An economic analysis of the “Home Appliance Eco-Point System” in Japan

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1 Citation (Scopus)

Abstract

The Home Appliance Eco-Point System was a subsidy program implemented by the Japanese government from May 2009 to March 2011. The system has two features. First, the subsidy was provided in the form of eco-points that were only exchangeable for environmentally friendly goods. Second, it was a replacement subsidy program for durable goods with uncertain termination dates. We investigate the policy implications of these features. We show that if the eco-points are exchangeable for any goods (i.e., if a simple rebate program rather than an eco-point system is implemented), the same outcome can be achieved at a lower subsidy rate and thus using fewer financial resources. Regarding the eco-point system as a replacement subsidy, we show that the uncertain termination has the same effect as an increase in the subsidy: both accelerate the replacement. Uncertainty is a substitute for a subsidy, thus saving the financial resources of the government. However, there are two welfare concerns: (a) acceleration may not be desirable in terms of the environment, and (b) it costs households their expected utility.

Original languageEnglish
Pages (from-to)1-19
Number of pages19
JournalEnvironmental Economics and Policy Studies
DOIs
Publication statusAccepted/In press - 2016 Apr 28

Keywords

  • Eco-point
  • Environmentally friendly goods
  • Replacement subsidy
  • Uncertain termination
  • Voucher

ASJC Scopus subject areas

  • Management, Monitoring, Policy and Law
  • Economics and Econometrics

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