This can be done via scaling, see here.
However...
Q: Why do render quality levels like you are proposing to implement, exist in games & video? That is, lowering texture quality while keeping the window / viewport size the same?
A: To improve performance on lower spec machines.
But... windowed Java AWT can't (?) be assumed to work that way. Instead, it uses the native resolution of the desktop and the size of the window within that desktop, to define the number of pixels / texels to be rendered, in x & y. AWT is not really designed for games or videos, but for simple desktop UI, graphing and diagrams. (Whether AWT's scaling and rendering mentioned above is GPU-accelerated, is up for debate.)
So if you keep things at the same size, but lower the quality, then you are possibly not changing the number of pixels that must be rendered - but rather just having to double or quadruple those texels into the final render's pixels. This makes the game look worse, potentially with no performance improvement.
So if you want a quality setting that will definitely decrease the rendering load (and thus isn't a complete waste of time!), you need to use a render technology like OpenGL for Java, in the form of e.g. LibGDX renderer, LWJGL, or JOGL. This is because GPU-based rendering actually will do less work when you render fewer texels, so that lowering quality actually does something useful.
So to have any assured benefits to what you're doing, I would suggest switching to a renderer that is intended for games. OtherwiseElse you couldmay be wasting your time. EDIT: See mipmappingGoogle "libgdx mipmap" for more.