Takako Wakiyama & Ambiyah Abdullah, IGES, Hayama, Japan

Joni Jupesta, United Nations University - Institute of Advanced Studies, Tokyo, Japan.

Presentation Title: Investment risk and return analysis for low carbon city development in Yokohama




This presentation analyzed risks of and returns on investment of renewable energy in the case study of Yokohama. In order to avoid those risks, the role of government, policy target setting, the provision of financial support, and introduction of new and innovative policies are necessary. Thus, in the case study, policy status and supports as well as innovative financing were examined qualitatively and quantitatively. Discount cash flow analysis using Monte Carlo simulation was applied to analyze the risks and returns from renewable energy businesses. As a financing method, this research explored the effectiveness of feed-in-tariff (FIT) and supplemented tax policy. For further details to assess the impacts of low carbon investment of renewable energy in Yokohama, the economic, environmental and social contexts in the city were assessed using an input and output model. The study addressed how low carbon investment on renewable energy can enhance the economic (GDP, electricity supply) and environmental benefits (CO2 emissions reduction) in the city.

 Key Lessons Learned

  • There is a strong economic impact from investment in renewables such as solar and wind. 
  • Thermal power generation is used for many production sectors, thus, political intervention is required to increase renewables to help achieve climate change mitigation targets.