woodlands for water pes schemes in japan (tbc)€¦ · in oku-tama •water source: 80% from tone...

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


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



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


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

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


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



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


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


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.


Public Investment for Private Forest Management

Public Investment in Japan


• 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


• 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.


Cost benefit assessment（１）


• 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）


• 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

http://www.rinya.maff.go.jp/j/sekou/hyouka/manual.html



Public Investment for Private Forest management Summary


• 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.


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.


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.


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

Application of tax deductible donation scheme (Okamoto and

Ito, 2018)


Kiso Mikawa basin municipality cooperation meeting secretariat Nagoya city Water and Sewerage Bureau Management Planning Division

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.


Donation scheme for Kiso three rivers watershed, Nagoya’s water source


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)


• 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


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.


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.


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.


Thank you for your kind attention!

We appreciate generous help from Dr. Izumi and others for this presentation.


woodlands for water pes schemes in japan (tbc)€¦ · in oku-tama •water source: 80% from tone...

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