Skip to main content

Energy Efficiency in Japan: Developments in the Business and Household Sectors, and Implications for Carbon Neutrality

May 24, 2023
Kosuke Aoki*1
Jouchi Nakajima*2
Masato Takahashi*3
Tomoyuki Yagi*4
Kotone Yamada*5


Recently the efforts toward decarbonization are spreading both in Japan and abroad. In this paper, we examine the developments in Japan's energy intensity, a measure of energy efficiency, and their background at the aggregate and sectoral levels. The main results are as follows. Energy efficiency in Japan improved considerably between the 1970s and the 1980s, mainly due to the progress in energy-saving technical changes in the business sector. Although the pace of improvement decelerated on the whole from the 1990s to the first half of the 2000s, Japan's energy efficiency has returned to a moderate improving trend, particularly in the household sector, in recent years. Our estimate using a simple model of the household sector shows that the recent improvement in aggregate energy efficiency may reflect households' purchases and utilization of energy-saving goods produced by the business sector. Further efforts are expected to be made in each sector to achieve carbon neutrality.

JEL classification
E21, E22, H23, Q54

Climate Change, Carbon Neutrality, Energy Efficiency, Technical Change

The authors thank Ryo Jinnai, Seisaku Kameda, and staff members of the Bank of Japan for their valuable comments. Any remaining errors are our own. The views expressed in this paper are those of the authors and do not reflect the official views of the Bank of Japan.

  1. *1University of Tokyo
    E-mail :
  2. *2Research and Statistics Department, Bank of Japan (currently at Hitotsubashi University)
    E-mail :
  3. *3Research and Statistics Department (currently at the Personnel and Corporate Affairs Department), Bank of Japan
    E-mail :
  4. *4Research and Statistics Department, Bank of Japan
    E-mail :
  5. *5Research and Statistics Department (currently at the Secretariat of the Policy Board), Bank of Japan
    E-mail :


Papers in the Bank of Japan Working Paper Series are circulated to stimulate discussion and comment. Views expressed are those of the authors and do not necessarily reflect those of the Bank.
If you have any comments or questions on a paper in the Working Paper Series, please contact the authors.
When making a copy or reproduction of the content for commercial purposes, please contact the Public Relations Department ( at the Bank in advance to request permission.
When making a copy or reproduction, the Bank of Japan Working Paper Series should explicitly be credited as the source.