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Results of the 4th Follow-up
to the Keidanren Voluntary Action Plan on the Environment

-- Section on Global Warming Measures --

Attachment 3

## Analysis of Factors Bearing on Increases or Decreases in CO2 Emissions

In these calculations, Keidanren has attempted to analyze how certain factors affected increases or decreases in CO2 emissions by industry as a whole, based on records of CO2 emissions and production output and/or sales submitted by the respective industries.

### Results of calculation

Emissions of CO2 in fiscal 2000 were approximately 1.2% higher than in fiscal 1990. Keidanren attributes this change to the following factors.

 Results of 4th Follow-up(Note 1) Cf. results of 3rd Follow-up(Note 2) Improvements in electric power consumption per unit output -2.2% -2.2% Efforts by the respective industries -4.1% -2.1% Economic expansion etc. +7.5% +4.2% Total +1.2% -0.1%(Note 3)
 (Note 1) Changes in CO2 emissions between fiscal 1990 and fiscal 2000 were analyzed for the 36 industries that participated in the 4th Follow-up. (Note 2) Changes in CO2 emissions between fiscal 1990 and fiscal 1999 were analyzed for the 34 industries that participated in the 3rd Follow-up. (Note 3) The findings of the 3rd Follow-up showed that emissions had decreased by 0.1% between fiscal 1990 and fiscal 1999.

### Approach to calculations

1. By multiplying the input-per-unit-output ratios for production output and/or revenues in fiscal 1990 by actual production output and/or revenues for each industry in fiscal 2000, Keidanren arrives at each industry's BAU emissions in fiscal 2000 (i.e., emissions in fiscal 2000, assuming that the input-per-unit-output ratios for production output and/or revenues remain unchanged between fiscal 1990 and fiscal 2000). Based on this, it then calculates Keidanren's "BAU emissions."
2. Subtracting actual Keidanren emissions in fiscal 2000 from Keidanren's "BAU emissions" results in a difference that is defined as Keidanren's overall contribution to lower emissions. This result is then expressed as a percentage of actual Keidanren emissions in fiscal 1990. (-6.3%)
3. To isolate reductions that results from changes in electric power input per unit output, Keidanren uses the electric power input-per-unit-output ratios in fiscal 1990 to calculate "electric power BAU" emissions by the respective industries in fiscal 2000 (i.e., emissions in fiscal 2000, assuming that the input-per-unit-output ratios in question remained unchanged between fiscal 2000 and fiscal 1990). Based on this, it calculates Keidanren's emissions on an "electric power BAU" basis.
4. Subtracting actual Keidanren emissions in fiscal 2000 from the Keidanren "electric power BAU" emissions results in a value that is defined as the reduction achieved through improvements in electric power input-per-unit-of-output ratios. Keidanren then expresses this reduction as a percentage of actual Keidanren "electric power BAU" emissions in fiscal 1990. (-2.2%)
5. Subtracting the reduction in emissions attributable to lower electric power inputs per unit output (-2.2%) from Keidanren's overall contribution to lower emissions (-6.3%) results in a value (-4.1%) that is defined as the reduction derived from "efforts by the respective industries."
6. Subtracting Keidanren's overall contribution to lower emissions (-6.3%) from the change in emissions between fiscal 1990 and fiscal 2000 (+1.2%) results in a difference of +7.5%, which becomes the estimated impact of economic expansion etc.

### Calculation Methods Used in Factor Analysis

(Hypothetical numbers are used to facilitate ease of understanding)

 Actual emissions in FY 1990 Actual emissions in FY xxxx CO2 emissions 100 110 Emissions from electrical power 50 55 X 0.9 = 49.5 Other energy 50 60.5 Production output 100 120 Quantity of electricity purchased 50 55 Purchased electricity per unit output 1 0.9
* Similar calculations are used when analyzing production amounts.

1. Calculate an industry's BAU emissions for FY xxxx
Industry BAU = input per unit output in FY 1990 (CO2 emissions/production output) X production output for FY xxxx
= (100/100) X 120 = 120

2. Calculate industry's overall contribution to lower emissions compared to FY 1990
Industry BAU - actual emissions in FY xxxx = 120 - 110 = 10
As percentage of FY 1990 emissions = 10/100 X 100 = -10%

3. Calculate CO2 emissions assuming no change in electric power input per unit output (industry BAU)
Industry BAU = (emissions from sources other than electric power in FY xxxx + amount of purchased electricity in FY xxxx) X electric power input per unit output in FY 1990
= 60.5 + 55 X 1 = 115.5

4. Calculate contribution to reduced emissions vis-a-vis FY 1990 from improvements in electric power consumption per unit output
Improvement in electricity consumption per unit output = electric power BAU for industry - emissions in FY xxxx
= 115.5 - 110 = 5.5
As percentage of FY 1990 emissions = 5.5/100 X 100 = -5.5%

5. Calculate amount attributable to industry efforts
Amount attributable to industry efforts = industry's overall contribution to lower emissions - improvement in electric power consumption per unit output
= -10% - 5.5% = -4.5%

 Improvement in electric power consumption per unit output -5.5% Change attributable to industry efforts -4.5% Economic expansion etc. +20% Total +10%