Energy Poverty in Japan: A Multidimensional Approach

Transcription

1 Governance for Sustainable Energy Transitions Hong Kong Baptist University, July 17th, 2017 Energy Poverty in Japan: A Multidimensional Approach Shinichiro Okushima University of Tsukuba

2 Today s presentation Evaluate energy poverty or energy vulnerability in Japan since the 2000s Propose a new approach, Multidimensional Energy Poverty Index (MEPI), to measure energy poverty for developed countries Show the aggravation of energy poverty in Japan, especially after the 2011 Great East Japan Earthquake (and Fukushima nuclear accident) 1

3 Background Concern about energy/fuel poverty in Japan after the 2000s Energy costs are soaring especially after the earthquake More dependent on fossil fuel imports after the Fukushima accident Introduction of a feed-in tariff (FIT) scheme in 2012 A new tax on fossil fuels (a carbon tax) in 2012 Raising the consumption tax in 2014 A weak yen, etc. Share of low-income households is increasing Reflecting Japan s aging and sluggish economy since the 1990s Deteriorating job quality Vulnerable households (e.g., single-parent-with-dependent children, elderly, and single-person households) are increasing 2

4 Trends in domestic energy prices and income Domestic energy prices climb gradually in the 2000s except after the global financial crisis, and the trend spikes after the GEJE and Fukushima accident In the same period, income is continuously declining Situation regarding energy poverty has been aggravated since the 2000s 3

5 Trends in Vulnerability Index for Energy Poverty The trend spikes after the GEJE and Fukushima accident High level of vulnerability even after the recent fall in international energy prices, exceeding the level before

6 Energy poverty: concept and definition To date, much less attention has been given to the energy poverty problem in developed countries compared with developing countries The lack of access to modern types of energy (e.g., electricity) is the focal point in the context of energy poverty in developing countries (e.g., IEA, 2010) Few studies for developed countries (exceptions: the UK and EU countries) No research has been found that examined the energy poverty problem in Japan 5

7 Energy poverty: concept and definition Energy poverty can be defined conceptually as the condition of lacking the resources necessary to meet their basic energy needs A similar definition as: the inability to attain a socially and materially necessitated level of domestic energy services (by Bouzarovski and Petrova, 2015) the inability of certain households to acquire the energy services required to live a decent and healthy life (by Middlemiss and Gillard, 2016) In developed countries like Japan, broader issues that prevent people from satisfying their basic energy needs should be the focus of the energy poverty problem 6

8 Energy poverty: concept and definition Energy poverty can be measured practically by the two steps like (general) income poverty measurement (Sen, 1979) Identification - who are the poor? Aggregation - how are the poverty characteristics of different people to be combined into an aggregate measure for the whole society? For example, it can define energy poverty households as those that spend more than 10% of their income on energy expenses (electricity, gas, and heating oil) Identification (poverty line) energy budget share, 10% Aggregation - identifying the extent of poverty in the society simply with the proportion of the poor to the total population Energy poverty: This is the (popular) 10 % measure case 7

9 Energy poverty in Japan, by Okushima (2016) My previous study Okushima (2016) in Energy Policy evaluates energy poverty in Japan using the 10% measure with the unique microdata of 2004, 2007, 2010, 2013 Earthquake & Fukushima accident Earthquake & Fukushima accident Energy poverty rate in Japan by 10% measure (Annual expenditure base) Energy poverty rate in Japan By 10% measure (Winter expenditure base) Shares of energy-poor households are increasing since the 2000s, especially after the GEJE 8

10 Energy poverty in Japan, by Okushima (2016) My previous study indicates 3 important factors to the escalation of energy poverty in Japan Factor 1: the rise of energy costs (energy prices) after GEJE Large contribution of energy costs to the escalation of EP after GEJE Before GEJE After GEJE Income Result of Shapley decomposition of change in energy poverty 9

11 Energy poverty in Japan, by Okushima (2016) Factor 2: severe impacts among low income households Half in the lowest income decile is energy-poor in 2013 Need to focus on the low-income group: richer households that are merely overconsuming energy might be identified as energy poor Energy poverty rate by income decile group 10

12 Energy poverty in Japan, by Okushima (2016) Factor 3: energy inefficiency of housing of EP households In Japan, energy-poor households usually live in old wooden homes Half EP household is living in old, inefficient homes before 1979 Before 1979 there is no insulation regulation in Japan regarding energy efficiency for housing - 30% improve required after the 1980 standard Housing conditions of EP households 11

13 Multidimensional Energy poverty measurement Based on the previous result, my recent study constructs a new multidimensional energy poverty index (MEPI): High energy costs & Low income & Living energy-inefficient house For more details or formal formulations, please see Okushima (2017) in Energy Concept of Multidimensional Energy Poverty Index (MEPI) 12

14 Multidimensional Energy poverty In the study, focus three dimensions to identify energy poor Dimension 1 Energy costs Dimension 2 Income Dimension 3 Energy efficiency of housing Since the classical work by Boardman (1991), researchers agree these 3 factors are behind being energy poor in developed countries For measurement, need threshold for each dimension Threshold 1 energy expenses / income >0.1 or not (10 % measure) Threshold 2 lowest three income deciles or not Threshold 3 living in homes built before 1979 (no insulation regulation) or after 1980 This study uses the Intersection approach; Multidimensional energy poor deprived in all three dimensions 13

15 Dimensional poverty energy costs For dimension 1 (energy costs), this study uses the so-called 10% measure for identifying dimensional poverty for energy costs Dimension 1 poor: Same as the previous result used by 10% measure Dimension 1 poverty rate 14

16 Dimensional poverty Energy costs & Income We define dimensional poverty for income as Dimension 2 the lowest three income deciles Other studies such as Heindl and Schuessler (2015) also use Truncated 10% measure - applying the 10% measure only to the lowest three income deciles This is the same as Dimensional poverty1&2 Blue Dimensional Poverty 1 Red Dimensional Poverty 1 & 2 =Same as the truncated 10% measure 15

17 Multidimensional energy poverty in Japan Finally, we define Energy poverty as Intersection 1&2&3 A gradual increase in the 2000s and a more significant one after 2011, reflecting the escalation of energy price after the Fukushima accident Earthquake Blue Dimensional Poverty 1 Red Dimensional Poverty 1 & 2 Green Dimensional Poverty 1&2&3 =Energy poverty 16

18 Multidimensional energy poverty in Japan Also measure energy poverty in Winter base (energy expenses in winter) Energy poverty rates in winter are much higher than annual-base calculation About one in ten households are in energy poverty after the earthquake Annual base Winter base Earthquake 17

19 Energy poverty: household type This study identifies the types of households which are vulnerable Mother-child & Single-elderly households are vulnerable These vulnerable households are at high rate of energy poverty Even in 2004 before the Great Surge in international energy prices A quarter of mother-child & single-elderly households are energy-poor after the earthquake in 2013 in winter base Annual base Winter base 18

20 Energy poverty: Individual type This study also identifies the individual types which are vulnerable Elderly are vulnerable to energy poverty at individual base On the other hand, the rates of children are low Elderly are vulnerable especially in winter Annual base Winter base 19

21 Energy poverty: Urban areas This study examines the energy poverty in urban areas Our data provides the information, whether the households live in the three metropolitan areas (Tokyo, Osaka, Nagaya regions) or not Energy poverty rates in the Metropolitan areas are lower than in other areas Lower income, living in older and larger wooden houses, colder climate in north areas, etc., in other (rural) areas Earthquake Green: Metropolitan (urban) areas Purple: Other (rural) areas Winter base Winter base,

22 Deep Energy Poverty in urban areas However, the result indicates the existence of Deep Energy Poverty in the metropolitan areas of Japan Deep Energy Poverty here means the EP households both in lowest-income decile and high energy expenditure (>20% of income) In the metropolitan areas, the share of Deep Energy Poverty is high Deep energy poverty in urban areas Share among (multidimensional) EP households, Winter base,

23 Policy implications Countermeasures regarding 3 dimensions can be considered Tackle Dimension 1, e.g. Social tariffs (Price Regulation for EP households) Tackle Dimension 2, e.g. Income support Tackle Dimension 3, e.g. Improving energy-efficiency of housing or appliances (support for retrofit ) All measures are considerable Most of all, improving energy-efficiency is essential More people tend to agree the third option (efficiency matter) Specifically target energy-poor households or individuals Integration of Energy poverty policy & Climate change policy 22

24 Policy implications Another type of measures to reduce energy vulnerability in line with the local context Some possible approach: promoting the use of wood stove, replacing kerosene stove Replace imported energy (kerosene) by regional unutilized renewables (firewood) Delink from the volatility of international market for energy Promote energy autonomy at the town or household base Source: Nishiwaga-town HP 23

25 Future prospects In recent, low international energy prices as well as restart of some nuclear power plants might ease the situation of energy poverty in Japan to some extent On the other hand, there are some concerns in the future: Continuously rising Feed-in Tariffs charges Need for higher carbon pricing to meet the Paris target Raising the consumption tax in 2019 Possible upturn of international energy prices and weaker yen, etc. Annual FIT charge (standard type of family, 300kw/h) In 2030, about twice the level of 2017 (estimated by CRIEPI) In 2017, about 10% of expense for electricity 24

26 Reference Boardman, B. Fuel poverty: from cold homes to affordable warmth. London: Belhaven Press; Boardman, B. Fixing fuel poverty: challenges and solutions. London: Earthscan; Bouzarovski, S. and Petrova, S.A. Global perspective on domestic energy deprivation: overcoming the energy poverty-fuel poverty binary, Energy Research and Social Science, 10, 2015, pp CRIEPI (Central Research Institute of Electric Power Industry). Research Material (Y16507), Heindl, P. and Schuessler, R. Dynamic properties of energy affordability measures, Energy Policy, 86, 2015, pp IEA (International Energy Agency). Energy poverty: how to make modern energy access universal?. Paris: OECD/IEA; Middlemiss, L. and Gillard, R. Fuel poverty from the bottom-up: characterising household energy vulnerability through the lived experience of the fuel poor, Energy Research and Social Science, 6, 2015, pp Okushima, S. Measuring energy poverty in Japan, , Energy Policy, 98, 2016, pp ( Okushima, S. Gauging energy poverty: A multidimensional approach, Energy, 2017, forthcoming ( Sen, A. Issues in the measurement of poverty, Scandinavian Journal of Economics, 81(2), 1979, pp