woodlands for water pes schemes in japan (tbc)€¦ · in oku-tama •water source: 80% from tone...
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Woodlands for Water and other PES schemes in Japan
Takuya Takahashi (University of Shiga Prefecture) & Takashi Fujiwara (Forestry Economics Research Institute)
Self-introduction Takuya Takahashi
• Professor, The University of Shiga Prefecture, The School of Environmental Science • Shiga prefecture has the largest (600 km2) lake in Japan.
• PhD (Resources Management & Environmental Studies, The University of British Columbia), Master of Management (Northwestern University), Bachelor of Agriculture (Kyoto University, Department of Forestry)
• Research interests: • Forest policy and planning • Forest certification, watershed forest management, InVEST simulation, optimization for forest planning, use of cross laminated timber (CLT) in Japan, etc.
• Corporate environmentalism • Environmental management systems (EMS), corporate culture and environmental management, etc.
2 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Objectives
• Overview of forest PES schemes in Japan
• Evaluation of current status
• Some thoughts and questions to the participants
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Outline • Introduction of forests and forestry in Japan
• Early partnership arrangements • Direct ownership or payments by water users (Tokyo and Yokohama)
• Forestry corporations
• Public Investment for Private Forest Management
• Forest environmental tax schemes by local governments (prefectures)
• National forest environmental tax scheme
• Corporate partnership
• “Tax payment for home town” scheme
• Some thoughts and questions
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1,692 2,492
1,487 482
5,719
4,426
116
18.8%
33.2%
0
20
40
60
80
100
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
S30
(1955)
35
(60)
40
(65)
45
(70)
50
(75)
55
(80)
60
(85)
H2
(90)
7
(95)
12
(2000)
17
(05)
22
(10)
27
(15)
Imported fuel Imported products
Imported log Domestic timber
Timber sufficiency rate (right axis)
(10K m3) (%)
(年)
7,516
H14(2002)
H27(2015)
Difficult times for forestry in Japan
6 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
0
1
2
3
4
5
6
7
8
9
S55
(1980)
61
(86)
H5
(93)
11
(99)
15
(2003)
19
(07)
23
(11)
27
(15)Landslide and flood prevention
Climate change mitigation
Water storage
Timber production
Wlidlife habitat
Education on the environment and forestry
Relaxation
Air purification and noise prevention
Forest products such as mushroom etc.
Ranking
Demands of Japanese people for forests
Early partnership arrangements Direct ownership or payments by water users (Tokyo and Yokohama)/ Forestry corporations
Tokyo Metropolitan Region’s drinking water source in Oku-Tama
• Water source: 80% from Tone river watershed, 20% from Tama river watershed
• Watershed area 488 km2 ; watershed forests 216 km2
• Precipitation 1,600 ㎜/year
• Elevation 500~2,100m
• Tokyo City Government purchased the forests from the imperial forest office at a low price in 1901, and started planting trees in deforested areas.
• After WW II (-1945) (Izumi, 2004) • 1st period (1946-1955)Emphasis on timber production • 2nd period (1956-1972)Expansion of plantation forests • 3rd period (1973-2001) Emphasis on water storage. Ban on natural forest harvesting. Double story forest management. • Factors of change
• Rise of environmental movement. Request from The Nature Conservation Society of Japan in 1967. • Natural protection policy of a socialist metropolitan government. “Ordinance on nature protection and
restoration” in 1973. • Change from giving away of timber rights to grant schemes for up-stream local residents.
18
19
Tokyo Oku-tama watershed: management policy
• Current policy
Natural forests
(70%)
Plantation forests
(16%)
Plantation forests(10%)
Plantation forests(2%)
Stable climax forests (left to natural processes)
Natural forests
Multi-story forests
Single story
forests
22
Tokyo Oku-Tama watershed forest management by figures Izumi (2004); Takahashi (2006)
Items Figures
Population receiving water supply 2.3 million
Water volume 1.2 million m3/day
Watershed area 49 K ha
Forested area (a) 22 K ha
Forests owned by the water bureau (b) 64%
Watershed residents 10 K
Expenditure for forest management (c) 800 million yen (6 million Euro) / year
Timber production 5 K m3
Per ha management expenses (c)/((a)*(b)) 430 Euro / ha
11 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Yokohama city’s water supply from Doshi area Izumi (2016)
• Yokohama: a major seaport city in Japan
• 1911-: The city started subsidizing afforestation.
• 1916: The city bought 2,800 ha of the prefectural forests from Yamanashi prefecture.
• 1920-1940s: Selective cutting of natural forests
• 1950-1980s: Clear cutting and plantation
• 1991: Change of the policy due to conflict over a golf course development in the area
• 1990s-: Logging ban and watershed conservation
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http://www.city.yokohama.lg.jp/suidou/os/suidou-suishitsu/suidou/pdf/suigen.pdf
About 20 km
Yokohama’s programs Izumi (2016)
Year Options Object Expense
1916- The YWB Forest management Investment for the YWB forest
140-150 million yen per year (1991, 1996)
1916-1996 Stumpage sales subsidy Doshi village 0 to 1.9 million yen per year (1975-1985)
Not sure Programme to provide one-third-aid for Doshi village’s public works
Doshi village
7 million to 58 million yen per year (1975-1987)
1996 “Doshi Headwater Fund” by Yokohama city
Doshi village 1 billion yen which earns 11-14 million yen per year
2001- Financial assistance for the Doshi Residential Wastewater Treatment Service
Household in Doshi village 29-49 million yen per year
2004- Doshi headwaters volunteer organization
Private forest owners in Doshi village
10-14 million yen per year (replaced by Doshi Forest Fund, see below since 2006)
2006- “Doshi forest Fund for Our Hometown of Water” by YWB --- relatively small fund
Doshi headwater volunteers 14-17 million yea per year (2006-2008) + Donations + Revenue from bottled water
20 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Yokohama Doshi watershed forest management by figures Izumi (2016)
Items Figures
Population receiving water supply 320 K (3.5 million total * 9%(Doshi share))
Water volume 173 K m3/day (2 * 60 * 60 * 24)
Watershed area 9 K ha
Forested area (a) 8.6 K ha
Forests owned by the water bureau (b) 32%
Watershed residents 2 K
Expenditure for forest management (c) 150 million yen (1.1 million Euro) / year
Timber production N.A.
Per ha management expenses (c)/((a)*(b)) 390 Euro / ha
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Other types of ownership
• Forestry corporations in Shiga prefecture
• Down-stream municipalities such as Osaka and Kyoto invested in the corporations, and the
corporations planted trees from 1960s to 1990s.
• Share-cropping type arrangement: Land owners provide forest lands, and the corporations
provide funds and operation services. When trees are harvested, the participants share profits
(owner 40%; corporation 60 %).
• Due to difficulties in forestry business, this arrangement appears not so successful at this
moment.
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23 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
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Public Investment for Private Forest Management
Public Investment in Japan
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• 3% of the Japanese public investment amount is allocated for the investment on forests, which is larger than housing field.
• 30% of forest investment is devoted to forest maintenance of private forests.
• Japanese citizens pay annually $ 530 million as public work expenses to private forest owners.
Public Investment of Japanese Government29.2 Breakdown of Forest Infrastructure Investment
Item Mill. yen Mill. US$ % Item Mill. yen Mill. US$ %
Social infrastructure 1,999,694 18,346 33.5% Erosion Control Work 71,994 660 36.3%
Road 1,666,194 15,286 27.9% Forest Management 126,170 1,158 63.7%
Port 232,057 2,129 3.9% Private Forest 57,844 531 29.2%
Agri. Infrastructure 308,404 2,829 5.2% National Forest 68,326 627 34.4%
Forest Infrastructure 180,049 1,652 3.0% Forest Infrastructure 180,049 1,818 100.0%
Housing 151,019 1,385 2.5%
Others 1,438,908 13,201 24.1%
Total 5,976,325 54,829 100.0%
Legislative Ordinance
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• Forest and Forestry Basic Act • Article 4
• The national government is responsible for formulating and implementing comprehensive policies for forest and forestry, pursuant to the basic principles for forest and forestry prescribed in the preceding two articles
• Article 7 (Financial Measures, etc.) • (1) The Government shall take legislative and financial measures required to implement the policies
concerning forest and forestry.
• (2) In taking measures for forest and forestry, the Government shall endeavor to provide adequate financial support smoothly
http://www.japaneselawtranslation.go.jp/law/detail/?id=50&vm=04&re=02
• Forest law • Article 109
• (1) The Government shall assist the prefectural government with part of the expenses assisted by prefectures to the prefecture in the case of a municipality or other person specified by a Cabinet Order.
• Article 2 In consideration of the indispensableness of sustainable fulfillment of the multiple roles that forests play through preservation of national land, water resources, natural environment, public health, prevention of global warming and supply of forest products (hereinafter referred to as the "multifunctional role") in maintaining the stable life of the citizens and the national economy, adequate efforts shall be given for the development and preservation of forests for the future.
• (2) In consideration of the importance of continuous forest production activities in mountain villages, necessary consideration shall be given for the promotion of such areas including promotion of the settlement of people for adequate development and preservation of forests.
• Article 3 In consideration of the fact that forestry plays an important role in the fulfillment of forests' multifunctional role, sustainable and sound forestry development shall be promoted by securing the workforce, improving the productivity, and establishing a desirable forestry structure.
• (2) In consideration of importance of securing adequate supply and utilization of the forest products, utilization of the forest products shall be promoted by supplying the products that meet thesophisticated and diversified needs of the citizens and obtaining their better understanding of forest and forestry.
28 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Cost benefit assessment(1)
29 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
• Forestry development projects are being evaluated as to whether the benefits generated by them are above cost
• Cost benefit analysis
• 評価期間と費用発生のイメージ
B: Benefits (all evaluation period) C: Cost Y: Evaluation period t: Number of years i: social discount rate
Cost benefit assessment(2)
30 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
• Forestry development projects are being evaluated as to whether the benefits generated by them are above cost
• Major benefit calculation method • Water source recharge benefit
• Flood prevention benefit • Difference in rainwater runoff before and after the project x Project area x Flood control dam
Depreciation • Basin water storage benefit (abridgement) • Water purification benefit (abridgement)
• Mountainous land control benefit • Sediment spill prevention benefit
• Difference in the amount of sediment runoff before and after the project x Business area size x Construction cost of the sabo dam
• Benefit of preventing sediment collapse (abridgment) • Environmental conservation benefit
• Carbon fixation benefit (trees fixed) • Difference in estimated forest prospects before and after project x Biomass conversion factor per tree
type x Carbon dioxide conversion factor x Emission transaction price • Carbon fixation benefit (soil retention amount) (abridgment)
Exhibition: Project evaluation manual in Forest Public Works (Forestry Agency, March 2018) http://www.rinya.maff.go.jp/j/sekou/hyouka/manual.html Japanese Only
Public Investment for Private Forest management Summary
31 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
• Public works related to forest administration constitute not small part of the public works of
the Japanese Government. (It is larger than the public works related to housing)
• Forestry development projects in the area support expenses on forest management such as
afforestation, undergrowth clearing, thinning, etc. for those who plan forest maintenance
• A national forest plan has been prepared based on the Forest Law in order to achieve the
target on the development of multipurpose function of forest, based on the Forest and
Forestry Basic Act. The project supports program carried out according to plan.
• When a project is started, a cost-benefit assessment (CBA) is carried out and an CBA
evaluation is carried out after the project.
• The CBA processes represent PES characteristics of public investment for private forest
management in Japan.
Prefectural forest environmental tax
Prefectural Forest Environmental Tax in Japan 1
Forest tending (e.g., thinning)
Protecting forest from deer
Volunteer activities
Forest environmental education
Use of wood for public facilities
http://www.pref.kochi.lg.jp/soshiki/030101/kankyouzei.html
Creative Commons by As6673
37 of 47 prefectures introduced the tax as of 2018 5
2003–2005: dark green 2006–2009: green 2010–2015: light green 2016: yellow
Tax rates: From 300 yen (2.2 E) to 1,200 yen (8.9 E) per annum
Created with Hakuchizu Mapmap ver.6 By KAMADA, T.
In the 1980’s a similar idea was proposed as water source tax for the whole country.
35 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
For.Env.Tax2010 Foretry2010 Multifunction GreenDon.2013
Series1 20,343 721,768 2,466 137
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000M
on
eta
ry a
mo
un
t (m
illi
on
ye
n)
Forestry2010
Patterns of diffusion and levels of payments reflect the needs of prefectures.
36 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Diffusion (early consideration)
Levels of payments/ ha
Drought risk
# of volunteer groups
Landslide risk
+ +
+
Low levels of tending
+
- High levels of
forestry spending
+
Financial difficulties
+ Large cities rely
on distant forests.
(Takahashi, 2005)
(Takahashi and Tanaka, 2017)
New national forest environmental tax
• 1,000 yen (7.4 Euro) per person (2024-); 60 billion yen (440 million Euro)
• The revenues will be distributed to prefectural governments and
cities/towns/villages. (2021-)
• 90 % to cities/towns/villages according to their private forest areas (50%), # of forestry
workers (20%), populations (30%)
• 10 % to prefectural governments
• The revenue is expected to be spent for thinning, human resource development, promotion
of wood use and other PR activities as well as for a new forest management scheme.
37 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Corporate partnership
39
Numbers of non-forestry organizations involved in forest volunteering activities (Forest and Forestry White Book 2015)
581
1,165
1,863
2,677 3,060
0
500
1,000
1,500
2,000
2,500
3,000
3,500
H12
(2000)
15
(03)
18
(06)
21
(09)
24
(12)(Year)
(No. of organizations)
40
Number of sites where corporations conduct forest volunteering and donating activities
399 420 443 466 475 486 496 499 490 490 493
94 156
244 325
472 638
803 853 924 962 989
0
200
400
600
800
1,000
1,200
1,400
1,600
H16
(2004)
17
(05)
18
(06)
19
(07)
20
(08)
21
(09)
22
(10)
23
(11)
24
(12)
25
(13)
26
(14)
(Number of sites)
(Year)
493 576
687 791
947
1,124
1,299 1,352 1,414
1,452 1,482
Non-National National
•Case study II-3 Forest management for sustaining the lifeline of the corporation, “water” (Forest and Forestry White Book 2015) •Since 2013, beverage producer S has been managing forests under
agreements with diverse forest owners in the areas of its water supplying
regions with the idea that high quality water is the lifeline of its businesses.
•The objectives of forest management are; 1) high water supplying capacity,
2) high biodiversity, 3) resilience against floods and landslides, 4) high
carbon sequestration capacity, and 5) beautiful forests people can enjoy.
•Thinning of under-thinned plantation forests. The operations are
subcontracted to local forest cooperatives and other organizations.
•Six thousands employees participate in forest management activities as a
part of employee education activities.
•As of December 2015, the total number of agreements is 18 in 13
prefectures and the total area s is about 8,000 ha.
41
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Application of tax deductible donation scheme (Okamoto and
Ito, 2018)
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Kiso Mikawa basin municipality cooperation meeting secretariat Nagoya city Water and Sewerage Bureau Management Planning Division
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What is tax deductible donation scheme (“Tax payment for home town” )?
• One can choose a municipality in Japan and donate money to the municipality. In return, he/she can reduce income and residential tax by the amount of (donated amount – 2,000 yen), and receive a gift from the municipality.
• The upper limit of the deductible amount is 20% of the residential tax.
• The number of people who use this scheme has increased from 1,912,922 in 2014 to 7,260,093.
• In order to attract donation, municipalities are competing against each other. Some municipalities give expensive gifts.
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Donation scheme for Kiso three rivers watershed, Nagoya’s water source
47 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Contributor
Upper-stream municipalities
Nagoya City
PR of the municipalities
Order gifts and spend the donated money
Enhanced collaboration
Gifts
Gifts Donation
Achievement so far … (2016)
• Total donation to Nagoya City •16,255 people; 68,703,810 yen (509 K Euro)
•Kiso three rivers watershed donation •41 people; 525, 000 yen (4 K Euro)
48 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
• Gifts •Soy paste, soy sauce, rice, gift set including sake, ham, ancient black rice, pork meat, tomato, jelly, gift set including noodles, sushi, cookies, dry fruits, business card case made from Japanese cypress, cup made from Japanese lacquer, spa powder, bottled water, sake, tomato juice, park entrance ticket, wooden comb, wooden bowl, persimmon vinegar, tea leaf, fruit vinegar
49 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
http://www.water.city.nagoya.jp/kisosansen/file/31263.pdf
Overview of “PESforW” in Japan
1. Direct / indirect ownership by down-stream municipalities • Financial gains from timber production were expected and important. In
these days, more emphasis is put upon partnership-type relations with up-stream residents with emphasis on conservation.
2. Governmental Subsidies for forest management • These subsidies are justified on the basis of cost-benefit assessment
(CBA) including water-related benefits.
3. Forest environmental tax (prefectural and national) • Governments collect and distribute significant amounts of money. The
national scheme will be introduced from 2019-2024.
4. Corporate partnership • Increasing in terms of numbers.
5. Other schemes • Application of the tax deductible donation scheme.
6. Credit schemes • Mainly related to carbon sequestration.
51 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Overview
Some thoughts and questions
Some thoughts and questions
Some thoughts
• Benefits related to water are, in general, not quantitatively considered in PES in Japan. They are considered rather qualitatively.
• Lump-sum (national or prefectural) arrangements are more common. Site-specific arrangements are few.
• Tax or water user fee schemes are more wide-spread than contract-like schemes.
• Forest owners prefer timber production to PES.
Some questions
Assumption: PESforW could be an important income source for forest owners/managers in Japan.
Can Wunder (2013) 5 conditions be met in Japan?
• Benefits > Costs • How can this be checked for each project or
watershed?
• Willing sellers and buyers • Can small holders sell ES?
• Trust • How can we enhance trust?
• Transaction cost challenge • Can small holders sell ES?
• Ownership challenge • Missing owners and unclear boundaries.
53 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
References
• Izumi, K. (2004) Modern water-source forests and its development: an environmental history of forests and cities. The University of Tokyo Press. (In Japanese)
• Izumi, K. (2016) Water resource conservation in a headwater area funded by a city: a century-long case study of Yokohama Waterworks Bureau forest and Doshi village (Japan) in terms of economic support and its consequences. In Lachassagne and Lafforgue (eds.) Forest and Water Cycle: Quantity, Quality, Management. Cambridge Scholars Publishing. 511-533.
• Okamoto, M (2018) Watershed collaboration utilizing the tax deductible donation scheme in Nagoya City: programs by the collaborative congress of Kiso three rivers watershed municipalities. Graduation thesis at Hosei University. (In Japanese)
• Okamoto, M. and Ito, T. (2018) Watershed collaboration utilizing the tax deductible donation scheme in Nagoya City: programs by the collaborative congress of Kiso three rivers watershed municipalities. Japanese Water Resources and Environmental Association 2018 Conference. June 2, 2018, Takushoku University. (In Japanese)
• Takahashi, T. (2005) How does local forest tax become a policy agenda? Political economical analysis of prefectures in Japan. Forest Economic Research, 51(3), No.156, 19-28. (In Japanese)
• Takahashi, T. (2006) A comparative study of watershed forest management for large cities in developed countries. In Tsuchiya and Ito (eds.) The current status of research on water resources and environment. Seibundo. 389-414. (In Japanese)
• Takahashi, T. and Tanaka, K. (2017) Models explaining the levels of forest environmental taxes and other PES-like schemes in Japan. IUFRO 2017, Freiburg, Germany.
54 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
Thank you for your kind attention!
We appreciate generous help from Dr. Izumi and others for this presentation.
55 2018-7-3 PES schemes in Japan by Takahashi & Fujiwara
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