Role of vehicle inspection policy in climate mitigation: The case of Japan

Abstract

In 1951, the Japanese government introduced a vehicle safety inspection system and this system has an effect of shortening the 'economic' lifetimes of automobiles and increasing CO₂ emissions associated with vehicle life-cycle. This study develops an integrated assessment framework by combining dynamic discrete choice analysis with life-cycle environmental accounting analysis based on a dynamic stock model. From the empirical results, we found that (1) the economic lifetime of a Prius in the benchmark model is surprisingly short, 5.07 years, due to the strict car inspection system, and this replacement cycle has contributed to increasing CO₂ over time; and (2) abolishing car inspections at the third and fifth years would considerably contribute to reducing life-cycle CO₂ emissions associated with Prius sold during the study period, 1997 to 2016, accounting for approximately one million tons-CO₂ eq. over 20 years. Thus, we conclude that modifying the regulation policy with a focus on the car inspection system to induce car owners to keep their automobiles longer would have environmental benefits.

Keywords: Automobile; Car inspection system; Dynamic discrete choice model; Life-cycle CO(2) emissions.