Effectiveness of Business Classification Evaluation System on Energy Conservation

Author Name YOSHIKAWA Yasuhiro (Agency for Natural Resources and Energy) / KOBAYASHI Yohei (Consulting Fellow, RIETI) / YOKOO Hidefumi (Research Associate, RIETI) / FUKAI Akio (Agency for Natural Resources and Energy) / TAGUCHI Sosuke (Mitsubishi UFJ Research & Consulting)
Creation Date/NO. March 2019 19-J-018
Research Project Promoting Evidence-based Policy in Japan
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The Agency for Natural Resources and Energy introduced the "Business Classification Evaluation System" in 2016 to encourage businesses enterprises to conserve energy. In this paper, we empirically analyze the effectiveness of the business classification evaluation system by using periodic report data submitted by business enterprises and our own survey. To reveal the causal effect of the system on corporate behavior for energy conservation, we employ a regression discontinuity design. Our empirical results show that business enterprises whose energy efficiency deteriorates for two consecutive years, improve the efficiency after receiving warning letters from the government.