Synopsis:

Japan’s rapidly aging and declining population poses serious challenges for its regional economies. In their efforts to revive regional economies, the Japanese government as well as local authorities are realizing the potential of renewable energy (RE) for regional economic development, local business and employment creation as well as public finances. Regional Value-Added (RVA) analysis of renewable energy provides a theory-driven, robust methodology to project and evaluate the economic effects of RE for a local community. Thus, it supports local policy makers in the formation of local energy and climate policies as well as in the design of effective communication strategies with local stakeholders. The paper introduces the methodology of RVA analysis of RE and demonstrates various applications of RVA analysis in local policy formation by referring to a set of case studies with Japanese municipalities and prefectures. In conclusion, the paper discusses key requirements as well as broader implications for a meaningful application of RVA analysis for local policy formation in the field of energy.