RENEWABLE ENERGY INVESTMENT RISK ANALYSIS FOR LOW-CARBON CITY... 15These policies are analysed by examining whether FIT systems mitigate
risks and increase the returns on renewable energy investment and whether
financing policies can enhance risk mitigation efforts. Thus, in the follow-
ing section, we examine the effects of solar PV investment policy interven-
tions at the city level using Yokohama as a case study.
2.3 case study on yokohama, Japan
Yokohama is a government ordinance–designed city with a popula-
tion of 3.7 million and boasts the second largest urban population in
Japan after Tokyo. Yokohama has experienced trends involving popula-
tion growth and increased total CO 2 emissions. Total CO 2 emissions
generated from Yokohama in 2010 reached 18.841 Mt-CO 2. Shares
of total emissions by sector are as follows: energy conversion (18.8 %),
industry (14.8 %), households (23.1 %), commercial (19 %), transpor-
tation (21.6 %), and waste (2.8 %) (Fig. 2.1). Household emissions
represent the largest share among the other sectors and have a high
rate of increasing CO 2 emissions. Household emission sources include
electricity (60.7 %) and city gas (26.8 %). The commercial sector also
shows the highest degree of basic year emissions rate increases among
the sectors due to an expansion of total office building floor space (a
42.5 % increase from 1990 levels), and 72.1 % of all emissions are gen-
erated from electricity and 20.5 % are generated from city gas sources.
Yokohama has promoted renewable energy use to combat global warm-
ing and to achieve the targets set by the city government (City of
Yokohama 2011 ).
In recent years, numerous cities have formulated climate change and
low-carbon action plans and have increased their annual budgets to
accommodate such plans that complement the increased funds provided
by national and subnational governments at the prefecture and city lev-
els. For instance, beginning in 2014, the renewable energy installation
promotion fund (as a part of regional green new deal fund) was created
at the prefecture and city levels to enhance the deployment of environ-
mentally friendly technologies and projects, including renewable energy
and energy-efficient technologies.^5 The fund was designed to increase the
installed capacity of renewable energy under the revised green new deal
fund initiated from 2014. In the case of Yokohama, the size of the climate
change action funds grew from 1.1 billion JPY in 2008 to 5.1 billion JPY
in 2013 (MOEJ 2014a).