VOLUNTARY OR REGULATORY? COMPARATIVE BUSINESS ACTIVITIES TO MITIGATE CLIMATE CHANGE

Abstract

The purpose of this paper is to make clear the historical significance of voluntary business activities to mitigate climate change. Roughly speaking, there are two main approaches: one based on regulations by the government of each country, and the other based on voluntary activities by the private sector. In Japan, we have been able to observe both approaches since the oil crises of the 1970s. The greatest issue in implementing global warming countermeasures is to avoid initiatives that may conflict with people's desire to attain affluence. Such initiatives create a “tradeoff” between affluence and global salvation. Unless this tradeoff mechanism is eliminated, global warming countermeasures cannot be expected to make any progress. Developing countries such as China and India did not participate in the framework for establishing country-specific greenhouse gas emission reduction targets under the Kyoto Protocol of 1997 because they feared that the establishment of such targets might interfere with efforts to realize affluence in their countries. The tradeoff between affluence and global salvation can only be resolved by promoting energy conservation. Energy consumption can be reduced considerably (and, in effect, achieve considerable reduction in greenhouse effect gas emissions) while maintaining and expanding affluence, if all countries/regions in the world achieve the same level of energy conservation as that in Japan. In this paper, we will make clear the historical reasons why and how Japan has been able to achieve such a high level of energy conservation.