Japan’s Residential Energy Demand Outlook to 2030 Considering Energy Efficiency Standards “Top-Runner Approach”

As one of the measures to achieve the reduction in greenhouse gas emissions agreed to in the "Kyoto Protocol," an institutional scheme for determining energy efficiency standards for energy-consuming appliances, called the "Top-Runner Approach," was developed by the Japanese government. Its goal is to strengthen the legal underpinnings of various energy conservation measures. Particularly in Japan's residential sector, where energy demand has grown vigorously so far, this efficiency standard is expected to play a key role in mitigating both energy demand growth and the associated CO2 emissions. This paper presents an outlook of Japan's residential energy demand, developed by a stochastic econometric model for the purpose of analyzing the impacts of the Japan's energy efficiency standards, as well as the future stochastic behavior of income growth, demography, energy prices, and climate on the future energy demand growth to 2030. In this analysis, we attempt to explicitly take into consideration more than 30 kinds of electricity uses, heating, cooling and hot water appliances in order to comprehensively capture the progress of energy efficiency in residential energy end-use equipment. Since electricity demand, is projected to exhibit astonishing growth in Japan's residential sector due to universal increasing ownership of electric and other appliances, it is important to implement an elaborate efficiency standards policy for these appliances.