Since the Great East Japan Earthquake, Japanese energy and climate problems have reached a critical junction that requires an innovative energy and environmental policy. The idea of a Personal Carbon Allowance (PCA) system, which has been under discussion in the United Kingdom, is one of the
innovative policies with the potential to solve related issues in Japan. The authors are proposing a Feed-in Tariff PCA (FIT-PCA) as a suitable policy for Japan to encourage citizens to manage CO2 emissions in their daily personal lives and to improve their attitudes towards global environmental issues. In the psychological model we developed to study behavioural changes arising from the use of a PCA system, one assumption was that the experience of living with a FIT-PCA would stimulate loss aversion, goal setting, eudaimonia and pro-environmental life style changes. We conducted a simulation for six months with the cooperation of 30 households to investigate the validity of the model, monitor changes in energy reduction behaviours and encourage more responsible attitudes towards global environmental issues.