Multiplier Impacts and Emission Reduction Effects of Joint Crediting Mechanism: Analysis with a Japanese and International Disaggregated Input-Output Table

The reduction of emissions from developing countries is essential in tackling climate change. The Clean Development Mechanism is effective in reducing greenhouse emissions but criticized by various parties. In response, the Japanese government has proposed the Joint Crediting Mechanism (JCM). Using the 2010 Japanese domestic and the 2005 Asian international input–output tables, we disaggregate the automobile industry and other electrical devices and parts industry to capture hybrid vehicles and solar panels. Moreover, we add the wind turbine industry and the geothermal turbine industry in our analysis. In evaluating the JCM, we find that the multiplier impacts of hybrid vehicles, wind turbines and air conditioners are high, whereas boilers and solar panels produce smaller effects. In contrast, the results for the employment effects show that the coke dry quenching plants and lighting equipment create more jobs. We also estimate the emission reduction from the JCM. Taking into account the lifetime of each product/technology and country-specific emission coefficients, we find that lighting equipment’s emission reductions are the greatest, whereas washing machines’ reductions are the least. Thus, it is important to choose the technologies/items suitable for the JCM by balancing their economic and reduction effects. The government must assess various technologies/items before determining the eligibility of each technology/item.