March 16, 2010


Local Eco-Point Initiatives Bringing Benefits to Individuals and Society

Keywords: Newsletter 

JFS Newsletter No.90 (February 2010)

In fiscal 2008, a total of 1.216 billion tons of carbon dioxide (CO2) were emitted in Japan. These emissions represent an increase of 6.3 percent from 1990, the base year under the Kyoto Protocol, although they were also a decrease of 6.7% from fiscal 2007 -- the year Japan's emissions hit a record high. It has been argued that the main factor in this decrease was a serious economic downturn. Looking at the country's emissions by sector, those from the industrial sector have decreased by 13% from the 1990 level, whereas emissions from transportation, commercial (services, offices, etc.), and household sectors increased by 8.5%, 41.3 %, and 34.7%, respectively. These results indicate that the commercial and household sectors need to make better efforts to reduce CO2 emissions.

Some environmental policy initiatives are economic approaches that take advantage of market mechanisms, as opposed to initiatives that depend on laws and regulations. Economic approaches utilize economic incentives to affect the costs and benefits to individuals, companies, etc., with a view to encouraging them to perform environmentally conscious actions. Typical economic incentives include CO2 emissions trading schemes or deposit systems for recycled containers, etc.; eco-point programs, which grant points to citizens who take environment-friendly action, have also been introduced in Japan.

Japanese Government Initiatives

Starting in May 2009, the Japanese government has taken this kind of initiative with its "household appliance eco-point system" that grants points to consumers who purchase air conditioners, refrigerators, and TVs that receive terrestrial digital broadcasting services when these appliances rate four or more stars in a national system of energy-efficiency standards.

This eco-point system started as a limited-time program that planned to cover appliances purchased between May 15, 2009 and March 31, 2010; the aim was to promote global warming countermeasures, revitalize the economy, and popularize the use of TVs that receive terrestrial digital broadcasting. The points granted could be exchanged for gift certificates, prepaid cards, regional specialties, and energy-efficient/ environment-friendly products; they could also be donated to any of 181 environmental organizations selected from public entries. By December 31, 2009, approximately 85.93 billion points had been issued for individual consumers, and 79.27 billion points had been used to order gifts or make donations. (in Japanese)

The time limit for appliance purchase has since been extended until December 31, 2010, under the second supplemental budget for fiscal 2009, which was adopted on January 28, 2010. The Japanese government will also launch another system -- an "eco-point system for housing" that offers points to citizens who remodel their house with better insulation or energy-efficiency, or build a new eco-friendly house.

In a similar initiative, the Ministry of the Environment has promoted an Eco-Action Points (EAP) program since fiscal 2008 in an effort to help reduce household CO2 emissions. In this program, citizens receive points when they purchase environmentally friendly goods and services, and can exchange the points for commodities and so on. The ministry also supports private companies' model projects with eco-point components, aiming to establish economically-independent business models starting from fiscal 2011. The ministry adopted 13 business models (4 national and 9 regional models) in March 2008, and 9 models (3 national and 6 regional models) in 2009. Entries for fiscal 2010 were accepted from February 2 through 19, 2010.

Environment Ministry to Give Eco-Points to Energy-Saving Contributors

Japan's Environment Ministry Selects Projects for Eco-Action Points Program

Eco-point programs in which individuals get points in return for environmentally friendly actions are being carried out not only by the national government but also by some municipalities and businesses. Below we introduce two exciting programs -- one being carried out in the Marunouchi district & vicinity in Tokyo, and another being implemented by a company based in Aichi Prefecture, central Japan.

Redevelopment Efforts by Otemachi, Marunouchi, Yurakucho - to Flourish for Another 1,000 Years

The downtown district that includes Otemachi, Marunouchi and Yurakucho in Chiyoda Ward, Tokyo originally flourished as a town serving the area surrounding Edo castle in the Edo era, and has led the economy of Japan and the world since the Meiji era. Today, this area is a noted as a business district, where over 240,000 people visit and work during the day, although only 34 residents actually have their residence there (according to a survey in 2007).

About 20 years ago, in 1988, the Otemachi, Marunouchi, Yurakucho District Redevelopment Project Council was founded to examine ideals for a city in the modern age. The future image drawn up by the council and related parties through discussion envisioned "a city continuing to flourish for 1,000 years." Such a city would be a leader, showing others an example of a sustainable city in harmony with nature and the world. (Japanese and English PDF file download)

The "1,000 Years" urban concept consists of eight environmental visions: The ideal urban district, town or city should be able to realize changes for the better and properly manage local conditions; it should be a place where the whole community cooperates to address world issues and values its relationship with nature, and it should also be home to a variety of plant and animals. In an effort to embody these visions and change the awareness and behavior of people working in this district, one of the practical schemes put in place was an eco-point system.

A verification test of this system, the Daimaruyu Eco-point system, was implemented for two years starting in October 2007. One of its major features was that people could save and use e-money by using a Suica prepaid card, which 90% of people working in or visiting this district use for transportation, including daily commutes, etc. People who register with the eco-point system are given one point for every 100-yen (US$1.1) purchase using a Suica card at affiliated stores. Points are also given when people join environmental events held in the district, or ride the Marunouchi Shuttle, a local hybrid electric shuttle bus equipped with a Suica card reader terminal.

A two-year verification test for the Daimaruyu Eco-point system was completed on October 1, 2009. The eco-point system was renamed Eco-musubi, literally "Eco-ties," and started full operation. The Eco-musubi logo represents an image of a tied omikuji, a Japanese traditional paper fortune slip obtained at shrines and temples. This image was chosen in the hope that the point system will help the district continue to flourish by developing new relationships among people, communities and stations. As another medium for e-money, PASMO prepaid cards issued by subways and private railway companies in Tokyo, were also included along with Suica cards.

Participants who register for this project through its PC or mobile-phone website can obtain points by participating in environmental events, or by shopping or dining at affiliated stores and eateries in the district and paying for the services with their e-money. In addition, 1% of the price paid with e-money is automatically saved in a fund that invests in activities to expand areas of plants and flowers, and other environmental activities.

People can use their points in three ways. One is to exchange the points for eco-goods that can be selected according to the amount of points. The second is to exchange the points for recycled goods provided by affiliated stores and companies implementing 3R (reduce, reuse, recycle) activities. The third is to indirectly participate in social action programs in and out of Japan by donating the points.

Four months have now passed since the project started in earnest, and the about 2,000 people have registered and the number of affiliated stores equipped with a card reader terminal exceeds 100. Naka Inoue of the eco-point project secretariat says, "I hope people will choose stores affiliated with the Eco-musubi-point project, rather than simply on the basis of products, as this will benefit both project participants and society." An information magazine, the MUSUBI TIMES, is issued locally to encourage people to consider environmental issues in the context of their everyday lives. The number of participants as well as of affiliated stores and companies is expected to increase through environmental events and shopping." (in Japanese)

Denso's Initiative to Support "Self-centered" Eco-friendly Activities

Denso Corporation, whose headquarters are located in Kariya City in Aichi Prefecture, is known as a leading auto part manufacturer. The company aims to place corporate social responsibility (CSR) at the core of its management and feels that it is important for each employee to participate in society (in the form of the local community). The company has an employee support scheme that awards points to employees who do certain things to help improve the environment and local community.

This scheme, the Denso Eco-Point System or DECOPON for short, was launched in December 2006. One of its characteristics is its focus. In order to encourage individuals to act in an environment-friendly manner, Denso shifted away from the idea of "being environmentally friendly to benefit society and other people" and started the scheme based on the idea of "being environmentally friendly to benefit yourself and your loved ones." When people are encouraged to "make efforts" to act in an environment- friendly way "for society and others," they may feel somewhat coerced to do so and eventually quit those activities. If, however, individuals are encouraged to "enjoy" such activities "little by little starting with whatever they can do," moreover doing so "together with their families and friends," it may ultimately result in more happiness in their community. This would give rise to a sense of community ownership among individuals and a wave of spontaneous activities involving more people. Summarizing this phenomenon, Denso created a slogan for the program, "Supporting 'Self-centered' Eco-friendly Activities."

DECOPON points are awarded for a wide variety of activities, for example, for attending seminars on environmental issues, participating in volunteer activities for forest conservation and other environmental protection, and purchasing eco-friendly products. One unique activity included the list is eco-commuting, in which employees who commute over 2.5 kilometers between home and the workplace by means other than their automobiles can accumulate points monthly.

Participating employees can exchange their accumulated points for items from two lists; one list for individual rewards and another for contributions to the local community. On the former list, are, for example, fair trade products, organic produce and other eco-friendly items selected by the DECOPON Office, as well as discount tickets for participating in nature-experience events together with family members. On the latter list are donations to tree planting activities or funds to aid local environmental activities involving mainly children. The amount of aid paid into any one fund is determined by the number of points donated by employees. As for funding recipients, a selection committee first screens applicants and then Denso employees and their families vote to decide which selected applicants should receive aid funds. Also, employees are strongly encouraged to participate in environmental activities sponsored by organizations that are receiving aid.

As of December 2009, the total number of employees participating in the DECOPON program was 8,010, accounting for about 20 percent of Denso employees who are eligible to participate in the program. So far, 371,960 points have been awarded, of which 153,697 have so far been exchanged for environmentally friendly products or donated to aid environmental activities. What is noteworthy is that of the 153,697 exchanged points awarded to 6,660 employees, 116,697 points from 5,944 employees were used to help fund local environmental activities.

Aid from the DECOPON program has been given to elementary schools, junior high schools and non-profit organizations (NPOs) in Aichi and Mie Prefectures. Three organizations (one school and two NPOs) received funds in fiscal 2008, but the number of recipient organizations increased to eight in fiscal 2009. A scheme to encourage employees and their families to act in an environment-friendly manner supports Denso's program to provide aid to local environmental activities, facilitating a cycle of money within the community.

In fiscal 2009, a call went out for volunteers from inside the company to help operate the programs being run by the DECOPON Office; at total of 21 people decided to become "DECOPON supporters." These volunteers act to promote DECOPON in order to spread the news about the program's mission, and reinforce the program's planning, operation and public relations functions. This unique initiative by Denso is expected to be adopted by other companies in the future. (in Japanese)

High Awareness into Action

In Japan, it is considered highly likely that more schemes to award people with points in exchange for environment-friendly action will be introduced with the aim of seeking greater individual behavioral change. However, it has been shown that such schemes need to be designed properly with due consideration of what kinds of actions are expected; good planning will make it easier to bring about the desired behavioral changes.

For instance, among products exchanged for the eco-points awarded to consumers who bought home appliances under the government program mentioned earlier, more than 95 percent of all awarded points - about 79.27 billion points - were exchanged for gift certificates and prepaid cards. Only 0.03 percent of all points exchanged were used for energy- saving or environment-friendly products and the percentage was even smaller for the points donated to environmental organizations: 0.0066 percent. What is obvious here is that the government program succeeded in encouraging consumers to buy the products covered by the eco-point program, but failed to go beyond that and lead consumers to further change their behavior in the direction of becoming more environment-friendly.

In Japan, more than 90 percent of people are said to be interested in the issue of global warming. In order to translate this high level of concern into actual behavior and action, it is essential to give due consideration to the design of schemes that provide economic incentives. This is one lesson that can be learned from what has happened so far in Japan.

Written by Kazumi Yagi