In May 2009, the Japanese government launched the 290 billion yen “Eco-point Program.” Apart from the reduction of greenhouse gas emissions and the improvement of energy efficiency, this subsidy program also aimed at boosting economic recovery. But did it really deliver on its promise?
The eco-points were introduced as a trading stamp scheme to encourage consumers to buy environmentally-friendly home electronics. Since, according to the Ministry of Environment, the majority of energy consumption in private households is caused by air conditioners, refrigerators and television sets, the program initially focused on these three product categories. In order to assist the complete digitization of the country’s TV broadcasts by July 2011, the subsidized flat-panel TV sets have to be capable of receiving terrestrial digital broadcasts.
Eco-Points & Eco-Labels
Illustration by Phil Couzens
The eco-points that consumers receive for the purchase of an environmentally-friendly appliance are worth 5-10 percent of the purchase total and can be exchanged for a product that either protects the environment or a locally produced good, which directly benefits the regional economies. To obtain the eco-point label, and thus become qualified for sale as part of the program, the devices need to comply with the guidelines of the Ministry of Environment.
Depending on the efficiency and size of the product, the quantity of the eco-points—each point is worth one yen—is determined. The bigger the device, the higher the subsidy. This allows the buyer to acquire up to 36,000 eco-points by buying one of the bigger digital television models. In addition the consumer can receive 3,000-5,000 eco-points if she exchanges an old, non-efficient product for an eco-friendly one.
Eco-success
According to the Ministry of Environment, the number of eco-products sold as of the end of March 2010 exceeded the 10 million mark. A total of over 160 billion eco-points were issued by the government. The most popular items were digital flat-screen TVs, for which approximately 82 percent of the eco-points were given out. 7.4 million devices, rewarded with over 130 billion eco-points, were sold. The Nikkei reported an increase of 57 percent (approximately 16 million units) of domestically shipped flat-screen TV sets in April compared to the previous year.
Panasonic, as the largest player in the TV-producing sector, recorded an increase of 20 percent in TV sets sold in 2009. The boom in the industry in Japan was even strengthened due to a rising demand from China and the developing countries. According to GfK Market Watch, Panasonic recorded an increase of 23 percent in refrigerator sales, so the company has maintained its leading position in this product category as well. Companies such as Sharp and Hitachi managed to improve their profits in 2009 by about 15 percent. Such figures suggest at least a temporary success related to the rollout of the eco-point campaign.
Bureaucratic Hurdles
In spite of these numbers, the program initially was, especially on the consumer side, plagued by a few growing pains. Thus, in the beginning it was not clear how and for what the points could be exchanged, primarily because detailed information issued by the government arrived about one month after the start of the program, rather than giving consumers more time and information to prepare for the program.
However, the biggest problem of the subsidy program was in the subsidy itself: the eco-points. The eco-points could be redeemed only for certain products from certain retailers and the retailer request system has become a complex and time-consuming process. Many documents and forms need to pass several check points before the eco-points can be approved and finally be redeemed for the product. Furthermore, the correct completion of the applications also seemed to present a hurdle, as, according to the Yomiuri Shimbun almost 468,000 of the 5.91 million entries were filled out incorrectly and had to be sent back to the applicants.
Eco-exchange
Because of this enormous effort and the comparatively small number of devices and products offered, customers have re-invested about 97 percent of the eco-points in gift certificates and prepaid cards, which enjoy great popularity in Japan. The certificates cover a wide range of products and services, such as coupons for public transport, hotels and food products. The most popular certificates were those of the big department stores and credit card companies, which accounted for about 70 percent of the program participants.
Although the environmentally-friendly products manufactured in rural areas were officially supposed to build an essential component of the campaign, according to the Ministry of Economy, Trade and Industry, not even 1.5 percent of all eco-points were spent for national and prefecture-specific products.
Pages: 1 2
