Low Carbon Green Growth Roadmap for Asia and the Pacific CASE STUDY Paying people to save energy Japan’s housing eco-point system Key points • Incentive programmes aimed at rewarding the greening of houses can encourage a higher uptake of efficient measures for residential retrofitting projects There was progress… Following on from the success of the eco-point system in promoting energy-efficient appliances, the Japanese Government expanded the programme to include residential buildings The expansion was stipulated in the Emergency Economic Countermeasures for Future Growth and Security, which took effect in January 2010 What was done? The housing eco-point system is an incentive programme jointly implemented by the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Economy, Trade and Industry and the Ministry of Environment to promote green buildings to fight against global warming and to stimulate the economy “Eco-points” are given to people who build a green home or undertake energy-efficient remodelling One eco-point is equivalent to yen but it cannot be redeemed for cash; points can be exchanged for eco-friendly products or gift certificates or used for additional renovations In the first phase, the programme, with 100 billion yen in funding,1 was initially intended to cover houses whose construction or renovation started before January 2012 However, the eligible period was reduced five months (to the end of July 2011) due to the large number of applicants exhausting the budget earlier than planned.2 The programme was recently resumed with 144.6 billion yen funding3 that had been set aside in the third supplementary budget for fiscal year 2011.4 Under the newly revived scheme, eco-friendly house renovations that start between 21 November 2011 and 31 October 2012 receive eco-points for improved thermal insulation of windows, replaced panes and exterior walls and ceiling or floor heat insulation New eco-friendly house construction that started between 21 October 2011 and 31 October 2012, including houses meeting building energy-efficiency performance standards and wooden houses meeting energy saving standards, are awarded eco-points Homeowners of new and refurbished homes will be given eco-points of 300,000 yen per unit in disaster-affected areas and 150,000 yen in other areas.5 Japan, Second Supplementary Budget for FY2009 (Tokyo, Ministry of Finance, 2009) Available from http://www.mof.go.jp/english/budget/budget/fy2009/09sb02b.pdf (accessed 17 March 2012) Japan, Ministry of Economy, Trade and Industry, “Reduction of Construction Period for Point Issuance under the Program to Promote the Spread of Eco-Friendly House by Utilizing Eco-points (Eco-Point System for Housing)”, Press release, 13 May 2011 Available from www.meti.go.jp/english/press/2011/0513_03.html (accessed 16 March 2012) Japan, The Outline of the 3rd Supplementary Budget of FY2011 (Tokyo, Ministry of Finance, 2009) Available from www.mof.go.jp/english/budget/budget/fy2011/11sb03.pdf (accessed 17 March 2012) Bank of Japan, Montly Report of Recent Economic and Financial Developments (Tokyo, 2012) Available from www.boj.or.jp/en/mopo/gp_2012/gp1201b.pdf (accessed 15 March 2012) Masahiro Takeishi, “Welcome Back, Eco points / Firms Ready to Capitalize on Push for Energy-Efficient Homes”, The Daily Yomiuri, November 2011 Available from www.yomiuri.co.jp/dy/business/T111107004145.htm (accessed 15 March 2012) Low Carbon Green Growth Roadmap for Asia and the Pacific : Case Study - Japan’s housing eco-point system Results As a result of the housing eco-point system, the domestic home remodelling market grew 13 per cent on the year to 5.9 trillion yen in 2010.6 The Government estimated the accrued economic benefits in the first phase were about 3.4 trillion yen.7 The Government has granted eco-points for 637,629 new houses and 582,012 refurbishments as of January 2012.8 Considerations for replicating Fiscal constraints on the budget: Although financial incentive can be a good way to attract consumers to a retrofitting project, the incentive programme alone cannot go very far due to the potential budget restraints A combination of regulations such as building standards and codes and mandatory building certification and incentives will help steer more people to building eco-friendly homes Weaknesses • • Points programme does not subsidize the upfront costs: Because the points are given in the forms of green products or certificates after the completion of the projects, this does not directly help in lowering the upfront costs of building or remodelling an eco-friendly home No incentives for tenants: The housing eco-point system targets only homeowners and developers It also appears that no provisions have been made for tenants, who represent some 40 per cent of the population Further reading Japanese Green Building Technologies: New Innovations and Policy, by Russell Vare, JETRO Green Building Report, vol (Tokyo, Japan External Trade Organization, 2010) ary 2012 Japan, Ministry of Land, Infrastructure, Transport and Tourism, Ministry of Economy, Trade and Industry, and Ministry of Environment website “Eco-points for housing” Available from http://jutaku.eco-points.jp/newsrelease/111014_1.html (accessed 11 November 2011) [Japanese language website] Masahiro Takeishi, “Welcome Back, Eco points / Firms Ready to Capitalize on Push for Energy-Efficient Homes”, The Daily Yomiuri, November 2011 Available from www.yomiuri.co.jp/dy/business/T111107004145.htm (accessed 15 March 2012)