Tokyo ETS is the first emissions trading scheme to control GHG emissions from office buildings. Although the Tokyo government claimed that Tokyo ETS had been successful, some argued that the emission reduction under Tokyo ETS was actually the result of electricity price increases triggered by the Great East Japan Earthquake in 2011. Using a facility-level data set for Japanese office buildings, we conducted an econometric analysis to examine the impact of Tokyo ETS. We found that half of the emission reduction is a result of the ETS, while the rest of the reduction is due to the electricity price increase. Another unique feature of Tokyo ETS is that an accurate permit price is not publicly available due to its design. Using our estimated model, we found that the price is approximately $50 per ton of CO 2 in the early phase.

The Tokyo Emissions Trading Scheme (ETS) is the first cap -and-trade program of CO2 emissions in Asia, and it is unique in regulating commercial and service sectors. We examine the impacts of the Tokyo ETS on CO2 emissions and energy consumption by universities in the first phase. Focusing on universities allows us to estimate the effects of the Tokyo ETS separately from the economic stagnation Japan experienced after the Great East Japan Earthquake in 2011 because universities are less likely to be affected by economic fluctuations compared to other sectors. In addition to the ETS, other factors may have achieved CO2 emissions reductions in Tokyo in this phase due to the influence of the earthquake. To deal with the shortage of electricity supply after the Fukushima disaster, several measures were undertaken, such as rolling blackouts and power-saving orders, particularly in the Tokyo Electricity Power Company’s jurisdiction. To capture the characteristics for each university at the campus level and their experience with being regulation targets of the policies mentioned above, we conducted a mail survey for universities in Japan and obtained panel data that contain information about both regulated and unregulated universities over 5 years (2009–2013). The difference-in-differences approach reveals that the Tokyo ETS caused regulated universities to reduce their CO2 emissions and energy consumption by approximately 3–5% relative to unregulated universities in the first phase. In addition, we find that the quantitative regulations, such as rolling blackouts and power-saving orders, also had an impact on the universities’ behavior.

The Tokyo ETS is the first emission trading scheme to control GHG emissions from office buildings. Although the Tokyo government claimed that Tokyo ETS had been successful, some argued that the emission reduction under Tokyo ETS was actually the result of electric power price increases triggered by the Great East Japan Earthquake in 2011.Using a facility-level data set for Japanese office buildings, we conducted an econometric analysis to examine the impact of Tokyo ETS. We found that half of the emission reduction is a result of the ETS, while the rest of the reduction is due to the electricity power price increase. Another unique feature of Tokyo ETS is that an accurate permit price is not publicly available due to its design. Using our estimated model, we found that the price is approximately $50 per ton of CO2 in the early phase.

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