Impact of Fukushima Nuclear Disaster on Oil-Consuming Sectors of Japan
Taghizadeh-Hesary, Farhad; Yoshino, Naoyuki; Rasoulinezhad, Ehsan | February 2017
Abstract
The Fukushima Daiichi nuclear disaster was an accident at the Fukushima I Nuclear Power Plant in Fukushima, Japan, which resulted primarily from the tsunami following the Tohoku earthquake on 11 March 2011, and which led to year-long nuclear shutdown in the country. During the shutdown, Japan substituted fossil fuels for nuclear power and became more dependent on import and consumption of fossil fuels including oil, gas, and coal. In this paper, we try to shed light on the elasticity of oil consumption to crude oil price before and after the Fukushima disaster in Japan’s various economic sectors. To do so, we apply a cointegration analysis and perform a vector error correction (VEC) variance decomposition by using quarterly data in two separate subperiods from Q1 1981 to Q4 2010 and from Q1 2011 to Q4 2015. Our findings reveal that the absolute value of elasticities of oil consumption by some economic sectors, such as the industry, non-energy, and transportation sectors to oil prices, has reduced after the disaster because of increased dependency on oil consumption, which endangered energy security in the country. To raise energy self-dependency and energy security, Japan needs to diversify its energy supply resources. For instance, the share of renewable energy in Japan’s energy basket needs to increase. Because renewable energy projects are mainly considered risky and banks are reluctant to finance them, we introduce an innovative form of financing these projects: Hometown Investment Trust Funds, which has been introduced and applied in Japan and other parts of Asia.
Citation
Taghizadeh-Hesary, Farhad; Yoshino, Naoyuki; Rasoulinezhad, Ehsan. 2017. Impact of Fukushima Nuclear Disaster on Oil-Consuming Sectors of Japan. © Asian Development Bank Institute. http://hdl.handle.net/11540/8667.Keywords
Commercial Energy
Energy Economics
Energy Technology
Household Energy Consumption
Industrial Energy Consumption
Primary Energy
Results-Based Monitoring And Evaluation
Project Evaluation & Review Technique
Evaluation Techniques
Evaluation Methods
Evaluation Criteria
Domestic Energy
Energy Demand
Energy Prices
Energy Pricing Policy
Energy Supply
Primary Energy Supply
Development Indicators
Social Participation
Low Income Groups
Income Generation
Newly Industrializing Countries
Input output analysis
Cost benefit analysis
Needs assessment
Economic evaluation
Energy Industries
Energy planning
Alternative energy technology
Project impact
Program management
Project appraisal
Electric power
Energy development
Power supply
Electric power consumption
Price
Consumer
Consumption
Supply and demand
Electric power plant
Power
Renewable energy source
Renewable energy resource
Energy conservation
Energy policy
Participatory monitoring and evaluation
Participative management
Energy consumption
Risk assessment
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