The Trade-Off between Economic and Environmental Objectives in Japan’s Power Sector *

Abstract

The current concern about global wanning has made it necessary for the electric power industry in Japan to reexamine its power generation mix plan. Past studies on the optimal power generation mix in Japan have only emphasized economic efficiency. Thermal power generation producing carbon dioxide (CO2) emissions has a lower generation cost than hydropower and new energy sources. Hence, there is a trade-off between generation-cost minimization (the economic objective) and CO2-emission minimization (the environmental objective). This paper presents a quantitative study of the trade-off between these two objectives in the year 2000, and discusses the nature of the trade-off curve and the extent of power generation by source.

Keywords

Electricity generation Japan Environmental protection Greenhouse gases

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