Cities100: Tokyo - Owners and Renters Collaborate to Reduce Energy Use

By mandating that large residential buildings disclose their energy use, Tokyo is getting tenants and owners to collaborate on prioritizing energy efficiency upgrades.

The Challenge

Split incentives are one of the most important barriers to energy efficiency upgrades in tenant-managed buildings, as tenants receive the benefit of lower energy consumption while owners often have to pay for the initial investment. With mandatory disclosure of energy use for tenant buildings, Tokyo forces renters and owners to collaborate transparently and encourages all actors involved to improve energy performance.

The Solution

Large residential buildings included in Tokyo’s Cap-and-Trade Program must report their energy use and efforts to reduce consumption, under the city’s mandatory Tenant Rating and Disclosure Program. As part of the program, each apartment unit receives an evaluation and a grade, which is disclosed on the city’s website. While Tokyo already works with owners to reduce energy use, tenant engagement is essential to accelerate the uptake of energy efficiency upgrades. The program not only increases awareness and transparency, but also incentivizes owners and tenants to collaborate by making tenants responsible parties. In addition, the city supports the disclosure program by providing important information on how to improve energy performance, as well as pilot projects for retrofits and environmental performance attached to leases. The city also encourages the participation of medium and small tenant buildings with a Carbon Certification Program, which rewards well-performing buildings, and releases energy performance to tenants and potential tenants. Through the new initiatives, Tokyo aims to reduce building energy use in all tenant buildings by approximately one-sixth by 2020.

Environmental Benefits – The program also aims to increase tenants’ awareness of climate issues such as resource scarcity, water use, and waste management.

Social Benefits – Increasing tenant and owner collaboration has positive effects on their preparedness and resilience to crises such as extreme weather events.

Economic Benefits – When implemented, energy-saving measures will reduce the energy expenditure of each tenant building – benefitting both unit renters and building owners.

About Cities100

In its second year, Cities100 – presented by C40 Cities Climate Leadership Group (C40), Sustainia and Realdania – showcases leading solutions to urban climate challenges in ten sectors, ranging from solid waste management to transportation. For the first time, this year’s publication features solutions that address the nexus of climate change and social equity.

Available online and in print, Cities100 provides stakeholders an accessible format to explore achievable solutions for climate action in cities, and will be a useful tool for relevant groups ranging from impact investors and development organizations, to mayors and city governments.  You can access the full Cities100 2016 publication online here and read more about how may­ors will de­liver the aims of the Paris Agree­ment in a fore­ward by Anne Hidalgo, C40 Chair and Mayor of Paris, here.