Promoting energy efficiency in Japanese manufacturing industry through energy audits: Role of information provision, disclosure, target setting, inspection, reward, and organizational structure

Abstract

An energy audit is a popular policy instrument for improving energy efficiency in facilities. However, it is unclear whether they serve to improve energy efficiency, because even under energy audits, several barriers to energy efficiency exist. Additional practices such as information provision, target setting, or reward by governments can make energy audits more effective. This study investigates the complementarity of energy audits and these practices by focusing on the Emission Reduction Program, an energy audit unique to Japan. Using municipality-level data, we show that target setting, inspection of planning, information provision, reward, and designating the department responsible for tackling climate change, complementarily reduce CO2 emissions via facilities under the Emission Reduction Program. Our results suggest that energy audit is more effective in reducing CO2 emissions when combined with additional policy instruments.