Voluntary business activities to mitigate climate change: Case studies in Japan

Voluntary business activities, such as the voluntary action plans conducted by comprehensive business associations in Japan to reduce environmental damage, are viable policy instruments alongside regulations and economic incentives (e.g. taxes and emissions trading schemes). This paper examines three case studies in which voluntary activities have played a successful role in mitigating climate change. Based on interviews with business organisations together with a literature review and data analysis, we show why businesses are motivated to take socially responsible actions and describe the major benefits of such activities. One of the important benefits of voluntary activities is their flexibility in phasing measures. This flexibility is greatly appreciated, since industries are able to retain control of their responses to future uncertainties, which allows them to tackle climate change issues aggressively. We conclude that voluntary activities have been more environmentally effective than alternative policy measures under a proper institutional framework, which consists of effective motivation mechanisms for businesses, governmental measures to encourage their compliance, and capable industrial associations that can lessen the transaction costs both of the government and of industry. - Highlights: • Businesses are well motivated to take suitable, technologically feasible actions. • Capability of industrial associations is a key to successful voluntary activities. • Flexibility allows businesses to manage uncertainty and aim for ambitious goals