Project Leader

HATTA Tatsuo, Faculty Fellow

Sub-Leader

TANAKA Makoto, Faculty Fellow

Overview

This project is aimed at providing academic support to the process of electric power industry reform in Japan. For this purpose, the latest available transactions data will be used to conduct economic analyses of institutional and systemic designs for electric power markets and power transmission networks as well as performance assessment. In past years, this project focused on developing and refining a number of models for conducting quantitative evaluation and analysis. Combining these models with the actual transactions data that is now being accumulated, the project will successively undertake detailed quantitative evaluation and analysis of such practices as retail bidding and wholesale electric power transactions. Regarding problems related to specific institutional and systemic designs pertaining to markets and networks, the project will conduct surveys and applied research with an emphasis on applicability to reality while taking maintenance of reliable supplies of electric power into consideration. The scope of research will be further expanded to include quantitative evaluation and analysis of gas markets, which are closely related to electric power markets.

Major Research Results

RIETI Discussion Papers

• "Regional Electric Power Demand in Japan" (HOSOE Nobuhiro and AKIYAMA Shu-ichi)
• "Oligopolistic Competition in the Japanese Wholesale Electricity Market: A Linear Complementarity Approach" (TANAKA Makoto)
• "Measuring Effects of Competition on Retail Power Charges in Public Procurement Bidding" (TAKAGI Shingo and HOSOE Nobuhiro)
• "Quantitative Evaluation and Analysis of the Internal Price Gap in the Town Gas Industry in Japan" (KAINOU Kazunari)
• "Evaluation and Analysis of Economic Welfare in the Wholesale Electric Power Market Using an Optimal Model of the Composition of Electric Power Sources" (KAINOU Kazunari)
• "Regional Electric Power Demand in Japan" (AKIYAMA Shu-ichi and HOSOE Nobuhiro)

Project Leader

KANEMOTO Yoshitsugu, Faculty Fellow

Overview

The aim of this project is to develop evaluation methodologies (tool boxes) that can be used on the frontlines of the policy-making process. Specifically, we aim to assess the benefits and costs of each policy option, by using small-scale microeconomic models that are understandable, actionable, and facilitate the policy-making process. As in fiscal 2006, during fiscal 2007 the project will primarily focus on countermeasures to global warming and the Japanese-style electric power market liberalization. Regarding countermeasures to global warming, we will analyze the effects of such policies in the consumer sector and other designated fields. Regarding the liberalization of the electric power markets, we will develop models reflecting the characteristics of Japan''s institutional and systemic designs and use these in evaluating various policy options.

Major Research Results

RIETI Discussion Papers

• "Evaluation and Analysis of Economic Welfare in the Wholesale Electric Power Market Using an Optimal Model of the Composition of Electric Power Sources" (KAINOU Kazunari)
• "Quantitative Policy Evaluation of the Energy-Conservation Judgement Standards Regulations for Commercial Buildings under the Energy Conservation Act in Japan by Cost-benefit Analysis" (KAINOU Kazunari)
• "Choice of Capacity and Wholesale Transactions in an Electric Power Market Using the Third Party Access Method" (KANEMOTO Yoshitsugu)

Project Leader

HASEGAWA Eiichi, Senior Fellow

Overview

Oil prices gradually moved downward after the events of September 11, 2001 and fell below the $20 per barrel mark in 2002. Thereafter, this trend was reversed and oil prices began to rise rapidly and broke through the $100 mark at the outset of 2008. The study aims to identify the background of these developments, the impact both on oil producing and oil importing countries as well as on the global economy, and the political impact on the Middle East and the entire world. The destabilization of Middle Eastern countries, the resurgence of Russia, marked increase in oil consumption in China and India, and the status of the U.S. dollar as a key currency are all parameters with far-reaching global consequences. Japan, heavily dependent on foreign sources of energy and committed to being a participant in the international economy, has an extremely important stake in these developments.

Project Leader

TANI Midori, Senior Fellow

Overview

It appears that Japan has been experiencing a weakening of "market norms" in recent years as a result of the diversification of consumer transactions. Jointly created and supported through the efforts of the government and market participants such as consumers and businesses, "market norms" contribute to the development and stability of the entire economy and society by directing the activities of businesses in a direction that will add to the welfare of society as a whole. This project addresses the questions of what are "market norms" and what types of consumer policies will contribute to the development and stability of such "market norms." Using these questions and recent consumer-related problems as a starting point, this project will undertake an analysis of laws and economics based on game theory. In addition, related literature in the fields of law, economics, sociology, political science, philosophy and others will be surveyed, and recent policy cases pertaining to consumer fraud and product safety issues will be examined.