PRODUCTION ACTIVITY
Here are two examples of sustainability analysis of production activities that this laboratory is working on.
Sustainability Analysis of Coal-Fired Power Plants in China
China’s coal-fired power sector is known as a major source of large amounts of CO2 emissions. In fact, it is estimated that approximately 50% of the nation’s total CO2 emissions in 2019 originated from the coal-fired sector.
China’s coal-fired power sector is also one of the most important sectors for mitigating air pollution issues. This is because power plants are often built in close proximity to densely populated urban areas. Various air pollutants (e.g., PM2.5) emitted from power plant stacks can enter the lungs and bronchi of nearby residents, triggering serious health problems such as lung cancer.
In light of these points, our research team estimated the extent to which increasing the total factor energy productivity (TFEP) in the production activities of coal-fired power plants in China would contribute to mitigating the CO2 emissions and health hazards due to air pollution.
Here, TFEP is one of the productivity indicators in the production theory of economics. For example, well-known productivity indicators in economics include labor productivity (output divided by labor input) and capital output (output divided by capital input). These productivity indicators allow for the evaluation of production (output) per unit consumption of a specific input.
TFEP is simply the same as these productivity indicators, i.e., output divided by energy consumption (i.e., coal input). However, the TFEP is a slightly special productivity indicator that, in addition to such simple efficiency, also takes into account the effects of other factors of production input (labor and capital) (i.e., total factors).
Our estimates, which combine various approaches from economics, mathematical sciences, atmospheric chemistry, and epidemiology, revealed that improving the TFEP contributes to mitigating CO2 emissions and health hazards (early deaths) due to air pollution from coal-fired power plants in China by 19% and 40%, respectively.
The most important finding here is that significant environmental and economic benefits could be achieved simply by improving efficiency without having to demolish power plants or install costly CO2 capture and storage technologies.
There is concern that a rapid shift to renewable energy could cause socioeconomic problems, such as employment issues and sunk costs of construction. Therefore, improving production efficiency (TFEP) is one effective way for coal-fired power plants in China to be sustainable.
For more details on the analysis, please see the following papers:
Nakaishi, T., Kagawa, S., Takayabu, H., Lin, C., (2021). Determinants of technical inefficiency in China’s coal-fired power plants and policy recommendations for CO2 mitigation. Environ. Sci. Pollut. Res. 28, 52064–52081. https://doi.org/10.1007/s11356-021-14394-4.
Nakaishi, T., Nagashima, F., Kagawa, S., Nansai, K., Chatani, S., (2023). Quantifying the health benefits of improving environmental efficiency: A case study from coal power plants in China. Energy Econ. 121, 106672. https://doi.org/10.1016/j.eneco.2023.106672
Sustainability Analysis of the Japanese Food Sector
Food waste is recognized as a social problem in Japan. “Food loss” is defined in Japan as food that can still be eaten but is discarded. There are two main causes of food loss in Japan: unsold or discarded food at food factories, supermarkets, convenience stores, and restaurants (i.e., business food loss) and uneaten or discarded food at home (i.e., household food loss). According to the Ministry of Agriculture, Forestry and Fisheries, Japan’s annual food loss is estimated at more than 6 million tons, which is equivalent to about five times the size of Tokyo Dome, or about 1.6 times the amount of food aid provided by the United Nations World Food Program.
There are two ways to reduce business food loss: (1) reducing excessive consumption and (2) reusing food as feed, fertilizer, etc. We have been conducting research focusing on the latter (2).
Our first focus has been on the initiative to recycle food residues generated at food manufacturing plants, such as bread and instant ramen, supermarkets, convenience stores, and restaurants, as feed for livestock, such as pigs and cows. In Japan, this initiative is called “Eco-feed.”
We conducted a joint study with two Eco-feed recycling companies to conduct a quantitative analysis of the excess input of materials and energy in the production of Eco-feed and the optimal production scale. The results revealed that improving the quality of the collected food residues and optimizing (mainly expanding) the scale of production are important for more efficient production of Eco-feed. It was also found that the production efficiency of recycling enterprises has deteriorated as a result of the reduced amount of food residues collected from restaurants due to COVID-19. It is important for the government to provide financial support for business continuity not only to restaurants, but also to these downstream recycling companies.
For more details on the analysis, please see the following paper:
Nakaishi, T., Takayabu, H., (2022). Production efficiency of animal feed obtained from food waste in Japan. Environ. Sci. Pollut. Res. 29, 61187–61203. https://doi.org/10.1007/s11356-022-20221-1
Our next focus was an initiative to collect cooking oil discarded by households and reuse it as “biodiesel (BDF),” a diesel fuel used in trucks and other vehicles.
BDF, a plant-derived fuel, is known as a carbon-neutral fuel source and is a beneficial energy resource for Japan, not only contributing to solving the global warming problem, but also improving food and energy self-sufficiency. However, price competition with imported fossil fuel-derived diesel has been getting tougher year by year, forcing many BDF manufacturing companies to abandon their business in recent years.
Therefore, we applied efficiency analysis methods in the economic and management fields to data from 35 Japanese BDF manufacturing companies to estimate the potential for production cost reductions if these recycling companies were to improve the efficiency of their production activities. We also investigated whether this would make BDF more price competitive with fossil fuel-derived diesel fuel on the market.
The results of the study revealed that even if the recycling companies made more corporate efforts, the average cost of BDF production would only decrease by 3.5 yen/ℓ from the current level of around 107 yen/ℓ. Considering that the average price of competing diesel fuel is 81 yen/ℓ (excluding tax, at the time of the survey), the price difference between the two is quite obvious. In other words, the production cost of BDF is higher than that of ordinary diesel fuel, making it impossible to compete with it in the price race. The Japanese government needs to introduce a higher carbon tax or provide tax incentives for BDF.
For more details on the analysis, please see the following paper:
Ogata, M., Nakaishi, T., Takayabu, H., Eguchi, S., Kagawa, S., (2023). Production efficiency and cost reduction potential of biodiesel fuel plants using waste cooking oil in Japan. J. Environ. Manage. 331, 117284. https://doi.org/10.1016/j.jenvman.2023.117284
