A Forest Environment Tax Scheme in Japan: Toward Water Source Cultivation [1st ed. 2022] 981169351X, 9789811693519

Table of contents :
Preface
Contents
1 Background to the Establishment of the Forest Environment Tax
1.1 Introduction
1.2 Trends in Japanese Forests and Forestry
1.3 Sustainable Development Goals (SDGs) and Forests
1.4 Conclusion
References
2 Forest Environment Tax (Prefectural Tax, City Tax)
2.1 Introduction
2.2 Forest Environment Tax (Prefectural Tax)
2.2.1 Overview of the Forest Environment Tax (Prefectural Tax)
2.2.2 Examples in Kochi Prefecture
2.2.3 Cases in Aichi Prefecture
2.3 Forest Environment Tax (City Tax)
2.4 Conclusion
References
3 Forest Environment Tax (National Tax)
3.1 Introduction
3.2 Forest Environment Tax as a National Tax
3.3 Forest Management System
3.4 Environmentally Related Taxes in Various Countries Similar to the Forest Environment Tax
3.5 Conclusion
References
4 Water Source Funds
4.1 Introduction
4.2 Toyota City Tap Water Source Conservation Fund
4.3 National Water Source Area Measures Fund
4.4 National Water Source Fund
4.5 Other Funds
4.5.1 Funds Relating to Water Quality Conservation
4.5.2 Funds Related to Ecosystems, Waterfront Spaces, and Water Culture
4.5.3 Fund Related to Groundwater Conservation
4.6 Conclusion
References

Citation preview

Keiko Nakayama

A Forest Environment Tax Scheme in Japan Toward Water Source Cultivation

A Forest Environment Tax Scheme in Japan

Keiko Nakayama

A Forest Environment Tax Scheme in Japan Toward Water Source Cultivation

Keiko Nakayama Faculty of Economics Chukyo University Nagoya, Aichi, Japan

ISBN 978-981-16-9351-9 ISBN 978-981-16-9352-6 (eBook) https://doi.org/10.1007/978-981-16-9352-6 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface

Living in Japan, a country abundant in freshwater and greenery, I always took pure and clear water for granted. As I started to travel more often, I came to understand that there are countries and regions where even pipe-borne water is unsanitary. I also learned that, as more countries’ utilities and infrastructure age, fewer and fewer of their citizens have access to potable water. In 1993, Toyota City in the Aichi Prefecture, which is world-famous for its automobile industry, established the “Water Resources Conservation Fund.” This added 1 yen per 1 m3 of water usage to the water rates paid into an annual fund. The official statement from Toyota City explained, “It is thanks to upstream areas that Toyota citizens can drink safe and delicious water. The fund is an expression of the gratitude of the citizens of Toyota for the upstream areas where the water source is located.” The fund is used for forest conservation projects upstream. However, the benefits of the water source recharge function redound to all residents of the basin in one way or another, so it is difficult to identify the beneficiaries of forest conservation projects or quantitatively measure the effects. The Toyota City Fund, which is based on this nation’s fortuitous status in this regard, has raised issues of whether it is justified to make residents in the downstream area bear the costs of conservation, despite the water source recharge function being a public good. Is it fair to make downstream residents bear the cost of forest conservation for the upstream area? Nevertheless, Toyota City’s approach has been followed by other local government jurisdictions as well. The Toyota City fund was the inspiration for this book. Potable water is not universally available, and forest revitalization efforts have proven to be effective. Failing forests pose a threat to all human beings, with UNICEF describing water as “water that nurtures life, water that takes life.” This fund reminds us that healthy forests play multifaceted roles in maintaining a thriving ecology. After this, the author unexpectedly became interested in the complex relationship between water and forests due to the overlap water supply, environmental taxes, and environmental regulations. In 2003, Kochi Prefecture introduced a forest environment tax as a prefectural tax, with each local government following suit. Under different labels, a city and 37 prefectures have introduced forest environment taxes. v

vi

Preface

In 2019, the forest environment gift tax was changed to a national tax, with a forest environment tax expected to be passed by 2024. Globally, the Sustainable Development Goals (SDGs) include specific targets related to water and forests. In recent years, the SDGs logo and distinctive color wheel have become internationally familiar—an excellent reminder of the importance of environmental awareness. In Japan, where forests occupy two-thirds of the national land, financial resources allocated for forestry restoration have been increasing steadily, drawn from sources such as local government funds, forest environment taxes, and the forest environment tax as a national tax. However, most other countries do not have such taxes. At best, taxes are levied on timber logging and forest owners, while other taxes are levied on the acquisition of clean water and drainage. Thus, unlike Japan, research on forest environment tax ranges from sparse to non-existent. In other countries, the main environmental tax is the carbon tax, with most environmental tax revenues derived from this one measure. In the OECD, the “polluter pays” principle is the basis of the environment-related tax system. Japan’s forest ecotax and water source fund are fundamentally different in concept. This author has applied a theoretical economic perspective to analyze the effectiveness and optimality of forest recharge conservation policies. However, Japanese taxes and funds aimed at preserving the forest environment are unusual in other nations. I wrote this book based solely on the introduction of taxes and funds for forest protection and revitalization, the actual state of operation, and the evidence of problems. However, sadly, since it is a tax and fund unique to Japan, many references and reference Web sites are written in Japanese, although there are some English-language materials published by government agencies on the condition of forests and water in Japan. This book comprises four chapters: Chapter 1—Background to the Establishment of the Forest Environment Tax Chapter 2—Forest Environment Tax (Prefectural Tax, City Tax) Chapter 3—Forest Environment Tax (National Tax) Chapter 4—Water Source Funds Chapter 1 describes how the importance of forest revitalization was recognized at home and abroad and the background of the establishment of the forest ecotax. Chapter 2 gives an overview of the forest environment tax that was introduced in a city and 37 prefectures prior to the national tax. In addition, we focus on several prefectures, including the Kochi prefecture, which devised the forest environment tax for the first time in Japan and how this tax became widely established in the local government. The enactment of the “Decentralization Law” in 1999 made it possible to create a non-statutory purpose tax that local governments can independently introduce through an ordinance. With this as a starting point, each local government began to construct its own environmental tax. However, it is interesting that, in the end, each created a forest environment tax in the category of ordinary tax, which is an excess taxation method for the inhabitant tax. In Japan, the ecological nurturing function of forests has been steadily declining due to several specific factors: the slump in timber prices, the aging of forestry workers, the shortage of successors, and the

Preface

vii

increase in degraded forests due to lack of funds. It is fair to say that the forest environment tax as a national tax was a long-cherished goal of the Forestry Agency and forestry organizations that had for many years been seeking financial resources for forest conservation costs. Chapter 3 deals with the national taxes of forest environment transfer tax and forest environment tax, as well as the mechanism of the forest management system started in conjunction with these taxes, summarizing its significance and related issues. Both the forest environment tax in prefectures and the forest environment tax as a national tax are scheduled to be levied from 2024, adopting the inhabitant tax per capita rate excess taxation method. However, the cost of forest revitalization need not be dependent on specific financial resources. Financial resources ought to be discussed in the future, along with tax bases. Chapter 4 comprehensively describes water source funds from all over the country. In the Aichi prefecture and neighboring areas (where the author lives), a large number of funds have been set up and basin cooperation is actively carried out. Because the Yahagi River Water Source Fund in Aichi Prefecture was a place where the idea of “one basin is a community destiny” was readily embraced, a fund created to express gratitude to the upstream of the Toyota City Water Resources Conservation Fund in Aichi Prefecture was accepted without any objection. It was easy for Japanese people to acknowledge that they should supply the finances needed to recharge the devastated forests since they benefit directly from pure, clean water from the devastated forests in upstream areas. The idea of surpassing the tax burden principle of polluter pays and beneficiary burden may have led to the nationwide passage of Japan’s unique forest ecotax and water source funds. In writing this book, Dr. Masatoshi Shirai (Professor Emeritus, Chukyo University), Dr. Akio Matsumoto (Professor Emeritus, Chuo University), Dr. Ferenc Szidarovszky (Professor, Corvinus University) provided a great deal of guidance. Dr. Kiyoshi Fujikawa (Professor of Aichigakuin University and Professor Emeritus, Nagoya University) gave advice from the stage of creating the structure of this book. Dr. Ryo Kohsaka (Professor, Nagoya University) gave me valuable feedback. Mr. Yutaka Hirachi, an editor from Springer Tokyo, provided support. Also, Aichi Prefecture and Toyota City provided precious documents. In addition, much help has been received from many local governments, funds, and organizations. I hereby would like to thank everybody once again. This is a book based on the first half of my previous work, which was published in February 2021, Forest Environment Tax in Japan—Toward the Conservation of Permanent Water Source of Recharge—(Chukyo University, Economic Research Series 29). Tokyo: Keiso Shobo (in Japanese) into which amendments and additions were incorporated. I would like to express my sincere gratitude to Keiso Shobo for allowing me to publish this book. A part of this book was supported by JSPS Grant-in-Aid for Scientific Research 18K01631. Finally, I hope that COVID-19 pandemic will be over as soon as possible. Nagoya, Japan August 2021

Keiko Nakayama

Contents

1 Background to the Establishment of the Forest Environment Tax . . . 1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Trends in Japanese Forests and Forestry . . . . . . . . . . . . . . . . . . . . . . . 1.3 Sustainable Development Goals (SDGs) and Forests . . . . . . . . . . . . . 1.4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 1 14 21 22

2 Forest Environment Tax (Prefectural Tax, City Tax) . . . . . . . . . . . . . . . 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Forest Environment Tax (Prefectural Tax) . . . . . . . . . . . . . . . . . . . . . . 2.2.1 Overview of the Forest Environment Tax (Prefectural Tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 Examples in Kochi Prefecture . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.3 Cases in Aichi Prefecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Forest Environment Tax (City Tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25 25 26

3 Forest Environment Tax (National Tax) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Forest Environment Tax as a National Tax . . . . . . . . . . . . . . . . . . . . . . 3.3 Forest Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Environmentally Related Taxes in Various Countries Similar to the Forest Environment Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45 45 45 61

4 Water Source Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Toyota City Tap Water Source Conservation Fund . . . . . . . . . . . . . . . 4.3 National Water Source Area Measures Fund . . . . . . . . . . . . . . . . . . . . 4.4 National Water Source Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

79 79 80 85 92

26 36 38 40 42 42

64 73 74

ix

x

Contents

4.5 Other Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5.1 Funds Relating to Water Quality Conservation . . . . . . . . . . . 4.5.2 Funds Related to Ecosystems, Waterfront Spaces, and Water Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5.3 Fund Related to Groundwater Conservation . . . . . . . . . . . . . . 4.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114 114 117 121 124 125

Chapter 1

Background to the Establishment of the Forest Environment Tax

1.1 Introduction In Japan, the “Law of Forest Environment Tax and Forest Environment Transfer Tax1 ” was enacted in March 2019. This established the “Forest Ecotax” (taxed from 2024) and the “Forest Ecotax” (transferred from 2019). The present chapter gives the background to establishing the forest environment tax from both a domestic and an international perspective. In Sect. 1.2, the forest ecotax is examined through the trends of Japan’s forests and forestry and the multifaceted functions of forests, while in 1.3, forest-related issues are analyzed from the global perspective of the Sustainable Development Goals (SDGs).

1.2 Trends in Japanese Forests and Forestry Japan is one of the most forested countries in the world. Table 1.1 shows the forest cover for selected countries. Japan’s forest ratio (the ratio of forest to land) is 68.5%, second only to Finland (73.1%) among the 34 OECD member countries. Japan’s planted forests rank seventh highest in the world, after large countries such as China, the USA, and Russia. The forested area of Japan has remained largely unchanged in recent fifty years. Around 40% of national forests are planted. Most trees were grown for the logging industry, either immediately after the end of World War II or during the period of high economic growth from 1955 to 1973. More than half of the trees are over fifty years old, which is prime age for logging. At present, there is a high demand for timber. This is shown in Fig. 1.1, which displays the changes in the age-class composition of planted forests. However, the young forests required for achieving a balanced age structure in the future are less prevalent. 1

Law number: 2019 Law No. 3, commonly known as Forest Environment Tax Law.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakayama, A Forest Environment Tax Scheme in Japan, https://doi.org/10.1007/978-981-16-9352-6_1

1

2

1 Background to the Establishment of the Forest Environment Tax

Table 1.1 Forest regions around the world Country/Territory

Land area (1000 ha)

Forest area (1000 ha)

Planted forest area (1000 ha)

Forest area/Land area (%)

Austria

8244

3869

1692

46.9

Belgium

3028

683

394

22.6

Czech

7722

2667

2643

34.5

Denmark

4243

612

464

14.4

Estonia

4239

2232

174

52.7

Finland

30,390

22,218

6775

73.1

France

54,766

16,989

1967

31.0

Germany

34,861

11,419

5295

32.8

Greece

12,890

4054

140

31.5 22.7

Hungary

9127

2069

1652

Iceland

10,025

49

38

0.5

Ireland

6889

754

683

10.9 31.6

Italy

29,414

9297

639

Latvia

6220

3356

612

54.0

Lithuania

6268

2180

570

34.8 33.6

Luxembourg

259

87

28

Netherlands

3375

376

376

11.1

Norway

30,427

12,112

1529

39.8

Poland

30,622

9435

8957

30.8

9026

3182

891

35.3

Portugal Russia

1,637,687

814,931

19,841

49.8

Slovakia

4809

1940

960

40.3

Slovenia

2014

1248

34

62.0

Spain

49,880

18,418

2909

36.9

Sweden

41,034

28,073

13,737

68.4

4000

1254

172

31.4

Switzerland

24,193

3144

···

13.0

Europe

2,213,947

1,015,482

82,006

45.9

Canada

909,351

347,069

15,784

38.2

Mexico

194,395

66,040

87

34.0

United States of America

916,192

310,095

26,364

33.8

2,134,366

750,653

43,320

35.2

768,230

124,751

2017

16.2

26,331

10,152

2087

38.6

United Kingdom

North Central America Australia New Zealand

(continued)

1.2 Trends in Japanese Forests and Forestry

3

Table 1.1 (continued) Country/Territory

Land area (1000 ha)

Forest area (1000 ha)

Planted forest area (1000 ha)

Forest area/Land area (%)

Oceania

849,680

173,524

4381

20.4

Angola

124,670

57,856

125

46.4

47,271

18,816

26

39.8

Cameroon Cote d’Ivoire

31,800

10,401

427

32.7

Democratic Republic of the Congo

226,705

152,578

60

67.3

Ethiopia

109,631

12,499

972

11.4

Madagascar

58,154

12,473

312

21.4

Mozambique

78,638

37,940

75

48.2

186,665

19,210

6121

10.3

Tanzania

88,580

46,060

290

52.0

Zambia

74,339

48,635

64

65.4

Zimbabwe

38,685

14,062

87

36.4

Africa

2,986,544

624,103

16,325

20.9

China

942,530

208,321

78,982

22.1

India

297,319

70,682

12,031

23.8

Indonesia

171,857

91,010

4946

53.0

Iran

184,806

10,692

941

5.8

164

165

89

7.6

Sudan

Israel Japan

36,450

24,958

10,270

68.5

Malaysia

32,855

22,195

1966

67.6

Myanmar

65,755

29,041

944

44.2

Korea

9710

6184

1866

63.7

51,089

16,399

3986

32.1

Turkey

76,963

11,715

3386

15.2

Vietnam

31,007

14,773

3663

47.6

3,117,641

593,362

128,546

19.0

Argentina

273,669

27,112

1202

9.9

Bolivia

108,330

54,764

26

50.6

Brazil

835,814

493,538

7736

59.0

Thailand

Asia

Chile Columbia Ecuador Peru Venezuela South America

74,353

17,735

3044

23.9

110,950

58,502

71

52.7

24,836

12,548

55

50.5

128,000

73,973

1157

57.8

88,205

46,683

557

52.9

1,746,599

842,011

15,022

48.2 (continued)

4

1 Background to the Establishment of the Forest Environment Tax

Table 1.1 (continued) Country/Territory The whole world

Land area (1000 ha) 13,048,777

Forest area (1000 ha) 3,999,134

Planted forest area (1000 ha) 289,599

Forest area/Land area (%) 30.6

Note “…” has no data Source Created by the author based on FAO (2015), pp. 3–8 and pp. 34–39

Fig. 1.1 Changing forest age class configuration of planted forests. Note Age-classes are divided by 5 year-period steps. “Age class 1” includes the 1st to 5th year after planting with the year of planting counted as the 1st year. Source Forestry Agency (2020, p. 9), Fig. I—1

Moreover, as shown in Fig. 1.2, forest cover in Japan has been steadily rising every year, mainly through planting. Forests now extend over about 5.2 billion m3 , which is a 250% increase in 50 years. Planted forests account for around 60% of this increase. Figure 1.3 gives a breakdown of forests by ownership. 57% of the forest area is privately owned, 31% is national, and 12% is public forest. The ratio of privately owned forests to planted forests is considerably high: 65% of the total planted area and 72% of the total planted forests are privately owned. Here, let us consider the effects that forests give to us. Forests can help improve people’s lives and aid in the development of the national economy in various ways. These “multifaceted functions of forests” and their specific details are summarized in Table 1.2. The multi-functionality of forests means that many functions overlap synergistically. Thus, whether a forest is planted mainly for timber production or maintained for land conservation or for public interest purposes, timber-cutting contributes to national production. Fundamentally, there is no better or worse role among the multifaceted functions of forests. It is merely that the functions considered important vary over time, depending

1.2 Trends in Japanese Forests and Forestry

5

(100 million ㎥) 60

49.0

50

44.3 40.4

40

34.8

10 0

17.0

28.6

30 20

52.4

18.9 13.3

21.9

8.0

1966

1976

19.3

17.8

15.9 15.0

13.9

5.6

18.6

13.6

1986

18.9

1995

Planted forest

23.4

26.5

2002

2007

30.4

33.1

2012

2017

Natural and other forest

Fig. 1.2 Growing stock in forest. Source Created by the author based on Forestry Agency Ed. (2020, p. 54)

Fig. 1.3 Breakdown of forest area. Source Forestry Agency (2020, p. 9), Fig. I—2

6

1 Background to the Establishment of the Forest Environment Tax

Table 1.2 Multi-function of forestry Functions

Specific details

Biodiversity conservation function

Gene conservation, species conservation, ecosystem conservation

Health/recreation function

Recuperation, recreation, recreation

Global environmental conservation function

Mitigation of global warming, stabilization of global climate system

Comfortable environment formation function Climate mitigation, summer temperature drop (and winter temperature rise), air purification, comfortable living environment formation Sediment disaster prevention function/soil conservation function

Prevention of surface erosion, prevention of surface collapse, prevention of other sediment-related disasters, prevention of sediment runoff, soil conservation (Maintaining forest productivity)

Cultural function

Landscape/scenery, learning/education, art, religion/festival, traditional culture, regional diversity maintenance

Water source cultivation function

Flood mitigation, water resources storage, water volume adjustment, water quality purification

Substance production function

Wood, fuel materials, food, fertilizers, feeds, chemicals and other industrial raw materials, greening materials, ornamental plants, craft materials

Source Created by the author based on the website of Forestry Agency, Ministry of Agriculture, Forestry and Fisheries. Retrieved May 20, 2021 from https://www.rinya.maff.go.jp/j/keikaku/tam enteki/con_1.html (in Japanese)

on the socioeconomic situation, the status of particular forests, and so on. However, if a forest only serves specific functions or urgently required functions, this may interfere with other needs or future prospects. For example, bitter experience proves that logging large amounts of forests to meet high demand for timber impairs public interest functions, such as national land conservation. According to the Science Council of Japan (2001),2 the impact of forests extends across 35 elements in eight categories. Although the report can only quantify the functions, the monetary estimate (Fig. 1.4) of these effects is calculated at 70 trillion yen per annum. Given that Japan’s annual GDP for 2019 was approximately 560 trillion yen, this figure shows the importance of forests. Before proceeding further, let us take a brief look at recent trends in forestry. After World War II, Japan’s forestry industry was for the most part centrally planned by government. Both during the war and afterward, huge amounts of hardwoods were cut down for munitions and reconstruction. An expanded afforestation policy has been adopted in areas, where sugi and cypress are planted for construction timber. However, before the trees got old enough for the main cutting season, timber imports 2

The Science Council of Japan is one of the special institutions of the Cabinet Office.

1.2 Trends in Japanese Forests and Forestry

Functions Carbon dioxide absorption

Fossil fuel alternative

7

Yen / year

1,239.1 billion

226.1 billion

ener gy

Sheet erosion

28,056.5 billion

prevention

Surface failure

8,442.1 billion

prevention

Flood mitigation

Water resource storage

Water purification

Recreation

6,468.6 billion

8,740.7 billion

14,636.1 billion

2,254.6 billion

8

1 Background to the Establishment of the Forest Environment Tax

Fig. 1.4 Monetary evaluation of the forestry functions. Source Created by the author based on Forestry Agency (Ministry of Agriculture, Forestry and Fisheries). Ed. (2018, p. 55) and the website of Forestry Agency. Retrieved May 20, 2021 from https://www.rinya.maff.go.jp/j/keikaku/tament eki/con_3.html (in Japanese)

Carbon capture Calculate the amount of carbon dioxide absorbed from the increase in forest biomass and evaluate it based on the carbon capture cost at the coal-fired power plant (alternative method). Fossil fuel alternative Evaluate the amount of carbon emission that would increase if all wooden houses were constructed with RC and steel prefabricated buildings based on the above carbon capture cost (alternative method). Surface erosion prevention Evaluate the difference in the amount of eroded sediment between forested and non-forested areas (surface erosion prevention amount) based on the cost of dam construction (alternative method). Surface collapse prevention Evaluation of the difference in collapse area between forested and nonforested areas (collapse reduction area) based on hillside construction costs (alternative method). Flood mitigation Evaluation of flow control amount for 100-year return period rainfall in comparison between forest and bare land through depreciation cost and annual maintenance cost of hydraulicdam (alternative method). Storing of water sources The amount of water resources stored is calculated from the amount of precipitation and evapotranspiration in the forest, and this is evaluated by the depreciation cost and annual maintenance cost of the water use dam (alternative method). Water purification Water quality is required for water equivalent to domestic water, and other than that, water quality of medium water is required and evaluated by depreciation cost and annual maintenance cost of rainwater treatment facility (alternative method). Insurance/Recreation Evaluated based travel expenses for the intention of admiring the natural scenery of Japan (household expenditure [for travel]). Reference Report of the Science Council of Japan “Evaluation of Multifaceted Functions of Agriculture and Forests Related to Global Environment and Human Life” and related materials (November 2001), (in Japanese). The Science Council of Japan is one of the special institutions of the Cabinet Office.

began with liberalization in 1964, thereby resulting in cheap imported timber taking over the local market. Consequently, not only did the price slump but the abandoned forests also stopped being thinned because of various factors: the aging of forestry workers, lack of successors, shortage of funds, and uncertainty regarding land ownership rights. However, after a long period of stagnation, forestry has begun to see a resurgence in recent years. Figure 1.5 shows the transitions in forestry output. This is defined as the total production of timber, cultivated mushrooms, firewood, etc., produced by domestic forestry production activities. Forestry output has been on the rise, reaching around 400 billion yen since 2005 and over 450 billion yen since 2014. In 2018, forestry generated 502 billion yen, up 3% from the previous year, exceeding 500 billion yen for the first time in 18 years since 2000. Similarly, timber demand (Fig. 1.6) has continued to rise, largely because of economic development during the postwar reconstruction period and the subsequent period of high economic growth, which attained a record high of 121.02 million m3 (log equivalent) in 1973. Subsequently, demand fluctuated owing to the effects of the two oil crises in 1973 and 1979 but had stayed steady since 1987 at approximately 100 million m3 . Then, with the collapse of the bubble economy in 1991, a downward

1.2 Trends in Japanese Forests and Forestry

9

Fig. 1.5 Gross forestry output. Source Forestry Agency (2020, p. 16)

Fig. 1.6 Changes in timber supply/demand. Source Forestry Agency (2020, p. 37)

trend began in 1996. In 2009, largely because of the collapse of Lehman Brothers, there was a significant decrease of 19% from the previous year. However, in recent years, timber demand has recovered and now exceeds 2008 levels. The number and age structures of forestry workers are important factors to discuss forestry industry. Figure 1.7 illustrates the age demographics of forestry workers. The number of forestry workers has seen a steady secular decline, dropping to 45,440 in 2015. The aging rate of forestry workers peaked in 2000 and has declined ever

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1 Background to the Establishment of the Forest Environment Tax

Fig. 1.7 Number of forestry workers. Note Elderly percentage of workers 65 years of age or older, and youth rate is percentage of workers 35 of age or younger. Source Forestry Agency(2018, p.17)

Fig. 1.8 Wood prices in Japan. Source Forestry Agency (2018, p. 17)

since, reaching 21% in 2010. Since Japan has the highest aging rate in the world, the forestry industry would reflect this overall trend, with a rise starting from 2010. However, the rate of young people in forestry under the age of 35 has risen since 1990, reaching 18% in 2010, and has remained almost level ever since. The average age of forestry workers was 52.4 years in 2015 while that was 56.0 in 2000. Given that the average age of all industries is 46.9 years, it is apparent the overall trend favors workers in lower age brackets. Finally, we look at the price of timber.3 Figure 1.8 shows the movement of the national average stumpage price. Approximately, 40% of Japan’s forests are planted

3

See Matsuoka (2010) for the profitability of forestry management.

1.2 Trends in Japanese Forests and Forestry

11

forests with the main tree species, in descending order of prevalence, being sugi, hinoki, larch, and pinus thunbergii (pinus thunbergii, Japanese black pine, and ryukyu pine). Wood prices are evaluated based on these trees, but all prices peaked in 1980 and have fallen since. The price of sugi had risen slightly from 1987, mainly because of housing demand, fell again from 1991, hovering in recent years around 13,000– 14,000 yen/m3 . The contemporary price of hinoki is similar at around 18,000 yen/m3 . Pine prices have been on a slight upward trend since bottoming out in 2004, averaging 12,000 yen/m3 in recent years. By contrast, many forests are not well maintained and do not fully meet the public interest functions of forests such as national land conservation, water source recharge, and the prevention of global warming. Moreover, the promotion of forest recharge greatly contributes to the quality of people’s lives and to the SDGs, but the challenges of the forest environment tax need to be discussed at regular intervals. Planted forest has now reached its full-scale utilization period, while establishing the recycling of forest resources such as “cutting, using, planting, and growing.” It is therefore necessary to institute measures to promote the maintenance and conservation of diverse and healthy forests since this is the essence of efficient and stable forestry management. In 1992, the United Nations Framework Convention on Climate Change (Climate Change Framework Convention)4 was adopted as an international framework for the prevention of global warming. On this basis, the function of preventing global warming through afforestation attracted worldwide attention. In 1997, the “Kyoto Protocol” was adopted at the “Third Conference of the Parties to the United Nations Framework Convention on Climate Change (COP35 ).” This conference set the five years from 2008 to 2012 as the “first commitment period” when there should be at least a 5% reduction in developed countries and a 6% reduction in Japan, compared to the average of each year of greenhouse gas emissions compared with the level of 1990, which was taken as the base year.6 For Japan to fulfill its pledge to the Kyoto Protocol, the “Kyoto Protocol Target Achievement Plan” was formulated based on the “Act on Promotion of Global Warming Countermeasures,” which promises a 6% reduction in greenhouse gases. To reach this target, 0.6% was secured by reducing greenhouse gas emissions, 3.8% by measures against forest sinks, and 1.6% through the Kyoto Mechanism,7 with forests given a central role. As for cultivated forests, the amount of absorption is included under “forest management” carried out after 1990 so, before the first commitment period; this was approximately 350,000 ha every year in Japan. This meant it was 4

United Nations Framework Convention on Climate Change (UNFCCC). COP3 is the common name for the third meeting of the Conference of the Parties (COP). COP3 was held in Kyoto. 6 See Ministry of the Environment (2020a) for further detail on Japan’s greenhouse gases and CO 2 emissions. 7 This is a greenhouse gas reduction method that utilizes market principles introduced in the Kyoto Protocol as an auxiliary means to achieve the numerical targets of each country. Joint Implementation (JI), Clean Development Mechanism (CDM), and Emission Trading (ET) Emissions Trading) have been seen. 5

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necessary to expand the forest maintenance area, such as setting the thinned area to an annual target of 550,000 ha on average during the first commitment period. For this reason, the Forestry Agency has secured additional financial resources for thinning, etc., as a measure against forest sinks through an annual supplementary budget, instituting measures based on the 2008 “Act on Special Measures Concerning Promotion of Implementation of Forest Thinning, etc.” Steady implementation secured the target amount of 3.8%. As for the national target set in 2012, the successful attainment of greenhouse gas reduction was announced on April 2014. The average decrease was 8.4% from the base year, and the target of the Kyoto Protocol, 6% decrease from the base year, was achieved. From 2013, global warming prevention measures entered the “second commitment period” (eight years until 2020) of the Kyoto Protocol. Under the “Climate Change Framework Convention,” the “Climate Change Framework Convention 16th Agreement” based on the agreement at the Conference of the Parties (COP16), each country is supposed to strengthen its voluntary efforts. At the 19th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP19) held in Poland in November 2013, Japan was among the developed countries that signed on to the United Nations Framework Convention on Climate Change. For the voluntary greenhouse gas reduction target for FY2020, Japan announced that it aimed to reduce the total emissions level in FY2005 by 3.8% (1397 million CO2 t). Forest sinks are expected to continue to play a major role in reaching this target, securing an absorption amount of 2.8% or more. The upper limit of forest absorption through management strategies is set at 3.5% (2013–2020 average) of total emissions (1990 baseline) in each country during the second commitment period so, based on this, it is assumed that this upper limit will be achieved. To achieve this goal, it was decided to carry out thinning of 520,000 ha on average. The relevant policies were outlined in the “Basic Guidelines for Promotion of Specific Thinning, etc. and Proliferation of Specific Mother Trees,” established by the Minister of Agriculture, Forestry, and Fisheries based on the “Act on Special Measures for Thinning, etc.” However, at that time, securing financial resources was still an issue. In 2019, the Cabinet Office issued a questionnaire to the public asking which of the multifaceted functions of forests should be included in the “Public Opinion Survey on Forests and Livelihoods.” The results are shown in Fig. 1.9. Preventing disasters such as landslides and floods, prevention of global warming by absorbing carbon dioxide, and preserving water resources were primary concerns. Targets that are exceeded help create the basis for getting financial resources from the forest environment tax. Later in this section, I will provide a detailed exploration of the issue of water and forests.8 The amount of water on Earth totals approximately 1.4 billion km3 , but 97.5% is seawater. Moreover, most of the freshwater is locked in ice and glaciers in the South and Arctic regions, with groundwater, rivers, lakes, and marshes accounting for around 0.8% of all water, with most of this being groundwater. Rivers and lakes 8

Black (2016) explains the world’s water problems and efforts to solve them in detail.

1.2 Trends in Japanese Forests and Forestry

13

Fig. 1.9 Changes in the public’s expectations for the roles of forests. Sources Created by the author based on Forestry Agency. Ed. (2020, p. 56)

account for a mere 0.01%. Total annual precipitation is around 577,000 km3 , with just 119,000 km3 falling on land, and about 74,000 km3 of that vanishes because of evapotranspiration. Of the remaining 45,000 km3 , approximately, 43,000 km3 will become surface water and about 2000 km3 groundwater.9 UNDP (2006) points out the issue that “in the world as a whole, there is enough water to reach all people, but there are large differences in water inflow and distribution of water resources between countries.” For example, in regions such as Brazil and Canada, the amount of water resources greatly exceeds the amount used; conversely, Middle East countries have significantly fewer water resources. Moreover, the distribution of water resources and population does not always show a positive correlation, frequently not matching at all. Water is a resource that is unevenly distributed, depending on the region. In addition, recent population increase, economic development, and climate change has caused various types of problems in water resource. It is the United Nations Water Conference held at Mar del Plata, Argentina, in 1977 that was the first international cooperation on the water resource issues in the world. Such organizations as the United Nations Secretary-Generals’ Advisory Board on Water & Sanitation, United Nations Commission on Sustainable Development, International Hydrological Program and World Water Forum followed. 9

See Ministry of Land, Infrastructure, Transport, and Tourism (2014a). Moreover, for the English version of the status of Japan’s water, see Ministry of Land, Infrastructure, Transport, and Tourism (2014b). There is a detailed description of the current status of Japan’s water sources in Ministry of Land, Infrastructure, Transport, and Tourism (2021).

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Fig. 1.10 Annual precipitation and annual precipitation and water resources per capita. Source Ministry of Land, Infrastructure, Transport and Tourism (2012, p. 2)

One of the indicators of water abundance is net annual precipitation. Figure 1.10 shows the endowment of water resources. This is the amount that can theoretically be used by human beings, obtained by multiplying the amount of precipitation minus the amount of evapotranspiration by the area of the region. Japan has ample water bodies, but its water resource reserves are below the world average. That average is approximately 8000 m3 of annual water resource reserve per capita; Japan has only 3400 m3 . Water, like air, is essential to life. In the future, if humankind and ecosystems are to continuously enjoy the blessings of water, it is necessary to create an environment in which the benefits of forests can be fully realized.

1.3 Sustainable Development Goals (SDGs) and Forests SDGs10 are international goals for a sustainable and better world, listed in the “2030 Agenda for Sustainable Development” that was adopted at the United Nations Summit in September 2015 as a successor to the Millennium Development Goals (MDGs) formulated in 2001. SDGs, consisting of 17 goals and 169 targets, pledge to 10

There are 40 types of logos for the SDGs, including versions that are in or are UN-based/nonUN-based, UN official six languages, vertical/horizontal, and color/black-and-white. Along with the 17 icons, the United Nations Information Center has detailed rules for use. The logo and 17 icons of the SDGs, including color wheels, will be available from January 1, 2016, to December 31, 2030, unless otherwise notified by the UN by general or specific notice. Furthermore, the design of the icon was changed on January 1, 2018.

1.3 Sustainable Development Goals (SDGs) and Forests

15

“leave no one behind” on Earth. While the MDGs were mainly targeted at developing countries, the SDGs are for all countries. The government and international organizations are working on the SDGs themselves and encouraging the participation of civil society and companies. Given the sense of crisis about the sustainability of the global environment, society, and economy, there is an increasing interest in the SDGs among citizens and companies. In 2017, an index for each target was adopted to track the progress of the SDGs, with the governments of each country conducting follow-ups on the achievement of the SDGs based on this index or their own index. Goal 15 (protecting the abundance of greenery) of the SDGs is “sustainable forest management.” Forests also contribute to Goal 6 (safe water and toilets around the world) and Goal 13 (to take emergency measures to mitigate climate change and its effects). Furthermore, forests link indirectly with all kinds of goals. Figure 1.11 summarizes the relationship between forests, forestry, and timber industries in Japan and SDGs. In April 2017, the United Nations Strategic Plan for Forests (UNSPF) aimed at promoting contributions in the forest sector to international goals such as the 2030 Agenda, including the SDGs. The UNSPF 2017–2030 was adopted by the United Nations General Assembly. The UNSPF sets out “World Forest Goals” to be achieved by 2030 and more detailed targets based on them and lists the SDGs11 to which each World Forest Goal is particularly relevant (Table 1.3). Since the 1950s, the number of forests, including rain forests, has declined sharply across the world. This is mainly attributed to environmental deterioration such as the conversion of forests to agricultural land and illegal logging. According to FRA 2020,12 the world’s forest area is about 4.06 billion ha (31% of land) and, although it is unevenly distributed, it is equivalent to 0.52 ha per person. Further, 45% of the planet’s forests are in the tropics, followed by the subarctic, temperate, and subtropical regions. Just five countries—the Russian Federation, Brazil, Canada, the USA, and China—account for more than half (54%) of the world’s forests. Since 1990, the world’s forests have lost 178 million hectares, which is equivalent to the area of Libya. However, the overall net depreciation of forests declined significantly from 1990 to 2020 owing to reduced deforestation in some countries and new plantations and natural growth in other countries (Figs. 1.12 and 1.13). In fact, the net deceleration of forests has slowed, with an average annual depletion area 11

The goals that are particularly contributing are as follows: “1. No poverty,” “2. Zero hunger,” “4. Quality education,” “5. Gender equality,” “Clean water and sanitation,” “8. Decent work and economic growth,” “Industry, innovation, infrastructure,” “12. Responsible consumption, production,” “13. Climate action,” “14. Life below water,” “15. Life on land,” “16. Peace, Justice and strong institutions,” and “17. Partnerships for goals.”. 12 The Global Forest Resources Assessment (FRA) also collects data on two forest-related indicators (15.1.1 and 15.2.1) of the SDGs adopted by the United Nations General Assembly in 2015. Since 1946, Food and Agriculture Organization of the United Nations (FAO) has been collaborating with member countries to regularly analyze and evaluate the world’s forest resources. FRA 2020 is the latest report analyzing the current status and trends of more than 60 forest-related indicators in 236 countries and territories between 1990 and 2020 (FAO 2021). For the status of the world’s forests, see FAO and UNEP (2020).

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1 Background to the Establishment of the Forest Environment Tax

Fig. 1.11 Relationship between Japan’s cyclical use of forests ant the SDGs. Source Forestry Agency (2020, p.7)

of 7.8 million ha from 1990 to 2000, compared to an average of 5.2 million ha per year from 2000 to 2010. From 2010 to 2020, the annual average decreased to 4.7 million ha. This is primarily due to re-afforestation efforts.

1.3 Sustainable Development Goals (SDGs) and Forests

17

Table 1.3 Global forest goals and targets Global forest goal

SDGs

1. Reverse the loss of forest cover worldwide through SFM, including protection, restoration, afforestation and reforestation, and increase efforts to prevent forest degradation and contribute to the global effort of addressing climate change 1.1 Forest area is increased by 3% worldwide 1.2 The world’s forest carbon stocks are maintained or enhanced 1.3 By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally 1.4 The resilience and adaptive capacity of all types of forests to natural disasters and the impacts of climate change is significantly strengthened worldwide

6.6, 12.2, 13.1, 13.3, 14.2, 15.1, 15.2, 15.3, 15.4 and 15.8

2.Enhance forest-based economic, social and 1.1, 1.4, 2.4, 4.4, 5.a, 6.6, 8.3, 9.3, 12.2, 12.5, environmental benefits, including by improving 15.6 and 15.c the livelihoods of forest dependent people 2.1 Extreme poverty for all forest dependent people is eradicated 2.2 Increase the access of small-scale forest enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets 2.3 The contribution of forests and trees to food security is significantly increased 2.4 The contribution of forest industry, other forest-based enterprises and forest ecosystem services to social, economic and environmental development, among others, is significantly increased 2.5 The contribution of all types of forests to biodiversity conservation and climate change mitigation and adaptation is enhanced, taking into account the mandates and ongoing work of relevant conventions and instruments (continued)

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1 Background to the Establishment of the Forest Environment Tax

Table 1.3 (continued) Global forest goal

SDGs

3. Increase significantly the area of protected forests worldwide and other areas of sustainably managed forests, as well as the proportion of forest products from sustainably managed forests 3.1 The area of forests worldwide designated as protected areas or conserved through other effective area-based conservation measures is significantly increased 3.2 The area of forests under long-term forest management plans is significantly increased 3.3 The proportion of forest products from sustainably managed forests is significantly increased

7.2, 12.2, 12.6, 12.7, 14.2, 14.5, 15.2 and 15.4

4. Mobilize significantly increased, new and 12.a, 15.7, 15.a, 15.b, 17.1, 17.2, 17.3, 17.6, 17.7, additional financial resources from all sources 17.16, 17.17, 17.18 and 17.19 for the implementation of SFM and strengthen scientific and technical cooperation and partnerships 4.1 Mobilize significant resources from all sources and at all levels to finance sustainable forest management and provide adequate incentives to developing countries to advance such management, including for conservation and reforestation 4.2 Forest-related financing from all sources at all levels, including public (national, bilateral, multilateral and triangular), private and philanthropic financing is significantly increased 4.3 North–South, South-South, North–North and triangular cooperation and public–private partnerships on science, technology and innovation in the forest sector are significantly enhanced and increased 4.4 The number of countries which have developed and implemented forest financing strategies and have access to financing from all sources is significantly increased 4.5 The collection, availability and accessibility of forest-related information is improved through, for example, multi-disciplinary scientific assessments (continued)

1.3 Sustainable Development Goals (SDGs) and Forests

19

Table 1.3 (continued) Global forest goal

SDGs

5. Promote governance frameworks to 1.4, 2.4, 5.a, 15.c, 15.9, 16.3, 16.5, 16.6, 16.7, implement SFM, including through the UN 16.10 and 17.14 Forest Instrument, and enhance the contribution of forests to the 2030 Agenda 5.1 Number of countries which have integrated forests into their national sustainable development plans and/or poverty reduction strategies is significantly increased 5.2 Forest law enforcement and governance are enhanced, including through significantly strengthening national and subnational forest authorities, and illegal logging and associated trade is significantly reduced worldwide 5.3 National and subnational forest-related policies and programs are coherent, coordinated and complementary across ministries, departments and authorities, consistent with national laws, and engage relevant stakeholders, local communities and indigenous peoples, fully recognizing the UN Declaration on the Rights of Indigenous Peoples 5.4 Forest-related issues and the forest sector are fully integrated into decision-making processes of land use planning and development 6. Enhance cooperation, coordination, 17.14 coherence and synergies on forest-related issues at all levels, including within the UN System and across CPF member organizations, as well as across sectors and relevant stakeholders 6.1 Forest-related programs within the UN system are coherent and complementary and integrate the Global Forest Goals and targets where appropriate 6.2 Forest-related programmes across CPF member organizations are coherent and complementary and together encompass the multiple contributions of forests and the forest sector to the 2030 Agenda for Sustainable Development 6.3 Cross-sectoral coordination and cooperation to promote SFM and halt deforestation and forest degradation is significantly enhanced at all levels 6.4 A greater common understanding of the concept of SFM is achieved and an associated set of indicators is identified 6.5 The input and involvement of major groups and other relevant stakeholders in the implementation of the UNSPF and in the work of work of the Forum, including intersessional work, is strengthened Note The table shows that the goals and targets on the left contribute specifically to the SDGs on the right Source Created by the author based on United Nations (2017)

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Fig. 1.12 Global annual forest area net change, by decade, 1990–2020. Source Food and Agriculture Organization of the United Nations (2020, p. 2)

Fig. 1.13 Annual rate of forest expansion and deforestation, 1990–2020. Source Food and Agriculture Organization of the United Nations (2020, p. 4)

1.4 Conclusion

21

1.4 Conclusion For Japan, maximizing the usage and utility of forests could significantly contribute to SDGs. This is because while the world’s overall forest acreage is declining, Japan’s forested areas have remained almost unchanged over the past half-century. Moreover, accumulation has been increasing annually for both natural and planted forests. Of these, half of the planted forests, which account for 40% of forests, are over 50 years old, which is the main cutting period, and are now in full-scale utilization. However, the sustainable use of forests is premised on logging that is proportionate to growth and accumulation with equivalent replacement through the appropriate renewal and maintenance of trees. It is thus essential to secure financial resources for Japan to contribute to the SDGs. In 2012, a “tax for global warming countermeasures” was established in Japan, but forest sink measures were not included. As is seen in Figs. 1.14 and 1.15, the ratio of environment-related taxation to gross domestic product (GDP) is also low compared to other countries. Against this background, it is not unreasonable to impose a national forest environment tax to obtain financial resources for this purpose. This can be requested both from home and abroad (Figs. 1.14 and 1.15).

Fig. 1.14 Revenues from environmentally related taxes, in percent of GDP, 2009. Source OECD (2011, p. 2)

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1 Background to the Establishment of the Forest Environment Tax

Fig. 1.15 Changes in the ratio of environmentally related tax revenue to GDP (1994–2016). Source Created by the author based on Ministry of the Environment (2020b, p. 6)

References Black, M. (2016). The Atlas of water: Mapping the world’s most critical resource, 3rd edition. University of California Press FAO (Food and Agriculture Organization of the United Nations). (2021). Global forest resources assessment 2020 (FRA 2020) Main report. Rome: FAO. http://www.fao.org/3/ca9825en/ca9 825en.pdf. https://doi.org/10.4060/ca9825en FAO (Food and Agriculture Organization of the United Nations). (2015). Global forest resources assessment 2015: Desk reference. Food and Agriculture Organization of the United Nations. http://www.fao.org/3/i4808e/i4808e.pdf FAO (Food and Agriculture Organization of the United Nations). (2020). Global forest resources assessment 2020 key findings. Retrieved May 20, 2021 from http://www.fao.org/3/ca8753en/CA8 753EN.pdf FAO and UNEP. (2020). The state of the world’s forests 2020. FAO and UNEP Forestry Agency. (2018). Annual report on forest and forestry in Japan, Fiscal year 2017, (Summary). Retrieved May 20, 2021 from https://www.maff.go.jp/e/data/publish/attach/pdf/ index-95.pdf Forestry Agency. (2020). Annual report on forest and forestry in Japan, Fiscal year 2019, (Summary). Retrieved May 20, 2021 from https://www.maff.go.jp/e/data/publish/attach/pdf/ index-182.pdf Forestry Agency (Ed.). (2020). Reiwa 2 nemban shinrin/ringyo hakusho [White paper on forest and forestry 2020 edition]. National Forestry Improvement and Extension Association (in Japanese) Matsuoka, T. (2010). Sanrin no kachi kara mita ringyo keiei no saisansei [Forestry feasibility analysis based on value of timber and timberland]. The Japanese Journal of Real Estate Sciences, 23(4), 73–79. (in Japanese)

References

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Ministry of Land, Infrastructure, Transport, and Tourism. (2014a). Nihon no mizu shigen (heisei 26 nemban) dai 2 hen dai 1 sho [Water resources in Japan 2014 edition volume II chapter 1]. Retrieved May 20, 2021, from https://www.mlit.go.jp/common/001049554.pdf (in Japanese) Ministry of Land, Infrastructure, Transport, and Tourism. (Water Resources Department, Water and Disaster Management Bureau). (2014b). Water in Japan, “Water” is a limited and valuable resource. Retrieved May 20, 2021, from https://www.mlit.go.jp/common/001044443.pdf Ministry of Land, Infrastructure, Transport, and Tourism. (2012). Japan’s experience and technology regarding water resources management. Retrieved May 20, 2021, from https://www.mlit.go.jp/ common/001040490.pdf Ministry of Land, Infrastructure, Transport, and Tourism. (2021). Nihon no mizu shigen no genkyo ni tsuite [Current state of water resources in Japan, 2020-year edition]. Retrieved May 20, 2021, from https://www.mlit.go.jp/common/001371908.pdf. https://www.mlit.go.jp/mizukokudo/miz sei/mizukokudo_mizsei_tk2_000028.html (in Japanese) Ministry of the Environment (2020a). Annual report on the environment, the sound material-cycle society, and the biodiversity in Japan 2020. Retrieved May 20, 2021, from https://www.env.go. jp/en/wpaper/2020/pdf/2020r_all.pdf Ministry of the Environment. (2020b). About the situation on the greening of the system in Japan and overseas (The 1st study group on promotion of greening of the entire tax system September 20, 2020) Retrieved May 20, 2021, from https://www.env.go.jp/policy/05_%E3%80%90%E8% B3%87%E6%96%99%EF%BC%95%E3%80%91.pdf (in Japanese) OECD. (2011). Taxation, innovation and the environment: A policy brief. Retrieved May 20, 2021, from https://www.oecd.org/environment/tools-evaluation/48178034.pdf Science Council of Japan. (2001). Chikyu kankyo/ningen seikatsu ni kakawaru nogyo oyobi shinrin no tamentekina koni no hyoka ni tsuite [Evaluation of multifaceted functions of agriculture and forests related to the global environment and human life]. Retrieved May 20, 2021, from http:// www.scj.go.jp/ja/info/kohyo/pdf/shimon-18-1.pdf (in Japanese) UNDP (United Nations Development Programme) Ed. (2006). Human development report 2006: Beyond scarcity: power, poverty and global water crisis. London: Palgrave Macmillan United Nations. (2017). United Nations strategic plan for forests, 2017–2030. Retrieved May 20, 2021, from https://www.un.org/esa/forests/wp-content/uploads/2016/UNSPF_AdvUnedited.pdf

Chapter 2

Forest Environment Tax (Prefectural Tax, City Tax)

2.1 Introduction The momentum for decentralization increased in the 1990s, leading to administrative and financial reforms, especially the enactment of the “Law Concerning the Development of Related Laws to Promote Decentralization”1 in 1999. Usually referred to collectively as the “Decentralization Collective Law,” this legislation included the amendment of 475 laws, such as the Local Autonomy Law, most coming into effect in April 2000. The legislation reviews the state of centralized administration and promotes the transfer of authority and financial resources from the national government to local government. Most importantly, the law created a non-statutory purpose tax (using tax revenue for a specific purpose) that local governments can independently introduce through ordinance. This measure has also become easier because the national permit system reverted to the former consultation system. Consequently, various local government bodies have set up prefecture-specific environmental taxes.2

1

It is also a law commonly known as the “Act on the Development of Related Laws to Promote Decentralization,” which stipulates that 475 laws, including the Local Autonomy Act, should be amended to promote decentralization. It was established in 1999, and most of the content was enforced in April 2000. This serves as a general term for laws that review the state of centralized administration and promote the transfer of authority and financial resources from the national government to local governments. It has the name of a collective law because it amends multiple laws at once, centering on the Local Autonomy Law. 2 The main local ecotaxes are the forest ecotax and the industrial waste tax, but some local governments have also created distinctive new taxes. For example, a “recreational fishing tax” was introduced in the town Fujikawaguchiko, which is located at the foot of Mt. Fuji. Moreover, a “Suginami Taxes for the Environment,” which imposes a tax on plastic shopping bags, has been introduced in Suginami-ku, Tokyo. Suginami ward’s attempt can be said to be innovative, given that charges being applied for plastic shopping bags began nationwide from July 1, 2020. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakayama, A Forest Environment Tax Scheme in Japan, https://doi.org/10.1007/978-981-16-9352-6_2

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2 Forest Environment Tax (Prefectural Tax, City Tax)

This chapter is structured as follows. Section 2.2 gives an overview of the forest environment tax introduced in prefectures. The focus will be on several prefectures, including Kochi Prefecture, which established the first forest environment tax in Japan that became the model for every local government body. Section 2.3 deals with the forest environment tax and the Yokohama City green tax.

2.2 Forest Environment Tax (Prefectural Tax) 2.2.1 Overview of the Forest Environment Tax (Prefectural Tax) Currently, 37 prefectures have introduced a forest environment tax, albeit under different labels. Table 2.1 is a summary of titles, tax collection methods, tax revenues, etc. by year of establishment. Figure 2.1 illustrates the prefecture positions.3 With the enforcement of the Decentralization Law, each local government can now independently institute taxes, while the conventional non-statutory ordinary tax has been considerably simplified. Furthermore, local government bodies are facing a problem with poorly maintained forests because of low timber prices, a decrease in forestry workers, an aging population, and lack of funds. Needless to say, only thriving forests are beneficial to the general public. Thus, taking advantage of the Decentralization Law, local governments began to implement a forest environment tax to help restore deteriorating forests, The Kochi Prefecture was the first in Japan to introduce a forest environment tax, doing so in 2003. The total area of Kochi Prefecture is about 710,000 ha, with 84% (about 600,000 ha) forest cover—the highest in Japan (Table 2.2). In addition, there are many commercial forests, centered on sugi and cypress trees (Fig. 2.2). Kochi’s planted forest rate is second only to the Saga Prefecture in Japan, but its planted forest per capita is the highest in Japan, approximately six times the national average. In Kochi Prefecture at that time, the forestry industry was in decline because of low timber prices, a sharp decrease in forestry workers as a result, and the aging population. 40% of the prefecture’s land was negatively affected, raising concerns that the public utility function of forests would also be diminished. Moreover, the Kochi

3

It would be good to refer to this as it is the Ministry of the Environment explaining the Forest Environment Tax in Kochi, Kanagawa, and Tochigi prefectures. Ministry of the Environment (2010). Forest Environment Tax in Kochi Prefecture. https://www.biodic.go.jp/biodiversity/shiraberu/policy/pes/en/forest/forest01.html Ministry of the Environment (2010). Increased Tax Rates for the Prefectural Inhabitant Tax on Individuals to Fund Water Source Environment Programs. https://www.biodic.go.jp/biodiversity/shiraberu/policy/pes/en/forest/forest03.html Ministry of the Environment (2010). Tochigi prefectural tax for healthy forest-making. https://www.biodic.go.jp/biodiversity/shiraberu/policy/pes/en/forest/forest02.htm All the websites were retrieved on March 10, 2021.

2.2 Forest Environment Tax (Prefectural Tax)

27

Table 2.1 List of environment taxes Prefecture

Name of tax

Year of introduction

Total tax revenue (Unit: 100 million yen)

Resident tax over taxation method Individual (Unit: yen)

Corporation (Unit: %)

Kochi

Forest environment tax

2003

1.7

500

500 yen

Okayama

Okayama forest-building prefectural tax

2004

5.5

500

5

Tottori

Forestry environmental protection tax

2005

1.8

500

5

Shimane

Tax for creating forests with water and greenery

2005

2.1

500

5

Yamaguchi

Yamaguchi forest creation prefectural tax

2005

4.0

500

5

Ehime

Forest environment tax

2005

5.4

700

7

Kumamoto

Tax for creating forests with water and greenery

2005

4.9

500

5

Kagoshima

Prefectural tax for creating forests for everyone

2005

4.4

500

5

Iwate

Iwate forest creation prefectural tax

2006

7.4

1000

10

Fukushima

Forest environment tax

2006

11.2

1000

10

Shizuoka

Forestry-building prefectural tax

2006

9.8

400

5

Shiga

Lake Biwa forest creation prefectural tax

2006

7.0

800

11

Hyogo

Prefectural green tax

2006

24.5

800

10

Nara

Forest environment tax

2006

3.7

500

5

Oita

Forest environment tax

2006

3.3

500

5

Miyazaki

Miyazaki prefecture forest environment tax

2006

3.1

500

5

Yamagata

Yamagata green environment tax

2007

6.6

1000

10

Kanagawa

Water source environmental protection tax

2007

38.9 300 yen + 0.03% of income

–

Toyama

Tax for creating forests with water and greenery

2007

3.7

500

5

Ishikawa

Ishikawa forest environment tax

2007

3.7

500

5

Wakayama

Kinokuni forest creation tax

2007

2.7

500

5 (continued)

28

2 Forest Environment Tax (Prefectural Tax, City Tax)

Table 2.1 (continued) Prefecture

Name of tax

Year of introduction

Total tax revenue (Unit: 100 million yen)

Resident tax over taxation method Individual (Unit: yen)

Corporation (Unit: %)

Hiroshima

Hiroshima forest-creation prefectural tax

2007

8.4

500

5

Nagasaki

Nagasaki forest environment tax

2007

3.8

500

5

Akita

Tax for creating forests with water and greenery

2008

4.6

800

8

Ibaraki

Forest lake environmental tax

2008

17.5

1000

10

Tochigi

Tochigi’s lively forest-creation prefectural tax

2008

8.4

700

7

Nagano

Nagano prefecture forestry-creation prefectural tax

2008

6.7

500

5

Fukuoka

Fukuoka prefecture forest environment tax

2008

13.7

500

5

Saga

Saga prefecture forest environment tax

2008

2.4

500

5

Aichi

Aichi forest and green-creation tax

2009

22.4

500

5

Miyagi

Miyagi environment tax

2011

16.4

1200

10

Yamanashi

Forest Environment Tax

2012

2.7

500

5

Gifu

Country of clear stream Gifu Forest and environmental tax

2012

12.0

1000

10

Gunma

Gunma green prefectural tax

2014

8.3

700

7

Mie

Mie forestry and green prefectural tax

2014

10.5

1000

10

Kyoto

Kyoto prefectural tax to grow enriched forests

2016

6.8

600

–

Osaka

Forest environment tax

2016

11.3

300

–

Source Created by the author based on the website of Local Tax Bureau, Ministry of Internal Affairs and Communications (2017) and the following websites (Retrieved March 10, 2021) Kochi https://www.pref.kochi.lg.jp/soshiki/030101/kankyouzei.html Okayama https://www.pref.okayama.jp/page/360893.html Tottori https://www.pref.tottori.lg.jp/100906.htm Shimane https://www.pref.shimane.lg.jp/life/zei/ken/syurui/mizuto/mizuto.html Yamaguchi https://www.pref.yamaguchi.lg.jp/cms/a10700/shinrin/shinrin.html Ehime https://www.pref.ehime.jp/h10500/1191372_1874.html Kumamoto https://www.pref.kumamoto.jp/soshiki/16/1678.html Kagoshima http://www.pref.kagoshima.jp/sangyo-rodo/rinsui/zei/index.html

2.2 Forest Environment Tax (Prefectural Tax)

29

Table 2.1 (continued) Iwate https://www.pref.iwate.jp/sangyoukoyou/ringyou/shinrinzei/index.html Fukushima https://www.pref.fukushima.lg.jp/site/shinrinkankyouzei/ Shizuoka http://www.pref.shizuoka.jp/soumu/b_talk/moridukurikenminzei.html Shiga https://www.pref.shiga.lg.jp/ippan/kurashi/zeikin/20003.html Hyogo https://web.pref.hyogo.lg.jp/kk22/pa04_000000001.html Nara http://www.pref.nara.jp/12162.htm Oita https://www.pref.oita.jp/site/zei/shinrin.html Miyazaki https://www.pref.miyazaki.lg.jp/miyazaki-morizukuri/kurashi/shizen/20200513095941. html Yamagata https://www.pref.yamagata.jp/140023/kurashi/shizen/sinrin/kankyouzei/kankyouzei. html Kanagawa https://www.pref.kanagawa.jp/zei/kenzei/a001/b001/002.html Toyama https://www.pref.toyama.jp/1107/kurashi/seikatsu/zeikin/kenzei/m01-00/m01-03.html Ishikawa https://www.pref.ishikawa.lg.jp/shinrin/kikaku/kankyouzei/index.html Wakayama https://www.pref.wakayama.lg.jp/prefg/010500/kenzei/moridukuri/moridukuri.html Hiroshima https://www.pref.hiroshima.lg.jp/site/zei/1172044970276.html Nagasaki https://www.pref.nagasaki.jp/bunrui/kurashi-kankyo/zeikin/kenzeisyurui/sinrinkan nkyou/ Akita https://common3.pref.akita.lg.jp/mizumidori/ Tochigi http://www.pref.tochigi.lg.jp/d01/eco/shinrin/zenpan/genkinamoridukuri.html Nagano https://www.pref.nagano.lg.jp/rinsei/sangyo/ringyo/shisaku/kenminze/kenminzei.html Fukuoka https://www.pref.fukuoka.lg.jp/contents/keepforest.html Saga https://www.pref.saga.lg.jp/kiji00332143/index.html Aichi https://www.pref.aichi.jp/soshiki/zeimu/0000025831.html Miyagi https://www.pref.miyagi.jp/soshiki/kankyo-s/kankyouzei4.html Yamanashi https://www.pref.yamanashi.jp/zeimu/shinrinkankyouzei.html Gifu https://www.pref.gifu.lg.jp/page/8460.html Gunma https://www.pref.gunma.jp/04/e3000107.html Mie http://www.pref.mie.lg.jp/SHINRIN/HP/mori/74681015390.html Kyoto http://www.pref.kyoto.jp/shinrinhozen/tax.html Osaka https://www.pref.osaka.lg.jp/midorikikaku/shinrinkankyozei/

Prefecture’s financial strength index was the lowest4 in the country and the fiscal situation was tight, so new sources of financing to stave off the destruction of forests were needed. Two months after the Local Decentralization Law was passed in April 2000, the prefecture set up a group to explore the issue of independent financial resources. After the group submitted its findings and recommendations, the Kochi Forest Development Promotion Committee was established in 2001 and, following consultations with citizens of the prefecture through public meetings, questionnaires, and symposiums, the first forest environment tax in Japan was introduced in April 2003. Over the following two years, six more prefectures—Tottori Prefecture, Shimane Prefecture, Yamaguchi Prefecture, Ehime Prefecture, Kumamoto Prefecture, and Kagoshima Prefecture—implemented similar taxes. As a model for integrating forest policy and cost burdens, Kochi Prefecture invoked the water source environmental conservation tax that had been used in the 4

Kochi Prefecture’s financial strength index in 2017 was 0.26933, ranking 46th out of 47 prefectures nationwide.

30

2 Forest Environment Tax (Prefectural Tax, City Tax)

Fig. 2.1 Prefectures that have introduced environment tax (shaded area). Source Created by the author

Kanagawa Prefecture in 2006. In 1996, Kanagawa was hit by drought for the first time in 29 years, leading to the imposition of water restrictions and, in some areas, severe water shortages. Since Kanagawa Prefecture has two ordinance-designated cities, Yokohama City and Kawasaki City, an adequate water supply was urgently required. Therefore, the prefecture introduced a system in 1997 to use additional water fees as a financial resource for water source forest conservation measures.5 This is a water source forestation project. Compared to standard forest maintenance measures, which are usually part of water source conservation, the project had a large annual budget of around 35.7 billion yen. The additional fees for the prefectural water supply financed part of the project. This project was different from the conventional local independent project, which typically draw on the national treasury subsidy project. The goal was to develop a large-scale water source forest with a new approach based on the prefecture’s concept. This attracted attention as an example of pioneering measures by local governments. However, the draft Water Source Ecotax Ordinance, which the prefecture aimed to introduce in 2006, failed to be deliberated at the prefectural assembly in February 2005, although the governor re-proposed the motion in June. 5

The case of Kanagawa prefecture is described in detail by Ishizaki (2002).

2.2 Forest Environment Tax (Prefectural Tax)

31

Table 2.2 Forestry area and forestry rate by prefecture Prefecture Hokkaido

Forest area (ha)

Artificial forest area (ha)

Land area (ha)

Forest rate (%)

Artificial forest rate (%)

5,538,447

1,475,342

7,842,076

71

632,805

269,438

964,556

66

43

1,171,446

488,680

1,527,501

77

42

Miyagi

417,086

198,235

728,222

57

48

Akita

839,247

409,506

1,163,752

72

49

Yamagata

669,272

185,636

932,315

72

28

Fukushima

973,834

341,026

1,378,374

71

35

Ibaraki

186,781

111,106

609,712

31

59

Tochigi

349,006

155,946

640,809

54

45

Gunma

423,141

176,947

636,228

67

42

Saitama

119,779

59,235

379,775

32

49

Chiba

157,276

61,416

515,764

30

39

Aomori Iwate

27

Tokyo

78,927

35,158

219,100

36

45

Kanagawa

94,695

36,495

241,592

39

39

Niigata

855,159

161,993

1,258,418

68

19

Toyama

284,994

54,513

424,761

67

19

Ishikawa

286,046

101,645

418,609

68

36

Fukui

312,025

124,399

419,049

74

40

347,781

153,541

446,527

78

44

1,068,636

444,655

1,356,156

79

42

Yamanashi Nagano Gifu

861,978

384,574

1,062,129

81

45

Shizuoka

497,123

280,435

777,743

64

56

Aichi

218,153

140,381

517,290

42

64

Mie

372,230

229,969

577,441

64

62

Shiga

202,890

84,910

401,738

51

42

Kyoto

342,300

131,591

461,219

74

38

Osaka

57,220

28,140

190,514

30

49

Hyogo

560,006

238,170

840,093

67

43

Nara

283,701

172,203

369,094

77

61

Wakayama

361,328

220,320

472,471

76

61

Tottori

258,988

140,234

350,713

74

54

Shimane

524,495

205,350

670,824

78

39

Okayama

483,378

205,431

711,447

68

42

Hiroshima

611,222

200,926

847,947

72

33

Yamaguchi

436,957

195,014

611,234

71

45 (continued)

32

2 Forest Environment Tax (Prefectural Tax, City Tax)

Table 2.2 (continued) Prefecture Tokushima Kagawa Ehime

Forest area (ha)

Artificial forest area (ha)

Land area (ha)

Forest rate (%)

Artificial forest rate (%)

314,829

189,685

414,679

76

60

87,514

23,181

187,673

47

26

401,050

244,597

567,619

71

61

Kochi

595,032

387,924

710,393

84

65

Fukuoka

222,394

140,234

498,640

45

63

Saga

110,403

73,828

244,068

45

67

Nagasaki

242,595

104,591

413,220

59

43

Kumamoto

462,965

280,267

740,944

62

61

Oita

452,791

233,485

634,074

71

52

Miyazaki

585,559

332,801

773,531

76

57

Kagoshima

587,983

278,601

918,699

64

47

Okinawa

106,730

12,089

228,114

47

11

National

25,048,19

10,203,84

37,296,84

67

41

Source Created by the author based on the website of Forestry Agency. Retrieved March 10, 2021 from https://www.rinya.maff.go.jp/j/keikaku/genkyou/h29/1.html (in Japanese)

Fig. 2.2 Distribution of planted forest (National distribution of Sugi and Hinoki plantations). Source Created by the author based on the website of Forestry Agency. Retrieved March 10, 2021 from https://www.rinya.maff.go.jp/j/sin_riyou/kafun/data.html (in Japanese)

2.2 Forest Environment Tax (Prefectural Tax)

33

Twenty years before, between 1984 and 1985, the Forestry Agency had launched a large-scale movement to create a water source tax.6 This was intended to shift the burden of forest maintenance costs, not only for forestry personnel and local governments with forest areas, but also for the entire population, including urban residents. The Forestry Agency’s water source tax concept, which sought financial resources for water source cultivation in the downstream area, imposed a tax of 1 yen per 1 m3 of water. This was in line with the revision of the running water occupancy fee separately requested by the Ministry of Construction in 1985 and a forest/river emergency maintenance tax of 2.5 yen levied per 1 m3 of water. These funds were to be used and developed as the foundation for forest and river maintenance. However, these initiatives were stalled due to fierce opposition from the business community, water personnel, and the Ministry of Finance (currently the Ministry of Finance), the Ministry of International Trade and Industry (currently the Ministry of Economy, Trade, and Industry), and the Ministry of Health and Welfare (currently the Ministry of Health, Labor, and Welfare). The proposed collection method was the main reason for this opposition to the forest ecotax (realized for the Forestry Agency’s water source tax concept). Initially, each prefecture had considered two collection strategies: (1) a water charge calculated according to the amount of water used and (2) a prefectural tax per capita rate excess taxation. Since the water source recharge function, which was considered easier for prefectural citizens to understand, was the focus of the discussion, taxing the amount of water used links the benefit and burden of the water source recharge function of the forest and the burden imposed by the amount of water used. This rationale was easy for citizens to grasp, and its status as a policy tax system was clear. By contrast, the second proposition was a prefectural tax per capita rate, which imposed the same tax demand on all prefectural citizens, while the intention and purpose remained opaque. In the end, the second policy was implemented. The forest environment tax was extended, not only toward water source recharge function, but also to the wider range of public interest functions. The rejection of the first policy might have been due to the Water Penetration Rate (for example, it is difficult to monitor households’ individual water usage), the variation in water charges from region to region, the difficulties in incorporating low-income earners, and the bureaucratic costs for the new water charge system combined, etc. In 2000, the Kochi Prefecture was considering the “(tentative name) water source recharge tax” under the first collection method but, in the final proposal, the beneficial aspect was eliminated, and the second method adopted instead. Thus, it was the nation’s first forest ecotax introduced. In response, Kanagawa Prefecture,7 in a report of the Kanagawa Prefectural Local Taxation Study Group in 2003, recommended the establishment of a water source ecotax as a non-statutory purpose tax. Their argument was that this would clarify the benefits and burdens. However, in the end, the second method, as was the case in Kochi Prefecture, was adopted. This situation shows,

6 7

See Yoshida (2004), Takai (2005), and Ishizaki (2010). See Ishizaki (2002) and Shimizu (2012).

34

2 Forest Environment Tax (Prefectural Tax, City Tax)

from the taxpayers’ perspective, the unacceptability of the beneficial burden on the amount of water used. Whether the forest environment tax is a non-statutory purpose tax or an ordinary tax depends on this funding method. The forest environment tax is a non-statutory purpose tax if the funding method is based on individual water use and an ordinary tax if it is calculated on a per capita basis. A forest environment tax is typically defined as a system in which local governments impose an additional tax burden for the purpose of forest conservation or forest recharge. In point of fact, however, there is no tax categorized as a forest environment tax. The forest environment tax introduced so far adopts the per capita approach, which secures financial resources to protect forestry through excess taxation (taxation exceeding the standard tax rate) of the inhabitant tax (prefectural tax, municipal tax), which is the tax stipulated by the Local Tax Law. Thus, the residence tax is an ordinary tax collected without specifying the purpose of use. In practice, however, the amount equivalent to the excess tax collected as forest ecotax is accumulated in the fund with the purpose specified as a forest conservation measure (Table 2.3). Currently, most prefectures impose a flat rate of excess tax on the per capita rate of residence tax for individuals, adopting a method of imposing excess taxation at a fixed rate on the per capita rate for corporations, where the amount is determined according to capital, etc. By contrast, Kochi Prefecture imposed a flat rate of excess tax on per capita rates for both individuals and corporations. Kanagawa Prefecture took a slightly different approach, not imposing on corporations, but charging individuals a fixed excess rate on income rate in addition to the flat rate over-taxation on the per capita rate. Excess taxation on the income percent reflects the benefit-bearing aspect on the premise that there is some positive correlation between income and water usage. The forest environment tax introduced in prefectures has some specific features. First of all, it was when taxes were introduced. Since 2003, each local government body has moved rapidly toward the introduction of forest environment tax,8 which became possible because of the Decentralization Law in April 2000. Second, the tax collection method requires all citizens of the prefecture to bear a tax burden that is equitable and modest. Although there are some differences, the tax is limited to an amount that residents can accept. Thirdly, most local governments aim to regenerate forests, with thinning used where applicable to the local area and environment. However, there are differences in the selection of other projects (e.g., forest maintenance, education, and information activities). As a local tax, the forest ecotax is slightly different from other ecotaxes. It is not an incentive measure that requires a polluter, who is a burden on the environment, to bear the cost in accordance with the principle of paying proportionately depending on environmental damage caused. Also, the beneficiary burden principle, which requires those who benefit from the policy to pay for it, does not apply.9 The current forest 8

Akiyama (2008) describes the situation in each prefecture during this period in detail. Ishida (2018) states that it is considerably unique that this forest ecotax is not a tax on forests but a tax for funding forests and claims that it should have been created as a non-statutory tax;

9

Source Created by the author based on the website (Matters that require continued consideration) of Local Tax Bureau, Ministry of Internal Affairs and Communications (2017, p. 24)

Table 2.3 Use of tax revenue from excess taxation of prefectures to use for the preservation of the forest environment and water source environment

2.2 Forest Environment Tax (Prefectural Tax) 35

36

2 Forest Environment Tax (Prefectural Tax, City Tax)

environment tax imposes a certain amount of excess tax on the per capita rate of residence tax and residents bear the cost jointly. This is called the “joint burden principle” or the participation principle.10

2.2.2 Examples in Kochi Prefecture11 In this section, we examine a few forest environment taxes in each prefecture. First, let us look at the case of Kochi Prefecture,12 which established the forest environment tax before the rest of the country. The tax, introduced in 2003, has already entered the fourth term since 2018. Under the slogan “Protecting the mountains of Kochi and protecting the forest, all citizens of the prefecture are supporters of the forest,” the aim has been to raise awareness of forestry issues. Projects being implemented under the forest environment tax are listed below. The total budget for the forest environment tax utilization project in 2020 is 245,190,000 yen. The numbers in parentheses show the breakdowns. ➀

Forest maintenance project (93.86 million yen) • Public interest forest conservation and maintenance project (implementation of thinning in planted forests that cannot be adopted by the national treasury subsidy project) • Green environment maintenance support project (implemented thinning (added to the national treasury subsidy project to reduce the burden on forest owners)) • Environmental forest maintenance project (implementation of thinning in forests where proper forest maintenance is not carried out) • Grants for multi-functionality measures for forests and mountain villages (supporting activities such as conservation activities for undeveloped woodlands)

➁

Measures against damage to deer (37.12 million yen) • Designated management bird and beast capture business (deer capture and habitat density survey conducted) • Rare wild plant promotion project (protecting rare wild plants from feeding damage by deer)

from the perspective of tax theory, it is a local forest ecotax. Ishizaki (2019) also discusses forest environmental tax from the perspective of benefits and burdens. Morotomi (2005, 2008) discuss the tax base and institutional design of forest ecotax. 10 He is familiar with Yoshida (2004), Takai (2005), Kawakatsu and Ueta (2005), Ishizaki (2010), etc. 11 There are many studies relating to Kochi Prefecture, for example, Takezaki (2003), Komatsu (2004, 2006), Yorimitsu (2008), and Takemoto (2009). 12 Kochi Prefecture. (2021, January 29). Forest Environment Tax. Retrieved March 10, 2021, from https://www.pref.kochi.lg.jp/soshiki/030101/kankyouzei.html.

2.2 Forest Environment Tax (Prefectural Tax)

➂

37

Independent activities of citizens of the prefecture (44.24 million yen) • Public relations project to promote understanding and participation in forest development (creation of forest environment information magazine “Moririn” and holding of forest environment learning fair) • Kochi Mountain Day Promotion Project (Implementation of a project to deepen understanding and interest in “Kochi Mountain Day”) • Tree education instructor activity support project (support for tree education activities to promote tree education in the prefecture) • Deer damage countermeasure information project (implementation of a project to provide public relations messaging about the impact of deer on the natural environment) • Rare animal and plant protection measures project (Implementation of public relations regarding the need for conservation of the natural environment and biodiversity of Kochi Prefecture) • Steering Committee, etc. Holding Fees (Holding a Committee to Examine the Usage of Forest Environmental Tax, etc.)

➃

Forest environmental education (33.27 million yen) • Environmental learning promotion project (training of nature experience activity leaders) • High school student forest environment education project (cultivation of high school students who can appreciate and support the conservation of the forest environment) • High school successor development project (promotion of forestry qualifications acquisition for high school students doing forestry-related courses) • Mountain learning support project (support for elementary and junior high schools that carry out forest environment learning throughout the year)

➄

Use of wood (36.69 million yen) • Wood-scented town development promotion project (support for the introduction of prefectural timber to public facilities, etc., support for the distribution of wooden toys, etc., to infants living in the prefecture)

Kochi Prefecture, which has the highest forest coverage in Japan, has a special challenge in managing manage deer and their interaction with the forests. In addition, the Kochi Prefecture Forest Environmental Conservation Fund Steering Committee (up to 10 people), which is composed of taxpayers and academic experts, has been set up to get feedback from citizens of the prefecture regarding business plans, progress, and the ideal system.

38

2 Forest Environment Tax (Prefectural Tax, City Tax)

2.2.3 Cases in Aichi Prefecture Next is Aichi Prefecture, where the author resides. In Aichi Prefecture, the “Aichi Forest and Greenery Tax” was introduced in 2009.13 The tax is collected by adding a specified amount to the prefectural tax per capita rate. The annual tax revenue is expected to be about 1.8 billion yen for individuals and about 400 million yen for corporations in 2020, which is about 2.2 billion yen. In Aichi Prefecture, the “Green Town Development by Aichi Forest and Greenery Project-Urban Greening Promotion Project” has been implemented since 2009 to maintain and conserve the prefecture’s forests, undeveloped woodlands, and cities. An amount equivalent to the tax revenue will be accumulated in the “Aichi Forest and Greenery Fund” to be used as a financial resource for the “Aichi Forest and Greenery Project.” Historically, the national government, prefectures, and municipalities have always attempted to improve park green spaces and promote green space conservation and urban greening. However, greenery has been diminishing overall, albeit mainly on privately owned land that occupies the majority of urban areas. Urban greenery is a valuable resource that contributes to environmental improvement and overall human health. Therefore, the efforts of municipalities, etc., to promote the conservation, creation, and utilization of greenery in cities receive widespread support. This initiative is geared to provide funding for the following projects, which are implemented by municipalities.14 ➀

Work to create familiar greenery (a)

(b)

(c)

➁ 13

The target of the grant In urban areas, etc., (1) Business to conserve existing forests, (2) Business to create new green areas and greening facilities with functions such as environmental improvement and fire prevention and containment (area of 300 m2 or more). Those in scope for the grant Municipalities. (iii) Rate of grant Land acquisition cost 1/3, Construction cost 10/10. Limit of grant Construction cost: Construction target area (m2 ) × 10,000 yen. However, only for rooftop greening and wall greening, the construction target area (m2 ) × 30,000 yen.

Green cityscape promotion business

See Aichi Prefecture. (n.d.) Forest and Greenery Tax Regulations. https://www.pref.aichi.jp/uploaded/attachment/339908.pdf (in Japanese). 14 See Aichi Prefecture. (2020, July 7). Forest and Greenery tax. Retrieved March 10, 2021, from https://www.pref.aichi.jp/soshiki/zeimu/0000025831.html Aichi Prefecture. (2020, April 1). Aichi Forest and Greenery Business Urban Greening Promotion Business. Retrieved March 10, 2021, from https://www.pref.aichi.jp/soshiki/koen/0000024409. html (in Japanese).

2.2 Forest Environment Tax (Prefectural Tax)

(a)

(b) (c) (d)

➂

(b)

(d) ➃

Aim of the grant To promote the greening of privately owned buildings and sites in urban areas, etc., excellent greening projects based on the evaluation of greening facilities established by the municipalities, and privately owned forests that carry out garden road maintenance to open existing privately owned forests. Land utilization type business (area of 50 m2 or more, extension of 15 m or more for hedge installation). Those in scope for the grant Municipalities. Rate of grant 1/2. Limit of grant Area for greening (m2 ) × 30,000 yen. Area for greening (m2 ) × 20,000 yen. Area for greening (m2 ) × 15,000 yen. Extension (m) × 5,000 yen. However, the total amount is limited to 5 million yen per case.

Beautiful tree-lined road regeneration business (a)

(c)

39

The target of the grant A project to regenerate municipal roads and prefectural management roads that have public facilities (stations, parks, government offices, etc.) along or near the road into beautiful tree-lined roads that are the face of the area (extension of 100 m or more). Those in scope for the grant Municipalities.

Rate of grant 10/10. Limit of grant The amount obtained by dividing the application project cost by the number of middle and high trees to be replanted must be 560,000 yen or less. Prefectural citizen participation green making business (a)

Aim of the grant (1) Greening activities such as forest land maintenance, planting, and biotope making with the participation of citizens of the prefecture on public land, projects to carry out experiential learning and dissemination and enlightenment of urban greening, and support projects when citizen groups carry out this (number of participants) 50 or more people), and a project to dispatch instructors to the activities of citizen groups, etc., to foster citizen groups that carry out green activities (those with 20 or more participants) (2) Projects to carry out greening activities such as forest land maintenance, planting, biotope making, experiential learning, and the

40

2 Forest Environment Tax (Prefectural Tax, City Tax)

(b)

(c) (d)

dissemination and enlightenment of urban greening in prefectural parks (with 50 or more participants) Those in scope for the grant (1) Municipalities (2) Citizen groups Rate of grant 10/10. Limit of grant The total amount of grants is limited to 3 million yen per grant. However, the total amount of grants is limited to 170,000 yen per case for projects such as dispatching lecturers to activities of citizen groups, etc.

A comparison of the Kochi and Aichi prefectures reveal clear difference in usage. Kochi Prefecture, which has a wide variety of forests and low prefectural income, introduced the tax first, whereas Aichi introduced it quite late. Other than Tokyo, Aichi is the only prefecture in Japan that has become a non-granting organization. In 2019, there were only 85 municipalities, of which 20 were in Aichi Prefecture. Unlike the Kochi Prefecture, it is possible that local governments, which are rich and have a relatively low forest rate, were not constrained by funding.

2.3 Forest Environment Tax (City Tax) The “Yokohama green tax” in Yokohama City, Kanagawa Prefecture is the sole instance of a city tax. This body promotes the “Yokohama Green-Up Plan” to preserve greenery in the city and so the next generation can inherit a verdant Yokohama. To secure the necessary financing, the Yokohama Midori Tax Ordinance, which imposed a new tax on citizens and corporations, was submitted to the city council and the ordinance enacted on December 12, 2008.15 The initial implementation period was five years from fiscal 2009, at a tax rate of 900 yen per year for individuals and 45–270,000 yen for corporations, depending on the scale, which was collected in addition to the municipal tax (individuals/corporations), totaling about 2.4 billion yen per year. In anticipation of tax revenue, usage was limited to the purchase of land where maintaining green space and planting trees was challenging. However, with the formulation of a new green-up plan, the taxation period for green tax was extended and linked with the “Yokohama Green-Up Plan [2019–2023],” so the third period (2019–2023) is imminent. Based on the initial budget for fiscal year 2020, the current tax revenue scale is about 2.9 billion yen (about 1.8 billion yen for individuals and about 1.1 billion yen for corporations). An amount equivalent to the tax revenue will be accumulated in the Yokohama City Green Fund to enhance the business that 15

Yokohama City, Kanagawa Prefecture. (2008). Yokohama Green Tax Ordinance. Retrieved March 10, 2021, from https://cgi.city.yokohama.lg.jp/somu/reiki/reiki_honbun/g202RG00001642. html (in Japanese).

2.3 Forest Environment Tax (City Tax)

41

contributes to the conservation and expansion of greenery. This fund can be applied to be used in the Yokohama Green-Up Plan, which will create reliable collateral for forests and agricultural land, promotion of everyday greening, improvement of green quality by enhancing maintenance, and promotion of citizen participation, such as volunteers. The current “Yokohama Green-Up Plan [2019–2023]” has three five-year planning goals under the slogan “Yokohama, a beautiful city with abundant greenery that everyone nurtures.” • Aim to maintain the total amount by stopping the reduction of greenery • Improve the quality of greenery by enhancing the conservation, creation, and maintenance of greenery according to regional characteristics • Deepen the relationship between citizens and greenery and realize a better quality life with greenery Passing on the lush green city of Yokohama to the next generation is an important issue. However, owing to limited financial resources for the growth and conservation of greenery (as required by the Yokohama green tax), the extension of the taxable period was unavoidable. Moreover, the following points should be considered for the city of Yokohama. • The Yokohama green tax is aimed at preserving and creating greenery in the city and is used for purchasing forest land and creating greenery in the city. Therefore, the purpose and use are different from the national tax, which aims to secure stable local financial resources to achieve Japan’s greenhouse gas emission reduction targets and prevent disasters. • The water source environment conservation tax (Kanagawa prefectural tax), which was established to foster businesses that contribute to the conservation and regeneration of the water source environment, is intended to reliably secure high-quality water that the citizens of the prefecture will need in the future. The tax is intended to conserve/regenerate rivers, conserve/regenerate groundwater, reduce the burden on the water source environment, promote measures for upstream areas outside the prefecture, and promote the conservation/regeneration of the water source environment. However, the target of the project is mainly the water source conservation area in the western part of Kanagawa Prefecture, so Yokohama City is not included. The purposes of the Yokohama green tax and the prefectural tax are different because the tax revenue is not issued. This is the explanation for the difference between the national tax, the prefectural tax, and the Yokohama green tax.16

16

For the evaluation and analysis of Yokohama green tax, see, for example, Aoki (2009) and Mochizuki (2015).

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2 Forest Environment Tax (Prefectural Tax, City Tax)

2.4 Conclusion With regard to the forest environment tax, not to mention the forest and forestry fields, there is a wide range of discussion in law, environmental economics, finance, etc., but the tax introduced by the prefecture is generally seen as positive.17 The results from questionnaire surveys of residents generally match. However, from 2024, the national forest environment tax will be introduced, with an annual amount of 1000 yen per person already determined. At such a time, it will be a significant issue as to whether this can be implemented as both a prefectural tax and a municipal tax under the conventional framework.

References Akiyama, T. (2004). Donyu ga susumu “shinrin kankyo zei”—Senko ken ni okeru jirei o chushin ni— [“Forest environment tax” that is being introduced focusing on cases in preceding prefectures]. Issue Brief, 211, 4–8 (in Japanese) Aoki, M. (2003). Mizu shigen kankyo zei no riron to genjitsu [Theory and reality of “water resources environment tax”]. Tax, 58(9), 40–50. (in Japanese) Aoki, M. (2009). Yokohama midori zei toha nanika— “Shinrin/suigen kankyo zei” tono ruijisei to soiten [What is “Yokohama green tax”—Similarity and differences from “forest/water-source environmental tax”]. Tax, 64(2), 4–23 (in Japanese) Ishida, K. (2018). Shinrin kankyo zei no sozeiron [Tax theory of forest environment]. Year Book of Forest and Environment, 2018, 180–192. (in Japanese) Ishizaki, R. (2002). Jichitai rinsei no sesaku keisei katei–Kanagawa ken wo jirei to shite [Processes of forest policy formation by local government: A case of Kanagawa Prefecture]. Journal of Forest Economics, 48(3), 17–26. (in Japanese) Ishizaki, R. (2010). Suigenrin hozen ni okeru hiyo buntan no keifu kara mita shinrin kankyo zei [Forest environment taxes in the progress of the measures for forest conservation]. Water Science, 54(5), 46–65. (in Japanese) Ishizaki, R. (2019). Shinrin kankyo zei ni okeru jueki to futan [Benefit and cost sharing in the forest: Environment-tax system]. Environmental Information Science, 48(1), 43–48. (in Japanese) Kawakatsu, T., & Ueta, K. (2005). Chiho kankyo zei to chiho zei gensoku [Local environment tax and local tax principles]. The Toshi Mondai (the Municipal Problems), 96(7), 57–68 (in Japanese) Komatsu, Y. (2004). Kochi ken no “shinrin kankyo zei” seido–kenmin sanka ni yoru shinrin o mamoru torikumi [Kochi Prefecture’s “forest environment tax” system—Efforts to protect forests with the participation of prefectural citizens]. International Tax Study, 12, 130–137. (in Japanese) Komatsu, Y. (2006). Kochi ken no shinrin kankyo zei ni tsuite–Sono igi to yakuwari [About Kochi Prefecture’s forest environment tax—Its significance and role -]. In Japan Association of Local Public Finance (Ed.), Sustainable Society and Local Finance (85–109). Keiso Shobo (in Japanese) Local Tax Bureau, Ministry of Internal Affairs and Communications. (2017). Shinrin kankyo zei (kasho) no kento jokyo ni tsuite (dai 2 kai kisei kaikaku suishin kaigi/norin working 17

According to Aoki (2003), if the main purpose of the forest environment tax is to conserve the forest, the beneficiary is the public interest from the entire forest, and the standard for measuring the degree of beneficiary must be wide-ranging. It is said that it is desirable to have a method in which the residents of Japan share the financial resources evenly.

References

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group–2017 nen 10 gatsu 5 nichi- sanko shiryo 2 [Regarding the status of consideration of forest environment tax (tentative name) 2nd regulatory reform promotion council agriculture and forestry working group (October 5, 2017) Reference material 2]. Retrieved March 10, 2021 from https://www.kantei.go.jp/jp/singi/keizaisaisei/miraitoshikaigi/suishinkaigo2018/nou rin/dai1/sankou2.pdf (in Japanese) Ministry of Internal Affairs and Communications. (2017). Hikitsuzuki seiri ga hitsuyona jiko–Heisei 29 nen 10 gatsu 26 nichi–Dai 6 kai shinrin Kyushu gen taisaku zeisei ni kansuru kento kai (Shiro 3) [Matters that need to be continuously organized 6th study group on forest sink countermeasures tax system document 3 October 26, 2017]. Retrieved March 10, 2021 from https://www.soumu. go.jp/main_content/000514508.pdf (in Japanese) Mochizuki, M. (2015). “Yokohama midori zei” no genjo to hyoka [The “Yokohama green tax” in practice and evaluation]. In the Annual Report of the Research Institute for Economics and Business Administration, 37, 18–27 (in Japanese) Morotomi, T. (2005). Shinrin kankyo zei no kazei konkyo to seido sekkei [Forest environmental tax base and system design]. In Japan association of local public finance. (Ed.), Institutional Design of a decentralized society, 65–81 (in Japanese) Morotomi, T. (2008). Chiho kankyo zei to shite no suigen zei no konkyo to seido sekkei [Arguments for the introduction forest cultivation charge and its policy design as a local environmental tax]. Journal of Japan Society on Water Environment, 31(4), 178–181. (in Japanese) Shimizu, M. (2012). Kanagawa ken suigen kankyo zei ni yoru sesaku no kensho to kadai [Verification and issues of measures by Kanagawa Prefecture water source environmental tax]. Public Finance and Public Policy, 34(2), 30–32. (in Japanese) Takai, T. (2005). Shinrin kankyo zei no ronten to jumin jichi [Forest environment tax issues and residents’ autonomy]. The Toshi Mondai (the Municipal Problems), 96(7), 69–81. (in Japanese) Takemoto, Y. (2009). Kochi ken deno shinrin kankyo zei donyu ni okeru seisaku kettei katei bunseki [Analysis of the decision process of introducing a forest environment tax in Kochi Prefecture]. Journal of Forest Economics, 55(3), 12–22. (in Japanese) Takezaki, M. (2003). Shinrin kankyo zei no donyu to tenbo [Forest preservation tax: Introduction and outlook]. Environmental Conservation Engineering, 32(12), 932–939. (in Japanese). Yorimitsu, R. (2008). “Shinrin kankyo zei” no igi to kadai–Kochi ken no torikumi kara [Significance and issues of “forest environment tax” —From Kochi Prefecture’s efforts]. Shinrin Kumiai, 459, 20–23. (in Japanese) Yoshida, K. (2004). Chiho kankyo zei donyuji ni okeru jumin sanka shuho to shite no kankyo hyoka riyo [Use of environmental evaluation as a method of participation of residents when introducing local environmental tax—Kanagawa Prefecture water-source environmental tax as an example]. Environment Tax, 9, 195–208. Society for Environmental Economics and Policy Studies, Annual Report (in Japanese)

Chapter 3

Forest Environment Tax (National Tax)

3.1 Introduction The 2018 tax reforms1 saw the establishment of the forest environment tax as a national tax. The Forestry Agency and forestry organizations had been actively working toward this goal since 2003. It took 15 years before the Kochi Prefecture introduced the forest environment tax as a prefectural tax, ahead of the rest of Japan. Section 3.2 of this chapter covers the background to the establishment of the forest environment tax, how the tax is executed, and the transfer tax. Section 3.3 outlines the forest management system that started with the forest environment transfer tax and problems encountered. Section 3.4 examines environmental taxes adopted by other countries that are similar to Japan’s forest ecotax.

3.2 Forest Environment Tax as a National Tax For many years now, the government has been studying and working with relevant stakeholders to secure financial resources for the conservation and improvement of the public interest functions of forests. It is against this backdrop that the Kyoto Protocol was adopted, coming into effect in February 2005. The Kyoto Protocol set the five years from 2008 to 2012 as the “first commitment period,” during which Japan was to reduce emissions by 6% compared to the base year (1990). Japan 1

See TEEB (2010) and the following articles. Editorials (December 23, 2017). Forestry tax merits scrutiny. The Japan Times. Retrieved May 20, 2021, from https://www.japantimes.co.jp/opinion/2017/12/23/editorials/forestry-tax-merits-scr utiny/ Fujiwara, T. (January 1, 2018). The forest environmental tax in Japan will start in FY 2019. Japan Forest Information Review Fujiwara Takashi Retrieved May 20, 2021, from https://jsfmf.net/ english/policy/Forest_ETax/Forest_Etax0.html.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakayama, A Forest Environment Tax Scheme in Japan, https://doi.org/10.1007/978-981-16-9352-6_3

45

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achieved this goal, with 3.8% through forest absorption. The eight years from 2013 to 2020 were the “second commitment period,” and at the 17th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP17) held in 2011, agreement was reached to set the upper limit of absorption by forest management activities of each country at 3.5% of the total emissions in 1990, evaluate the amount of carbon fixation in timber (logged timber products (HWP)) after being removed from domestic forests, and to record the change in carbon accumulation as the amount of greenhouse gas absorption or emission in each country. This means that Japan must also secure its forests to reach the reduction target, making it necessary to secure stable financial resources for projects such as thinning. In 2004, the Ministry of Agriculture, Forestry, and Fisheries requested a tax to finance forest sink measures. However, each region also called on the national government to secure financial resources. In particular, since 2006, the National Federation for Promotion of Forest Ecotax Creation, formed by municipalities with extensive forest, and the National Federation of Parliamentarians for the Promotion of Forest Ecotax Creation, comprising members of local councils, began lobbying for a forest ecotax. The lobby was specific in trying to obtain funding in ways unique to each region. The forest environment tax—a local tax that seeks financial resources for an additional inhabitant tax for forests—had by 2014 already been instituted by 34 organizations, led by Kochi Prefecture in 2003. In addition, in December 2015, the Paris Agreement,2 a new international framework to help tackle global warming, was adopted. Table 3.1 provides an overview, while Table 3.2 shows the reduction targets for each country. The establishment of a forest ecotax was finalized in the 2018 Tax Reform Charter, supported by the growing desire of citizens for forest conservation due to the increasing frequency of mountain disasters. Table 3.3 details the requests for tax reforms by the Ministry of Agriculture, Forestry, and Fisheries and the ruling party’s history on this issue. The forest environment tax will be levied from 2024, and the forest environment transfer tax was transferred from 2019, together with the creation of a new forest management system under the Ministry of Agriculture, Forestry, and Fisheries. It was shown that the expenditure should be on costs relating to thinning, human resource development, securing leaders, forest maintenance such as promotion of timber use and dissemination, and public service education for municipalities and for prefectures, costs related to the promotion, with prefectures supporting municipalities that do forest maintenance. Following this, Cabinet in December 2018 signed off on the “General Guidelines for Tax Reform (2019),” while the “Law Concerning Forest Environment Tax and Forest Environment Transfer Tax” was enacted in March 2019 and partially enforced from April of the same year. The government gave the following explanation for the forest environment tax: “The public interest function of forests not only prevents global warming, but also 2

On November 4, 2019, the Trump administration in the USA notified the United Nations of withdrawal from the Paris Agreement and withdrew a year later. It was feared that the withdrawal of the USA, the world’s second largest greenhouse gas emitter, would seriously undermine the effectiveness of the Paris Agreement. However, on February 19, 2021, the Biden administration officially returned. This is expected to be a major step toward curbing global warming.

3.2 Forest Environment Tax as a National Tax

47

Table 3.1 Overview of the “Paris Agreement” What is the Paris Agreement? • A tactical framework for international warming countermeasures after 2020 in which all countries, including developing countries, participate • Adopted at COP21 in 2015 and effective in November 2016 Details of agreement • Continue efforts to control the global average temperature rise well below 2 and to 1.5 °C compared to before industrialization • Each country shall submit reduction targets and implement countermeasures • Reduction targets to be submitted/updated every five years • Achieving a balance between anthropogenic emissions and absorption of greenhouse gases in the latter half of this century • Developed countries are obliged to provide financial support to developing countries, and developing countries are recommended to provide it voluntarily Forestry-related details (Agreement Article 5) • Take action to conserve and strengthen sinks and storages such as forests, etc. • Recommended implementation and support of emission reductions (REDD+) due to deforestation and degradation in developing countries Source Created by the author based on Forestry Agency (Ministry of Agriculture, Forestry and Fisheries). Ed. (2020a, p. 100)

Table 3.2 Reduction targets Country

Reduction target

Year to be the standard for reduction

Russia

Suppressed to 70–75% by 2030

Compared to 1990

China

Reduce CO2 emissions per GDP by 60–65% by 2030

2005

EU

40% reduction by 2030

1990

India

Reduce CO2 emissions per GDP by 33.35% by 2030

2005

USA

26–28% reduction by 2025

2005

Japan

26% reduction by 2030

2013

Source Created by the author

broadly benefits the people, such as national land conservation and water source security, where appropriate. While promoting the development of forests will protect the lives of Japan’s land and people, the increase in forests whose owners and boundaries are unknown, and the shortage of bearers have become major issues. Under these circumstances, based on the Forest Management Law enacted in May 2018, in order to achieve Japan’s greenhouse gas emission reduction targets and prevent disasters under the framework of the Paris Agreement. The forest environment tax

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Table 3.3 Changes in tax reform requests related to forest sink measures FY

Ministry of Agriculture, Forestry and Fisheries Tax reform request

Outline for tax reform compiled by ruling parties

2004 [FY 2005 request] Environmental tax (global warming countermeasure tax) February 2005 Kyoto Protocol comes into effect ~ 2006 Formation of the National Forestry Environment Tax Construction Promotion Federation National Forest Environment Tax Creation Promotion Parliamentary Collaboration Formation ~ 2012 October 1, 2012 Introduction of global warming countermeasure tax (Special example of petroleum and coal tax introduction) • Forest absorption measures are not included in the purpose of use

Immediately and comprehensively consider securing financial resources for forest sink measures and local global warming measures

2013 [FY 2014 request] Forest Environment Tax

A comprehensive consideration should be given regarding measures for forest sinks and securing financial resources for local global warming, (omitted) by setting up a specialized study team to conduct a comprehensive study on a new mechanism as soon as possible

2014

Obtain a conclusion regarding measures for forest absorption and securing financial resources in respect of local global warming, (omitted) regarding the introduction of a new mechanism, (omitted) a specific view before setting greenhouse gas reduction targets for COP21 after 2020

2015 November 30–December 11 COP21 (Paris) Adoption of the Paris Agreement

Enhancing the utilization of the global warming countermeasure tax to curb CO2 emissions from energy sources, ➁ examining new mechanisms such as the tax system (forest environment tax (tentative name)) allocated to financial resources such as continuous and stable forest maintenance by municipalities are described (continued)

3.2 Forest Environment Tax as a National Tax

49

Table 3.3 (continued) FY

Ministry of Agriculture, Forestry and Fisheries Tax reform request

2016 November 4 Paris Agreement comes into effect

Outline for tax reform compiled by ruling parties

➀ Enhancing the utilization of global warming countermeasures to curb CO2 emissions from energy sources, and ➁ intent to comprehensively examining specific mechanisms for the establishment of forest ecotax (tentative name) and reach a conclusion in the 2018 tax reform are described

Source Created by the author based on Forestry Agency (Ministry of Agriculture, Forestry and Fisheries). Ed. (2017, p. 2)

was established from the perspective of stably securing the local financial resources necessary for forest maintenance.”3 From 2024, the forest environment tax will be levied by the municipalities as a national tax of 1000 yen per year based on the per capita rate of individual inhabitant tax. Also, in response to the urgent issue of forest maintenance, the forest environment transfer tax4 will be funded by the allocation tax and the borrowings in the Transfer Tax Distribution Special Account, taking into account the time when the forest management system was introduced and transfers started in September and March from the 2019 fiscal year. These funds will be distributed to municipalities and prefectures proportionately, based 50% on privately owned forests, 20% on forestry workers, and 30% on population. From the perspective of disaster prevention and strengthening of national land conservation functions, the Law Concerning Forest Environment Tax and forest environment transfer tax was revised in March 2020 to further promote forest maintenance. In response to this, regarding the forest environment transfer tax in each fiscal year from 2020 to 2024, the transfer tax revenue source in the allocation tax and the Transfer Tax Distribution Special Account will be utilized from the Japan Finance Organization for Municipalities’ reserve for interest rate fluctuations. It was decided to increase the transfer amount of the forest environment transfer tax ahead of schedule without borrowing. The mechanism applied to the Forest Environment Tax and forest environment transfer tax is illustrated in Fig. 3.1.

3

Forest Agency. (n.d.). Forest Environment Tax and Forest Environment Transfer Tax. Retrieved May 20, 2021, from https://www.rinya.maff.go.jp/j/keikaku/kankyouzei/kankyouzei_jouyozei.html (in Japanese. 4 Kohsaka and Uchiyama (2019) considered the impact of introduction of Forest Environment Transfer Tax on prefectures. In addition, Yoshihiro (2019) estimated and examined the transfer criteria for Forest Environment Transfer Tax.

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Fig. 3.1 Mechanism of Forest Environment Tax and Forest Environment Transfer Tax

The forest environment transfer tax is used for “forest maintenance and expenses related to its promotion” such as thinning, human resource development, securing of bearers, promotion of timber use and dissemination and enlightenment in municipalities, and “forest maintenance” in prefectures. These tax monies are to be used for “expenses related to the support of municipalities to be implemented.” Through this tax, the Forestry Agency will develop the forests around mountain villages that have not been sufficiently maintained, allowing urban cities and wards to use timber produced from these areas. It is expected that working on forest maintenance through

3.2 Forest Environment Tax as a National Tax

51

exchanges with the local community will foster urban residents’ understanding of forests and forestry and also benefit mountain village communities. However, to ensure that the tax is used properly, municipalities must communicate the purpose of the forest environment transfer tax through the internet. At the beginning of the system, the transfer ratio to prefectures was set at 20%, but this will be gradually reduced to 10% (Fig. 3.2). In FY2019, a total of about 4 billion yen was allocated to prefectures and a total of about 16 billion yen to municipalities, for a total of about 20 billion yen. A half is allocated in September and the other half in March. Table 3.4 is a breakdown of the “Forest Environment Transfer Tax” of approximately 10 billion yen, which was first allocated by the Ministry of Internal Affairs and Communications at the end of September 2019. The largest amount (in regions including municipalities) was 766.59 million yen, in Hokkaido. This was followed by Tokyo at 360.06 million yen and Kochi Prefecture at 355.85 million yen. It should be noted that prefectures with large populations such as Tokyo and Aichi are in the top ten. On the other hand, the smallest amount was Kagawa Prefecture, which is less than one-twentieth of the sum allocated to Hokkaido. By municipality, Yokohama City, Kanagawa Prefecture, was ranked first at 71.04 million yen, followed by Hamamatsu City, Shizuoka Prefecture (60.67 million yen) and Osaka City, Osaka Prefecture (54.8 million yen). Seven government-designated cities are included in the top ten municipalities. Apart from its large population, Yokohama was given such a large allocation because it has more privately owned forests than any other ordinance-designated cities. Privately owned plantations in Yokohama cover about 510 ha, but Osaka has none. In October 2019, the city council of Kurihara, Miyagi Prefecture, stated “the amount allocated to large cities with a large population is notably high. The transfer criteria for metropolitan dominance should be reviewed urgently.”5 In fact, the area of privately owned forest plantations was about 10,000 ha, and the transfer to Kurihara City totaled around 11 million yen, with no such acreage for Osaka City, Setagaya Ward, Tokyo (about 17.1 million) and Nerima Ward (about 13.6 million yen). In the fall of 2019, the Miyagi Prefectural Assembly also accepted a written opinion stating that “more private forests should be transferred to local governments that have a large, planted area and need forest maintenance.”6 There was also criticism from local governments that the transfer criteria did not make a distinction between depopulated and under-populated areas, such as Akita and Yamagata prefectures. In local governments where forestry is thriving, forest owners are often groups or companies rather than individuals. In reality, there are just a few privately owned forests like those of Yokohama City and the number of forestry workers is low. Since the forest environment tax was created for the purpose of solving the shortage of forest caretakers and promoting the utilization of timber, it is unsurprising that 5

Tsunozu, E. (January 24, 2020). A lot of allocation in large cities with large populations dissatisfaction over Forest Environment Tax in the regions. See Asahi Shinbun Digital. Retrieved May 20, 2021 from https://www.asahi.com/articles/ASN1R4FTWN1GUNHB004.html (in Japanese). 6 Miyagi Prefectural Assembly (2019).

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Fig. 3.2 Amount of Forest Environment Transfer Tax, transfer ratio to municipalities and prefectures, and transfer criteria. Source Created by the author based on “Forest Environment Tax and Forest Environment Transfer Tax” of Forestry Agency, Ministry of Agriculture, Forestry and Fisheries. Retrieved May 20, 2021. From https://www.rinya.maff.go.jp/j/keikaku/kankyouzei/kankyo uzei_jouyozei.html (in Japanese)

preferential treatment for large cities skews transfers toward cities and away from regions with vast forests, such as Tohoku. Since the total amount of the transfer will be increased year on year, dissatisfaction with forest areas and depopulated areas will further increase under the current standards. Therefore, a review of the transfer criteria, which has been the subject of criticism, is an urgent issue.

3.2 Forest Environment Tax as a National Tax

53

Table 3.4 September 2019, Forest Environment Transfer Tax allocated (unit: 10,000 yen) Prefecture

Allocation

Prefecture

Allocation

1

Hokkaido

76,659

17

Osaka

23,878

33

Prefecture Aomori

Allocation 16,685

2

Tokyo

36,006

18

Ehime

23,616

34

Gunma

16,124

3

Kochi

35,585

19

Ooita

22,808

35

Tochigi

16,012

4

Gifu

34,173

20

Fukuoka

22,711

36

Ibaragi

14,937

5

Hyogo

31,362

21

Saitama

22,368

37

Yamagata

13,565

6

Nagano

30,962

22

Kagoshima

22,078

38

Tottori

11,598

7

Iwate

30,623

23

Hiroshima

21,199

39

Fukui

11,152

8

Shizuoka

29,989

24

Nara

20,250

40

Ishikawa

10,581

9

Aichi

29,936

25

Tokushima

19,739

41

Yamanashi

10,374

10

Miyazaki

28,834

26

Okayama

19,657

42

Nagasaki

10,087

11

Kumamoto

27,259

27

Chiba

19,484

43

Shiga

12

Akita

24,806

28

Yamaguchi

18,033

44

Saga

6,999

13

Kanagawa

24,335

29

Niigata

17,722

45

Toyama

6,533

14

Wakayama

24,030

30

Miyagi

17,561

46

Okinawa

4,182

15

Fukushima

23,975

31

Kyoto

17,492

47

Kagawa

3,955

16

Mie

23,880

32

Shimane

17,278

National

999,912

8,817

Source Created by the author

Treating the forest environment tax as a national tax7 has also drawn objections from relevant parties. One issue is the overlapping uses of the forest environment tax as both a national tax and a prefectural tax. Shimizu (2019) expanded the use of national tax and forest ecotax, not only to projects related to forest maintenance, but also to promoting timber use and public awareness so the national tax and prefectural forest ecotax could be conflated. Some critics point out that it has become necessary to avoid duplication with the prefectural/forest ecotax expenditure allocation. Each prefecture addressed such concerns, and many local governments were able to separate both prefectural and national taxes from the forest environment tax through “compartmentalization.” The rationale and the technical information are published on various Web sites. In addition, Morotomi (2019) identifies overlapping uses of tax revenues for prefectural and national forest ecotaxes and reviews the ordinances for each prefectural forest ecotax sunset clause (regulations for each taxable period). If duplication can be resolved through a clause-by-clause review, it will be possible

7

See Tobita (2019). Tobita (2019) focused on the five actors involved in the establishment of the forest environment tax and the forest environment transfer tax system, and analyzed the direction in which the forest and forestry system is going taking into account the issues of national tax, and combines the forest environment tax/transfer tax and the Forest Management Law. In addition, Tobita (2018) is examining the ideal way of forest management that municipalities aiming to balance forestry and the environment should go under two new systems, the Forest Magement Law and the National Forest Environmental Tax.

54

3 Forest Environment Tax (National Tax)

to separate the two taxes in the future. However, to ensure citizens understand the legislation, a clearer division will have to be done. When it comes to national tax, the amount to be paid is usually predictable but, among the prefectures that introduced their own forest environment tax, all except the Kochi Prefecture transfer the amount of national tax and forest environment tax (FY4). The minimum annual tax revenue of prefectures and forest ecotaxes is about 4% (Kanagawa Prefecture) and the highest is 60% (Miyazaki prefecture).8 The next issue to consider is the rationale underlying the taxes. Many studies question the basis of the taxes. For example, Aoki (2019) states that the forest ecotax is a poll tax that deviates from basic principles of tax theory, is extremely unfair, goes beyond the ostensible purpose of the tax increase, with no clear correlation with preferred outcomes. On this basis, the national tax and forest ecotax were deemed extremely unfair, so we insisted on withdrawal. By contrast, Aoki (2019) does not oppose the government’s efforts to enhance forest maintenance projects and expand the financial resources for maintenance. Moreover, if the goal is to secure the water source of the forest to ensure a potable water supply, it is understandable that the beneficiary will be charged a fee even though the forest is also for greenhouse gas absorption. There are many calls for companies, as sources of emissions, to be taxed in accordance with the “polluter pays” principle. According to the breakdown of CO2 emissions in Japan (2015 confirmed figures), household-related ratios such as heating and cooling/hot water supply at home, the use of home appliances, and private cars at home do not exceed 22%, including waste, leaving the remaining 78% from the corporate and public sector. In fact, according to the Ministry of Environment in April 2019, Japan’s CO2 emissions are 1.19 billion tons, of which only 5900 come from the household sector.9 One argument holds that if companies are strongly resistant to new taxation and if the requirements for applying special tax measures include possession of a specified area or more of a developed company-owned forest, this will incentivize companies to acquire new company-owned forest.10 There are also many criticisms of over-taxation. It is often said that double taxation will be applied within 37 prefectures. Yokohama citizens are under triple taxation since the water source environmental tax of Kanagawa Prefecture and the Yokohama green tax of Yokohama City are levied in Yokohama City and the Kanagawa Prefecture. Compared to other taxes, the forest environment tax is easier to understand for the residents and, because it uses an over-taxation method for the inhabitant tax, there is less resistance. However, it is doubtful whether such an easily implemented tax is fair and equitable.

8

See Shimizu (2019). See Ministry of Environment (2019). 10 Adachi E. (January 15, 2018). New tax for individuals “Forest environment tax” Companies also bear a reasonable burden. Nikkei Sangyo Shinbun (Online). Retrieved May 20, 2021, from https:// www.nikkei.com/article/DGXKZO25567000R10C18A1X93000/ (in Japanese). 9

3.2 Forest Environment Tax as a National Tax

55

Table 3.5 Examples of applications of the Forest Environment Transfer Tax Prefectures Municipalities

Examples of cases tackled

• Forest maintenance cases such as thinning and road network maintenance 40 cases Hokkaido

Iwamizawa City

Implementation of thinning based on Iwamizawa city private forestry maintenance project

Hokkaido

Kikonai Town

Implementation of forest improvement and an opinion survey utilizing environmental transfer tax

Iwate

Hanamaki City

Promotion of Satoyamaa maintenance

Saitama

Chichibu City

Efforts such as thinning based on the forest management systems

Ishikawa

Nanao City

Implementation of thinning by municipalities based on the forest management systems

Ishikawa

Suzu City

Implementation of thinning by municipalities based on the forest management systems

Ishikawa

Shiga Town

Implementation of thinning by municipalities based on the forest management systems

Ishikawa

Nakanoto Town

Implementation of thinning by municipalities based on the forest management systems

Ishikawa

Anamizu Town

Implementation of thinning by municipalities based on the forest management systems

Ishikawa

Noto Town

Implementation of thinning by municipalities based on the forest management systems

Fukui

Eiheiji Town

Support for introducing heavy machinery to areas related to forest road maintenance

Yamanashi Nannbu Town

Private forest maintenance and bamboo forest maintenance business

Nagano

Okaya City

Pine worm control measures business

Nagano

Takagi Village

Implementation of bamboo grove maintenance in the region

Shizuoka

Mishima City

Efforts aimed at broad-leaved forests of suitable trees in the right places

Shizuoka

Shimada City

Promotion of forest maintenance in undeveloped forests

Shizuoka

Kawanehoncho Town

Promotion of peri-urban woodlands maintenance based on the needs of local residents

Aichi

Toyota City

Promotion of thinning due to housing complexes being built in the forests

Aichi

Toei Town

Promotion of maintenance of village-vicinity forests and clarification of boundaries

Mie

Matsuzaka City

Promotion of forest maintenance based on a tripartite agreement

Mie

Iga City

Implementation of thinning by the city based on a business agreement that contributes to public interest (continued)

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3 Forest Environment Tax (National Tax)

Table 3.5 (continued) Prefectures Municipalities

Examples of cases tackled

Shiga

Otsu City

Implementation of thinning by the city based on the agreement

Shiga

Koka City

Implementation of thinning, etc., in undeveloped forests (peri-urban woodlands)

Osaka

Toyonaka City

Reforestation within the city

Osaka

Chihayaakasaka Village

Improvement of road network for the purpose of proper management of forests

Hyogo

Kobe City

Promotion of forest maintenance based on the forest maintenance implementation plan

Hyogo

Himeji City

Understanding the current state of forests and promoting thinning of disadvantaged areas

Hyogo

Yabu City

Implementation of thinning based on the forest management system and dissemination and promotion of self-cutting forestry

Hyogo

Tanba City

Promotion of forest maintenance in undeveloped forests

Wakayama Katsuragi Town

Efforts for forest maintenance for the purpose of improving the forest environment, etc.

Wakayama Hirokawa Town

Promotion of forest maintenance by repairing work roads, etc

Okayama

Mimasaka City

Opinion surveys based on forestry business management policies

Kagawa

Takamatsu City

Forest maintenance work including preparations for forestry management systems

Kochi

Kochi City

Damaged forest maintenance

Kochi

Ino Town

Promotion of peri-urban woodlands maintenance in collaboration with local residents

Fukuoka

Asakura City

Environmental improvement support for forest maintenance by forest environment maintenance project

Fukuoka

Soeda Town

Implementation of projects targeting forests devastated by disasters, etc

Kumamoto Yachiyo City

System of forest roads in regions with forest owners’ opinion surveys

Okinawa

Ie Village

Improvement of windbreak and tide forest by holding tree-planting festivals

Okinawa

Yomitan Village

Maintaining and improving public functions by removing pressure factors

• Forest maintenance-forest agglomeration/consolidation 38 cases Iwate

Tono Village

Developing a system in order to carry out thinning

Miyagi

Tome City

Prioritization of opinion surveys by sphere promotion meeting and matrix tables (continued)

3.2 Forest Environment Tax as a National Tax

57

Table 3.5 (continued) Prefectures Municipalities

Examples of cases tackled

Akita

Odate City

Promotion of forest maintenance and tree education utilizing forest management systems

Yamagata

Yamagata City

Formulation of basic policy of efforts based on forest management system and trial in model area

Fukushima Minamiaizu Town

Conducting an opinion survey of the forest owners

Ibaraki

Hitachiota City

System development to promote forest management systems

Tochigi

Kaminokawa Town

Promotion of forest maintenance via forest management systems

Gunma

Kanra Town

First year efforts toward the implementation of forest management system operation

Chiba

Ichihara City

Preparation of the draft opinion survey priorities

Niigata

Murakami City

Toward the construction of a system that connects forest owners and forestry managers

Niigata

Itoigawa City

Conducting an intention survey based on forestry management systems

Ishikawa

Hakusan City

Implementation of intention surveys by municipalities based on forest management systems

Yamanashi Hayakawa Town

Conducting forestry owners’ opinion surveys based on forestry management systems

Nagano

Kiso Town

Extract candidate sites in preparation for an opinion survey

Gifu

Gujo City

Selection of forests to be surveyed based on disaster risk conditions

Shizuoka

Hamamatsu City

Aiming for sustainable forest management by utilizing FSC certification

Shizuoka

Fuji City

Promotion of forest management systems integrated with forest management plans

Mie

Tsu City

Opinion survey/forest survey for setting forest management rights

Shiga

Higashiomi City

Promotion of forest management systems

Kyoto

Ayabe City

Establishment of Forest Management Promotion Council to promote forest management

Kyoto

Seika Town

Forest survey and development of forest conservation management guidelines in collaboration with universities

Nara

Totsukawa Village

Promotion of boundary clarification for appropriate forest management

Wakayama Tanabe City

Promotion of forest maintenance based on forest management systems

Wakayama Aridagawa Town

Implementation of opinion surveys utilizing forestry management system (continued)

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3 Forest Environment Tax (National Tax)

Table 3.5 (continued) Prefectures Municipalities

Examples of cases tackled

Tottori

Chizu Town

Promotion of forest maintenance utilizing forest management systems

Shimane

Oda City

Smooth operation of new forest management systems and utilization of municipal timber

Okayama

Misaki Town

Promotion of forest maintenance based on forest management systems

Hiroshima

Miyoshi City

Conducting an intention survey based on forestry management systems

Yamaguchi Iwakuni City

Promotion of forestry management system

Tokushima Mima City

Promotion of forest management system by outsourcing

Ehime

Matsuyama City

Conducting an intention survey based on forestry management systems

Kochi

Kami City

Implementation of opinion surveys based on forestry management systems

Saga

Kashima City

Conducting an intention survey based on forestry management systems

Nagasaki

Goto City

Implementation of opinion surveys related to forestry management systems

Kumamoto Amakusa City

Establishment of forestry information bank by municipalities

Kumamoto Mifune Town

Promotion of forest maintenance utilizing forest management systems

Miyazaki

Promotion of forest management system by regional forest administration advisors

Hinokage Town

Kagoshima Kanoya City

Conducting an intention survey based on forestry management systems

• Human resources development 17 cases Iwate

Kuzumaki Town

Promotion of forest management system by regional forest administration advisors

Miyagi

Sendai City

Fostering human resources that can lead forestry

Saitama

Hanno City

Utilization of forest residues by forest volunteers carrying them out

Tokyo

Minato Ward

Forest, forestry, wood popularization activities, etc

Fukui

Fukui City

Human resource development and securing of leaders through forestry machinery leasing and safety equipment support projects

Yamanashi Tsuru City

“Forest School” held to solve the shortage of forestry workers

Aichi

Forest maintenance human resource development project where you can learn from the basics to practice

Okazaki City

(continued)

3.2 Forest Environment Tax as a National Tax

59

Table 3.5 (continued) Prefectures Municipalities

Examples of cases tackled

Hyogo

Shiso City

Forestry leaders training business

Tottori

Nichinan Town

Developing forestry engineers who will lead the forestry of the future

Okayama

Shinjo Village

Securing forestry workers and leaders through internships

Okayama

Kagamino Town

Creation of a new organization “Kagamino Town Forest Creation Center”

Kochi

Shimanto City

Shimanto City Forestry Leader Development Support Operation

Kochi

Tsuno Town

Measures for leaders utilizing environment transfer tax

Kumamoto Aso Area 7 Municipalities

Training of forestry leaders by “Aso Regional Forestry Leaders Countermeasures Council”

Oita

Hita City

Green employment measures and training and securing of leaders in collaboration with Oita Prefecture

Miyazaki

Nichinan City

Labor force support from other areas, measures for leaders by reforming the working environment

Kagoshima Isa City

Training and securing field technicians in the Isa area

• Local government/related companies—wood utilization/dissemination and public awareness promoting activities 9 cases Akita

Kitaakita City

Forestry maintenance through cooperation between local governments

Saitama

Saitama City

Timber utilization and public awareness through cooperation between local governments

Tokyo

Chiyoda Ward

Implementation of forest maintenance projects through collaboration between local governments

Tokyo

Shinjuku Ward

Carbon-offsetting business through cooperation between the bodies

Tokyo

Toshima Ward

Promotion of forestry maintenance through cooperation between local governments

Tokyo

Akishima City

Promotion of the use of timber via cooperation between local governments

Fukui

Awara City /Sakai City

Formulation of the overall concept of forestry maintenance through cooperation between local governments

Aichi

Toyoake City

Efforts to raise awareness of timber by donating timber products to newborns

Tokushima Naka Town/Kitajima Town Implementation of forestry experience and mutual exchange by concluding an agreement • Cooperation between local governments and wood utilization/dissemination Aomori

Owani Town

Promotion of education in trees for people of towns (continued)

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3 Forest Environment Tax (National Tax)

Table 3.5 (continued) Prefectures Municipalities

Examples of cases tackled

Iwate

Nishiwaga Town

Forest environmental education in elementary and junior high school lessons

Ibaraki

Ushiku City

Enhancement of tree-rearing activities in the forest for nature observation

Ibaraki

Tokai Village

Activities to develop more forests such as forest pest control and tree planting

Saitama

Kitamoto City

Dissemination and increasing public awareness of multi-functions of forests through forest therapy businesses

Chiba

Sammu City

Granting subsidies for the wooden station project

Tokyo

Komae City

Partial lignification within public facilities

Kanagawa

Kawasaki City

Efforts to promote the use of wood—Centered around the three pillars

Fukui

Fukui City

Public awareness through the use of wood at events

Gifu

Hida City

Promotion of wood utilization by lignification of public facilities

Shizuoka

Kakegawa City

Establishment of Forest Management Promotion Council and Hosting Transfer Tax Awareness Lecture

Aichi

Nagoya City

Forestry project

Aichi

Miyoshi City

Implementation of forest friends tours

Aichi

Shitara Town

Manufacture of name tag cases using Hinoki cypress from the town through forestry-welfare collaboration

Osaka

Osaka City

Work to promote maintenance of wooden products such as public nursery schools

Osaka

Moriguchi City

Implementation of timber utilization and creating public awareness in friendly partner cities

Osaka

Takaishi City

Implementation of forest environmental education for elementary school students

Kagawa

Tadotsu Town

Tadotsu Town tree education awareness work

Fukuoka

Umi Town

Lignification business of facilities in public facilities

Miyazaki

Misato Town

Maintenance of public library bookshelves using basin products

Okinawa

Kunigami Village

Efforts to learn about the forest environment and raise awareness of local products

Okinawa

Nakijin Village

Distribution of wooden toys that utilize prefectural timber

a

“Situated between urban areas and pristine forests, Satoyama is a human-influenced natural environment, comprised of farmlands (rice paddies), secondary forests, reservoirs and channels. Forty percent of Japan is Satoyama, traditional production landscapes representing sustainable practices of agriculture, forestry and fishery that the Japanese people have long been engaged in.” See the Web site of Ministry of the Environment. (https://www.biodic.go.jp/biodiversity/shiraberu/policy/ pes/en/satotisatoyama/index.html). Source Created by the author based on Forestry Agency (2020c)

3.2 Forest Environment Tax as a National Tax

61

Finally, there is the transfer standard for the forest environment transfer tax. This is an issue that needs urgent review. Table 3.5 summarizes cases where each municipality used the forest environment transfer tax in 2019, the first year of the transfer, and classification by item. Examples of “forest agglomeration and consolidation” efforts need to be considered. “Forest management system” or “forest management,” is frequently considered, along with “intention to forest owners” or “system connecting forest owners and forestry owners.” All terms such as “forest bank” are related to the forest management system. Not all municipalities listed here actually conducted business, but, as the table shows, it seems that the municipalities that did allocate resources to the accumulation and consolidation of forests have a fairly high number of forest management systems. We will consider these systems in the following section.

3.3 Forest Management System As noted at the start, Japan is one of the most forested countries in the world. About 25 million ha, which is two-thirds of the country, is forest, with about 10 million ha being planted forests. The accumulation of forest resources, mainly in planted forests, has increased by about 70 million m3 every year and currently totals approximately 5.2 billion m3 . As available forests expanded, the amount of domestically produced timber, which had been sluggish, began to increase and the timber self-sufficiency rate reached its highest level of 36.2% in 30 years in 2017. Furthermore, timber selfsufficiency rate rose for the ninth consecutive year, reaching 37.8% in 2019. Indeed, domestic forest resources have entered a new era in which cyclical use of “cutting, using, planting, and growing” is a necessity (Fig. 3.3).11 However, Japanese forest ownership is small and decentralized. Owing to the long-term stagnation of forestry and changes in ownership over generations, owners’ interest in forests has diminished. As a consequence, forest management is not carried out properly. For example, it is not uncommon for new trees not to be planted after

11

As of April 2021, global timber prices are significantly higher than the previous year. Japan is also suffering from the so-called wood shock in which there is a sudden shortage of timber in a short period of time and prices soar. This is a phenomenon called the third wood shock following on from 1990 and 2008. The causes are the increase in housing demand in the USA owing to the COVID-19 disaster, the increase in demand for timber owing to the economic recovery in China, the shortage of containers, and the disruption of marine logistics owing to COVID-19. Most of the timber used in Japanese houses relies on imported timber. Even in late May 2021, there is no sign that it will subside, and the impact on the construction industry is unavoidable. Even though Japan’s timber self-sufficiency rate is increasing, it is hoped that the current situation of having to rely on imported timber will be overcome.

62

3 Forest Environment Tax (National Tax) Self-sufficiency rate

(%) 100 90 80 70 60 50 40 30 20 10 0 1989199119931995199719992001200320052007200920112013201520172019

Fig. 3.3 Wood self-sufficiency rate. Source Created by the author based on Forestry Agency (2019)

logging. In fact, 83% of municipalities lack many private forests in their jurisdiction. Without proper management of forests, the public functions of forests, including prevention of global warming, will be hindered. Additionally, there are issues such as lack of established land registry and property rights and unclear boundaries. With this situation in mind, the “Forest Management Law” enacted on May 25, 2018, and the “Forest Management Policy”12 was established to achieve both the growth industrialization of forestry and appropriate management of forest resources. The forest management system officially began on April 1, 2018. This system stipulates that if the owner, etc., does not or cannot manage a forest properly the municipality is authorized to carry out that management function on their behalf. The system is structured as below (Fig. 3.4). ➀ ➁

12

Investigate the intentions of forest owners regarding forest management. A survey of forest owners’ intentions regarding forest management will be carried out. Acquired business management rights from forest owners, etc. Based on the results of the initial survey, we will choose forest business management strategies in consultation with the forest owners who indicated they would prefer to leave this responsibility to the municipalities. Following this, the right to cut standing trees, sell timber, re-afforestation, caring for young trees, etc. (business management right), is acquired for a specified period from the forest owners.

See Forest Management System Promotion Study Group (Ed.) (2019). In this book, the contents of the forest management system and the operation method of various administrative procedures are explained in detail.

3.3 Forest Management System

63

Fig. 3.4 Outline of Forest Management System. Source Forestry Agency (2020a, p. 10)

➂

If suitable for forestry management, subcontract business management to forestry manager

If the forest entrusted in the second stage is suitable for forestry management, the business management is subcontracted to a “motivated and capable forestry management entity” selected by the municipality (business management license is set). Forestry managers with motivation and ability will result in high productivity and profitability through efficient and stable forestry management. The management organization will ensure the continuity of forest management by implementing reforestation after major felling of trees. If no suitable forestry management entity can be found, the municipality will assume direct responsibility for the forest. If the forest is not suitable for forestry management because it is located in the hinterland, or until a forestry manager is contracted, the local government will be responsible for management. Forests placed under the business management right accumulation plan will be managed according to the regional forest plan established by the prefectural governor. These are considered to be “forests not managed,” while “agreed unmanaged forests” refers to forests that have been untouched for a long time. This is in the context that thinning is necessary to demonstrate the multifaceted functions of the forests, such as water source security, timber production, and biodiversity conservation. This system is expected to ensure the utilization and consolidation of abandoned forests to make forestry a growth industry, while proper maintenance will preserve public interest functions. Minowa (2020) is hopeful that forest owners will be reassured about their property through the municipalities taking responsibility for forest management through the Forestry Agency Forest Maintenance Department Planning

64

3 Forest Environment Tax (National Tax)

Division Chief Forest Planning Officer. Additionally, this will create job opportunities for forest workers and managers, which will, in turn, lead to the elimination of under-maintained forests and progress in tree planting after logging. Thus, the functioning of forests will be maintained, contributing to the safety and security of local residents, and the forests formerly left unattended will now generate economic return. However, some problems have been pointed out in this system. The business management system is also called “forest bank.” For agriculture, the Agricultural Land Bank (Agricultural Land Intermediate Management Organization), which collects and rents land, was established in all prefectures in 2014 as an “intermediate saucer for reliable agricultural land.” However, the Agricultural Land Bank is not functioning very well. Moreover, it is not easy to apply the system to agriculture, since the timeframe from planting to logging is several decades. As Minowa (2020) points out, improving the system of municipalities also poses a challenge. Many local governments have raised the issue of the shortage of forestry and forestry staff and forestry engineers. Two-thirds of municipalities are said to have either none or one full-time forestry employee. It seems that some of the forests entrusted to the forest bank were abandoned because the owners cannot make profits. In addition, it is not easy to select the appropriate contractor. Accurately gauging the operators’ future effectiveness is a key consideration for future management.

3.4 Environmentally Related Taxes in Various Countries Similar to the Forest Environment Tax This section looks at taxes from various countries that have a similar purview as Japan’s forest ecotax. The OECD defines environmentally related taxes as follows13 : • All compulsory and unilateral payments to the general government imposed on taxable properties that are considered to be especially environmentally relevant • The name and purpose of the tax are not standardized • Whether or not the tax is used is not a standard In 2012, Japan established the tax for global warming countermeasures aimed at controlling CO2 emissions from fossil fuels, implementing it in stages from October 1. On April 1, 2016, the final tax rate increase was instituted. This tax system applies to all fossil fuels, including oil, natural gas, and coal, according to the environmental load (i.e., CO2 emissions). The revenue is used for energy-saving measures, including renewable energy. Therefore, the tax for global warming countermeasures meets the OECD definition.

13

Ministry of Finance (n.d.) OECD Environmental Statistics. Retrieved May 20, 2021, from https:// www.mof.go.jp/tax_policy/summary/environment/k03a.htm (in Japanese).

3.4 Environmentally Related Taxes in Various Countries …

1.

65

Groundwater tax14 This is an overview15 of each country’s groundwater tax and groundwater surcharge system. • Netherlands ➀ Legal system: Dutch Groundwater Law – Prohibition of pumping and recharging groundwater without state permission – States can impose surcharges (State Water Law provides details on surcharges). ➁ ➂

Legal positioning: Pumping and recharging groundwater without prior permission are prohibited Taxes and surcharges Item: Groundwater tax. Overview: – Taxation according to the amount of groundwater collected – Revenue is transferred to general financial resources Background, etc.: – The levy system was already implemented on a state-by-state basis – There was no confusion when taxing because the users and usage amount were already known – Water usage has already been saved to the limit, and there was a precedent to choose to pay taxes over reducing usage

• Netherlands ➀ Legal systems: Groundwater surcharge ➁ Legal positioning: – Charged according to the amount of groundwater collected – There was no confusion when taxing because the users and usage amount were already known ➂

Taxes and surcharges – The Dutch Groundwater Law stipulates that the state imposes a levy – Introduced by states with all authority and responsibility for groundwater management as solutions to problems such as overuse and deterioration of water quality

14

See Ministry of Land, Infrastructure, Transport, and Tourism (2009). Moreover, there is Watanabe (2015) on the establishment of a system for groundwater conservation. Kawakatsu (2004) visited Kumamoto Prefecture for the design of the groundwater conservation tax system. Nam, Goto, and Osawa (2017) discuss Vietnam as an example. 15 See Ministry of Land, Infrastructure, Transport, and Tourism (2007).

66

3 Forest Environment Tax (National Tax)

• Germany ➀ Legal systems: (a) Federal Water Management Law Use of water area including groundwater requires permission/patent (b) State Water Law Stipulates specific conditions for groundwater management based on the Federal Water Management Law ➁ Legal positioning: (a) Federal Water Management Law – “Groundwater use” is under public control – Land ownership does not include the use of groundwater regulated by a permit system, etc. (b)

State Water Laws – Property ownership includes groundwater resources, but requires the use of groundwater for public purposes (Bavaria, Hamburg) – Groundwater cannot be disposed of voluntarily by the landowner

➂

Taxes and surcharges Item: Water Resources Tax (Baden-Württemberg). Summary: Taxation based on groundwater and surface water intake. Background, etc.: Despite the fact that groundwater is a source of drinking water, pollution caused by nitrates contained in agricultural fertilizers has become more serious→ It was recognized that limiting and optimizing land use such as agriculture is essential for groundwater conservation. • U.S. Texas ➀ Legal systems: – Achieve the public interest of conserving groundwater for residents by restricting the amount of groundwater (without a comprehensive groundwater law at the US level) ➁

Legal positioning: Texas Constitution – Groundwater, which is the property of the landowner, is also subject to regulations.

➂

Taxes and surcharges Item: Pumping surcharge. Summary: Charged according to the amount of water pumped from the well. Background, etc.: – Local groundwater management organizations (groundwater conservation areas) regulate the use of groundwater based on their

3.4 Environmentally Related Taxes in Various Countries …

67

natural and social conditions. A surcharge is levied to deal with the seriousness of land subsidence caused by excessive pumping of groundwater (Galveston Harris coastal land subsidence area) The above examples in various countries that are common with the underlined part are: – Positioning that groundwater should be placed under public control – The purpose is to deal with the emergence of various problems such as overuse of groundwater and deterioration of water quality. – Social consensus building that accepts new taxes – It is a state/district-level system that reflects geographical and social circumstances and responds to regional diversity • Belgium A groundwater tax has been introduced in Wallonia. • Japan In April 1994, Hadano City, Kanagawa Prefecture, established the Hadano City Groundwater Pollution Control Fund for the purpose of recharging groundwater. Funds from vendors using specified substances stipulated in the Hadano City Groundwater Conservation Ordinance, such as trichlorethylene, and donations from the general public, are used to finance countermeasures, such as Hadano City’s Contaminated Groundwater Purification Project. Revenues in 2019 totalled 264,099 yen, and the fund balance as of March 31, 2020, was 992,493 yen. In FY2019, 297,200 yen was allocated to various initiatives, such as the purification project for contaminated groundwater. There are groundwater-related taxes that have not been instituted. For example, mineral water companies buy the land of the water source and sell the collected water itself to make a profit, and, in 2000, Yamanashi Prefecture considered taxing the mineral water tax since it is appropriate to request the principal beneficiary to bear the cost of any externality. The policy paper explored the relationship between forest maintenance and groundwater and the fairness of taxation. In the draft, a specific duty of 0.5 yen per liter was levied on the amount of mineral water produced with reference to the French “mineral water surcharge,” positing an expected annual tax revenue of 260 million yen to be used for forest maintenance. In the Yamanashi Prefecture, industrial water accounts for a quarter of the total groundwater sampling. However, most firms utilizing groundwater are in the information technology sector, such as electronic product manufacturing industry, and the amount of groundwater collected in those industries is 7% of the whole Yamanashi Prefecture. In contrast, the beverage manufacturing industry accounts for only about 4%. Yamanashi Prefecture never instituted such a tax because the mineral water industry did not benefit much more than other

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3 Forest Environment Tax (National Tax)

industries and taxpayers for mineral water tax were specific and limited. The groundwater tax in Japan is explained in Chap. 4. 2.

3.

Drainage surcharge16 The OECD countries that have introduced the drainage surcharge are Austria, Belgium, Canada, Czech Republic, Denmark, France, Germany, South Korea, Mexico and the Netherlands,17 Poland, Slovakia, Spain, United Kingdom, etc. In France, Germany,18 the Netherlands and Slovakia, the use of surcharges is limited to water pollution control costs. Water tax • British Columbia, Canada, Finland, Italy, Netherlands,19 South Korea, Austria, France, Baden-Württemberg, Germany, Greece It is a tax on the act of taking water for the purpose of conserving water resources.

4.

Water pollution tax • Sweden, Belgium, Flanders, Denmark, Italy, Netherlands

5.

Taxes are levied according to the amount of pesticides, nitrogen, phosphorus, etc., emitted for the purpose of water quality conservation.20 Logging surcharge • Indonesia A system that certifies national and private forests for legal logging and collects fees for resource conservation and greening has been adopted. Specifically, in order to protect forests and eradicate illegal logging, logging operators will receive a new utilization business license donation (Iuran Izin Usaha Pemanfaatn Hutan: IIUPH)21 a forest resource fee (Profisi Sumber Daya Hutan: PSDH), and a reforestation fund (PSDH). Dana Reboisasi: DR), Standing Tree Sale Fund (Dana Hasil Penjualan Tegakan: DHPT) is paid.

6.

Forest protection tax22 • Vienna, Austria, British Columbia, Canada, California, USA The act of cutting down trees without planting replacements is taxed by forest, as well as the act of cutting down standing trees itself.

16

See, for example, Oka (1996) and Fujiki (2010) for information on the drainage surcharge. See OECD (2017). 18 For more information on German drainage surcharges, see Morotomi (1996a) and Morotomi (1996b). 19 Yamamoto (1997) analyzes Dutch drainage surcharges. 20 Ministry of Environment (2013, p. 4). 21 (Official name in Indonesian: abbreviation). See Japan Federation Wood-Industry Association (2007). 22 See Ministry of Environment (2020). 17

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In 1995, the city of Vienna introduced a forest protection tax for the purpose of ecosystem protection and landscape conservation. Regardless of whether it is publicly owned or privately owned, a tax is levied when cutting a standing tree (circumference over 40 cm), and a tax is collected as a cost for obtaining a logging permit. The taxable objects and amounts are as below. Federal fees for moving trees: e14.3 Evaluation document fee: e3.9/1 page Evaluation survey fee: e7.63/30 minutes Standing tree management fee: e4.72 − 21.8/1 bottle Furthermore, the maximum is set at e494.17. Fines are imposed if there is no tree planting. 7.

Environmental Billing System • Korea In South Korea, apart from direct regulations such as concentration regulation and total amount regulation, economic incentives to finance environmental measures have also been widely used. A typical example is the environmental levy system.23 The main water and forest-related levy systems in South Korea and the years they commenced are as follows. • Forest restoration cost deposit 1980 ➀ Emission levy (water quality) 1983 ➂ Alternative forest resource creation cost 1990 ➀ Water quality improvement contribution 1995 ➁ Water usage contribution (Han River water system) 1999 ➁ Water usage contribution (Nakdong River, Geum River, and Yeongsan River) water system) 2002 • Total water quality excess contribution 2002 ➀ Total amount excess contribution (water quality) 2004. ➀ are based on the cause burden principle, while ➁ apply the beneficiary burden principle, and ➂ is based on the principle of levy on the person who caused the damage to forest. In South Korea, a water use contribution system has been introduced to procure financial resources for water resource conservation and water environment improvement in river basins. This imposes a burden on water users in river basins, depending on the amount of water used. This system was introduced in 1999 for the Han River, which is the main water source for residents of the Greater Tokyo Area, similarly for the metropolitan areas of the Nakdong River, Yeongsan River, and Geum River in 2002. The system was expanded to one of the four major rivers in South Korea. The funds collected from this contribution

23

See Lee and Kim (2007).

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are mainly for land acquisition for the conservation of the river basin and compensation for land use restrictions of residents in the water source management area. Funding has also been allocated for water quality management infrastructure construction projects such as resident support projects and sewage treatment plant development. To efficiently manage the water use contribution, a management committee has been appointed for each water system, and a water system management fund has been set up using the collected water use contribution as a source of funds. Therefore, there is a slight difference in the load factor of the water usage contribution for each water system. For example, the levy rate of water usage contribution per 1 m3 of water used in the Hangang River system started at 80 won when it was introduced in 1999, 110 won in 2001, 140 won in 2006, and 2011. This has now been raised to 170 won. Rates for the other three water systems are also being increased. As a result, the water usage contribution collected in the four water systems from the time of introduction to 2012 amounted to 7,361.8 billion won.24 8.

Forest surcharge • Philippines Forest cover in the Philippines in 2010 was 7.67 million ha, accounting for about 26% of the national land area. Of these, natural forests are 7.31 million ha and planted forests are 350,000 ha. Most of the forests in the Philippines are managed as community forests under an administrative program, with an area totaling 6 million ha (as of 2009).25 Logging companies pay logging application fees, annual usage fees, forest surcharges (royalties) according to the amount of logging, property tax and sales tax owed to the government (Boado, 1988). According to Saito (1996), the government, which owns the resources, imposes several types of taxes and royalties (charges according to logging), but forest charges (per unit volume) according to logging are an important source of revenue, along with the sales tax introduced in 1970. In addition, the government promulgated Law No. 115 in 1947 and planned to promote forestation by imposing a levy of 0.4–0.5 pesos per cubic meter (forestation tax: called Reforestation Charge) for logging from national forests. Recently, on May 15, 2019, a law was passed that requires all elementary, high school, and college students to plant 10 trees when they graduate from school. Annually, about 12 million children graduate from primary school, five million from high school, and about 500,000 from college; thus, if this law were to be enforced, there would be at least 175 million new trees each year and more than 525 billion trees planted in one generation. These trees will be planted in mangrove areas, forests,

24 25

See Jiang, Otchia, Fujjikawa, Lee, and Park (2016). Ministry of Agriculture, Forestry, and Fisheries (2015). p. 3.

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and protected areas as well as military training centers, abandoned mining sites, and some urban areas. The Ministry of Education and the Higher Education Commission will play a central role in this initiative, and many government agencies will work together to implement it.26 Forest area is declining sharply in the Philippines. The policy may have been driven by widespread illegal logging and the issue of the decline in the forest regeneration function. 9.

Water resource tax • China At the end of November 2017, the Ministry of Finance, the Ministry of Taxation, and the Ministry of Water Resources announced the “Water Resources Tax Reform/Trial Expansion Method.” The Ministry of Education and the Higher Education Commission will play a central role in this initiative, and many government agencies will work together to implement it. Of these, nine provinces—Beijing, Tianjin, Shanxi, and Inner Mongolia—are in the North China region, where excessive groundwater mining is a major problem, and there is a large gap between the supply and demand of water resources. Henan, Shandong, Sichuan, Shaanxi, and Ningxia are eastern, central, and western provinces, with different amounts of water resources and different types of water used. Chinese officials have asserted that by expanding trials, they would promote the conservation and protection of water resources and they intend to bolster the water resources tax system.27 In China, after the trial stage of the Water Resources Law, the Resource Tax Law was passed at the National People’s Congress (NPC) on August 26, 2019. The law, which came into effect on September 1, 2020, allows local governments to impose a “resource tax” on the mining of 164 items. The new law also allows local governments to tax water resources. This allowed local governments to raise the water resource tax rate in areas of high water stress.

26

Iwami, A. (2019, May 31). You can’t graduate from school without planting 10 trees!? A unique bill passed in the Philippines. FINDERS. Retrieved May 20, 2021 from https://finders.me/articles. php?id=1037 (in Japanese). 27 Japanese.China.org.cn. (China Net). (November 30, 2017). Water source tax trial, to be implemented in Beijing, etc.. Retrieved May 20, 2021 from http://japanese.china.org.cn/life/2017-11/30/ content_50078399.htm (in Japanese). Water Business Journal. (May 12, 206). China promulgates provisional law on water resource tax reform trial-Hebei Province (kahokushou) started trial of water resource tax collection from July 1, 2016. Retrieved May 20, 2021, from https://water-business.jp/article/f-059004/ (in Japanese). Water Business Journal. (October 16, 2017). China expands scope of water resource tax test project. Retrieved May 20, 202, from https://water-business.jp/article/201711044/ (in Japanese). The Water Business Journal is a water business specialized information service provided by EnviX, an independent consulting company in the field of overseas environmental regulation, which was established in 1994.

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Logging tax • Malaysia Sarawak, located on the island of Borneo in eastern Malaysia, raised the timber logging tax (Timber Premium (TP)), which has been untouched for 30 years, 60-fold from the end of May and July 1, 2017. According to state government officials, this is to prevent the disappearance of tropical forests owing to logging and to protect forest resources. Traditionally, the state has imposed a tax of 0.8 ringgit per 1 m3 of timber harvested in the forest and 3 ringgit for logging from farmland, but, from July 1st, all timber logging tax will be levied. It is expected the timber-related industry in the state will inevitably face rising costs since the tax will be raised to 50 ringgit, which will increase prices. The Timber Association, which has six major timber companies that own about one-third of the total forest area of Sarawak, called on the state government to review the measure, but this has not happened.28 The revenue of forestry in Sarawak largely aggravated due to the implementation of this law and the regulation of timber exports in the end of 2017. In addition, Malaysia’s National Water and Sewerage Commission (SPAN: The National Water Services Commission) announced on October 2, 2019, that it is considering tax incentives for water reuse on the basis that responsibility for water resource conservation should be shared by all stakeholders.29

11.

Reduction measures such as income tax reduction and exemption. • Canada/Netherlands In Canada and the Netherlands, income tax deductions are allowed when forest owners donate the land to the country, and income tax exemptions are provided when land, including protected forests, is acquired. In Canada, in particular, incentives have been implemented to exempt capital gains tax on donations of ecologically important forests to the country. • Brazil Brazil has been applying tax incentives for 20 years to promote investment in water and sewerage development and water source protection. Although it is not an environmental tax, it is an initiative to secure a stable potable water supply and protect water sources. On August 1, 2016, the Government of Brazil added a clause incentive for investment in water and sewage service development to Decree No. 11.445, which stipulates the guidelines for water and sewage maintenance promulgated since January 5, 2007 (hereinafter referred to as this decree). This decree took

28

Sankei Biz (May 30, 2017). 60 times timber logging tax to protect forests in eastern Malaysia, Increased from July. Retrieved May 20, 2021, from https://www.sankeibiz.jp/macro/news/170530/ mcb1705300500004-n1.htm (in Japanese). 29 Water Business Journal. (October 2, 2019). Malaysia considers tax incentives for water reuse. Retrieved May 20, 2021, from https://water-business.jp/article/f-072011/ (in Japanese).

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effect on the day of promulgation and began to apply two years after it takes effect. This decree added the following clauses (Decree No. 13.329) to Decree No. 11.445. – A tax incentive system will be established to attract investment for water and sewage maintenance by corporations that supply water and sewage services. This system shall continue until 2026. – Investment aimed at improving the continuity and efficiency of water and sewage systems in accordance with the Basic National Plan for Water and Sewage (those for 100% dissemination of drinking water supply, sewerage, and sewage treatment; those for protecting water sources, reducing water leakage from drinking water infrastructure, and improving the efficiency of drinking water supply, sewerage, and sewage treatment systems; those for improvements, reduction of water leaks from drinking water infrastructure; those for improvement of drinking water supply, sewerage, efficiency of sewage treatment systems, and those for technological innovation) is in scope. The National Plan for Water and Sewage Basic Services, presented in 2013, aims to reduce the leakage of drinking water by setting the drinking water supply penetration rate and sewage treatment rate to 100% in addition to protecting water sources over the next 20 years. It is reviewed every four years. The government’s position is that real investment of R $ 508 billion will be required to achieve the national plan, 59% will be funded by the federal government, and 41% by state and local governments.30 Environmental tax reduction measures have been adopted in many countries, and Japan is no exception. For example, the Taxes for Global Warming Countermeasures, which has been in force since 2014, provides necessary tax exemption and refunds for certain sectors.31

3.5 Conclusion In 2019 (the first year of the introduction of the Environmental Transfer Tax), the prefectural tax was reviewed in 15 of the 37 prefectures that introduced the forest environment tax. Policy issues have also been identified regarding support policies for municipalities, the forest management system, with a focus on providing guidance and advice, technical guidance, and training on “planning of intention” surveys for forest owners. According to Kohsaka and Uchiyama (2019), changes have been seen 30

Water Business Journal. (2016, August 1). Brazilian government issues legislation stipulating tax incentives to encourage investment by water and sewage service companies. Retrieved May 20, 2021, from https://water-business.jp/article/f-060001/ (in Japanese). 31 For a consideration of measures related to global warming countermeasure tax, see Ministry of Environment. (n.d.). Comprehensive Environmental Policy. Retrieved May 20, 2021, from https:// www.env.go.jp/policy/tax/about (in Japanese).

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in the organizational structure and personnel in about half of the 37 prefectures. In the future, a clear distinction between national tax and prefectural tax will be required in the process of increasing the Environmental Transfer Tax. Most prefectural taxes include a sunset clause, so coexistence with national taxes may not persist much longer. It is too early to confirm the success or failure of the Environmental Transfer Tax, which reached the time of taxation of the national forest environment tax only a year ago. However, in future, regardless of whether or not the forest environment tax as a local tax has been introduced, the effect of forest regeneration at the national level and the impact of the national tax on each local government should be analyzed. Forest ecotaxes and funds for water source conservation are unique to Japan, so this book focuses on practical aspects such as the introduction process, systems, tax bases, uses and operations, and economics. No theoretical analysis is offered. However, in recent years, the author has focused on theoretical analysis of environmental billing policies aimed at forest environment taxes and forest regeneration. The result, albeit modestly, are as follows: Nakayama and Shirai (2009), Nakayama et al., (2017; 2019); ; 2016, Matsumoto and Szidarovszky (2019, 2021), Matsumoto et al., (2017, 2018), Matsumoto et al. (2019a, 2019b, 2021). It would be good if these are found to be useful references.

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Economics Discussion Paper (Vol. 2101, pp. 1–20). Chukyo University. Retrieved May 20, 2021 from https://www.chukyo-u.ac.jp/research_2/cuie/img/discussionPdf/2101.pdf Ministry of Agriculture, Forestry and Fisheries. (2015) Connecting the Ikalahans to voluntary carbon market -Republic of the Philippines. Retrieved May 20, 2021 from https://www.maff.go. jp/j/kokusai/kokkyo/yosan/pdf/sg_case5.pdf (in Japanese) Ministry of the Environment. (2013). Shogaikoku ni okeru zeisei zentai no gurinka no jokyo to (Zeisei zentai no gurinka suishin kento kai dai 1 kai shiryo 4–2013 nen 7gatsu 18 nichi [Status of greening of the entire tax system in other countries (1st document 4 of the study group on the promotion of greening of the entire tax system, July 18, 2013))]. Retrieved May 20, 2021 from https://www.env.go.jp/policy/tax/conf/conf01-08/mat04.pdf (in Japanese) Ministry of the Environment. (2019). 2017 nendo no onshitu koka gasu haishuturyo ni tsuite [2017 greenhouse gas emissions]. Retrieved May 20, 2021 from https://www.env.go.jp/earth/ondanka/ ghg-mrv/emissions/results/honbun2017-2.pdf (in Japanese) Ministry of the Environment. (2020) Kokunaigai ni okeru zeisei no gurinka ni kansuru jokyo ni tsuite (Zeisei zentai no gurinka suishin kento kai dai 1 kai shiryo 5 – 2020 nen 7 gatsu 17 nichi) [Status of greening of tax system in Japan and overseas (1st document 5 of the study group on greening promotion of the entire tax system, July 17, 2020)]. Retrieved May 20, 2021 from https://www.env.go.jp/policy/%E5%9B%BD%E5%86%85%E5%A4%96%E7%A8%8E%E5% 88%B6%E3%82%B0%E3%83%AA%E3%83%BC%E3%83%B3%E5%8C%96%E3%81% AE%E7%8A%B6%E6%B3%81%E3%81%AB%E3%81%A4%E3%81%84%E3%81%A6.pdf (in Japanese) Ministry of Land, Infrastructure, Transport and Tourism. (2007). River Administration in Japan. River Bureau, Ministry of Land. Retrieved May 6, 2021 from https://www.mlit.go.jp/river/basic_ info/english/pdf/RiverAdministrationInJapan(e).pdf. Ministry of Land, Infrastructure, Transport and Tourism. (2009). Chihyosui to chikasui ga ittai to natta management (dai 4 kai “kiko hendo to ni yoru risuku o fumaeta sogotekina mizu shigen kanri no atikata ni tsuite” kenkyu kai–2007 nen 12 gatsu 13 nichi ni okeru sanko shiryo 4) [Management of surface water and groundwater in an integrated manner (4th “Comprehensive water resources management based on risks due to climate change, etc.” Study group reference material 4 on December 13, 2007)]. Retrieved May 20, 2021 from https://www.mlit.go.jp/tochim izushigen/mizsei/07study/documents/04/doc06.pdf (in Japanese) Minowa, T. (2020). Shinrin/ringyo no genjo to shinrin keiei kanri ho -Shinrin wo mamori, ikasu jidai ni- [Forest environment tax and forest management system have begun to move: New initiatives to connect forests and cities]. City Government, 69(6), 28–30. (in Japanese) Miyagi Prefectural Assembly. (2019). Miyagi ken gikai dayori [News from Miyagi prefectural assembly], 131. Retrieved May 20, 2021 from https://www.pref.miyagi.jp/uploaded/attachment/ 761648.pdf (in Japanese) Morotomi, T. (1996a). Naze Doitsu no haisui kachokin seido ha henyo shitanoka–Sosai kitei o chushin ni kangaeru [Why has Germany’s drainage surcharge system changed?] Water Information, 16(6), 11–14, (in Japanese) Morotomi, T. (1996b). Doitsu haisui kachokin seido no keizai bunseki [Economic analysis of the German water effluent charge system]. Economic Review, 157(5/6), 16–34. (in Japanese). Morotomi, T. (2019). Shinrin ringyo saisei ni muketa shinrin kankyo zei sosetsu no keii to mondai ten [Significance and issues of forest environment tax for forest and forestry regeneration.] Local Tax, 70(2), 2–13, (in Japanese) Nakayama, K., and Shirai, M. (2009). Suido suigen hozen ni kansuru shinrin kanyo kokyo toshi no hiyo futan mondai–Saitekika mondai ni yoru shinrin kankyo zei no bunseki- [Burden of public investment costs for forest conservancy in preservation of water supply sources: - Analysis of the effects of environmental taxes on the destruction of forests–], Studies in Regional Science, 39(3), 553–565. (in Japanese) Nakayama, K., Shirai, M., & Matsumoto, A. (2016). Environment preservation policy. Institute of Economics Discussion Paper, 1609, 1–12. Chukyo University. Retrieved May 20, 2021 from https://www.chukyo-u.ac.jp/research_2/cuie/img/discussionPdf/1609.pdf

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Chapter 4

Water Source Funds

4.1 Introduction Since the 1990s, many local government bodies have established Water Source Funds. This has been facilitated by a growing social interest in the public environment, especially the demand for a stable supply of potable water. In fact, the government had also considered implementing a tax similar to the Water Source Fund. In the 1980s, the Forestry Agency proposed a “Water Source Tax” and the Ministry of Construction (currently the Ministry of Land, Infrastructure, Transport, and Tourism) proposed a “Running Water Fee.” The Forestry Agency’s Water Source Tax concept stated that a purpose tax of 1 yen per 1 m3 of water used would be levied on water users to pay for forest maintenance projects urgently needed for water source forests. In 1986, these proposals were unified to enact the emergency maintenance tax, which imposes 2.5 yen per 1 m3 of water used for forest and river maintenance. However, this policy was rejected not only by businesses and industry but also by the Ministry of Finance, Economy, Trade, and Industry and the Ministry of Health, Labor, and Welfare as well as water companies and thus was never enacted. While the necessity for forest maintenance was understood, the beneficiaries of the public interest function of forests were ill-defined so justifying the increase in the tax burden on the people was problematic. Gomyo and Kuraji (2006) and Ishizaki (2010) detail the circumstances surrounding this issue. However, apart from the fact that the establishment of Water Source Funds by each local government has been expanded nationwide, citizens now have a better appreciation and understanding of the issue since payments are for a fund rather than a tax and the money is being collected from beneficiaries according to actual water usage. In this chapter, the Tap Water Source Conservation Fund of Toyota City, which was the first attempt in Japan to collect 1 yen per 1 m3 of water used in tap water for a fund, will be covered in Sect. 4.2. The fund for water source measures under the jurisdiction of the National Water Source Area Countermeasure Fund Council will be dealt with in Sect. 4.3, while Sect. 4.4 summarizes the Water Source Funds © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakayama, A Forest Environment Tax Scheme in Japan, https://doi.org/10.1007/978-981-16-9352-6_4

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nationwide and examines funds of the same type as the Toyota method of Sect. 4.2. Finally, Sect. 4.5 adds to some types of funds that contribute to the water environment, although the main purpose is not to replenish water sources.

4.2 Toyota City Tap Water Source Conservation Fund Toyota City, which is located in the northern part of Aichi Prefecture, is known around the world as the home of Toyota Motor Corporation. It is derived from the surname “Toyoda,” the founder family of the company. Toyota Motor Corporation was founded in 1936 by Kiichiro Toyoda, a child of Sakichi Toyoda, the founder of Toyota Industries Corporation. The site for the construction of Toyota Motor Corporation was the city of Koromo, which was established in 1951. However, in 1959, the name of Koromo City was changed to Toyota City because Koromo City, where Toyota Motor Corporation’s head office is located, had grown into one of the leading “car towns” in Japan (and the place name “Koromo” is difficult to read.) Subsequently, Toyota City, which achieved rapid development together with the automobile industry, became the first core city in Aichi Prefecture in 1998 (see Fig. 4.1 for the location of Toyota City). The Yahagigawa River, a major river that flows through the central part of Toyota City, has a total length of 117 km and has contributed to the regeneration of the area. It is a mother river that has nurtured life since ancient times, helping with logistics, transportation, agricultural water, and industry. The Yahagigawa River originates in

Fig. 4.1 Location of Toyota City, Aichi Prefecture. Source Created by the author based on “Welcome to Toyota City” of Toyota city. Retrieved May 6, 2021 from https://1stkurasu-toyota.com/pro file (in Japanese)

4.2 Toyota City Tap Water Source Conservation Fund

81

Nagano Prefecture, with its source high in the mountains, and spans three prefectures: Nagano, Gifu, and Aichi. Toyota City is located in the middle part of the Yahagigawa River, which flows from the Southern Alps into Mikawa Bay, where the mountains meet the plains. The forested area accounts for 99,000 ha, which is 87% of the upstream basin area of the Yahagigawa River, which covers 114,000 ha, with 58,000 ha being planted forest. Toyota City acquires more than 70% of its raw water from the Yahagigawa River, with the upstream Yahagigawa Dam also providing water for power generation, industry, agriculture, and potable water. Nonetheless, the forestry industry has declined significantly due to an aging population, people leaving, and the slump in timber prices because of imports. After the war, afforestation was actively carried out in the Yahagigawa River basin, but more than 50% of the artificial forests in the water source basin were left unattended even during periods of thinning, so rough forests became conspicuous throughout the basin. The decline also negatively affected the forests’ public benefits. There is a limit to the efforts of forestry officials and residents in preserving the public interest functions of forests, and of course it is desirable that the residents, local governments, and companies in the downstream waters, who are benefiting from these functions, also make such efforts. In the Yahagigawa River basin, we have been striving for water quality conservation and river purification from very early on with the consciousness that “a community with the same basin has the same destiny.” The Yahagigawa River Coastal Water Conservation Measures Council was established in 1969 and the Yahagigawa River Water Source Fund, comprising 20 towns and villages in Aichi Prefecture and the Yahagigawa River basin, was set up in 1978. It is probably these antecedents that facilitated the “Toyota City Tap Water Source Conservation Fund” as the first such in the country. In 1993, Toyota City established a Tap Water Source Conservation Fund at a rate of 1 yen per 1 m3 of water usage, in addition to the city’s water charges for upstream forest conservation projects. The Fund charges started the following year. In 2000, the city aggregated five towns and villages (Fujioka Town, Obara Village, Asuke Town, Shimoyama Village, and Asahi Village) in the upstream area for the implementation of the tap water source conservation project. This attracted nationwide attention, with several local governments adopting the approach used by this fund (detailed discussion later in this chapter). The Toyota City Fund seems to have been seen by citizens as a so-called gratitude to the upstream area for supplying pure potable water. The mechanism of the Fund will be explained using numbers from the time of introduction. The average monthly water usage of ordinary households back then was about 22 m3 , so 22 yen was paid to the fund monthly. Since water charges were estimated to be 46 million m3 per year, it was calculated that the annual injection would be 46 million yen. In fact, the total reserves from 1994 to the end of 1999 reached around 270 million yen. Initially, the plan was to implement a tap water source conservation project after accumulating about 500 million yen over the 10 years ending in 2003. But the upstream area, which is the water source, had un-thinned planted forests, arousing

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concerns about landslides and landslips. This led to the project being advanced three years ahead of schedule to commence in 2000. Since this project was intended to improve the replenishment function of the water source, the focus was on thinning the planted forests. As a general rule, an area of approximately 2 ha or more is identified in abandoned privately owned forests over 11 years old, then the towns and villages take the lead in public management for 20 years. Furthermore, forest owners are banned from clear-cutting for 20 years since timber production is not the goal (Fig. 4.2). Table 4.1 shows the transition of the reserve amount of the Toyota City Tap Water Source Conservation Fund.

Fig. 4.2 Toyota system. Source Created by the author

4.2 Toyota City Tap Water Source Conservation Fund

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Table 4.1 Balance of Toyota city water source conservation fund (Unit yen) Year

Fund balance at the end of the previous fiscal year

Reversal amount for the year

Amount of reserve for the year

Fund balance for the year

1994

0

0

39,281,014

39,281,014

1995

39,281,014

0

45,056,738

84,337,752

1996

84,337,752

0

45,600,000

129,937,752

1997

129,937,752

0

47,200,000

177,137,752

1998

177,137,752

0

47,250,000

224,387,752

1999

224,387,752

0

48,018,000

272,405,752

2000

272,405,752

0

27,501,248

299,907,000

2001

299,907,000

0

24,219,000

324,126,000

2002

324,126,000

0

14,274,000

338,400,000

2003

338,400,000

0

13,300,000

351,700,000

2004

351,700,000

0

18,925,000

370,625,000

2005

370,625,000

0

27,159,000

397,784,000

2006

397,784,000

0

21,299,000

419,083,000

2007

419,083,000

0

45,126,000

464,209,000

2008

464,209,000

70,295,000

4,093,815

398,007,815

2009

398,007,815

0

41,180,000

439,187,815

2010

439,187,815

0

45,114,000

484,301,815

2011

484,301,815

0

46,535,000

530,836,815

2012

530,836,815

0

39,723,000

570,559,815

2013

570,559,815

0

38,429,500

608,989,315

2014

608,989,315

0

29,146,000

638,135,315

2015

638,135,315

9,068,000

1,828,468

630,895,783

2016

630,895,783

17,221,000

515,106

614,189,889

2017

614,189,889

0

6,047,000

620,236,889

2018

620,236,889

3,937,000

290,321

616,590,210

2019

616,590,210

18,097,000

552,950

599,046,160

Source Created by the author based on the data provided by Toyota City Business Management Division

Ota (2005) describes the institutional design process in setting up the fund, including questions addressed at the council. For details on the structure of the fund, see Kojima (1995), Kamiya (2000), Harada (2001), and Harada (2007). Kuraji (2008) also refers to the Toyota City Fund. At the time, the Toyota City Water and Sewerage Bureau director, the Environment Department manager, and the Water and Sewerage Bureau Water and Sewerage specialist made numerous contributions to the establishment of the Water Source Conservation Fund, through such channels as The Monthly Journal Of Global Environment, Monthly Jichiken, and Suikon, a public

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Fig. 4.3 Toyota City merged with 6 towns (Asahi, Asuke, Inabu, Fujioka) and villages (Obara, Shimoyama). Source Created by the author based on “Welcome to Toyota City” of Toyota City. Retrieved May 6, 2021 from https://1stkurasu-toyota.com/profile (in Japanese)

relations magazine of the Association of Water and Sewage Works Consultants of Japan, emphasizing the Toyota City’s commitment toward the Fund. In April 2005, Toyota City merged with six neighboring towns and villages (five upstream towns and villages with which an agreement was signed plus Inabu Town) (Fig. 4.3). The population of Toyota City has grown steadily, increasing 11-fold since the inception of the city system in 1951, totaling less than 360,000 before the merger in 2005. The merger tripled the area of Toyota City, but the population increased by 50,000–400,000, while the water supply only increased 1.12 times.1 The fund was created to benefit people living downstream with potable water. All the towns and villages came under the fund but, after the merger with Toyota City, the benefit shifted from smaller towns and villages to the city, which was not the goal when the fund was implemented. Since 2000, the degraded forests in Toyota City have been thinned utilizing general financial resources but, now that the conservation forests covered by the fund have become part of Toyota City, the proper use of financial resources has to be debated. Aichi Prefecture introduced the forest environment tax, Aichi Forest and Greenery Tax, in 2009 and had extended the taxation period by another five years to 2018. Furthermore, from 2024, forest ecotax will be levied as a national tax. The citizens of Toyota have inevitably debated whether this constitutes an excess burden or not. For Toyota City’s fund, which has achieved solid results (but is not working as originally intended), there is scope for consideration of the benefits of water from the perspective of fairness and other taxes.

1

Details of the forestry situation in Toyota City after the merger can be found in Forest Division, Industry Department, Toyota City (2008).

4.2 Toyota City Tap Water Source Conservation Fund

85

The Toyota City Fund, which aims to conserve water sources, has attracted attention from all over the country. Some local government bodies have adopted this approach, while others have created funds for the same purpose. Yet, although there are many studies that have organized or discussed the fund system, target areas, uses of financial resources, ordinances, etc., almost none have analyzed these funds from an economic perspective. However, for reference, Nakayama, Shirai, and Yamada (2006) and Nakayama et al. (2007) consider the Toyota City method and forest ecotax an optimization problem.

4.3 National Water Source Area Measures Fund The Water Source Area Countermeasures Fund is a mechanism for implementing livelihood reconstruction and regional promotion measures in the water source area. It is funded by contributions from downstream local governments that get the benefits of water control and water utilization from dams. An additional fund consisting of related local governments in the water source area and the downstream beneficiary area has been produced in various places starting with the 1976 Tone River/Arakawa River Water Source Region Measures Fund.2 This is to promote detailed water source area measures that complement the Water Special Law, based on the agreement of local governments, etc., of both the water source area and the downstream beneficiary area. Five more funds have been created that are related to the water resource development water system of the Water Resources Development Promotion Law (Tone River/Arakawa River, Kiso Three Rivers,3 Chikugo River, Yoshino River, and Toyo River) and the Yahagigawa River Water Source Fund. These cover multiple prefectures, so fall under the jurisdiction of the national government (Ministry of Land, Infrastructure, Transport, and Tourism). The Water Source Area Countermeasures Fund mainly covers the acquisition of alternative land, maintenance of exchange facilities (maintenance of district meetinghouses, maintenance of tourist facilities, etc.), and support for town development (roads, etc.). Subsidies are provided to local governments in the water source area for other projects (water source forest maintenance, upstream/downstream exchange, etc.) (Fig. 4.4). In 1988, the National Water Source Area Countermeasures Fund Council (http:// www.zenkoku-kkn.org/) was established in Toyohashi City, Aichi Prefecture. At the National Water Source Area Measures Fund Council, nine organizations (funds) nationwide that implement water source measures cooperate with one another to 2

Regarding rivers and river administration in Japan, please refer to the English versions of the Ministry of Land of Infrastructure, Transport, and Tourism (2006) and the Ministry of Land of Infrastructure, Transport, and Tourism (2007), although these sources are slightly old. 3 Kiso Three Rivers is a general term for the three rivers—Kiso River, Nagara River, and Ibi River—that flow through the Nobi Plain.

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Purpose: Compensation by dam operators and supplementation of the Act on Special Measures for Water Source Areas Measures for Water Source Areas Detailed life reconstruction and implementation of regional measures Water source area measures fund under the jurisdiction of the country (designated water area, those related to multiple prefecture areas) Tone River / Arakawa River

Chikugo River

Kiso Three Rivers

Yahagigawa River

Toyo River Water

Yoshino River

Water

supply

for

flood

Subsidy

adjustments

Water source area measures fund operations

Water supply for flood adjustments

Implemented subsidies, etc. for local public organizations that carry out the following projects ·Supplemental interest for acquisition of alternative land ·Exchange facility maintenance (district meeting place maintenance, tourist facility maintenance, etc.) ·Establishment of life reconstruction counselor ·Others (water source forest maintenance, upstream/downstream exchange, etc.)

Downstream beneficiary region Contribution

Fig. 4.4 Overview of fund operations to put in measures in water source regions. Source Created by the author based on Ministry of Land, Infrastructure, Transport and Tourism (2020) p. 84

improve project management as well as promote the fund and, ultimately, measures that affect the entire area. All nine members of the council are public interest incorporated foundations. Table 4.2 shows location, establishment, etc., of each organization (Fig. 4.5). The main measures implemented by the fund are vertical exchange projects, livelihood reconstruction/regional promotion measures projects, water source forest measures projects, and water source forest conservation basin collaboration projects. Several of the funds are outlined below. (1)

Tone River/Arakawa Water Source Area Measures Fund

This corporation shall implement various measures specific to the water source area where dams, etc., will be installed in the Tone River system and the Arakawa system, and contribute to the use and maintenance of the national land, the sound development

4.3 National Water Source Area Measures Fund

87

Table 4.2 Council constituent organizations and locations Council constituent organizations

Address (prefecture)

The date of establishment Inside () is the old foundation

Website

Fund for measures in the Tone River and Arakawa River water source regions

Tokyo

2 July, 2012 (22 December, 1976)

http://www.zenkokukkn.org/tonegawa-ara kawa.html

Fund for measures in Gifu the Kiso Three Rivers water source regions

7 January, 2014 (27 September, 1977)

http://www.kiso-kkn. com/

Fund for measures in the Chikugo river water source regions

Fukuoka

1 April, 2013 (5 July, 1982)

http://www.zenkokukkn.org/tikugogawa. html

Fund for measures in the Yoshino River water source regions

Kagawa

1 April, 2013 (17 March, 1986)

http://www.zenkokukkn.org/yoshinogawa. html

Fund for measures in the Toyo River water source regions

Aichi

1 April, 2012 (17 December, 1977)

http://www.zenkokukkn.org/toyokawa. html

Fund for measures in Aichi the Yahagigawa River water source regions

1 April, 2012 (10 February, 1978)

http://www.zenkokukkn.org/yahagigawa. html

Fund for measures in the Asuwa River water source regions

1 April, 2014 (19 March, 1996)

http://www.zenkokukkn.org/asuwagawa. html

Fund for measures in Okayama the Yoshii River water source regions

1 October, 2013 (28 April, 1979)

http://www.zenkokukkn.org/yoshiigawa. html

Fund for measures Fukuoka prefecture water source forest

2 May, 2011 (8 March, 1995)

http://www.zenkokukkn.org/fukuoka.html

Fukui

Fukuoka

Note 1. Kiso Three Rivers is an aggregate term referring to the three rivers running through the Nobi Plain - Kiso River, Nagara River and Ibi River 2. For water cycle plans in Japan, see the English version of The secretariat of the Headquarters for Water Cycle Policy of the Cabinet Secretariat (2020a) and (2020b) Source Created by the author based on the National Water Source Area Measures Fund Council (http://www.zenkoku-kkn.org/) and the websites of each fund

of the local community, and the securing of water resources essential for people’s lives. It was established in 1976 and then changed to a public interest incorporated foundation in 2012. The founding organizations are Ibaraki Prefecture, Tochigi Prefecture, Gunma Prefecture, Saitama Prefecture, Chiba Prefecture, and Tokyo. Its main work includes the following: (1)

an assistance project for various measures related to water source areas taken by local governments related to dams;

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Kiso Three Rivers

Asuwa River

Yoshii River Fukuoka Water Tone River

Source Forest

/Arakawa River Yahagigawa River

Toyo River

Yoshino River Chikugo River

Fig. 4.5 Water resources development systems. Source Created by the author based on the National Water Source Area Measures Fund Council (http://www.zenkoku-kkn.org/)

(2) (3)

an exchange program in water source area and water demand area; and other businesses necessary to achieve the purpose of this corporation.

Since its establishment, the funds have been Takizawa Dam, Urayama Dam, Naramata Dam, Watarase Reservoir, Yamba Dam, Yunishi River Dam, etc. It has been applied to eight projects of the Tokura Dam and the Omoi River Development Facility. The construction of the Yamba Dam, which was the origin of the “fund,” finally started in January 2015. Regarding the Yamba Dam, we are already promoting regional promotion measures for displaced communities and surrounding residents. Net assets at the end of the fiscal year in 2020 showed a negative balance of 20,128 thousand yen. (2)

Chikugo River Water Source Area Measures Fund

The Chikugo River is one of Japan’s leading rivers, along with Bando Taro (Tone River) and Shikoku Saburo (Yoshino River). The Chikugo River is the largest river in Kyushu, spanning the four prefectures of Kumamoto, Oita, Fukuoka, and Saga, but as suggested by its popular name “Chikugo Jiro,” this is a savage watercourse that has caused many disasters throughout history. The Chikugo River basin was hit by a great flood in 1953 and an abnormal drought in 1978, so hydraulic control and water utilization measures were urgently required. However, the active promotion of dam construction involves a number of issues, such as displaced communities, promoting and improving the environment of submerged areas, and conserving and replenishing water sources. Given these circumstances, the foundation was established in 1982 with the cooperation of the government, Fukuoka Prefecture, Saga

4.3 National Water Source Area Measures Fund

89

Prefecture, Kumamoto Prefecture, Oita Prefecture, Kitakyushu City, and Fukuoka City. The Chikugo River Water Source Area Countermeasures Fund was changed to a public interest incorporated foundation in 2013 owing to the reform of the public interest incorporated foundation. Dam construction is intended for water control and water utilization measures by providing financial assistance, surveys, information exchange, and communication necessary for the livelihood reconstruction measures of displaced communities and the promotion and environmental improvement of submerged areas by local governments, etc. The purpose is to contribute to various measures, such as the stability of the displaced communities and the development of submerged areas. Its main work includes the following: ➀ ➁ ➂ ➃

assistance such as granting funds for measures necessary for stabilizing the lives of displaced communities taken by relevant local governments, etc.; upstream and downstream exchanges, information exchange, and surveys required for various measures such as dam construction; assistance for activities necessary to replenish and conserve water sources and ensure proper water circulation functions in the basin; and other businesses necessary to achieve the purpose of this corporation. The balance of net assets at the end of FY2020 was 1,022,802,000 yen.

(3)

Kiso Three Rivers Water Source Area Measures Fund

In the Kiso Three Rivers, which consists of the Kiso, Nagara, and Ibi rivers, flooding occurred frequently at the usual high water flow rate. Therefore, the construction of a dam was considered for protecting the property of the residents of the Kiso Three Rivers basin and satisfying water demand. However, although dam construction is an effective measure for water control and improved water distribution, there is a high possibility that it will deprive the residents in the water source area and depopulate the surrounding area. However, in the situation at that time, it was not possible to exhaustively consider these negative effects. To overcome this situation, local governments connected by the basin need to work together to take measures, while the compensation system had to be improved and the operation of the Act on Special Measures for Water Source Areas, upstream and downstream, needed to the strengthened and expanded. Thus, in 1977, Gifu Prefecture, Aichi Prefecture, Mie Prefecture, and Nagoya City came together to create the Kiso Three Rivers Water Source Area Countermeasure Fund” to cohesively promote water source area measures such as livelihood reconstruction measures for displaced communities and promotion of submerged areas, with the assistance of the national government. However, owing to the reform of the public interest incorporated foundation, the foundation was changed to a public interest incorporated foundation in 2014. The Kiso Mikawa Water Source Area Countermeasures Fund provides exchange programs for organizations that carry out upstream and downstream exchange projects, providing subsidies to develop and promote water source areas between upstream and downstream areas. The projects that get assistance through loans and grants are real estate acquisition, special assistance, regional promotion measures,

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research, and basin activity promotion. According to the breakdown of the income and expenditure budget for FY2020, the balance is 357,283 yen. (4)

Toyokawa Water Source Foundation

The Toyo River, located in the eastern part of Aichi Prefecture, has a trunk channel length of 77 km and a basin area of 724 km3 , with Toyohashi City, Toyokawa City, Shinshiro City, and Kitashitara District as basins. The water taken from the Toyokawa main river and the Ure River, which is a tributary, extends from Toyohashi City and Toyokawa City located in the downstream area to the Atsumi Peninsula and Gamagori City beyond the basin. It irrigates and supports the foundation of the Higashi-Mikawa area. In the Toyo River basin, because of repeated floods and an increase in local water demand, hydraulic control and the security of water resources have become important issues. Although related government agencies have continued to make efforts to address these issues, the upper reaches of Toyokawa need an entity to manage measures that impact the area. Under these circumstances, the water system is integrated as an organization to continuously implement measures for mountain restoration, conservation of forests that play an important role in hydraulic control and water resource replenishment, or mitigation of the impact of water resource development. In 1977, the Toyokawa Water Resources Foundation was established on this basis (in 2012, it was transferred to a public interest incorporated foundation). Higashi-Mikawa, which is approved by Toyokawa, is funded by eight municipalities and the national and prefectural governments and is jointly operated. The main efforts are as follows ➀

Promotion of water source area • Regional promotion through forest maintenance and diversification of local industries • Regional revitalization through upstream and downstream exchanges • Improving the attractiveness of the area by improving leisure and sports cultural facilities.

➁

Water source forest measures • Forest maintenance • Work path new construction/improvement.

➂

Water source forest conservation basin collaboration (financial resources: 1 yen per ton of tap water) • • • •

Human resources development Promotion of thinning Water source forest maintenance agreement Forest creation

According to the 2020 income and expenditure budget, the net property balance at the end of the period is 438,045,160 yen.

4.3 National Water Source Area Measures Fund

(5)

91

Yahagigawa River Public interest incorporated foundation (Yahagigawa River) Water Source Fund4

Owing to the importance of coordination in the “basin,” the Yahagigawa River Water Source Fund was established in 1978 by Aichi Prefecture (currently 10 municipalities because of the merger of cities, towns, and villages) and Aichi Prefecture (public interest foundation in 2012). The aim was to ensure the stable water control and water resources of the Yahagigawa River system by subsidizing the water source measures, as well as mutual understanding in the upstream and downstream areas. The purpose was to facilitate internal exchanges and contribute to the promotion of related areas and the integrated development of watersheds. The fund is divided into two parts: basic and business. Basic assets comprise contributions from Yahagigawa River basin municipalities in Nagano Prefecture, Gifu Prefecture, Aichi Prefecture and the national government and donations from individuals and Chubu Electric Power Co.,5 Ltd., which is a supporting member. Two-thirds of the sum is essentially borne by the prefecture and one-third by municipalities, with interest earned from the basic assets. The Yahagigawa River originates from Okawairiyama in Nagano Prefecture and is a major river with a trunk channel length of 118 km, a basin area of 1830 km, and a basin population of about 1.4 million, which spans Nagano, Gifu, and Aichi Prefectures. For the Nishi-Mikawa area of Aichi Prefecture, the Yahagigawa River is used for drinking water as well as agricultural and industrial water. Of the Yahagigawa River basin, 72% is forest, of which approximately 60% is forest. Forests are expected to have a water source replenishment function that nurtures high-quality water while mitigating droughts and floods, and a national land conservation function that prevents sediment-related disasters. However, poorly maintained man-made forests do not provide all these benefits. Therefore, the Yahagigawa River Water Source Fund subsidizes forest conservation measures (forestation, weeding, thinning, etc.) in the Yahagigawa River water source area and promotes hydraulic control and securing of water resources and related areas. The basin is to be developed in an integrated manner. In addition, from the idea of “one basin, one destiny,” a project to promote exchanges within the basin and a regional exchange project upstream and downstream was implemented. The Yahagigawa River basin is depicted in Fig. 4.6. The fund’s main projects are as follows: ➀ ➁

4

a subsidy for water source forest area measures implemented in the Yahagigawa River system; a subsidy for water source area measures implemented in the Yahagigawa River system;

Ministry of the Environment (2010). Yahagigawa River water source forest profit-sharing afforestation project. Retrieved May 6, 2021, from https://www.biodic.go.jp/biodiversity/shiraberu/policy/ pes/en/water/water01.html. 5 In 1951, Chubu Electric Power Co. inherited all the power plants of the Yahagigawa River system from Japan Electric Generation and Transmission Company; since then, development by Chubu Electric Power Co. has been promoted.

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Fig. 4.6 Yahagigawa River basin. Source Yahagigawa River water source forest profit-sharing afforestation project. Retrieved May 6, 2021 from Ministry of the Environment Web site: https:// www.biodic.go.jp/biodiversity/shiraberu/policy/pes/en/water/water01.html

➂ ➃ ➄

survey research and proposal projects necessary for implementing water source forest area measures and water source area measures; business related to the promotion of regional exchange in the Yahagigawa River system; and other businesses necessary to achieve the purpose of this corporation

According to the FY2020 income and expenditure budget, the balance of net assets at the end of the period is 971,726 yen.

4.4 National Water Source Fund In 2001, the Ministry of Health, Labor, and Welfare and the Forestry Agency conducted a survey on the status of efforts related to the conservation of tap water sources. In addition, the Ministry conducted a questionnaire survey based on the follow-up of the water services vision in 2007 (Ministry of Health, Labor, and Welfare, “Survey on the status of efforts for conservation of tap water sources,” https://www.mhlw.go.jp/topics/bukyoku/kenkou/suido/jouhou/suisitu/o6.html) that

4.4 National Water Source Fund

93

investigated the unique efforts of prefectures and water utilities to conserve potable water sources. The content covers the establishment of ordinances such as water source protection, guidelines for water source protection, the establishment of funds, involvement in water source forests, the organization and participation of watershed councils, assistance to upstream wastewater treatment facilities, etc., is there. Gomyo and Kuraji (2006) examine Water Source Funds nationwide in 2006, classifying funds based on their background, form, and purpose. Moreover, Honda (2007) introduced a fund that adopted the same method as Toyota City. In this section, we referred to the funds described in these materials and literature, but there were some that could not be confirmed because they had been discontinued, did not function in the endowment, the person in charge at that time was absent, or no material was available from local government. Furthermore, since several funds had name changes and newly introduced funds have been confirmed, this information is currently summarized to the extent that it can be confirmed. Therefore, not all Water Source Funds are covered, but some lapses, changes, and additions are described and compared to previous surveys. (1)

Iwaki City, Fukushima Prefecture Iwaki City Water Source Conservation Fund6

In 2001, Iwaki City established the Water Source Conservation Fund based on the ordinance for forest conservation in the water source area over the long term. Initially, the reserve period was set to 10 years, with financing from the general account and the water supply business account. The goal was to reserve 1 billion yen by 2010. The target amount of this fund is 1 billion yen, and the profits generated from the fund are used for projects for water source conservation, such as planting broad-leaved trees, maintaining forests, and maintaining semi-urban woodlands. (2)

Tomioka City, Gunma Prefecture Tomioka City Water Source Recharge Fund

Tomioka City established a fund in 2003 based on the Tomioka City Water Source Recharge Fund Ordinance as a financial resource for the water source replenishment project. The fund is used for land acquisition, tree replacement, and afforestation. On page 12 of the Tomioka City Basic Environmental Plan7 of March 2017, there is a statement that “We will strive to further enhance the fund based on the Tomioka City Water Source Recharge Fund Ordinance and expand water source forests and protection forests.”

6

Iwaki City Waterworks Bureau. (2020, November 12). Iwaki City Waterworks Bureau tap water source conservation measures. Retrieved May 6, 2021. See http://www.city.iwaki.lg.jp/www/contents/1001000002239/index.html (in Japanese). 7 See Tomioka City (2017).

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Yokohama City, Kanagawa Prefecture Charitable Trust Doshi Water Source Fund8

Yokohama City and Doshi Village, Minamitsuru District, Yamanashi Prefecture, located in the southeastern part of Yamanashi Prefecture, have been tied together through water since they started taking water from the Doshi River in 1897. Since then, Yokohama City has been an international port city, and Michishimura, a water source, has been a town of greenery and clear streams. In 1995, Doshi Village was certified as one of the 100 Best Water Source Forests by the Forestry Agency. As a water source forest, Yokohama City has systematically maintained and managed the forest in Doshi Village for nearly a century, with the 2873 ha Doshi Water Source Forest owned by the Yokohama City Waterworks Bureau. This is about 36% of the total area of Doshi Village, which is almost the same as the area of Tsuzuki Ward, Yokohama City. For many years, we have provided subsidies for projects that contribute to the conservation of the natural environment and the improvement of social living infrastructure in Doshi Village, Yamanashi Prefecture, which we are actively involved with, with the aim of conserving water sources, promoting the region, and improving the well-being of local residents. Yokohama City established the Charitable Trust Doshi Water Source Fund in 1997. As suggested by the name, it is a charitable trust9 holding with a principal of 1.01 billion yen (1 billion yen in Yokohama City, 10 million yen in Doshi Village), with investment income generated from the trust to be used for subsidies. The projects covered by the 2018 grant (the amount of the grant from the fund is 10 million yen) were activities that contributed to nature maintenance activities and improvement of living infrastructure. (4)

Yokohama City, Kanagawa Prefecture Water Hometown Doshi Forest Fund10

The Yokohama City Waterworks Bureau owns and maintains a water source forest in Doshi Village. However, privately owned forests cover about 60% of the area of Doshi Village and labor shortages have resulted in diminishing forest maintenance every year, raising concerns that water source replenishment will be hindered. Citizen volunteers and the Waterworks Bureau are collaborating to carry out forest maintenance activities such as thinning. In 2006, the Yokohama City Water Hometown Doshinomori Fund was established to support the voluntary water source conservation activities of these volunteers, including the NPO Doshi Water Source 8

Yokohama City (2019, July 23). Charitable Trust Doshi Water Source Fund. Retrieved May 6, 2021, from https://www.city.yokohama.lg.jp/kurashi/sumai-kurashi/suido-gesui/suido/torikumi/ suigen/suigen-kikin.html (in Japanese). 9 A public interest trust is one in which an individual or a corporation trusts property for a certain charitable purpose, and a trustee such as a trust bank manages and manages the property and carries out its duties to realize the charitable purpose. 10 Yokohama City. (2020, November 30). Yokohama City Water Furusato Doshi Forest Fund. Retrieved May 6, 2021, from https://www.city.yokohama.lg.jp/kurashi/sumai-kurashi/suido-gesui/ suido/torikumi/suigen/doshi-kikin.html (in Japanese).

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Table 4.3 Balance of Yokohama City Water Furusato Doshi Forestry fund Breakdown

2006–2019 (Unit Yen)

2020 (Unit Yen)

Donations

95,301,926

6,590,000

Breakdown (individuals)

64,755,023

3,700,000

Breakdown (Doshi forestry supporters)

18,978,718

2,050,000

Breakdown (collaborating businesses)

11,002,889

800,000

Breakdown (donations) Hamakko Doshi the Water sales Interest on fund application deposit

565,296

40,000

27,624,751

1,166,000

153,943,027

7,762,000

Contribution to water works accounts contribution

91,769,057

9,571,000

Total fund reserve

62,173,970

60,364,970

Fund withdrawal

91,769,057

9,571,000

Year-end fund balance

62,173,970

60,364,970

Source Created by the author based on the website of Yokohama City. Retrieved May 6, 2021 from https://www.city.yokohama.lg.jp/kurashi/sumai-kurashi/suido-gesui/suido/torikumi/sui gen/doshi-kikin.html#8801D (in Japanese)

Forest Volunteer Association. The idea is that citizens who cannot directly participate in volunteer activities can help in water source conservation through financial cooperation. For example, if you purchase a commuter pass for a municipal bus or subway with the “Yokohama Kotsu Hama Eco Card,” it will be automatically donated to the Mizuno Furusato Doshinomori Fund. It is the same when bottled mineral water from the Doshi River, “Hamakko Doshi the Water”11 is purchased from a vending machine located on the Waterworks Bureau premises. This is because a beverage vending machine installation company donates part of its sales from this vending machine to the Yokohama City Water Hometown Michinomori Fund. Doshi the Water is the official water of Yokohama City, sold by the Yokohama City Waterworks Bureau. The Waterworks Bureau sells and delivers Hamakko Doshi water between Hamako and Yokohama cities on a case-by-case basis.12 The value of grants to the fund in 2019 was 8,416,588 yen for the NPO Doshi Water Source Forest Volunteer Association and 250,000 yen for other citizen volunteer groups, for a total of 8,666,588 yen. Donations to the Water Hometown Doshinomori Fund are also possible through hometown tax payments. Moreover, the income and expenditure status of the fund are as per Table 4.3.

11

Yokohama City (2021, April 22). Hamakko Doshi—The Water. Retrieved May 6, 2021, from https://www.city.yokohama.lg.jp/kurashi/sumai-kurashi/suido-gesui/suido/the_water/ hamakkodoshi.html (in Japanese). 12 One case contains 24 bottles of 500 ml, and the direct sales price of the Waterworks Bureau is 2,400 yen including tax.

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Table 4.4 2018 donations

Donor

Amount (Unit Yen)

Individual/business/organization

1,498,538

Cooperation partner

1,131,097

Total

2,629,635

Note In the past, if you purchased a municipal bus/subway commuter pass with the Hama Eco Card issued by the Yokohama City Transportation Bureau, a certain amount would be donated to the “Yokohama Collaboration Forest Fund” but from 2017, Yokohama city changed the destination of the donation to be “the Water Furusato Doshi Forestry Fund” Source Created by the author based on the website of Yokohama City. Retrieved May 6, 2021 from https://www.city.yokohama.lg. jp/kurashi/machizukuri-kankyo/midori-koen/midori/kifukin/par tner/jisseki-H30.html (in Japanese)

(5)

Yokohama City, Kanagawa Prefecture Yokohama Collaboration Forest Fund13

In 2005, the city of Yokohama established the Yokohama Collaboration Forest Fund to conserve small-scale forests through collaboration between citizens and the government. Their efforts included land acquisition and facility development paid through contributions collected by the citizens and the fund. Since the fund is limited to the conservation of small-scale forest land and expenditure is small, no effect on the water source can be expected. However, the fact that “forest” is included in the fund’s title shows the Yokohama City’s concern about this issue. Table 4.4 lists the donation record for FY2018. (6)

Kofu City, Yamanashi Prefecture Kofu City Tap Water Source Replenishment Forest Conservation Fund

Just before the end of the Meiji era in 1912, the Yamanashi Prefecture was hit by a series of floods, putting people’s lives in dire straits. Emperor Meiji was worried about this predicament and, in 1911, most of the forests were placed under the protection of the prefecture to help in reconstruction. Subsequently, the forest in the upper reaches of the Arakawa River was designated as a “water source protection forest” by the application of Kofu City, and the forest extending 15 km east–west and 17 km north–south was sold by the prefecture to the city. Currently, forest accounts for about 63% of the total area of Kofu City, with about 80% of the forests in the northern part categorized as “water source cultivation forests.” Also, Kofu City is focused on water source replenishment and has long been working on forest management. Against this historical background, the city’s Water and Sewerage Bureau enacted the Kofu City 13

Yokohama City. (2021, May 10). Yokohama Collaboration Forest Fund. Retrieved May 6, 2021, from https://www.city.yokohama.lg.jp/kurashi/machizukuri-kankyo/midori-koen/midori/kif ukin/kyoudou.html (in Japanese). Yokohama City. (2005). Yokohama City Collaboration Forest Fund Ordinance. Retrieved May 6, 2021, from https://cgi.city.yokohama.lg.jp/somu/reiki/reiki_honbun/g202RG00001393.html (in Japanese).

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Water and Sewerage Forest Conservation Fund Ordinance in 1993 to protect forests that contribute to water retention, sediment outflow prevention, water purification, etc., and to preserve all these benefits for posterity. The base amount is 180 million yen (213.03 million yen as at February 24, 2017). In addition, the operating profit is recorded in the water supply business accounting budget to be used for water source cultivation, forest protection, and training. ➀ ➁ ➂ ➃ ➄

Water source forest tree-planting gathering (water source forest protection enlightenment, water source forest maintenance) Water source forest observation meeting (observe the water source forest and learn the importance of water) Installation of water source forest protection signage (to inform tourists of the importance of water source forests) Water source cleanup operation (cleanup activity of water source protected area) Cooperation with related organizations’ projects (cooperation with related organizations’ forest protection enlightenment projects).

Location of Kofu City Tap Water Source Conservation Area and Breakdown of Forests in Kofu City Tap Water Source Conservation Area are shown, respectively, in Figs. 4.7 and 4.8. (7)

Nagano Prefecture Kamiina Wide Area Water Supply Enterprise Group Constituent Group Sougo Water Source Forest Development Fund

The Kamiina Wide Area Water Supply Enterprises Group in Nagano Prefecture petitioned the prefecture for the construction of a flood control dam for the Minowa Machizawa River in 1980 (Ina City, Komagane City). It was established by the city (Minowa Town, Minamiminowa Village, Miyada Village) and Nagano Prefecture. Between 1980 and 1992, the Minowa Dam was completed at a total cost of 25,073 million yen. In the same year, water supply facilities such as the Minowa Water Purification Plant began operation, supplying tap water to 50,000 people in five municipalities: Minowa Town, Minamiminowa Village, Ina City, Miyada Village, and Komagane City. Residents living in the dam’s catchment area called for the institutionalization of returns from beneficiaries for the residents of the dam basin. This led to the establishment of the Forest Maintenance Fund. The Kamiina Wide Area Water Supply Enterprises Group in Nagano Prefecture, based on the Sougo River Water Source Forest Development Fund Ordinance enacted in 1992,14 stipulated the investment amount and investment method of each constituent group, as outlined in Table 4.5. The constituent organizations were to invest half of the investment amount in 1993 and 1994 at the request of the corporate group. The Sawakawa Water Source Forest Development Fund has been used as a water source cultivation measure to subsidize projects such as afforestation and removal of undergrowth in the forests of the water 14

Nagano Prefecture Kamiina Wide Area Water Supply Enterprises. Sawakawa Water Source Forest Maintenance Fund Ordinance. Retrieved May 6, 2021, from http://kamiina-suidou.jp/pdf/reiki/75.pdf (in Japanese).

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Fig. 4.7 Kofu city water source conservation area map. Source Created by the author based on the website of Kofu City Water Works and Sewerage Bureau. Retrieved from May 6, 2021 from https:// www.water.kofu.yamanashi.jp/general/suigen/20170224152242.html (in Japanese)

Fig. 4.8 Forest area of Kofu city water source conversation area. Source Created by the author based on the website of Kofu City Water and Sewerage Bureau. Retrieved from May 6, 2021 from https://www.water.kofu.yamanashi.jp/general/suigen/20170224152242.html (in Japanese)

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Table 4.5 Investment of constituent organizations Group (prefecture/municipalities)

Investment amount (unit yen)

Nagano Prefecture

60,000,000

Ina City

17,910,000

Komagane City

7,517,000

Minowa City

7,174,000

Minamiminawa City

4,698,000

Miyata Village

2,701,000

Total

100,000,000

Source Created by the author based on the website Nagano Prefecture, Kamiina, Wide Area Water Supply Company Group. Retrieved May 6, 2021 from http://kamiina-suidou.jp/pdf/reiki/10-7.pdf (in Japanese)

Table 4.6 Details of subsidy business Business category

2014 (Unit Yen)

2015 (Unit Yen)

Water source forestry work

5 (cases) 3,000,000 5 (cases) 3,000,000 4 (cases) 1,313,240

Work to encourage public 2 awareness of environment protection

600,000

Maintenance of water source forestry

3,600,000 7

7

2

600,000

2016 (Unit Yen)

2

3,600,000 6

600,000

1,913,240

Source Created by the author based on the website Nagano Prefecture, Kamiina, Wide Area Water Supply Company Group (Kamiina Koiki Suidoyosui Kigyodan), “Kamiina Water Supply Business”. Retrieved May 6, 2021 from http://www.kamiina-suidou.jp/pdf/syoukai_panf_1.pdf (in Japanese)

source area, as well as prevent overdevelopment and pollution of the Minowa Dam catchment area. Table 4.6 provides details of recent projects. (8)

Nagano Prefecture Nagano Prefecture Kiso Wide Area Union Tap Water Source Environmental Conservation Fund/Kiso Forest Conservation Fund

The Kiso Wide Area Union comprises six towns and villages in Kiso District, Chushin District, and the Nagano Prefecture. In 2003, the Kiso Wide Area Union established the Tap Water Source Environmental Conservation Fund with the aim of promoting forest maintenance in the water source area and building a healthy water circulation network based on the Kiso River “Water Source Forest” Forest Improvement Agreement, with accumulations starting from the following year. The Toyota method was applied, in which 1 yen is added to the water charge per 1 m3 of usage and accumulated. The fund is used for environmental conservation projects such as forest protection and cultivation in the water source area. Even upstream, the Kiso Forest

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Conservation Fund has been established for the purpose of forest maintenance by the Kiso Wide Area Union,15 with accumulation starting in 2004. (9)

Kamifukuoka City, Saitama Prefecture Kamifukuoka City Forest Dam Fund

In 1998, the city of Kamifukuoka established the Kamifukuoka Mori Dam Fund with the aim of deepening awareness of the water source area and supporting afforestation projects. The fund was established in 1991, after a representative of the downstream area paid a courtesy visit to the Chichibu 3 dam water source area (Urayama Dam, Takizawa Dam, and Kakkaku Dam), which was an activity of the Saitama Prefecture Water Resources Countermeasures Council.16 Mayor Kamifukuoka took note of the stagnation of forestry that impacted 10 cities, towns, and villages in the water source area and wondered what could be done to ameliorate situation where mountain villages were paying the price for drinking water in the city. The fund’s target was initially set at 50 million yen, and the plan was to allocate the investment profit to the business, so it was a fruit management type fund in which the investment profit of the reserve fund was used for the project cost. However, the interest rate was too to cover the costs so, in 2002, the fund was changed to a fund withdrawal type. The forest development projects targeted for support are maintenance and cultivation initiative carried out by the municipalities to replenish the water sources of planted forests and to enhance the conservation function of the natural environment. ➀ ➁ ➂

Forest maintenance work Public relations activities such as enlightenment of the importance of forests Other work required for forest creation.

However, on October 11, 2005, the fund was closed due to the merger of Kamifukuoka City and Oi Town, Iruma County, and the establishment of Fujimino City. (10)

Misakubo Town, Iwata-gun, Shizuoka Prefecture Water Source Forest Development Fund

The town of Misakubo has a public interest function with forests inside and outside the town, as well as funding the expenses for promoting forest maintenance in the water source area to enhance the water source cultivation function of the forest in the town and to conserve the natural environment. The Misakubo Town Water Source Forest Fund was established in 1996 based on the ordinance with the purpose “to appeal its importance and necessity.” The fund takes 1 yen per 1 m3 of annual water usage in the town from the general account every year. The accumulated amount in 15

Kiso Wide Area Union. Kiso Forest Conservation Fund Ordinance. Retrieved May 6, 2021, from http://www.kisoji.com/data/open/cnt/3/942/1/500_shinrin.pdf (in Japanese). 16 Water Resources Countermeasures Council was established in 1978 with the aim of deepening the understanding of the actual situation of the water source area and cooperating with its promotion measures in order to promote the construction of the water resource development facilities such as dams related to Saitama Prefecture. It consists of 57 municipalities and 9 enterprises that receive tap water supply from Saitama Prefecture.

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101

the first year was 589,900 yen. This is used to conserve the natural environment and acquire water source forests, subsidize welfare, and welfare expenses for timberrelated projects aimed at forest maintenance, subsidize the training and securing of bearers, subsidize seedling distribution projects, and subsidize exchange events with downstream areas. However, in 2005, Mizukubo Town was merged into Hamamatsu City along with the surrounding 10 municipalities and, as Hamamatsu City was designated a government-designated city in 2007, it became part of Tenryu Ward. (11)

Kawane Town, Shizuoka Prefecture Kawanehoncho Town Water, and Forest Environmental Conservation Fund.

In 2006, Kawanehoncho Town established the Kawanehoncho Town Water and Forest Environmental Conservation Fund based on the Kawanehoncho Town Water and Forest Environmental Conservation Fund Ordinance. This body was set up to prevent the deterioration of public interest functions of clear streams and forests, such as prevention of global warming, conservation of ecosystems and landscapes, and for further conservation of the natural environment. (12)

Shizuoka Prefecture Voluntary organization/Okitsugawa Conservation Citizens’ Meeting17 Shizuoka City Okitsugawa Conservation Fund.

The Okitsu River, which is located in the center of Shizuoka Prefecture and flows down Shimizu Ward in Shizuoka City, is a second-class river with a main river channel length of 21.7 km and a basin area of 120.0 km2 . About 68% of the basin is forest and about 12% agricultural land. The average annual flow of the Okitsu River is 690,000 m3 per day, and 100,000–120,000 m3 of the surface water supplies potable water to Shimizu Ward, Shizuoka City (formerly Shimizu City), which has a population of 240,000. Many large-scale golf courses had been planned for construction in the mountains of the Okitsu River basin, a major water source for citizens. According to concerned citizens, “When a golf course is constructed, green spaces such as forests and tea gardens will disappear (around 100 ha), and the water-holding capacity of the mountains will be lost. Furthermore, if a large amount of pesticide is sprayed, the pesticide will eventually pollute the tap water source of the Okitsu River.” Along with these citizens, the administration and companies came together to protect the Okitsu River, leading to the establishment of the Okitsu River Conservation Citizens’ Conference in 1994. The conference is chaired by the chairman of the Chamber of Commerce, with the president of the Association of Residents’ Associations appointed as vice president, and conference officers being drawn from women’s associations in the city, hotel inn associations, consumer groups, inland fishery cooperatives, forestry associations, etc. Since this is an organization representing the people and community, the secretariat was set up as a subordinate group, the Okitsu River Conservation Citizens’ Meeting/Business Committee, with member 17

Japan River Association. (2015). Protecting the “Water of Life”—Citizen’s Activities in the Okitsu River Basin-. Retrieved May 6, 2021, from See www.japanriver.or.jp/taisyo/oubo_jyusyou/ jyusyou_katudou/no17/no17_pdf/okitsu-yamasemi.pdf (in Japanese).

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appointed by the groups to which the officers belong, the civic activity organizations, and volunteer citizens, with an office located in the former Shimizu City Land Measures Division. The business committee is planned by the citizens, who play a central role in the activities, and the administration is run collaboratively to support these initiatives. To continue the public education programs, the business committee laid out the following. ➀ ➁

➂

Continue educational activities to protect the purity of the Okitsu River, which is the drinking water of the citizens, from overdevelopment of golf courses, etc. (To date, there has been no golf course development in the Okitsu River basin.) Raise people that love Okitsu River, which is familiar to everyone from an early age and has been familiar to everyone since childhood, with parents and children entering the waterside and the river, having fun, and learning about aquatic life and water quality. Learn how forests store water as a “green dam” and play a role as a water source, and also work on the awareness and human resource development to protect the mountains through tree-planting activities.

Since protecting potable water resources requires independent financial resources, we decided to raise funds. We started with 100 million yen from one company and 1 million yen from one organization. Citizens were also asked to assist. With another 100 million yen from the former Shimizu City before the merger, the total amount reached 250 million yen in 2015. However, because this period has experienced low interest rates, the business committee continues its activities with the help of its members and related volunteers, using the return of interest obtained from the fund and the subsidy from the city to pay for its programs. Citizens’ initiatives in the Okitsu River basin received the 17th Japan Water Awards/Judging Committee Special Award from the River Foundation in 2015. (13)

Aichi Prefecture Gamagori City Tap Water Source Fund18

Gamagori City began receiving pipe-borne water from the Toyokawa Water Supply Project in 1968 and has been getting all its water from the Aichi Prefectural Water Supply Project since 1971. Considering that the city depends on Toyokawa for all potable water, the collapse of forests in the water source area is an issue that will directly impact the lives of citizens. Hence, the Tap Water Source Fund was established to secure a stable supply of high-quality tap water, to raise the public’s awareness of the importance of the water source, and to garner financial resources by adding 1 yen per 1 m3 of water usage to the water charge. The sum is transferred every six months from the water supply business account to the general account of the Gamagori City Tap Water Source Fund. The reserve amount for the first year was 2,865,906 yen. The project target area is the municipality of the water source forest countermeasure project in the Toyokawa Water Source Fund, which is used for: 18

Gamagori City. (2011, March 1). Gamagori City Tap Water Source Fund. Retrieved May 6, 2021, from https://www.city.gamagori.lg.jp/unit/kikaku/suigenkikin.html (in Japanese).

4.4 National Water Source Fund

➀ ➁ ➂ (14)

103

Forest acquisition, profit-sharing forestry business Water source exchange business Contribution of water source forest conservation basin collaboration project carried out by Toyokawa Water Source Fund Aichi Chubu Water Supply Authority Tap Water Source Environmental Conservation Fund19

The Aichi Chubu Water Supply Corporation is a special local public organization that supplies water to the areas of Toyoake City, Nisshin City, Miyoshi City, Nagakute City, and Togo Town, Aichi Prefecture. In 2000, the Aichi Chubu Waterworks Enterprise Group started upstream and downstream exchange projects with the signing of the “Kizuna of Exchange” with the Kiso Wide Area Union in Nagano Prefecture. Similarly, in 2000, the Tap Water Source Environmental Conservation Fund was established, with accumulation starting the following year. This fund adds 1 yen per 1 m3 of water usage to the fee for the purpose of investing in water source environmental conservation projects such as forest protection and cultivation in the water source area. The reserve started in 2001, and the reserve amount in the first year was 2,865,906 yen. Upstream, the Kiso Forest Conservation Fund was established by the Kiso Wide Area Union for the purpose of forest maintenance, with savings starting in 2004. The Aichi Chubu Waterworks Corporation has made efforts to protect the environment of the water source in the Kiso region of Nagano Prefecture, which is the water source of the Kiso River system, and in the Inabu District of Toyota City, which is the water source of the Yahagigawa River system. Under the Yahagigawa River “Water Source Forest” Forest Improvement Agreement concluded in April 2010, the forests of the three property areas (Kuwabara, Goshogaitsu, and Nakato property areas) in the Inabu area of Toyota City are covered, and it was decided that the Tap Water Source Environmental Conservation Fund would subsidize the costs of forest maintenance, etc., in the upper reaches of the Yahagigawa River, with an upper limit of 1.7 million yen per year. Up to 2004, 500 ha of thinned trees have been systematically implemented annually for young plantations that are 11–35 years old, an age that can be subsidized by the national and prefectural governments. On the other hand, most of the forests that are 36–60 years old are left unattended because they cannot receive subsidies and owners cannot generally meet the maintenance expenses. However, part of the project cost for these older forests is borne by the local government of the water source. This is based on the Kiso River “Water Source Forest” forest maintenance agreement, which was concluded by the Aichi Chubu Waterworks Corporation with the Kiso Wide Area Union in Nagano Prefecture upstream and downstream. As a result of this joint burden, the Forest Improvement Agreement Forestation Project was subject to preferential treatment under the national and prefectural subsidy systems, hence reducing the maintenance burden on the owners of old forests. 19

Aichi Chubu Water Supply Authority. (2020, August 18). Forest maintenance business and afforestation business by the Tap Water Source Environmental Conservation Fund. Retrieved May 6, 2021, from https://www.suidou-aichichubu.or.jp/suidou/koho/suigen/suigen3 (in Japanese).

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Therefore, in the Kiso area of Nagano Prefecture, we are working on a “water source forest” forest maintenance agreement forestation project to sustainably secure clean and abundant drinking water. From 2005, when the project started, 23 million yen were invested from the Tap Water Source Environmental Conservation Fund of the Aichi Chubu Water Supply Corporation, and four million yen was invested from the Kiso Forest Conservation Fund of the Kiso Wide Area Union, for a total of 27 million yen per year. In addition to the maintenance of young plantations, it has become possible to maintain 300 ha of undeveloped mature plantations annually. After that, with the change of the subsidy system of the national and prefectural governments, the project has been promoted from FY2018 with the goal of 600 ha of forest maintenance area per year and 29 million yen per year as the project scale. Furthermore, from fiscal 2016, as part of the forest maintenance agreement project, we will start a subsidy project of three million yen per year to take measures against wild birds and animals (bear and deer), pests such as pine worms, and maintenance of forest work roads (Fig. 4.9).

Fig. 4.9 Increased subsidies and additional subsidy work. Source Created by the author based on the website of Aichi Chubu Water Supply Authority. Retrieved May 6, 2021 from https://www.suidou-aichichubu.or.jp/assets/upload/files/1696/2019%E6%B0%B4% E6%BA%90%E3%81%AE%E6%A3%AE_4%E3%83%90%E3%83%A9.pdf (in Japanese) (Kiso River” Water Source Forest “Forest Improvement Agreement)

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The wide-ranging efforts of the Aichi Chubu Waterworks Enterprise Group, especially in collaboration with upstream and downstream for many years, were evaluated as an outstanding initiative to help the development of healthy forests and forestry in Nagano Prefecture. In 2015, the Aichi Chubu Waterworks Corporation and the Kiso Wide Area Union received the 2014 Nagano Prefecture Forestry Award Grand Prize. Similar efforts by the Kiso Wide Area Union were also recognized and, in 2018, the National Land Afforestation Promotion Organization Chairman’s Award was awarded at the National Tree-Raising Festival. (15)

Nissin City, Aichi Prefecture Nissin City Eastern Hill Conservation Fund20

This fund was established in 2002 with the intention of conserving the lush hills in the eastern part of the city of Nisshin and creating a comfortable and safe environment for citizens. The fund balance at the end of 2019 was 12,706,000 yen. Expenditures have been for the hometown forest development consignment fee, maintenance and repair work cost, and conservation measures. In this way, there are many Water Source Funds in Aichi Prefecture, and the area has a high awareness of water sources nationwide.21 (16)

Shirakawa Town, Gifu Prefecture, Shirakawa Town Acorn Fund

Shirakawa Town established the Shirakawa Town Acorn Fund in 1999 to acquire forests for conservation of a rich natural environment.22 Gifu Prefecture Shirakawa Town Shirakawa Town Acorn Fund. (17)

Ena City, Gifu Prefecture, Ena City Tap Water Source Conservation Recuperation Fund

The city of Ena set up the Ena City Tap Water Source Conservation and Recharge Fund in 1999 with the aim of funding various projects and subsidies for the conservation of potable water sources. The reserve amount for the first year is two million yen. We were told by Ena City Hall that they are still transferring two million yen every year from the water supply business account to the general account and saving this in the fund. (18)

Izumi Village, Fukui Prefecture Izumi Village Forestry Fund

Izumi Village was once located in Ono County, Fukui Prefecture, but was abolished on November 7, 2005, when it was incorporated into Ono City. As a result, Ono-gun, which the village had belonged to, disappeared and the Izumi Village government office became the Ono City Izumi branch. Thus, the fund has lapsed.

20

Nisshin City. (2021, April 2). Eastern Hill Conservation Fund. Retrieved May 6, 2021, from See https://www.city.nisshin.lg.jp/department/tosiseibi/toshi/7/2/2/3201.html (in Japanese). 21 For example, see Kitagawa (1978). 22 Shirakawa Town. (1999). Donguri Fund Ordinance. Retrieved May 6, 2021from See https://www. town.shirakawa.lg.jp/div/admin/htm/reiki/reiki_honbun/i366RG00000116.html (in Japanese).

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Katsuyama City, Fukui Prefecture Katsuyama City Forest Creation Project Fund.23

In 1990, Katsuyama City passed the Katsuyama City Forest Development Project Fund Ordinance, and the Katsuyama City Forest Development Project Fund was established to promote municipal forest development projects and contribute to the creation of municipal property. (20)

Fukui Prefecture Ota Town Furusato Millennium Forest Fund

Ota Town was once located in Nyu District, Fukui Prefecture. However, on February 1, 2005, Asahi Town, Nyu District, Miyazaki Village, and (former) Echizen Town were merged to form a new Echizen Town, and Ota Town was abolished. (21)

Wakayama Prefecture Nachikatsuura Town Nachikatsuura Town Rich Water Resources Conservation Fund24

Nachikatsuura Town is a place rich in forest resources, but the forestry industry, which has been responsible for forest maintenance, has deteriorated in profitability due to sluggish timber prices, a decrease in workers, and an aging population. Consequently, there is growing concern that the water source cultivation function will decline. In 1999, Nachikatsuura Town enacted the Nachikatsuura Town’s Abundant Water Resource Conservation Fund Establishment Ordinance with the aim of securing the financial resources necessary for the conservation and cultivation of water source forests and ensuring a reliable water supply for the future. The Nachikatsuura Town Rich Water Resources Conservation Fund was established in accordance with this ordinance. The fund is financed by general account transfer, simple water supply business account transfer, donations, and interest. (22)

Nachikatsuura Town, Wakayama Prefecture Nachi Falls Headwaters Water Source Resource Conservation Project Fund

Nachi Mountain possesses abundant resources such as Shijuhachi Falls and the virgin forest around, Kumano Kodo, and Kumano Nachi Taisha Shrine. Nachi Falls, in particular, is an iconic waterfall for Japan and one of the most scenic spots in the Kumano region. However, most of the forests around Nachi Falls are privately owned and, since they were cut down in large quantities for timber during the period of high economic growth, future depletion of the waterfalls aroused concern. In view of these circumstances, Nachikatsuura Town established the Nachi Falls Headwaters Water Resources Conservation Project Fund in 2001 with the aim of preserving the water resources and landscape of Nachi Falls by drawing on the 100 million yen of the Furusato Creation Project Fund. According to the online paper Shimbun Online, dated 23

Katsuyama City. (2002). Katsuyama City Forest Creation Project Fund Ordinance. Retrieved May 6, 2021, from https://www.city.katsuyama.fukui.jp/soumu/jyourei/act/frame/frame110000195.html (in Japanese). 24 Nachikatsuura Town. (n.d.). Nachikatsura Town Rich Water Resources Conservation Fund. Retrieved May 6, 2021, from http://forester.uf.a.u-tokyo.ac.jp/~kuraji/BR/database/kikin/kikin5 131.html (in Japanese).

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September 14, 2018, the mayor of Hori said, “Last year was the 1700th anniversary of the founding of Kumano Nachi Taisha, and this year is the milestone of the 1300th anniversary of Seigantoji Temple Nishikuni. It is necessary to protect the water of Nachi, which is the very identity of Japan as well as Nachikatsuura Town and the origin of the uninterrupted Kumano faith.” The fund’s finances come from hometown creation funds, town transfers, general donations, donation boxes, and interest—the total amount at the end of 2016 was 226,344,238 yen. In 2004, Nachi Falls, Kumano Kodo, Kumano Nachi Taisha, etc., were registered by World Heritage Sites as sacred sites and pilgrimage routes in the Kii Mountains, which increased recognition of the fund itself. (23)

Shirahama Town, Wakayama Prefecture Shirahama Town Water Source Forest Fund25

Shirahama Town, Wakayama Prefecture, established the Shirahama Town Water Source Forest Fund in 1997 based on the ordinance with the aim of purchasing and nurturing water source forests and enhancing water source replenishment. The total amount of the fund up to the end of 2017 was 84,411,810 yen (of which the donation amount was 6,577,131 yen). In 1998, the water source forest (acquisition amount 14,801,288 yen for 503,000 m2 ) was acquired and, in 2003, 800,500 m2 (21,613,500 yen) and 348,600 m2 (9,412,200 yen). (24)

Wakayama Prefecture Shimizu Town Water Source Forest Fund

Shimizu Town used to be in Wakayama Prefecture. On January 1, 2006, it merged with Kibi Town and Kanaya Town in the same Arida District to become Aridagawa Town. (25)

Wakayama Prefecture World Heritage Forest Protection Fund26

The Wakayama Prefecture Greening Promotion Association was established in 1992 to promote green projects and ideas in Wakayama Prefecture, and to promote “green funding.” Green Grandchildren Fund27 was established by the Wakayama Prefectural Greening Promotion Association in 2003 through contributions from people who support the protection and legacy of forests that have a public interest function. This fund, which started in 2009, was used to nurture abundant forests that will be passed down to posterity. The total amount of donations was 30,644,670 yen. In 2004, the sacred site and pilgrimage route in the Kii Mountains of Wakayama Prefecture was registered as a World Heritage Site and a new “World Heritage Forest Protection 25

Shirahama Town. (2021, January 18). Water Source Forest Fund. Retrieved May 6, 2021, from http://www.town.shirahama.wakayama.jp/kurashi/gomishinyo/shizen/1452760030031.html/ (in Japanese). 26 Wakayama Prefecture Greening Promotion Association. (n.d.). World Heritage Forest Protection Fund. Retrieved May 6, 2021, from http://wakayama-ryokusui.jp/sekaiisan/ (in Japanese). 27 Wakayama Prefecture Greening Promotion Association. (n.d.). There is a forest that we want to pass on to my grandchildren over time. Retrieved May 6, 2021, from http://wakayama-ryokusui.jp/ contents/mago.html/ (in Japanese).

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Fund” was established. The financial contributions came from all over the country, provided to the municipalities that maintain and manage the forest landscape around the World Heritage Site. (26)

Hiroshima Prefecture Water Source Forest Accounting

Established in 1965, Hiroshima Prefectural Forestry Corporation has been creating forests for water sources in the Ota River system since 1982 and in the Ashida and Numata river systems since 1991. In 1997, Kosha integrated with other organizations and changed its name to Hiroshima Prefecture Green and Mizunomori Kosha and, in the same year, established the Water Source Forest Accounting. The financial resources of the fund were shared 10/20 for Hiroshima Prefecture, 9/20 for municipalities in the water system, and 1/20 for companies using industrial water. Furthermore, in 2003, Hiroshima Prefecture Green and Mizunomori Kosha were combined with the Hiroshima Prefectural Agriculture and Forestry Promotion Corporation and renamed Hiroshima Prefectural Agriculture and Forestry Promotion Center.28 With this center as the main business entity, Water Source Forest Accounting has given subsidies for forest maintenance such as planting, thinning, and weeding and has endeavored to develop water source forests that support water source replenishment. However, due to the fall in timber prices, cumulative debt became problematic and, on June 3, 2013, we applied to the Hiroshima District Court for the application of the Civil Rehabilitation Law. The center transferred the forestation to the prefecture, wound up the debt, and then dissolved. (27)

Yamaguchi Prefecture Ube City Water Source Recharge Fund

Ube City was located in the Ono district of the city in 1998 and established a water source Recharge Fund to improve replenishment around Lake Ono, which is the city’s main water source. In 2002, a council was established to promote the project. The fund’s financial resources come from the balance of the Sanyo Automobile Related Business Fund (which has been dissolved) and the reserves from the water supply business, which was calculated as 1 yen per 1 m3 of water usage implemented from 2002. (28)

Yamaguchi Prefecture Iwakuni City Water Source Recharge Fund.29

In Iwakuni City, the Iwakuni City Water Source Recharge Fund Ordinance was enacted to improve the cultivation function of beautiful and abundant rivers such as the Nishiki River and the Oze River that flow through the city and the forests upstream. The Iwakuni City Water Source Recharge Fund, which was established based on the ordinance, is used to promote surveys of water source forests, acquisition, and forest maintenance, plus dissemination, and enlightenment initiatives to 28

See Every day fukeiki news. (2013, June 3). Retrieved May 6, 2021, from https://www.fukeiki. com/2013/06/hiroshima-norin2.html (in Japanese). Hirosima Prefecture. (2020, January 28). Retrieved May 6, 2021, from https://www.pref.hirosh ima.lg.jp/soshiki/87/keneirin-gaiyou.html (in Japanese). 29 Iwakuni City. (n.d.). Iwakuni City Water Source Recharge Fund. Retrieved May 6, 2021, from https://www.city.iwakuni.lg.jp/site/water/17408.html (in Japanese).

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raise replenishment awareness. Water source replenishment is to be achieved through the following: ➀ ➁ ➂

Securing the amount of water in Nishiki River, etc. Conservation of the natural environment in the basin. Prevention of overdevelopment in the surrounding area.

In 2006, (former) Iwakuni City was located in Yu Town, Kuga County, Kuga Town, Hongo Village, Shuto Town, Nishiki Town, and Mikawa. The current city of Iwakuni was established by a merger with the town of Miwa. The Iwakuni City Water Source Recharge Fund Ordinance was an ordinance that was immediately enacted and enforced by the mayor’s duty executor at the same time as the merger. The fund, which relies on general donations and donations from the Waterworks Bureau, is ongoing. (29)

Shimane Prefecture Matsue City Hometown Water Source Forest Fund and Matsue City Water Source Conservation Activity Subsidy30

The Matsue City Waterworks and Sewerage Bureau uses microorganisms in the Imbe River to promote safe, secure, and pure pipe-borne water and to send the message that “water is a basic need of all citizens.” The Bureau has been manufacturing and selling “Matsue Marginal Water,” which is close to natural water, since 2014. Since the Matsue City Furusato Water Source Forest Fund Ordinance was enacted in 2014, the Furusato Water Source Forest is part of the sales of plastic bottled water sold by the Waterworks and Sewerage Bureau, including the previously sold “Matsue Ancient Water” and it was decided that a fund should be set up to support water source conservation activities. This is a water source conservation activity subsidy project. The subsidy helps afforestation for the purpose of improving replenishment, environmental improvement projects for water sources, and educational activities about water source conservation. The subsidy started in 2015 and equals half of the project cost, with an upper limit of 50,000 yen per project. (30)

Ehime Prefecture Imabari City Water Source Forest Fund31

More private forests are being abandoned in the upper reaches of the Soja River, which supplies agricultural water, industrial water, and potable water to Imabari City and its municipalities. Imabari City, which was hit by drought in 1994, recognized the importance of water source forests, and the following year established the Water Source Forest Fund, accumulating 25 million yen annually until FY2014. From 1999, this fund started to subsidize the forests in Tamagawa Town and Asakura, where the dam is located, and now quarter of the costs are subsidized. Furthermore, since 2002, to conserve forests and utilize thinned wood, we have subsidized half of the standard unit price for the cost of carrying out thinned wood. 30

Matsue City Waterworks and Sewerage Bureau. (n.d.). Matsue City Water Source Conservation Activity Subsidy. Retrieved May 6, 2021, from https://www.water.matsue.shimane.jp/living_and_ water/suigen_hozen/ (in Japanese). 31 Imabari City Waterworks Department. (n.d.). Water Source Forest Fund. Retrieved May 6, 2021, from https://www.city.imabari.e.hime.jp/suidou/sp/suigen/mori.html (in Japanese).

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Fukuoka City waterworks water yield business fund.32

Fukuoka City is poor in water resources and is the only ordinance-designated city that does not have a major river within its boundaries. Various sources such as desalinated water, water conveyance from the Chikugo River outside the city, and dam development inside and outside the city area have been implemented, but the city still depends on external pipe-borne water. Also, there is a shortage of forestry workers for the usual reasons, so forests have been devastated, making it difficult to secure stable water sources for the future. In response, Fukuoka City established the Tap Water Source Replenishment Project Fund in 1997 to improve the replenishment function of potable water sources and revitalize the water source area by rehabilitating the water source forest and conducting exchange projects with the water source area. Like the Toyota City Fund system, 1 yen per ton of water usage (0.5 yen from the water supply account and 0.5 yen from the Fukuoka City General Account) was accumulated for 10 years and, currently, about 100 million yen a year is spent on the water source forest management, water source area exchange projects, and the Fukuoka metropolitan area basin cooperation fund. Moreover, since the Tap Water Source Conservation Fund of Toyota City adopted a method of collecting and accumulating 1 yen per 1 m3 in addition to the water charge, water users can check “1 m3 1 yen” with the water charge but, as Fukuoka City does not have an additional system, this process is slightly different. The reserve amount in the first year was 137,792,000 yen, and the fund balance at the end of 2017 was 316 million yen. (32)

Fukuoka Prefecture Fukuoka Prefectural Water Source Forest Fund.33

In the wake of the great drought that struck northern Kyushu in 1978, a fund was established by Fukuoka Prefecture, Kitakyushu City, and Fukuoka City in 1979 for forest maintenance in the water source area, securing water resources, and prefectural land conservation. In the same year, the forest development and maintenance project was started with subsidies from Fukuoka Prefecture and all municipalities in the prefecture, as well as donations from companies, organizations, and individuals. In 1985, the fund was certified as a forest maintenance corporation by the Governor of Fukuoka Prefecture under the provisions of Article 9 of the “Special Measures for Divided Forests Law” and, in 2011, it became a foundation based on the new Public Interest Incorporated Foundation Law. In collaboration with Fukuoka Prefecture, municipalities within the prefecture, and related organizations, the Water Source Forest Fund is promoting the following projects related to “water and greenery:” 32

See Fukuoka City Waterworks Bureau. (n.d.). Fukuoka city waterworks water yield business fund. Retrieved May 6, 2021, from https://www.city.fukuoka.lg.jp/mizu/ryuiki/0037.html (in Japanese). Ministry of the Environment (2010). River basin tariffs for trans-border water source management in Fukuoka City. Retrieved May 6, 2021, from https://www.biodic.go.jp/biodiversity/shirab eru/policy/pes/en/water/water02.html. 33 Fukuoka Prefecture Water Source Forest Fund. (n.d.). Water Source Forest Fund Retrieved May 6, 2021, from http://www.f-suigen.or.jp/01/03.html (in Japanese).

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➀ ➁ ➂ ➃

111

Water source forest funding business Green feather funding campaign Forestry labor force measures business Water source area promotion business. The net value of the fund as of March 31, 2020, is 3,785,697,477 yen.

(33)

Fukuoka Prefecture Fukuoka Metropolitan Area Wide Area Administrative Business Association Metropolitan Area Wide Area Administrative Business Association Basin Cooperation Fund34

The Chikugo River is a large river that flows from east to west in the northern part of the Kyushu region with Mt. Aso as its water source and its mouth flowing into the Ariake Sea. The Fukuoka metropolitan area consists of 16 cities and towns in and around Fukuoka City (17 cities and towns in the Fukuoka metropolitan area: Fukuoka City, Chikushino City, Kasuga City, Onojo City, Dazaifu City, Nakagawa City, Koga City, Umi Town, Sasaguri Town, Shime Town, Sue Town, Shingu Town, Hisayama Town, Kasuya Town, Munakata City, Fukuoka City, Itoshima City). The Chikugo River is an important water source for 2.4 million inhabitants. The Fukuoka metropolitan area, which has sparse water resources, depends on the Chikugo River outside the area for about one-third of its water consumption. To provide a stable supply of pipe-borne water to the Fukuoka metropolitan area, the understanding and cooperation of the residents of the Chikugo River basin and its water source is indispensable. Bearing these circumstances in mind, the Fukuoka Metropolitan Area Wide Area Administrative Business Association established the “basic corporation fund” in 2005 based on Fukuoka Metropolitan Area Wide Area Administrative Business Association Basin Cooperation Fund Ordinance.35 The purpose is to foster cooperation between water source areas and basins common to the Fukuoka metropolitan area by doing exchange promotion projects, forest conservation, environmental measures, regional promotion, and other support projects, hence deepening mutual understanding. The basin cooperation fund project is overseen by the Fukuoka Metropolitan Area Wide Area Administrative Business Association as a joint project of the Fukuoka metropolitan area. In addition, the water source area common to the Fukuoka metropolitan area and its basin (including the Ariake Sea) will be the target area of the project. ➀ ➁

“Exchange promotion projects” such as culture, sports, tree-planting festival with water source area and basin “Forest conservation project” that supports forestation, forestation, and other measures against devastated forests in the water source area

34 See Fukuoka Metropolitan Area Administrative Business Association. (n.d.). Basin Cooperation Fund Project: Overview. Retrieved May 6, 2021, from https://fukuoka-tosiken.jp/fundbusiness/sit uation/environment2021/ (in Japanese). 35 Fukuoka Metropolitan Area Administrative Business Association. (2005). Fukuoka Metropolitan Area Wide Area Administrative Business Association Basin Cooperation Fund Ordinance. Retrieved May 6, 2021, from https://www.fukuoka-tosiken.jp/fundbusiness/pdf/jourei01.pdf (in Japanese).

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➂ ➃ ➄

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“Regional promotion support project” that supports the use or utilization of public training facilities, etc. as a place for comprehensive learning and lifelong learning for local residents in the Fukuoka metropolitan area “Environmental measures support project” that supports environmental conservation through river and sea cleanup activities, etc. Businesses for which other support is deemed appropriate, such as disaster support.

Every year, as well as creating and publishing a basin cooperation fund project implementation report, various publicity activities such as those using the basin cooperation fund character “Chikkorin”36 (Chikugo River + Forest and a fairy of water named after the circle of cooperation) or basin cooperation fund image song “at Chikugo River.” (34)

Fukuoka Prefecture Sasaguri Town Green Trust Fund

Sasaguri Town established the Green Trust Fund in 1997 to mitigate forest destruction, saving 30 million yen a year. We have acquired a devastated water source forest and actively implemented maintenance. However, in March 2014, the following four funds were abolished, along with the Green Trust Fund: • Sasaguri Town Mountainous Hometown/Water and Soil Conservation Measures Fund • Sasaguri Town Partnership Promotion Fund • Sasaguri Town Welfare Business Fund • Sasaguri Town Narufuchi Dam Area Facility Management Fund. This was to facilitate flexible fund management for more effective responses to changes in social conditions, such as the financial status of the town council. At the same time, it was decided that the Green Trust Fund will be abolished.37 (35)

Kagoshima Prefecture Manose River Water Source Fund38

In 1982, Kagoshima Prefecture and Kagoshima City established a Water Source Fund to develop water source forests. Since 1990, the secretariat work has been done by the Kagoshima Prefectural Forest Maintenance Corporation but, in 2012 this responsibility was transferred to a public interest incorporated association. Until 2001, in addition to the basic property of 30 million yen (Kagoshima Prefecture and Kagoshima City each contributed 15 million yen), a single-year loan from Kagoshima Prefecture and Kagoshima City was received, and the investment interest was used to implement the business. However, since 2002, business has been run using subsidies from Kagoshima Prefecture and Kagoshima City Waterworks Bureau. The project provides subsidies for forest maintenance carried out by the four related 36

Fukuoka metropolitan area. (n.d.). Basin cooperation fund character “Chikkorin.” Retrieved May 6, 2021, from https://www.fukuoka-tosiken.jp/fundbusiness/character/ (in Japanese). 37 See Sasaguri Town (2014). 38 Manose River Water Source Fund. (n.d.) Manose River Water Source Fund. Retrieved May 6, 2021, from http://www.ss-kosya.sakura.ne.jp/mannose/mannosegawa.html (in Japanese).

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cities (Minamisatsuma City, Minamikyushu City, Hioki City, Kagoshima City) in the Manose River basin, forests and awareness and dissemination related to forestry, promotion of greening, conservation of the global environment, etc. (36)

Okinawa Prefecture Kunigami Higashi Village Water Source Fund39

In Higashi Village, the Higashi Village Water Source Fund was established in the same year based on the Higashi Village Water Source Fund Ordinance enacted in 1990. The base amount was set at 491 million yen. (37)

Okinawa Prefecture Okinawa Prefectural Water Source Fund

Okinawa Prefecture, which had been struggling with a lack of water sources, planned and implemented dam water source development projects (such as redevelopment of the Fukuji dam) in the Okinawa promotion plan to secure water sources. By 2013, nine dams had been constructed in Yanbaru. The Okinawa Prefectural Water Source Fund was established in 1979 jointly by the prefecture and the receiving municipalities for the construction of multipurpose dams and intake weirs, due to the increase in both water supply and demand. This secured stable water control and water resources and promoted the water source area by subsidizing the municipalities that take measures for the water source area. Until 2014, the water source forest development measures project, general and special promotion measures projects, water source area promotion projects, and water source revitalization projects were implemented according to the memorandum, but then the foundation was dissolved and the fund abrogated. (38)

Forest Fund for Greenery and Waters.40

The National Land Afforestation Promotion Organization was established in 2011 to contribute to the realization of a rich national life, the cultural development of Japan, the conservation of the global environment, and the international contribution through the promotion of the National Land Afforestation Movement, to create forest resources, conserve the land, replenish water resources, and green the living environment. It is known for national tree-rearing festivals, national tree-planting festivals, and the Green Feather Fundraising Campaign. For details on the activities of the organization, refer to the National Land Afforestation Promotion Organization (2018). Deterioration of forests is a global concern and, in 1988, a forest fund was established within the organization to protect and nurture forests and promote the creation of more abundant forests. In 2011, the name was changed to the current “Green and Water Forest Fund” due to the reorganization of the organization. This fund is implementing various projects to promote the “Forest Creation with Public Participation” movement by using the operating profits of the fund generated by voluntary donations 39

Higashi Village. (2001). Higashi Village Water Source Fund Ordinance. Retrieved May 6, 2021, from http://www.vill.higashi.okinawa.jp/reiki/2020/0406/reiki_honbun/q914RG00000141. html (in Japanese). 40 See National Land Afforestation Promotion Organization. (n.d.). About Us. Retrieved May 6, 2021, from https://www.green.or.jp/about-us/green-fund/ (in Japanese).

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from the general public, companies, and organizations. As at June 30, 2016, the fund was worth approximately 17.5 billion yen. Forestry fund business is further divided into central business, prefectural business, or public offering business, depending on the implementing body. It covers dissemination and enlightenment projects, research and research projects, activity infrastructure development projects, or international exchange projects, depending on the purpose. It differs from other funds in that the fund relies primarily on donations (Fig. 4.10).

4.5 Other Funds The name and purpose do not specify the water source, and some funds have been established focusing on water quality improvement, ecosystems, waterside spaces, water culture, etc., or groundwater.41 Since these funds also contribute to the proper water cycle in general, some of them are introduced below. Here we introduce several of these.

4.5.1 Funds Relating to Water Quality Conservation (1)

Fukushima Prefecture Kirameru Water Furusato Bandai” Lake Mizumirai Fund42

“Kirameku Water Furusato Bandai” Lake Mizumirai Fund (hereinafter referred to as “Fund”) was established in 2002 to transmit information relating to activities for conserving the water environments in Lake Inawashiro and Urabandai Lakes, promote water environment conservation activities in the basin by broadening the circle of understanding and support, as well as supporting practical activities carried out by volunteers. The fund is managed by the Inawashiro Lake and Urabandai Lake Water Environmental Conservation Measures Promotion Council, which was established in 2000. The fund’s is financed by the “Kirameku Water Furusato Bandai” Lake Mizumirai Club membership fee and fundraising. The annual membership fee is 2000 yen for individuals and 10,000 yen for corporations. The membership fee is used for club management and also as a subsidy for water environment conservation activities carried out in the Inawashiro Lake and Urabandai Lake basins. In 2020, a total of 3,678,331 yen was dispensed to 19 groups and individuals. Lake Inawashiro is more or less located at the center of Fukushima Prefecture, which is the fourth largest in Japan and as well as being the top tourist destination 41

See Headquarters for Water Cycle Policy, Cabinet Secretariat (2018). Lake Inawashiro and Lake Urabandai Water Environmental Conservation Measures Promotion Council (2021, March 10).Mizumirai Fund. Retrieved May 6, 2021, from https://mizu-mirai.jp/ (in Japanese).

42

4.5 Other Funds

115

Organization

Business

Individual Contribution

National land afforestation promoting organization Forest fund for greenery waters Operation Operation profit Deliberated by the Subsidy

management council Determined by the board

Work of forest fund for greenery and Waters

Central operation

Public offering

Prefectural work

Work to spread and raise public awareness

Investigative and research work

business

Work

on

activity

infrastructure maintenance

International exchange work

Fig. 4.10 Structure of forest fund for greenery and water work. Source Created by the author based on the website of National Land Afforestation Promotion Organization. Retrieved from May 6, 2021 from https://www.green.or.jp/about-us/green-fund (in Japanese)

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within the prefecture. The lake is also a water source for hydroelectric power generation, irrigation, and water services. However, in recent years, the neutralization of lake water has progressed and the natural purification function has declined, so there is concern that the water will deteriorate. (2)

Chiba Prefecture The Environmental Fund for Imbanuma43

Inba-numa is a flood plain with abundant natural resources. The water supports the inhabitants’ livelihoods. Inba-numa is an important swamp for preventing floods, a water source for drinking water, industrial water, and agricultural water, and a fishing and tourism destination. Recently, though, the swamps have become polluted because of an increase in population. Consequently, the fund was established in 1984 to assist local residents and related local governments in working together to conserve water and the natural environment and to regenerate the swamp for the next generation. This fund is a public interest corporation established by a group of related organizations, including 13 municipalities in Chiba Prefecture and the Inba-numa basin, to help conserve the water quality and environment of Inba-numa and the surrounding area. In addition to open lectures, waterside landscape painting contests, and Inba-numa observation meetings by the Inba-numa sightseeing boat, activities that contribute to environmental surveys, environmental conservation, and environmental improvement in the Inba-numa and Inba-numa basins. Subsidies are given to elementary schools, junior high schools, high schools, colleges, and city organizations carrying out the following activities (150,000–200,000 yen each): Natural environment survey, Inba-numa, history related to water, folk research, Activities related to conservation and restoration of the natural environment, Activities related to water pollution control, Activities related to environmental beautification. (3)

Shiga Prefecture Lake Biwa Day Fund44

Lake Biwa is located in the Shiga Prefecture and is a key resource for the Japanese orange industry. Lake Biwa belongs to 10 cities. The Lake Biwa Day Fund was established in memory of 30th Lake Biwa Day on July 1, 2011, with the hope that each citizen who has a feeling for Lake Biwa will contribute to the environmental conservation activities. Ohmi Network Center is in charge of management. (4) 43

Okayama Prefecture Kojima Lake Basin Water Quality Conservation Fund.45

See The Environmental Fund for Imbanuma. (n.d.) About the eEnvironmental fund for Imbanuma. Retrieved May 6, 2021, from https://www.i-kouiki.jp/imbanuma/outline.html (in Japanese). 44 Lake Biwa Day Fund. (n.d.). Lake Biwa Day Fund. Retrieved May 6, 2021, from https://ohminet.com/jyosei/kikin_syokai/jyosei3/ (in Japanese). 45 Kojima Lake Basin Water Quality Conservation Fund. (n.d.). Kojima Lake Basin Water Quality Conservation Fund. Retrieved May 6, 2021, from http://kojimako.jp/about/index.html (in Japanese).

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Lake Kojima in the southern part of Okayama Prefecture is the second largest artificial lake in the world (after Lake IJsselmeer in the Netherlands, excluding lakes for dams). The Kojima Lake Basin Water Quality Conservation Fund was established as a Foundation in 1989 with the purpose of purifying the water quality of Lake Kojima and its basin rivers, Okayama Prefecture. Basin municipalities and residents work together to raise awareness of water purification and contribute to the environmental conservation of Lake Kojima and its basin rivers. The Fund was made into a Public Interest Incorporated Foundation in 2013. Educational initiatives for promoting environmental conservation and support for various water quality purification practice activities developed in the region. Works carried out include: Research and research project on water purification of Lake Kojima and its basin rivers. • Dissemination and enlightenment project to purify the water quality of Lake Kojima and its basin rivers • Assistance for water purification activities of Lake Kojima and its basin rivers conducted by an organization that promotes water purification of Lake Kojima • Cooperation with Lake Kojima basin municipalities for water quality purification measures for Lake Kojima and its basin rivers. Other businesses necessary to achieve the purpose of this corporation. The total net worth as of March 31, 2020, is 244,104,965 yen.

4.5.2 Funds Related to Ecosystems, Waterfront Spaces, and Water Culture (5)

Ibaraki Prefecture Asaza Fund46

Asaza Fund, Asaza Project, started with the Asaza flowers (Nymphoides peltata) blooming by the lake (Fig. 4.11). The place with the most Asaza in Japan was Kasumigaura, the second largest lake in Japan. However, by the mid-1990s, Kasumigaura’s water pollution had worsened, and the government identified this as a major problem. In 1995, local people stood up to save the endangered Asaza in Kasumigaura. In 1995, the Asaza Foundation was established and the Asaza Project commenced. In 1999, Asaza Fund, as a business division of the Kasumigaura/Kitaura Citizens’ Liaison Conference, which is a network organization in the Kasumigaura Kitaura basin, became a Specified Nonprofit Organization (NPO) Asaza Fund. The Citizens’ Liaison Conference to improve Kasumigaura and Kitaura was established in 1981 and is currently run by 14 organizations and 50 individual members. From 1995 46

Asaza Fund. (n.d.). What is Asaza Fund. Retrieved May 6, 2021, from http://www.asaza.jp/ (in Japanese). For English version website for Asaza Fund, see the websites http://www.asaza.jp/en/ profile/ and http://www.asaza.jp/en/outline/

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Fig. 4.11 Asaza (Nymphoides peltata)

until the present, the Asaza Project, which is promoted in collaboration with various organizations in the basin, is not only a lake restoration project, but also functions as a regional promotion and environmental learning program for the entire region. More than 200 elementary schools, companies, and the general public, totaling 240,000 people (2013 figures), are participating in the lakeside vegetation zone restoration project and the foster parent system of Asaza. The project also provides an environmental education program for elementary and junior high schools. The activities are also noted by the Cabinet Office, the Ministry of the Environment, and the Ministry of Education47 and have also been drawing attention from the media. (6)

Tochigi Prefecture Watarase Future Fund48

The Ashio Copper Mine Poisoning Incident was the first pollution incident in Japan that occurred around the Watarase River in Tochigi and Gunma prefectures in the latter half of the nineteenth century. Ashio, which is upstream on the Watarase River, lost large areas of forests and soil as a result. By contrast, the downstream Watarase Wetland is now a low-level wetland with one of Japan’s leading Phragmites australis (or Phragmites australis) fields, and home to many endangered species. Watarase Fund carries out environmental conservation activities, research, and human resource development projects for people who are interested in the environment, adhering to the three principles of the Ramsar Convention (wetland conservation/regeneration, wise use, and CEPA). The Watarase River basin has the goal of conserving and regenerating the diversity of the ecosystem of Japan, and allowing storks and Japanese cranes to live there. In 2019, the Watarase Future Fund, a Specified NPO, was established. Watarase Future Fund, which manages the Watarase future projects, is a civic group operated by membership fees and donations. The annual 47

See Ministry of Education’s website (https://www.mext.go.jp/a_menu/ikusei/npo/npo-vol4/131 6882.htm). 48 Watarase Future Fund. (n.d.). Watarase Future Fund. Retrieved May 6, 2021, from http://www. asaza.jp/https://www.watarase-mirai.org/ (in Japanese).

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membership fee varies as follows: special support members (10,000 yen), corporate/group support members (5000 yen), individual support members (2000 yen), operating members (3000 yen), and family members (500 + yen). The Watarase Future Project aims to promote the cooperation of upstream and downstream, to conserve and regenerate the natural environment of the Watarase River basin, and to build an environmental conservation society. Its main work involves: Environmental protection business Investigation and research business Policy proposal business Information transmission business Human resources development business Collaborative coordination business Support project for social contribution activity bases Business necessary to realize the Watarase Eco-Museum Plan. (7)

Yokohama City, Kanagawa Prefecture Yokohama City Environmental Conservation Fund49

In 1990, the Yokohama City Environmental Conservation Fund was established based on the Yokohama City Environmental Conservation Fund Ordinance to promote the conservation and creation of a sustainable environment by developing communitybased conservation activities. This fund solicits donations and supports environmental efforts carried out by companies and educational institutions. Its donation status in 2020 was 32 cases for individuals, 2,282,166 yen, one case for groups, 12,500 yen, eight cases for companies, 4,224,858 yen, totaling 6,519,524 yen. (8)

Nagano Prefecture, Aichi Prefecture, Gifu Prefecture Water Source Village Fund.50

“Min-Min no Kai” (“Forest is the source of water, water is the source of life, and river is the connection of life”) is the motto of a group that gives thanks to the people who protect the forests while living in upstream mountain regions that support water. With the slogan “Upstream to consider downstream and downstream to be grateful to the upstream,” activities started in September 2008 for upstream and downstream exchange and cooperation in the Kiso River basin (Kiso River, Hida River, Aichi Irrigation Water). In December, the Kiso River Basin Water Source Village Fund was established. 49

Yokohama City Environmental Conservation Fund. (2021, May 12). Yokohama City Environmental Conservation Fund. Retrieved May 6, 2021, from https://www.city.yokohama.lg.jp/kurashi/ machizukuri-kankyo/kankyohozen/jyoho/kikin/kankyohozenkikin.html#kikin (in Japanese). 50 See Kiso River Basin “Min no Kai.” (n.d.). Water Source Village Fund. Retrieved May 6, 2021, from https://kisogawaminmin1.net/category/kikin/index.html (in Japanese).

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The motto “Min-Min no Kai” aims for exchange and cooperation between the upstream people (Min: Min means people.) and the downstream people (Min). The Water Source Village Fund is an initiative for people in the lower reaches to purchase products such as mineral water from the upper reaches of the Kiso River, traditional handmade miso, local sake, and woodwork products to foster appreciation for the upper reaches. These products are handled by the “Nagoya Seikatsu Club,” which sells natural foods and organic agricultural products, with 2% of the profits saved for a water source village fund to support activities such as environmental conservation in the upstream area. (9)

(9) Kyoto Prefecture Mother River Hozu River Fund51

Mover River/Hozu River Fund was established in 2010 with cooperation from 17 organizations due to an application from the Specified Nonprofit corporation project Hozugawa and Kappa52 study group. The Hozu River and its basin, which displays great natural beauty in each of the four seasons, are still one of the leading tourist destinations today, but there are problems arising from environmental deterioration. The purpose of the fund is to link citizen groups that carry out various activities to solve this problem and the citizens who support those activities, and to make the Hozu River basin familiar to more people. The fund is managed by the Kyoto Foundation for Positive Social Change. (10)

Kochi Prefecture Shimanto River Fund53

The Shimanto River Fund was established in 1994 based on donations from companies and individuals across the nation. This fund is currently managed and operated by the Shimanto River Foundation and is used to protect and nurture the Shimanto River through environmental learning, water accident prevention activities, forest conservation projects, environmental conservation type community development, and support for regional development. The Shimanto River Foundation was jointly funded by Kochi Prefecture and five cities and towns in the Shimanto River basin (Shimanto City, Shimanto Town, Nakatosa Town, Tsuno Town, and Yusuhara Town) in 2000. It is a private organization that collaborates with the government and private organizations established in Tsuno to carry out activities for the conservation of the Shimanto River and the promotion of the region. (11)

Kochi Prefecture Shimanto City Shimanto River Clear Stream Conservation Fund

In Kochi Prefecture, the Shimanto City Shimanto River Clear Stream Conservation Fund was also established in 2005. This succeeds the Nakamura City Shimanto 51

Mother River /Hozu River Fund. (n.d.). Mother River / Hozu River Fund. Retrieved May 6, 2021, from https://www.plus-social.jp/project.cgi?pjid=14 (in Japanese). 52 Kappa is a creature which is part of Japanese legends. 53 Shimanto River Foundation (n.d.) Shimanto River Foundation. Retrieved May 6, 2021, from https://www.shimanto.or.jp/?page_id=30 (in Japanese).

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River Clear Stream Conservation Fund and Nishitosa Village Shimanto River Safety Facility Development Fund. As of April 10, 2005, Nakamura City merged with neighboring Nishitosa Village to become Shimanto City.54

4.5.3 Fund Related to Groundwater Conservation (1)

Kanagawa Prefecture Hadano City Groundwater Pollution Control Fund55

Hadano City Groundwater Pollution Control Fund was established in 1994 for preserving the quality of groundwater. Hadano City has accumulated funds from businesses that use target substances such as trichlorethylene and donations from the general public as stipulated in the Groundwater Conservation Ordinance, and a portion is appropriated for expenses such as for contaminated groundwater purification projects implemented by the city. The total amount of donations in 2019 was 264,099 yen, and the balance of the fund on March 31, 2020, was 992,493 yen. In 1985, the Environment Agency, focusing on clear water, selected springs and rivers as one of the 100 best waters across the country to raise awareness, deepen awareness of water quality conservation, and actively protect the water environment. In 2008, the Ministry of the Environment selected a new 100 famous water locations. In 2015, the Ministry conducted a survey to list 100 regions with the best water. Number 1 in the taste category is Hadano’s water, Tanzawa’s Shizuku. One of the reasons for selection is that the Hadano basin springs have abundant and high-quality springs, its water and water supply have been developed for a long time, and efforts are being made to adhere to ordinances and guidelines to maintain water quality. With this background, the city of Hadano has a local government that is highly aware of water, along with residents and businesses. In particular, regarding groundwater, Hadano City has been discussing groundwater usage fees.56 Although it is not a fund for water sources, this is not because it is a pollutant discharger or a beneficiary, but because there exists a strong consciousness to maintain water in a favorable condition as a sentiment of gratitude for pure water. We can see the same attitude as the Water Source Fund trying to bear the cost of forest replenishment in the upstream area. The fact that Japan’s forest ecotax and Water Source Fund are widespread, despite being extremely rare in the wider world, may be due to attitudes peculiar to us Japanese.

54

Shimanto City, Shimanto River Clear Stream Conservation Fund Ordinance. (2005, April 10). Shimanto River Clear Stream Conservation Fund Ordinance. Retrieved May 6, 2021, from http:// www.city.shimanto.lg.jp/city-office/reiki_int/reiki_honbun/r101RG00000181.html (in Japanese). 55 Hadano City. (2020, May 18). Hadano City Groundwater Pollution Control Fund. Retrieved May 6, 2021, from https://www.city.hadano.kanagawa.jp/www/contents/1589336330933/index.html (in Japanese). 56 See Hadano City (2012) or Hadano City (2015).

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Kanagawa Prefecture Zama City Groundwater Conservation Measures Fund

For Zama City, which depends on groundwater for about 85% of tap water, groundwater can be said to be a property shared by citizens. The Groundwater Conservation Measures Fund was established in 1998 based on the Zama City Groundwater Conservation Ordinance with the aim of contributing to a healthy and cultural life by conserving groundwater, which is a valuable resource. The financial resources are covered by donations and used for projects to conserve groundwater and ensure safety. Interest in groundwater in Zama City is high, and the groundwater conservation plan is detailed in Zama City (2016). (3)

Chiba Prefecture Chiba City Groundwater Purification Project Promotion Fund

Chiba City has been enforcing the Chiba City Groundwater Purification Project Promotion Fund since 2002 in accordance with Chiba City Groundwater Purification Project Promotion Fund Ordinance57 stipulated in 1999 to promote the business of groundwater purification. Money saved by the city and donations from businesses are used for an environmental fund. (4)

Fukui Prefecture Ono City Ground Water Conservation Fund58

Most of the domestic water used in Ono City is groundwater. In Ono City, there are about 8000 wells, mainly in the city area, and each household draws groundwater for domestic use. In addition, high-quality abundant groundwater has contributed to the development of local industries. Groundwater is common property for citizens, but the groundwater level drops significantly in winter, which hinders the lives of citizens.59 All large-scale well water depletion in the past happened during the winter. Hence, in 1977, Ono City has enacted the Ono City Groundwater Conservation Fund Ordinance to conserve groundwater for citizens’ daily life and established a fund in 2000. The fund is based on donations from individuals and businesses. It is used for: • Activities to promote awareness/projects for investigations and research, • Facility maintenance assistance project for rational use of groundwater, • Groundwater replenishment business in the upstream area, etc. Accumulated donations as at March 21, 2021, totaled 46,824,694 yen. Like Hadano City, Ono City has been certified as one of the 100 best waters in the city, and its water springs are a tourist resource. In addition, Ono City has a vast forest, which is 90% of the city area, so there is a high awareness of forest conservation. An annual groundwater report is published every year,60 and ordinances relating to groundwater are stipulated. 57

Chiba City. (1999). Chiba City chikasui joka jigyo suishin kikin jorei [Chiba City Groundwater Purification Project Promotion Fund Ordinance] Retrieved May 6, 2021, from https://www1.greiki.net/chiba/reiki_honbun/g002RG00000757.html (in Japanese). 58 Ono City. (2021, June 3). Chikasui hozen kikin [Ground Water Conservation Fund] (Retrieved July 6, 2021, from http://www.city.ono.fukui.jp/kurashi/kankyo-sumai/mizujunkan/chikasui/gro undwater_protect.html (in Japanese). 59 See Ono City (2019) for the status of ground water. 60 See Ono City (2019).

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Kyoto Prefecture Oyamazaki Water Source Conservation Fund

The Oyamazaki Water Source Conservation Fund was established based on the 2012 Oyamazaki Town Water Resources Conservation Fund Ordinance61 to accumulate funds required for the replenishment of groundwater in the Honmachi area. (6)

Kyoto Prefecture Nagaokakyo Water Resources Countermeasure Fund62

Nagaokakyo City was a land rich in groundwater due to the Nishiyama and the Katsura and Yodo River systems that flow to the east. Groundwater has been used as domestic water for citizens and as industrial water and has greatly contributed to the development of the city. However, as the use of groundwater increased, the water level dropped, and there was concern that it would be depleted. Therefore, based on the recognition that groundwater is public water shared by the region, we decided to ask a certain amount of contributions from groundwater users, according to the water intake. Against this background, the Nagaokakyo Water Resources Countermeasures Fund was established in 1982. The contribution is used for the project cost of the fund and the reserve for the basic fund. In addition, those who are subject to the contribution are groundwater collectors stipulated by the ordinance in Nagaokakyo City, and the calculation is such that, when the category of water intake per month is 0–3000 m3 , the basic amount is 2000 yen, between 3001 and 10,000 m3 , 1 yen, between 10,001 and 30,000 m3 , 2 yen, and beyond 30,000 m3 , 2.5 yen. The number of target business establishments in 2019 was 23, and the burden amount was 3772,000 yen. The transition of groundwater intake was 2,024,520 m3 in 2019, compared to 6,914,175 m3 at the peak over the past 50 years. (7)

Kumamoto Prefecture63 Kumamoto Groundwater Fund.

The 11 municipalities in the Kumamoto area share one groundwater basin throughout the area, and the groundwater obtained from it has been used as domestic water for about 1 million people, as well as agricultural and industrial water. However, due to the deterioration of the environment, the Kumamoto Groundwater Fund was established in 1991 to tackle groundwater conservation in the Kumamoto area over a wide area and in the long term. In 2012, the three organizations that had been working for groundwater conservation in the Kumamoto region (Kumamoto Groundwater Fund, Kumamoto

61 Oyamazaki. (2012, April 1). Oyamazaki Water Source Conservation Fund Ordinance. Retrieved May 6, 2021, from http://www.town.oyamazaki.kyoto.jp/reiki/reiki_honbun/k114RG00000609. html (in Japanese). 62 Nagaokakyo Water Resource Countermeasures Fund. (2021, March 19). Kagaokakyo Water Resource Countermeasures Fund. Retrieved May 6, 2021, from http://nagaokakyo-mizushigen. com/index.html (in Japanese). 63 For Kumamoto Prefecture ground water, see the English version of Ministry of the Environment (2010). Increased Tax Rates for the Prefectural Inhabitant Tax on Individuals to Fund Water Source Environment Programs. Retrieved May 6, 2021, from https://www.biodic.go.jp/biodiversity/shirab eru/policy/pes/en/water/water03.html

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Area Groundwater Conservation Measures Council, Kumamoto Area Groundwater Conservation and Utilization Council) were united to become Kumamoto Groundwater Foundation.64 Its main work involves the following: • • • •

Groundwater environment research project, Groundwater quality conservation project, Groundwater replenishment business, Groundwater sampling and use optimization business.

The Kumamoto City Waterworks and Sewerage Bureau is participating in the activities of the Kumamoto Groundwater Foundation to conserve groundwater, which is the source of potable water, and to strengthen cooperation in efforts for groundwater conservation in the Kumamoto area. Incidentally, in 2017, the water intake of the Kumamoto City Waterworks and Sewerage Bureau × 0.3 yen = 24,325,000 yen is borne.65 (8)

Kumamoto Prefecture The Foundation for the Preservation of Green and Water Resources of Higo66

In 1987, the Higo Bank advocated “protecting groundwater, which can be said to be a valuable asset of the hometown, from depletion and pollution,” and the Resource Protection Award was established through a co-sponsorship of “Higo water” with Kumamoto Prefecture and Kumamoto Nichi newspaper. This activity was taken over by The Foundation for the Preservation of Green and Water Resources of Higo, which was established in 1992. The purpose of the foundation is to raise awareness and subsidize the conservation of water and greenery in Kumamoto, and to arouse the interest and practical actions from the citizens of the prefecture regarding water conservation. In addition, the basic property is 210 million yen (according to the contribution of Higo Bank and its group companies, etc.). Its main work includes the following: the Higo water and greenery protection award, hosting and cooperation for symposiums and seminars on water resources protection topics, and practical activities including tree planting, undergrowth mowing, etc.

4.6 Conclusion This chapter provided an overview of Water Source Funds nationwide. There are very few cases of such funds being introduced in the Hokkaido and Tohoku regions but, in contrast, the number of cases in the Chubu region is very high. This is probably 64

Kumamoto Groundwater Foundation. (n.d). Kumamoto Groundwater Foundation. Retrieved May 6, 2021, from https://kumamotogwf.or.jp/english.html. 65 Waterworks and Sewerage Bureau, Kumamoto City. (2018, March 28). The Water and Sewerage Bureau participates in the activities of the Kumamoto Groundwater Foundation. Retrieved May 6, 2021, from https://www.kumamoto-waterworks.jp/waterworks_article/15791/ (in Japanese). 66 The Foundation for the Preservation of Green and Water Resources of Higo. (n. d.). About Us. Retrieved May 6, 2021, from https://mizutomidori.jp/en/info.html.

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because the neighboring districts followed the Tap Water Source Conservation Fund in Toyota City. In general, taxpayers seem to be less opposed to forest ecotaxes than other taxes. However, the fact that funds are more easily accepted than taxes, and therefore easier to implement, may have bolstered the Water Source Fund nationwide. Even so, 37 prefectures and one city have already introduced a forest ecotax and, from 2019, a forest ecotax was introduced. Forest ecotax as a national tax seems inevitable. We have entered an era in which the future of the fund is uncertain.

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