the key decision-making elements in thesocioeconomic system. Nongovernmental organizations (NGOs) and non-profit
organizations (NPOs) will play important roles under such a socioeconomic
system.
In the B2 scenario, a cyclical economy will be formed with arterial and venous
industries cooperating in independent production areas. It is a scenario intended toharmonize the economy with the environment just as the B1 scenario does.
However, such an environmentally harmonious society will be formed on the basisof changed lifestyles due to an altered sense of values in B2, not by technology asis the only solution in B1. For example, purchase-cycles for housing, furniture,appliances, automobiles, etc., will all be extended, so that expenditures on
consumer goods will decrease, while on the other hand, consumer demand for
longer lasting goods will increase despite their higher cost. Moreover, service
industries such as the refurbishment and repair industry will be bolstered tosupport longer life cycles for these products. Manufacturers will also betransformed from companies that simply produce and sell goods into service-lease170

Kainuma, M. et al.

companies. As a result, they will strive for environmental harmony in all stages of
their goods’ life cycles, from production through usage to disposal.
In the realm of transportation, public transport and bicycles will take the placeof automobiles thanks to the close proximity of living and business areas.
In employment terms, opportunities for women and the elderly will increase
thanks to work-sharing schemes to promote social involvement of various types ofpeople. Although the welfare system to support them will be enhanced, the role
played by local communities under such welfare systems is important. As a resultof work sharing, fewer hours will be allocated per person, and recreational periods
will be spent doing various activities in the local community.
In terms of energy, service demand in the energy industry will be lower than in
any of the other cases, due to a transition toward more environment-friendly
lifestyles. Also, since people will be far more conscious of environmental mattersand decision-making by local communities will be emphasized, environmentfriendly energy systems will be adopted although they cost more. Accordingly, no
new nuclear power plants will be built, while the building of new thermal power
plants will be kept to a minimum—with an emphasis on natural gas power
plants—because demand for large-scale power plants will decrease following the
adoption of fuel cells based on local energy sources such as biomass energy, in
addition to falling electrical demand due to changes in lifestyles.
10.4.3 Estimation of CO2 emissions using AIM/Enduse [Japan]
Simulation assumptions
Using AIM/Enduse [Japan], we estimated the long-term profile of CO2 emissions
based on the four aforementioned scenarios. An estimation of the energy service
demand per sector assumed on the basis of these four scenarios is shown in Table
8. Future CO2 emissions in Japan were estimated using AIM/Enduse [Japan] forthe following reference and countermeasure cases.
a. Reference case (fixed technology case)
CO2 emissions until 2020 were estimated on the assumption that the usage
shares of energy technologies will not change.
b. Countermeasure case (carbon tax case)
CO2 emissions were estimated assuming the adoption of energy saving andrenewable technologies with a marginal cost limited to ¥30,000, which will be
realized by charging a ¥30,000 carbon tax per ton of carbon used for secondary
energy.

Table 8. Energy service demand assumed in AIM/Enduse [Japan]

10. Application of AIM/Enduse Model to Japan

2010
2020
A1 A2 B1 B2 A1 A2 B1 B2
Gene ral Economic growth rate (% /ye ar) 2.1 0.9 1.6 0.5 1.9 0.6 1.4 0.6
Population (mil ion) 127 126.3 128.4 127.6 123.6 121.4 126.4 124.1
Industrial Crude ste l (10,000 t) 8,887 9,860 9,120 9,119 7,876 9,584 8,265 8,268(10,000 t) 8,398 8,194 8,264 7,727 8,667 8,245 8,422 7,161
Cement(10,000 t) 668 701 640 645 616 687 573 598
Ethylene
Pape r and paperboards (10,000 t) 3,052 3,311 3,010 3,004 2,891 3,366 2,836 2,848)
65.9 64.1 65.4 64.8 68 64.3 67.1 66.4
Share of te rtiary industry (％Residential House holds (mil ion) 49.6 49 49.4 48.8 50 48.4 49.7 48.2
Heating service per(2000 = 100) 100 92 97 89 101 86 88 77
household
Cooling serv ice per(2000 = 100) 145 137 145 133 145 145 145 143
householdInformation appliances per(2000 = 100) 128 116 122 116 154 127 139 127
household
Fuel cel cogeneration (mil ion kW) 0 0 1 0 0.5 0.5 5 2.5Comme rcial Floor space (mil ion m2) 1,804 1,710 1,796 1,702 1,957 1,749 1,922 1,766
Fuel cel cogeneration (mil ion kW) 0 0 1 0 0.5 0.5 5 2.5Transportation Pas e nge r transportation (mil. pas .-km) 1,387 1,343 1,367 1,323 1,402 1,325 1,377 1,291
0 0 0 0 0 0 20 10
Fuel cel vehicles (% )Freight transportation (mil ion t-km) 593 544 559 506 660 552 584 478
Powe r generation Nuclear powe r plants (M W) 53,248 57,546 49,580 44,917 53,819 63,819 49,521 41,190

171

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Kainuma, M. et al.

Results of simulations
CO2 emissions of simulation cases are shown in Table 9 and Fig.4. CO2 emissions
will be largest, increasing by 33% compared to 1990, in the A1-reference case thatemphasizes economic efficiency in a highly competitive market society. When we
look at changes in GDP per capita as shown in Fig. 5, although the economic scaleis larger than that of the other scenarios and energy demand is expected toincrease, energy intensity drops dramatically in accordance with an industrial shift
toward services. Furthermore, this scenario offers the worst situation in terms ofcarbon intensity, due to the maintenance of oil/coal-based energy systems with aworldwide stabilization in the energy status. In transportation terms, thedevelopment and adoption of fuel cell-powered vehicles does not advance due torelatively low gasoline prices. Coal and oil would also likely be chosen by electricutilities under free market conditions as low-cost energy sources. Moreover, in theA1-countermeasure case, CO2 emissions increase by 2% in 2010 and by 5% in
2020, compared to 1990.
Energy intensity is largest in the A2 scenario. An industrial shift toward
services cannot advance much because factors such as the comparative advantagesof Japanese manufacturers remain the same under these circumstances in which a
global economic market does not penetrate to a high degree, or stable demand for
civil engineering and construction work led by old-style public investment
maintains the current level of domestic steel and cement production, all of which
result in a high energy intensity. Conversely, carbon intensity shows a certain
1,600

A1-Reference
A2-Reference

1,400

B1-Reference

CO2 emissions (Mt-CO2)

1,200

A1-Countermeasure
B2-Reference

1,000

A2-Countermeasure

800

B1-Countermeasure
B2-Countermeasure

600

400

200

0
1990

1995

2000

2005
Year

2010

Fig.4. CO2 emission profiles of simulation cases

2015

2020

10. Application of AIM/Enduse Model to Japan173

drop. This is because the number of nuclear power plants continues to increase
under circumstances that require energy security due to global instability in termsof energy supplies. In this scenario, CO2 emissions would dramatically decrease
from 1990 levels, showing drops of 4% by 2010 and 12% by 2020.
In the B1 scenario, relative compatibility between economic growth anddematerialization will be achieved by development and distribution ofenvironmental technologies. Technologies to reduce the amounts of waste for
disposal (i.e., eco-cement, biodegradable plastic) will have been developed andadopted for the industrial sector, as well as technologies for comfortable lifestyles(such as insulation systems) for the residential sector, countermeasuretechnologies against air pollution and noise (i.e., fuel cell vehicles and nextgeneration public transportation) for the transportation sector, and natural gasbased systems as countermeasures against air pollution (natural gas thermal power
generation, fuel cell cogeneration) in the energy field. As a result, CO2 emissions
will be reduced. Both energy intensity and carbon intensity will be smaller, andCO2 emissions will be significantly small even though the scale of economy iscomparatively larger. If countermeasures to reduce CO2 emissions are
implemented, a significant reduction from the 1990 level will be possible as in the
A2 scenario, with a reduction of 2% in 2010 compared to 1990, increasing to 13%
by 2020.
The B2 scenario emphasizes local issues and equitability. From the viewpoint ofrevitalization and local equitability, job-sharing enables both a reduction in
working hours and guaranteed employment at the same time. Direct decisionmaking by residents will be adopted for local issues, and decisions that might
result in pollution or destruction of the local environment or even prove fatal will
be replaced. In concrete terms, energy diversification rather than the newdevelopment of nuclear power plants, the purchase of recycled or long-lasting
goods rather than building waste incinerators, and the use of fuel cell vehicles
rather than gasoline-powered vehicles that cause air pollution will be chosen. The
scale of economy will be relatively small and the speed of development andadoption of environmental technologies will be slower than in the B1 scenario,
Table 9. CO2 emissions of simulation cases
2010

2020

A1 - Reference

1,051

1990

1,120

1998
(107)

1,292 (123)1,394 (133)

A2 - Reference
B1 - Reference

1,051
1,051

1,120
1,120

(107)
(107)

1,202 (114)
1,186 (113)

1,174 (112)1,099 (105)

B2 - Reference
A1 - Countermeasure

1,051
1,051

1,120
1,120

(107)
(107)

1,152 (110)1,068 (102)1,041 (99)
1,102 (105)

A2 - Countermeasure
B1 - Countermeasure

1,051
1,051

1,120
1,120

(107)
(107)

1,012
1,030

(96)
(98)

926
914

(88)
(87)

B2 - Countermeasure
1,051
Unit: Mt-CO2, (1990 = 100)

1,120

(107)

1,008

(96)

867

(83)

174

Kainuma, M. et al.

which stimulates the environmental industry under a market economy. However,
CO2
120

200

100
Population (1990 = 100)

A1
80

A2

60
40
20

GDP per capita (1990 = 100)

B1
B2

A1
150

A2
B2
100

50

0
1990

B1

0
2000

2010

2020

1990

2000

Year

2010

2020

Year

120

120
A1
A2
B2
A1
B1

80
60
40
20
0
1990

100

CO2 intensityb (1990 = 100)aEnergy intensity (1990 = 100)

100

A2
B1
B2

80
60
40
20
0

2000

2010

Year

2020

1990

2000

2010

2020

Year

Note: a: Energy intensity = Energy consumption / GDP, b: CO2 intensity = CO2 emission / Energy consumption

Fig. 5. Population, GDP per capita, energy intensity, and CO2 intensity in reference cases

emissions will still be at the same level as in B1, in the event that society andthe economy are headed toward the end indicated in the B2 scenario. Over thelong term, CO2 emissions are the smallest among the four scenarios provided thatgreenhouse effect countermeasures are adopted, resulting in decreases of 4% in2010 and 17% in 2020 compared to 1990. CO2 emissions in Japan are smallest
under the B2 scenario; however, the same is true under the B1 scenario in SRES
by IPCC. This is because there is no significant difference in population increase
between the Japanese scenarios, and the difference in economic growth between
B1 and B2 directly affects the emissions, in contrast to B2 of SRES, in which the
population increase causes larger emissions.

10. Application of AIM/Enduse Model to Japan

175

10.4.4 Discussion
As described above, energy consumption and CO2 emissions in Japan up to 2020
were estimated using AIM/Enduse [Japan] on the assumption of four narrative
scenarios of Japan’s society and economy. When we compare the CO2 emissions
with the proviso that measures to reduce CO2 emissions are adopted, possibilities
for reductions to below the level of 1990 are demonstrated in three of the fourcases, with the A1 scenario being the exception. Each case can be characterized asfollows. The A2 scenario reduces carbon intensity by increasing nuclear power
output. The development and adoption of environmental technology in the B1
scenario leads not only to economic growth but also to a reduction in greenhousegases. In the B2 scenario, a social system is formed on a regional basis, withbottom-up decision-making that can be followed by reduction of greenhouse gas
emissions. The means of achieving the reduction differ greatly from one scenario
to the other. Furthermore, the emissions in 2010 when countermeasures are
implemented will be almost the same for A2, B1, and B2, but will differ in 2020
(it should be noted that the scale of economy in B1 and A2 are significantly
different, although their estimated emissions in 2020 are similar). In other words,
when we examine long-term (i.e., 20 to 30 years) countermeasures against global
warming, there must be sufficient discussion to understand which development
pattern will be adopted and whether or not the countermeasures that are being
planned or implemented are appropriate to that pattern, rather than merely
discussing global warming countermeasures by themselves.

10.5 Concluding Remarks
Various decision-makers have used the AIM/Enduse model. Due to wide use of
the modeling approach for dealing with the global warming problem, it isexpected that the application of AIM/Enduse will spread to various involved
parties in Japan. The following are some expected applications of AIM/Enduse in
the near future.
! Governments will develop an integrated management system for theatmospheric environment with linkages between emission inventories and
AIM/Enduse so as to address both air pollution and global warming
simultaneously.
! Governments will analyze the effects of various policy combinations, such as
voluntary plans, energy efficiency regulation, emission regulation, emission
trading, energy tax, and emission tax.
! Private companies will analyze the impact of their own products on global
warming using AIM/Enduse linked with their environmental accounting
system.
! Private companies will develop strategies for emission trading using
AIM/Enduse.

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Kainuma, M. et al.

! Citizens will analyze their activities using a system linking environmental
household account books and AIM/Enduse.
In order to meet these requirements, we need to develop additional modules for
AIM/Enduse such as a user-friendly interface, expansion of target gases, linkages
with material and top-down models, linkages with statistical tools and emission
inventories, and so on.

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