When Two Governments Regulate Together, Solar Power and Forests Both Win

Japan’s solar boom has an awkward side effect. Across the country, hillsides have been stripped of vegetation to make way for rows of photovoltaic panels, prompting complaints about soil erosion, muddy runoff, damaged landscapes and lost wildlife habitat. A new study suggests the solution is not to choose between promoting solar energy and protecting the environment, but to regulate at two levels of government at once — and to let those regulations reinforce each other.

The research, published in Clean Technologies and Environmental Policy by Chenyang Lee and Seiichi Ogata of Kyoto University’s Graduate School of Energy Science, examines Japan’s Special Provisions for Photovoltaic Power Generation Facilities, or SPPF. These are local ordinances, adopted by prefectures and municipalities, designed to harmonize renewable energy development with the natural, historical and cultural environment. Because different local governments adopted the provisions at different times, the policy rollout created what economists call a quasi-natural experiment: a real-world setting in which the effects of a policy can be isolated in much the same way as in a controlled trial.

The authors assembled an unusually rich dataset covering 1,689 Japanese municipalities over the period from 2014 to 2022. Photovoltaic installation figures came from the renewable energy statistics maintained by the Agency for Natural Resources and Energy at the Ministry of Economy, Trade and Industry, collected under the country’s Feed-in Tariff system, under which the government commits to purchasing renewable electricity at a fixed price and passes part of the cost to electricity users through a surcharge. Land-cover information was drawn from the European Space Agency’s Climate Change Initiative land cover time series, which provides globally consistent classifications at a resolution of 300 meters. Municipal boundaries, local fiscal indicators and meteorological data rounded out the panel.

To extract the causal effect of the ordinances, the researchers employed two complementary econometric techniques. The first is a multi-period Difference-in-Differences model, which compares municipalities that adopted the SPPF provisions with those that had not yet done so, before and after adoption, while accounting for the staggered timing of adoption across jurisdictions. The second is a Continuous Difference-in-Differences model, which exploits variation in the intensity or stringency of regulation rather than treating the policy as a simple on-off switch. This distinction matters, because the SPPF ordinances differ considerably in how they are written: some lay out clear, standardized procedures with explicit time requirements for each step, while others remain more abstract. The authors used the well-documented ordinances of Yamagata Prefecture and Sano Municipality, with their transparent step-by-step guidance procedures, as benchmarks for assessing the timeliness and transparency of implementation.

The headline result is striking. The SPPF policy significantly increased photovoltaic equipment installation, expanded mixed forests composed of both broadleaf and coniferous trees, and improved land-use patterns. In other words, the very regulations designed to constrain solar development did not suppress it — they accompanied more solar deployment and more forest cover at the same time. The likely mechanism is that well-designed environmental provisions channel projects toward appropriate sites, require mitigation measures such as revegetation, and give developers a predictable approval process, which reduces conflict and accelerates rather than stalls construction.

Just as important is where the policy works best. The study finds that the effectiveness of environmental regulation depends on the level of government doing the regulating. Prefectural-level policies proved more effective at promoting overall photovoltaic installation capacity, consistent with their broader jurisdictional reach and their ability to set consistent rules across many municipalities. Municipal-level policies, by contrast, were more effective at encouraging the adoption of small-scale photovoltaic systems and at shaping local land-use patterns, reflecting their closer familiarity with specific sites, ecosystems and community concerns. Neither level dominates the other; each excels at a different dimension of the energy-environment trade-off.

The most consequential finding, however, concerns the interaction between the two levels. The authors report that policy interventions implemented at different governance levels generate complementary effects that enhance overall policy effectiveness. When prefectural and municipal regulations operate together, the combined outcome exceeds what either could achieve alone. This synergy arises through a hybrid regulatory approach that combines traditional command-and-control instruments — binding rules, procedural requirements and standards — with public participation mechanisms such as information sessions and opportunities for residents to influence decisions. Regulatory design and public involvement both matter, and their importance differs across levels of government.

The study also documents a subtler pattern in how governments manage their policy portfolios. Municipalities tend to avoid implementing policies with overlapping objectives simultaneously. In particular, the SPPF policy is typically not enforced concurrently with the Ordinance on Specialization of Global Warming Countermeasures, even though the two share goals such as promoting renewable energy and protecting ecosystems. The researchers note that the global warming ordinance mentions these aims only in general terms, without specific measures or clear benchmarks, so running the two together would risk redundancy and policy conflict. Local governments, it appears, actively curate their regulatory mix to prevent overlap — a finding with direct implications for anyone designing policy packages for sustainability transitions.

These results speak to a long-running debate in environmental governance. Scholars have argued that climate and energy problems are polycentric, requiring action at multiple scales, and that collaborative governance can achieve collective action in social-ecological systems. But empirical evidence on whether multi-level regulation actually complements or merely duplicates itself has been scarce. By quantifying the synergy between prefectural and municipal ordinances, the Kyoto team provides rare causal evidence that vertical coordination pays off. The findings align with international work on policy mixes for sustainability transitions, which emphasizes that the interaction between instruments — not just their individual strength — determines outcomes.

The practical implications extend well beyond Japan. As countries worldwide race to expand solar capacity, conflicts over land are intensifying, from farmland conversion disputes to habitat loss around utility-scale installations. The Japanese experience suggests a template: pair capacity-promoting frameworks at higher levels of government with site-sensitive, participatory regulation at the local level, write ordinances with clear procedures and defined timelines, and audit the portfolio for overlapping mandates. Done well, environmental regulation stops being a brake on the energy transition and becomes its steering mechanism — one that delivers more panels on rooftops and suitable sites, healthier forests on the hillsides, and communities that feel heard in the process.

Subject of Research: Multi-level environmental regulation and its complementary effects on photovoltaic deployment and land use in Japan

Article Title: The complementarity of multi-level heterogeneous environmental regulation: a quasi-natural experiment based on the special provisions for photovoltaic power generation facilities in Japan

Article References: Lee, C., & Ogata, S. (2026). The complementarity of multi-level heterogeneous environmental regulation: a quasi-natural experiment based on the special provisions for photovoltaic power generation facilities in Japan. Clean Technologies and Environmental Policy, 28(10), Article 267. https://doi.org/10.1007/s10098-026-03619-0

Image Credits: AI Generated

DOI: 10.1007/s10098-026-03619-0

Keywords: environmental regulation, photovoltaic energy, multi-level governance, Japan, difference-in-differences, land use, renewable energy policy, public participation, quasi-natural experiment, forest cover, Feed-in Tariff, policy synergy