Niche Markets for Economic Revitalisation of Satoyama Forest ...

Niche Markets for
Economic Revitalisation
of Satoyama Forest Resources
in Ishikawa Prefecture
Prospects, Challenges and Policy Responses

This report was written by:
Alphonse Kambu
Utiang P Ugbe
Masanori Toga
Grant Boyle
Maiko Nishi
The authors wish to acknowledge and thank the following individuals and
organisations for their insightful comments on earlier drafts and for providing
various useful materials and information during the preparation of this policy
report.
Unai Pascual
Hiroe Ishihara
Hiroshi Tsujii
Junji Deguchi
Shinobu Saito
Japan Wildlife Research Center
Ishikawa Prefectural Government
The opinions expressed herein are those of the authors and do not necessarily
represent the views of the UNU–IAS and IICRC. Likewise, omissions and errors are
those of the authors.
For further information, contact:
United Nations University Institute of Advanced Studies (UNU–IAS)
6F International Organizations Center
Pacifico–Yokohama
1-1-1 Minato Mirai, Nishi–ku
Yokohama 220–8502
Japan
Tel: +81 45 221 2300
Fax: +81 45 221 2302
Email: unuias@ias.unu.edu, URL: http://www.ias.unu.edu
Copyright © 2008 IICRC All Rights Reserved

IICRC Report
Niche Markets for Economic Revitalisation
of Satoyama Forest Resources
in Ishikawa Prefecture
Prospects, Challenges and Policy Responses
April 2008
1

Contents
Preface 1
Foreword 2
Executive Summary 3
INTRODUCTION 5
What is Satoyama? 5
a) Working Definition 6
Profile of Forest Resources in Ishikawa Prefecture 6
a) Natural Forests 6
b) Artificial Forests in Ishikawa 7
Renewed Interest in Economic Revitalisation of Satoyama 7
1. EMERGING NICHE MARKETS FOR SATOYAMA FOREST RESOURCES 8
1. 1 The Wood Market in Japan 8
1.1.1 Domestic Wood Supply in Japan 8
1.1.2 Domestic Wood Supply in Ishikawa Prefecture 8
1.1.3 Demand for Wooden Homes 8
1.2 Commercialisation of Wood Block Construction in Satoyama 10
1.2.1 Use of Forest Thinnings for Wood Block Production 10
1. 3 Commercialisation of Bio–energy in Satoyama 11
1.3.1 Power Generation from Woody Biomass Gasification 11
1.3.2 Biomass Energy Supply 12
1.3.3 Demand for Wood Biomass Fuel 12
1.4 Enhancing Carbon Sinks in Satoyama 12
1.4.1 Financing Management Projects through Carbon Markets 12
1.5 Ecotourism or Green Tourism 13
1.6 Role of Non–governmental Organizations and Other Local Stakeholders 13
1.7 Summary of Niche Markets 13
2. EXISTING AND EMERGING CHALLENGES 15
2.1 Challenges Relating to Viability of Market for Wood Products 15
2.2 Challenges Relating to Biomass 15
2.3 Challenges Relating to Carbon Markets 16
2.4 Technical Challenges of Forestry Projects 16
3. POLICY RESPONSES 17
3.1 Satoyama and National Forest Policies in Japan 17
3.2 Satoyama and Environmental Policy in Japan 17
3.3 Policy Responses to Degradation of Satoyama in Ishikawa 17
3.4 Forest Thinning Progress in Ishikawa Prefecture 18
3.5 Policy on Wood Block Technology 18
3.6 Policy on New Energy Products 19
3.7 Policy on Carbon Markets 20
3.8 General Discussion on Policy 21
3.9 Investment in Satoyama Economic Revitalisation 24

CONCLUSION 25
ENDNOTES 26
REFERENCES 29
Tables and Figures
Table 1: Price by Year Comparison: Domestic Cedar versus Imported Larch 8
Table 2: Summary of Niche Markets 13
Table 3: Trends in Emissions and Removals of GHGs from Land–Use Change and Forestry (LUCF) Sector 21
Figure 1: Ownership Profile of Non–national Forests in Ishikawa Prefecture 6
Figure 2: What Home Do You Prefer? 9
Figure 3: Appeal of Wood Materials 9
Figure 4: Wood Block Method 10
Figure 5: Dwelling Interior 10
Figure 6: Two Story House Built Using Wood Block Construction 11
Figure 7: Wood Tile Made from Forest Thinnings 11
Figure 8: Electricity Generation by Source in Japan 12
Figure 9: Use of Prefecture Materials for Public Projects 18
Figure 10: Kyoto Target Achievement Plan in Japan 20
Figure 11: Price by Year Comparison: Domestic Cedar versus Imported Larch 22

Preface
The completion of the Millennium Ecosystem Assessment (MA) and the
publication of its findings in 2005 have contributed to a renewed worldwide
interest among academic, policy and practitioner communities in deepening
our understanding of the various links between ecosystem services and
human well–being. The renewed quest has been prompted, at least in part, by
the need to find and develop effective environmental stewardship strategies
which could simultaneously sustain both environmental well–being and
human well–being.
In Japan, the MA process has spurred the Sub–global Assessment (SGA) which
seeks to focus on the historical as well as contemporary uses and stewardship
practices of the country’s rural mountain slopes, hillside forests, paddy
fields, wetlands, seafronts, and other landscapes—generally referred to in
the Japanese language as satoyama and satoumi Integrated utilisation and
management of these landscapes were once the hallmark of rural economy
in Japan, but many of these landscapes have since fallen into disuse or under–
use, while some others have been converted or built up to serve the needs of
urbanisation.
This paper is part of a new effort to understand and articulate the transitions
which have occurred in the economic utilisation and management policies
associated with satoyama resources, and ways by which the ecosystem
services could be economically revitalised, sustainable and relevant to the
Japan’s economy in the twenty–first century.
The study examines the local, prefectural and national issues that have led
to economic stagnation and uncertainty in the satoyama sector in Ishikawa
Prefecture, and the evolving niche market opportunities with the potential to
revive the sector and the local economy. The report identifies and discusses
policy responses to the satoyama sector across multiple scales, the economic
activities related to some of the ecosystem services, the active stakeholders
in the sector, and some of the gaps responsible for the economic uncertainty
of the sector.
The development of this report is part of the wider programme on ecosystems
and people at the United Nations University Institute of Advanced Studies
(UNU–IAS) which is also providing leadership and secretariat on the SGA on
Satoyama and Satoumi. The Institute was established in 1996 as a research
and training centre of UNU to undertake research and postgraduate education
on emerging issues of strategic importance for the United Nations and its
Member States. Pursuant to its statute, UNU–IAS undertakes its work in an
independent, neutral, and objective manner. A key mandate of the Institute
is to promote the interactions between the UN–System and the academic
community. UNU–IAS currently focuses a significant amount of its efforts on
researching the theme of ecosystems and people as part of the follow–up to
the MA, and thereby preparing a platform for the next phase of the global
assessment programme.
This report is one of a series which are being published by UNU–IAS on issues
relevant as input into the package of reports that will be presented at the
Tenth Conference of Parties Meeting of the Convention on Biological Diversity
scheduled for 2010 in Nagoya City.
A H Zakri
Director, UNU–IAS
April 2008
1

Foreword
Satoyama has always provided food, charcoal and wood for fuel, compost,
water and timber in addition to its roles as pool for plant and animal species
and a dwelling ground for humans. These are services that satoyama has been
providing to Japan for many centuries, which benefited many people living in
and beyond the satoyama setting.
However, since the 1950s, when Japan began to undergo social, economic
and technological changes, satoyama began to change, too. For instance,
the advancement in science and technology that gave rise to the production
of fossil fuels and their extensive use killed off or reduced the century old
practice of wood gathering from satoyama for charcoal and other sources of
energy. This particular change can be attributed to policy priorities and shifts
in consumption patterns for energy. With the decline in the value of some
of the resources of satoyama it began to face abandonment leading to other
problems such as overgrowth.
The change in satoyama and the declining value, however, does not mean that
satoyama is an area without resources or value. There are resources within
satoyama that still have the potential of being developed to revitalise the
value it once possessed. Innovative ways are needed to revitalise the value
of satoyama and the resources that exist in it. One such resource is its forest
resources. Japan’s forest cover has increased since the 1960s and it accounts
for over 60 per cent of Japan’s total landmass. Given the huge forested areas
on one hand and the changes in policy and consumption patterns on the other,
which are sometime unavoidable, a link between the trends and the resources
of satoyama is deemed necessary to revitalise the value of satoyama. One
such potential is to explore the links that the market opportunities can offer
for satoyama forests.
This report highlights some foreseeable opportunities for consideration
to boost the economic value of satoyama but at the same time trigger
interaction for continued management of satoyama so that its ecological,
cultural, and social aspects are retained in entirety. Some of the specific areas
of potential addressed in this paper include the commercialisation of wood
block method and technology, bio–energy, enhancement of carbon sinks and
carbon markets, and ecotourism.
The paper discusses some of these issues above with a specific focus on
Ishikawa Prefecture and some general references on Japan as a whole. We do
not expect this report to be representative of the situation in Japan, but it is
our intention to introduce to the reader some of the issues affecting satoyama
and the opportunities and challenges.
The Ishikawa International Cooperation Research Centre (IICRC) is committed
to working on issues that face the local region with an intention to link the
local region to the national and international levels.
Alphonse Kambu
Director, IICRC, UNU–IAS Special Programme
April 2008
2

Executive Summary
Japan, a chain of islands with a national population of about 127.5 million (July
2007 est.) and total area of 377,835 square kilometers, has only about 12 per
cent arable land. Due to its geographical coordinates in Asia (36.00 N, 138.00 E),
Japan has historically experienced extreme climatic conditions which include
earthquakes, torrential rainfall, floods, windstorms, and heat–waves. To survive
these types of harsh conditions and produce enough food for the population,
the Japanese people had to find innovative ways by which to maximise land
use and conserve the quantity as well as the quality of available land, forest
resources, water, wetlands, and built–up infrastructure.
In the 18th and 19th centuries, long before Japan became one of the most
industrialised nations in the world, part of the innovation involved a careful
and integrated use, maintenance and management of scarce community–
based ecosystem resources which supported human well–being in both rural
and urban communities. The generic Japanese term for the centuries–old
practices which ensured a sustainable coexistence of people and nature is
satoyama.
After World War II, as Japan’s industrialisation and urbanisation processes
intensified, an unprecedented rural–urban population migration occurred,
the proportion of the population which lived in rural areas fell from 82 per
cent in 1920 to about 21 per cent in the year 2000. Similarly, the proportion
of the population actively engaged in agriculture fell from about 52 per cent
in 1920 to about 6 per cent in 1977. One of the ramifications of these and
other major transitions was that most satoyama ecosystem resources became
underutilised or simply abandoned, leading to the degradation of biodiversity,
loss of some of the ecosystem services, and decline or loss of economic value
to the local communities.
The last fifteen years has witnessed a renewed interest across Japan among
scientists, policy makers, business community, and environmental activists in
reviving the satoyama sector to harness its potential economic contributions.
Since the publication of the Millennium Ecosystem Assessment (MA) report
in 2005, scholars have shown a strong interest in examining more closely the
types of ecosystem services which the satoyama sector provided, the factors
that led to the economic decline and current uncertainty of the sector, the
multiscale issues facing the sector now, and what needs to be done to revitalise
it. These objectives have become even more pressing now as the world seeks
to address a global energy crisis by taking effective actions at the local level.
This paper examines the satoyama forest resources in Ishikawa Prefecture of
Japan, identifies and discusses some of the emerging niche markets taking
advantage of some of the ecosystem services, stakeholders leading these
initiatives, and the policy environment across the scales (prefectural, national,
and Asia regional) which has hurt or helped the ecosystem services being
examined.
The Introduction section reviews a conceptual problem of satoyama in general,
drawing from various perspectives in the literature and proposing a working
definition. This section also presents a general profile of the forest resources
in Ishikawa Prefecture and the satoyama forest resources within that context,
and some of the recent developments in the sector.
The first chapter identifies the various niche markets—essentially, initiatives
led by private sector stakeholders aimed at utilising satoyama forest resources
in a sustainable manner within the Ishikawa Prefecture. The paper examines
four potential niche markets through which the satoyama forest sector could
be revitalised in the prefecture.
3

The first refers to the current and potential wood supply in Ishikawa Prefecture
in relation to the overall wood market in Japan, including the demand for
wooden homes as well as the potential commercialisation of the wood
block production to support construction in the housing sector. The second
potential niche market examined is the commercialisation of bio–energy,
in particular the generation of power from woody biomass gasification and
biomass energy supply.
The third niche market potential examined is carbon market enhancement, or
the financing of management projects through carbon markets. Fourth but
not the least potential niche market for the satoyama forest sector in Ishikawa
Prefecture is ecotourism, green tourism, or furusato or recreational activities
that satisfy people’s nostalgia for interaction with nature. The paper identifies
and evaluates some of the opportunities related to these niche markets across
different scales.
The second chapter of the paper identifies and discusses existing and
emerging challenges facing the economic viability of the various niche
products and services discussed in the first chapter. These include the
issues of costs associated with wood harvesting, collection, processing and
distribution in Japanese relative to the costs of imported wood of comparable
quality, equipment costs, and technical challenges associated with carbon
measurement, natural/accidental deforestation, access to benefit sharing,
and equitable participation in related local economic opportunities by
stakeholders.
The third chapter examines policy responses across the scales to address the
challenges identified in chapter two, including local, prefectural, and national
policies related to satoyama forests in general, and activities such as forest
thinnings, wood block technology, new energy products, and carbon trading.
These policy responses indicate the support, or the lack thereof, of the different
levels of governance in Japan toward the economic revitalisation of satoyama
forest resources in Ishikawa Prefecture as well as across the country.
The last chapter draws conclusions from the discussions and analyses, and
points to possible policy interventions or adjustments that could create
economic incentives for stakeholders and encourage investment in the
satoyama forest sector.
4

INTRODUCTION
This section briefly introduces the notion of satoyama and
proposes a working definition of the term. A brief profile of
forest resources in Ishikawa Prefecture and a highlight of the
key issues are also introduced and discussed.
What is Satoyama?
To many Japanese, the term satoyama is associated with
images of idyllic rural woodlands. At the same time, this
environment has traditionally provided food, fuel, fertilisers
and other material goods to Japanese communities, as well as
regulating local climates and ecosystems, fostering cultural
ties, and supporting local production systems and ecological
cycles. However, the overall functioning of satoyama has
been in steady decline in recent years due to a decline in its
economic application and subsequent neglect over the last
half a century. 1
Unlike many forestry management problems globally that
are associated with deforestation, the challenges facing
satoyama stem from the absence of human intervention.
At one time Japanese forests of this kind were an important
resource for rural society, particularly as a source of charcoal
fuel and natural fertiliser, and were, thus, intensively
managed. However, satoyama, since the latter half of the
twentieth century, has increasingly been neglected or
abandoned outright. Consequently, some of the additional
ecosystem services provided by satoyama, including
soil retention, watershed conservation, carbon fixation,
biodiversity, buffer zones, and the spiritual and aesthetic
benefits to community have been in decline as well.
Managed forest lands like satoyama are referred to generally
in English as “coppice woodlands” (Takeuchi et al., 2001).
In the UK, as in Japan, the practice of coppicing trees has
created a unique ecosystem where there is less dead
wood, and a more open canopy that permits greater solar
radiation and often higher plant and animal diversity than in
unmanaged forests. As in Japan, managed woodlands in the
UK are no longer commercially viable. Little or no cutting has
taken place in the last fifty years, and there is a shortage of
skilled labour and volunteer–based management does not
present itself as a viable long–term solution. Appropriate
responses to the decline of satoyama are, thus, closely
associated with identifying economic incentives upon
which to reinstitute the types of management practices
that accompanied previous economic exploitation of these
forests prior to the urbanisation trends of the postwar
period and the concomitant uptake of fossil fuels as the
primary energy resource in Japanese society. While there
are many possibilities in this regard 2 , this paper investigates
three niche markets which have the prospect of economic
utilisation of and revitalisation of satoyama resources
through enhanced market–based management. In general,
the niche markets include innovative wood–based products
from forest thinnings, new bio–energy products, and trade
in carbon markets. These niche products which have
cross–sector utilisation are highlighted and discussed both
as local initiatives and within the context of opportunities
offered by larger societal trends that have the potential to
arrest and eventually reverse the deterioration of satoyama
economy. While this paper does not represent a specific
action plan for satoyama revitalisation in any given region
in Japan, it specifically seeks to address the situation in
Ishikawa Prefecture through a better understanding of the
local, prefectural, and national policies, satoyama resources
management practices and related local, and national
economic activities.
Use of the term satoyama has become widespread relatively
recently. 3 The 5 th edition of “Kojien” (monolingual Japanese
dictionary) describes satoyama as “mountain or forest areas
that are close to human habitation and tied to people’s lives”. 4
There is also a viewpoint that the designation “satochi” can
be applied when it refers to the overall traditional agricultural
village landscape consisting of farmland and villages besides
the narrowly defined satoyama—consisting mostly of forests
(Takeuchi et al, 2001). The Ministry of the Environment of
Japan defines “satochi–satoyama” as “conceptual geographic
regions located between urban and primitive natural areas
where the environment has been formed through the efforts
of diverse human activity, and is comprised of secondary
forests surrounding villages intermixed with farmland,
reservoirs, and grasslands, among other features” (Nature
Conservation Bureau, Ministry of the Environment, 2001a).
In addition, the “Ordinance for Protecting and Fostering the
Environment in Hometown Ishikawa Prefecture (Hometown
Environment Ordinance)” enacted in March, 2004 in
Ishikawa Prefecture highlighted in this paper, defines
“forests, farmland, and wetlands among other features
formed or maintained through connection with people” as
“satoyama” (Article 132). 5 Although there are differences in
the way satoyama is defined, the common idea is that of “a
secondary natural environment formed through interaction
with people”. This point is important as it fundamentally
relates back to the present day issue of the deterioration of
satoyama due to a reduction in human involvement.
These definitions above are examples of the many
terminologies of satoyama that exist in Japan today. The
definitions are usually influenced by the backgrounds and
interests of the scholars and stakeholders who are defining
satoyama, and the context within which the definition
is placed. Therefore, as a concept, satoyama could be
narrow or broad, specific or nebulous. For example, without
contradicting the "Kojien" definition of satoyama quoted
above, Yoshimura, Noda, Tanaka and Hosoda (2005) specify
that it refers to “secondary forests that are within about
400m of the paddy field . . . [and] close to the village and
traditionally used for agricultural purpose, collection for
charcoal wood and edible herbs.” On the other hand, the
forests which are located farther from the community and
not subject to human intervention and management but
suitable for forestry in a more traditional or general sense
can be defined as okuyama. Therefore, satoyama is broader
than it is frequently conceived or defined. It is a concept that
is inclusive or holistic, as the proposed working definition
below attempts to convey.
5

a) Working Definition
Working Definition of Satoyama
Satoyama refers to an area found in rural districts
that encompasses human settlements and ecosystems
(e.g. agro–ecosystems, secondary forests, wetlands,
grasslands and hills or mountains) that provide
numerous vital services (e.g. food, forest products, non–
timber forest products, economic, cultural services, etc.)
for human well–being, and is created through prolonged
interaction between humans and ecosystems.
As this paper discusses the use of satoyama wood resources,
the focus will be on the forest dimensions of satoyama with
some cross reference to forests generally in Japan. 6 However,
for the future use of the term it is encouraged that a broader
approach such as the one proposed in the working definition
above be used to avoid conveying a narrow and misleading
perception of satoyama.
Profile of Forest Resources in Ishikawa Prefecture
Approximately 287,000 hectares or approximately 69 per
cent of Ishikawa Prefectural land is forested 7 of which 12 per
cent (approx. 35,000 hectares) is nationally owned, 81 per cent
(or 232,000 hectares) is under private ownership, and 7 per
cent (20,000 hectares) under communal ownership (Forest
Management Division, Agriculture, Forestry and Fisheries
Department, Ishikawa Prefectural Government, 2005).
Approximately 56 per cent of the privately and communally
held forests are natural forest 8 while 39 per cent is artificial
forest (see Figure 1).
Given the slightly elevated altitude (between altitudes of
50 and 350 meters 9 ) of satoyama land (excluding plains and
remote areas) in Ishikawa Prefecture, it is calculated that the
number of one kilometer mesh areas within the range in
the prefecture is approximately 50 per cent (Japan Wildlife
Research Center, 2004). Furthermore, as the number of konara
oak forests and Japanese red pine forests—representative of
natural forests—combined with the number of Japanese
cedar forests and Japanese cypress forests—representative
of artificial forests—in a one kilometer mesh area also
account for approximately 50 per cent of forests in the
entire prefecture (Ministry of the Environment, 2001b), it
can be surmised that the satoyama of Ishikawa Prefecture
targeted by this paper accounts for approximately half of the
prefectural land. 10
a)
Natural Forests
Natural forests make up 56 per cent of the non–national
forests in Ishikawa Prefecture, of which 49 pre cent are
broadleaf trees and 7 per cent are conifer trees (Figure
1). As for the phytosociological classification (vegetation
zone) of the satoyama in Ishikawa Prefecture, most of the
trees belong to the Camellia japonica class. 11 The evergreen
broad leaf forest that is the indigenous vegetation (original
vegetation) has been reclaimed as farmland and villages
together with the development of agriculture and increased
population since the Yayoi Era, which started around the
middle of the fifth century BC. Forests in the area were
repeatedly cut for fuel. It was also important as an area
for collecting undergrowth and fallen leaves as fertiliser,
(compost and cuttings). However, since the latter half of
the nineteenth century (Meiji Era), demand for firewood
and charcoal increased dramatically. Konara oak seeds were
sown among other species, resulting in the formation of
so–called fuel wood forests over
wide areas (Japan Wildlife
Research Center, 2004). These species were introduced
because of their suitability for use as firewood and charcoal
and because resources could be renewed in a relatively
short
20–year cycle without high costs—in part because shoots
could be cultivated from stumps after cutting.
This type of thicket—established through human use—
underwent a rapid transformation during the economic
expansion that started after World War II. After 1960, as
companies and households switched energy sources from
firewood and charcoal to fossil fuels such as petroleum
and gas and began using chemical fertilisers instead of
natural fertilisers, the economic value of these forests
began to decline. From the perspective of charcoal
production since
World War II, the industry reached its peak
around 1951 at approximately 2.2 million tons per annum,
followed by a rapid decline. Although in recent years,
new
applications for charcoal have been popularised (for water
purification, household insect deterrent, and humidity
control,
for example), present day annual production is only
approximately 20,000 tons (40,000 tons when charcoal
Figure
1: Ownership Profile of Non–national Forests in Ishikawa Prefecture dust and bamboo charcoal are included) (Forestry Agency
edition, 2006b; Japan Special Forest Production Promotion
Association edition, 2006).
6

Many satoyama areas lost significant economic value and
some were redeveloped as locations for industrial factories,
leisure facilities such as golf courses, or as housing or
commercial developments. In addition, in line with the
national forestation expansion policy, 12 thickets where
converted into Japanese cedar forests through tree planting.
Furthermore, thickets that were simply left idle and unused
became overgrown with shrubs and shrubby bamboo. With
the growth of evergreen broad leafed trees that are the
indigenous vegetation, heavier and fuller forest canopies
have resulted in darker forests with less solar radiation
reaching the forest floor. Therefore, organisms that once
grew and lived in the deciduous broad leaved forests where
plentiful sunlight reached the forest floor during early spring
are in rapid decline. 13
The lack of human intervention in the satoyama forest
has also led to overgrown thickets, thereby transforming
the forests into okuyama (remote forests). As a result, the
numbers of Japanese serow, Japanese monkey, Asiatic black
bear, and other wild animals that previously lived in more
remote forest habitats have come into closer contact with
human populations through expansion of their habitat
(Japan Wildlife Research Center, 2004) and the incidence
of damage or harm to people and agriculture or forestry
operations has increased. An increases in Asiatic black bear
populations 14 in the Hokuriku and Tohoku regions has been
attributed to record low yield of nuts (from beech and konara
oak) —an important food source for bears—but also to the
fact that the satoyama environment which once functioned
as an important buffer zone between bears and people has
been lost (Hayashi and Nozaki, 2004).
Finally, a decline in management activity in red pine forests
in Ishikawa has worsened their growing conditions. Japanese
red pine, which accounts for the majority of indigenous
coniferous forests, was formerly distributed primarily along
mountainous ridges. However, as these forest areas have
fallen into disuse as with the deciduous broad leaved tree
forests, the piling of fallen branches and leaves lead to a
worsening of the growing environment and decay damage 15
due to increased pine wood nematode infestation.
b) Artificial Forests in Ishikawa
The share of artificial forests makes up 39 per cent of the
non–national forests in Ishikawa Prefecture and most of
these are coniferous 16 . In terms of total volume of wood, they
account for 63 per cent (34 million cubic meters) of the 55
million cubic meters total in Ishikawa Prefecture (Forestry
Management Division, Agriculture, Forestry and Fisheries
Department, Ishikawa Prefectural Government, 2005).
Coniferous trees such as Japanese cedar and Japanese cypress
trees were planted in abundance as part of the national forest
expansion policy that started in 1955 in response to a rapid
increase in demand for wood materials for construction and
other purposes. About 60 per cent of the forest is between 21
and 50 years old (Forestry Management Division, Agriculture,
Forestry and Fisheries Department, Ishikawa Prefectural
Government, 2005).
importation of foreign wood products during the same
period (in 1960), causing a plunge in the prices of domestic
wood materials. This resulted in depopulation of mountain
villages, and the rapid reduction and aging of forestry
workers. Consequently, previous thinning and pruning
practices were not kept up and have not been reestablished.
In these dense forests, the loss of forest floor foliage and the
piling of fallen trees have led to a reduction in the forests
water retention capacity and resulted in and soil runoff. The
area also has greater susceptibility to avalanches, floods, and
mudslides during heavy rain.
Renewed Interest in Economic Revitalisation of Satoyama
There is currently a growing interest among conservationists
and interested parties to channel voluntary efforts into
targeted cooperation and to develop market opportunities
and incentives around which satoyama management can be
more robustly developed. As will be discussed below there
are opportunities in bio–energy, wood–based construction
materials, and possibly carbon sink management. Other
opportunities include food production—mushrooms, local
rice varieties (e.g. kamo–mai) and local rice wines (e.g.
maizokin) or conservation activities through ecotourism 17 ,
green tourism 18 , furusato (nostalgic values of past era type of
landscape) and other cultural (spiritual) retreats.
Still, it is important to recall that commercial incentives
should not dominate so much as to compromise the
ecological integrity of satoyama, through the promotion
of artificial forests required to produce one given product.
The high level of biological diversity in satoyama can be
attributed to the diverse environments included therein,
including agriculture land, grasslands, and water areas. In
the typical satoyama of the past, deciduous broad–leaved
trees such as konara oak and saw tooth oak of different
ages were common due to the cyclical cutting of firewood
and charcoal production. Thickets with mixed tree types
and well–maintained artificial forests, agriculture land, and
reservoirs were laid out in a mosaic pattern. Currently, as
satoyama resources have not been used, and through loss
of their characteristics and functions, species diversity has
reduced (Takeuchi et al, 2001). Thus, the promotion of the
use of firewood and charcoal is still very important from
the standpoint of the regeneration of satoyama deciduous
broad–leaved forests (thickets) and conservation of the
natural ecosystem. Production system need to make use of
deciduous broad–leaved trees—including the conservation
and nursing of thickets, the mixed planting of deciduous
broad–leaved trees among artificial forests (conifer), or the
conversion of coniferous forests to deciduous broad–leaved
forests.
However, while promoting the expansion of the national
forest, the government of Japan also liberalised the
7

1 EMERGING NICHE MARKETS FOR SATOYAMA
FOREST RESOURCES
This section briefly highlights and discusses the market
conditions for wood materials, associated products, and
services in both Ishikawa and across Japan, and identifies
and discusses old and emerging niche markets which
present opportunities for the development of a range of
new products to enhance the utilisation of satoyama forest
resources in Ishikawa Prefecture. The products include
timber and other wood materials, wood block technology
for housing construction, new energy products (i.e. biomass
products) from forest thinnings and other forest materials,
and carbon sink initiatives. Local, national, and international
issues related to these niche products are identified and
discussed.
1.1 The Wood Market in Japan
1.1.1 Domestic Wood Supply in Japan
The wood materials supply in 2004 in Japan, when converted
to numbers of logs was 89.8 million cubic meters. Although
the amount supplied domestically has increased slightly
in recent years, local supply is still only 16.56 million cubic
meters or 18.4 per cent (Forestry Agency edition, 2006a) of
annual demand. While Japan has traditionally been a major
consumer of wood materials, the level of domestic supply has
been below 50 per cent since the 1970s and has remained at
approximately 20 per cent for the last 10 years.
At the same time, Japan’s domestic forests have increased in
recent years. Approximately 80 per cent of forest build–up
has been due to growth of artificial forests, and from 1995
to 2002, this forest build–up has increased by 450 million
cubic meters. Looking at this from a yearly basis, even if the
amount of timber cutting (approximately 26 million cubic
meters of all forests) is subtracted, this is still a net forest
build–up of approximately 64 million cubic meters each year
(Forestry Agency edition, 2005).
Indeed the price of domestic wood materials is decreasing
relative to international products. For example, a comparison
of the price of northern larch trees that compete with
Japanese cedar trees is shown in the table below (Forestry
Management Division, Agriculture, Forestry and Fisheries
Department, Ishikawa Prefectural Government, 2006a).
Thus, there is clearly a growing opportunity for domestic
forest products to compete with foreign imports. It would
appear that capitalising on this market trend through the
marketing of satoyama wood products would enhance the
public benefits of satoyama as well as lower the Japanese
demand for forest products from overseas. 19
Table 1: Price by Year Comparison: Domestic Cedar versus Imported Larch
(Per 1m3)
Classification 1995 2000 2005
Japanese Cedar
(domestic materials)
Larch (imported
materials)
21,900 yen 16,500 yen 11,400 yen
18,400 yen 14,100 yen 16,100 yen
1.1.2 Domestic Wood Supply in Ishikawa Prefecture
The supply and demand ratio for wood materials for Japan
as a whole is similar to that of Ishikawa Prefecture. Of the
439,000 cubic meters of wood material supplied within the
prefecture in 2004, approximately 19 per cent (approximately
84,000 cubic meters) was produced within the prefecture
and this percentage has not changed very much for the last
ten years. The supply of wood materials produced within
the prefecture in 2005 was 102,000 cubic meters, indicating
an increase to approximately 25 per cent of total supply.
However, the overall amount of wood materials supplied
within the prefecture dropped to 403,000 cubic meters.
Furthermore, the amount of growth in artificial forests during
a one year period in FY 2004 was approximately 933,000
cubic meters. The supply of wood material produced within
the prefecture in that year accounted for a mere 9 per cent
of the amount of growth, and when external supply sources
were included, wood supplied in the year accounted for only
47 per cent of the amount of growth (Forestry Management
Division, Agriculture, Forestry and Fisheries Department,
Ishikawa Prefectural Government, 2006a). This indicates
that although forest cover is on the rise in the prefecture,
local forest resources are not being proportionately sourced
to meet forest product supply.
1.1.3 Demand for Wooden Homes
Trends in housing construction demand have a large effect
on the supply and demand of wood materials in Japan.
According to the 2006 “Annual Report on Trends of Forest
and Forestry” building timber accounts for 80 per cent of the
timber products delivered in the country (Forestry Agency
edition, 2006a).
However, housing demand is generally declining in Japan. The
number of residential construction starts peaked at 1.9 million
in 1973, and in recent years has leveled at approximately 1.2
million. Furthermore, although the percentage of houses
built with wood exceeded 75 per cent in the 1960s, this figure
has continued to decrease, and over the last 10 years has
remained at approximately 45 per cent. While the percentage
of total housing starts using wood in 2004 accounted for 45
per cent of the total 1.19 million houses, 80 per cent of single
family dwellings (510,000 homes), were built using wood
(Ministry of Land, Infrastructure and Transport, 2005), so the
construction of non–wooden multi–family dwellings plays
a significant role in lowering overall demand for wooden
homes. Still, as the number of households is projected to
decline over the long term, it is difficult to expect an increase
in the demand for wood products due to an increase in
residential constructions (Forestry Agency edition, 2006a).
However, building in recent years in Ishikawa Prefecture
presents an exception to the trend. The number of new
residential building constructions started in 2005 amounted
to 8,909 (93.8 per cent compared to the previous year). Of
these, 70 per cent (or 6,219) were wooden constructions—a
more than 100 per cent increase in terms of absolute numbers
relative to the previous year—thus indicating an increasing
trend (Forestry Management Division, Agriculture, Forestry
8

and Fisheries Department, Ishikawa Prefectural Government,
These opinion poll results indicate
a high public awareness
2006a). 20
about, and understanding and
desire for, the benefits of
wooden homes or wood materials. If this poll results reflect
A 2003 national opinion poll—“Opinion Poll about the Forest reality, even if the number of housing construction starts
and Life” (Public Relations Office, Minister’s Secretariat, does not significantly increase, the
use of wood materials,
Cabinet Office, 2003), indicated a general preference for including the use of forest thinnings, for the construction of
wood construction among the public. In response to the wooden homes and as interior
materials could be expanded
question: “What type of home do you
want to choose?”, 80 to meet this consumer preference. For example, there is an
per cent indicated a desire to select a home built from wood increasing trend in the demand for condominiums in urban
(See Figure 2).
areas, partially
due to the aging population. In residences
designed for seniors, even if the residence is not built out of
With respect to the question: “points considered important wood, there
is a good possibility that wood can be used as an
when selecting a home built
with wood”, the following interior material for health and safety reasons.
ranked as the top five: “good quality and performance and
superior durability” (71 per cent),
“material which considers Furthermore, in the near future, it is anticipated that the
human health is being used” (66 per cent), “domestic vast number of retirees from the so–called “baby boom”
materials are being used” (41 per cent), “the type of wood generation will return to their hometowns and build new
materials being used, area of production, and costs are homes or renovate old homes.
clear” (33 per cent), and “products that are easy to recycle
and are environmentally friendly are used” (25 per cent).
As for the “appeal of wood materials”, characteristics such
as “insulating capability,” “humidity regulation”, and “has a
calming effect” were among the top items related to wood
as a construction material, followed by “ability to recycle”
and “a material that can be reproduced” (See Figure 3).
9

1.2 Commercialisation of Wood Block
Construction in Satoyama
1.2.1 Use of Forest Thinnings for Wood Block Production
Commercial forest products from forest thinnings include
conventional pulp raw material, construction materials
for public works and building construction, and in recent
years, applications in laminated timber and plywood. As an
example, road guardrails, built with forest thinnings have
been developed in Miyazaki Prefecture and subsequently
used in nearly 900 locations throughout the country
(Forestry Agency edition, 2006a).
Another promising application of forest thinnings is the
production of wood blocks for the housing construction
industry. 21 This method produces wood blocks mainly from
naturally–dried cedar forest thinnings. A wall is formed by
sheathing the wood blocks between two pillars and fixing
them in place. According to test data from the Forest
Experiment Station of Ishikawa Prefectural Government
and the Wood Research Laboratory of Kanazawa Institute of
Technology, this construction method is considered to have
higher earthquake resistance than standard construction
wall methods. 22
Figure 4: Wood Block Method
Source: Deguchi Construction
Wood block construction of this sort is similar to construction
of log houses. Like wood block construction, log houses offer
superior earthquake resistance—utilising the four walls to
support the roof—as well as the aesthetic appeal of natural
wood interior walls. However, unlike log house construction,
wood block construction is not limited in terms of layout, size
and placement of windows, or restrictions on second story
construction.
and will not lead to sick building syndrome and the warm
look and feel and fragrant smell of the wood surface offers
aesthetic and healing properties. As a result, the wood block
construction method combines the strengths of providing a
comfortable dwelling space through the use of natural wood,
together with the freedom of layout offered by conventional
construction methods.
From the perspective of satoyama conservation, the
greatest advantage in using wood block construction is that
construction can be performed using forest thinnings. This
method uses a large quantity of tree thinnings to create
one piece of material at a standard size of 180 centimeters
in length, 10 centimeters in height, and 9 centimeters in
thickness. Also, use of such blocks would help incorporate
local materials into wood building. Notably, the long and
large diameter log materials conventionally used in log house
construction are generally imported from abroad. According
to the Japan Log House Association the proportion of log
house materials sourced domestically is a mere 14 per cent. 23
This situation makes a case for the local development of
wood blocks, which are innovative product alternatives with
a strong commercial viability potential and a sustainable,
low–cost raw material supply base.
An Example of Wood Block Constructed Home
The home in the pictures has a floor space of
approximately 120 square meters excluding the
basement garage. Except for a portion of the
construction materials and the ceiling, it is made
entirely from forest thinnings. Furthermore, except for
the floor material (Japanese cypress), Japanese cedar
from the Hakusan area has been used, amounting to
approximately 42 cubic meters. This figure, converted
into numbers of 20–30 year old trees, is equivalent
to approximately 1,800 trees. The amount of tree
thinning materials supplied to Ishikawa Prefecture
in 2005 was 22,360 cubic meters, of which, 214 cubic
meters was used for public construction projects
(Forestry Management Division, Department of
Agriculture, Forestry and Fisheries Department,
Ishikawa Prefectural Government, 2006b). Therefore,
20 per cent of the forest thinnings were used in the
building of one standard floor area home.
Also, as the wood material includes an inner air layer, it
possesses lower thermal conductivity than concrete or ceramic
tile and high insulating capacity. The wood block construction
helps regulate humidity, enhancing the possibility of creating
a comfortable dwelling even if materials such as insulation
or cloth are not used. Furthermore, wood material is natural
Figure 5: Dwelling Interior
(walls are wood block construction)
10

form of solid fuels (chips, pellets, briquettes, and logs) 25 , liquid
fuels (methanol, ethanol, butanol, and biodiesel), gaseous
fuels (synthesis gas, biogas, and hydrogen), electricity and
heat (IPCC, 2007). Globally, biomass currently provides
about ten per cent of global primary energy but with over
two thirds consumed as traditional biomass in developing
countries for household use.
(Hakusan City)
Figure 6: Two Story House Built Using Wood Block Construction
As the main materials used for the wood block construction
are pre–fabricated, most of the on–site work is assembly. As a
result, the construction period is shortened and construction
costs are reduced, leading to lower cost of the finished
products. 24 In addition, a pre–processed kit can be supplied
and owners can undertake construction independently
as the method can be well suited to various building types
such as temporary homes, sheds, and toilets located in
mountainous areas and disaster areas where road systems
are not in place. Furthermore, wood block construction
kits could potentially be exported to countries where the
supply of wood materials is limited. Wood blocks are already
being used in fencing and can also be used for various other
applications, such as wood floor tiling, for example, using
forest thinnings from Noto cypress (ate) and cypress (see
Figure 7).
Figure 7: Wood Tile Made from Forest Thinnings
1.3 Commercialisation of Bio–energy in
Satoyama
1.3.1 Power Generation from Woody Biomass Gasification
Biomass can serve as a renewable resource for use as a source
of heat, electricity, and liquid fuels. Biomass sources include
forest, agricultural and livestock residues, short rotation
forest plantations, energy crops, the organic component of
municipal solid waste, and other organic waste streams.
These are used as feedstock to produce energy carriers in the
According to the IPCC (2007) combustion for heat and steam
generation remains the primary biomass energy applications,
but advancing technologies include second–generation
biofuels, biomass integrated gasification combined cycle
co–firing (with coal or gas), and pyrolysis. Many of these are
close to commercialisation but are still costly. Biochemical
conversion using enzymes to convert ligno–cellulose to
sugars that, in turn can be converted to bioethanol, biodiesel,
di–methyl ester, hydrogen, and chemical intermediates
in biorefineries are not yet commercial, but hold great
promise.
Prior to conversion, biomass feedstock tend to have lower
energy density per volume or mass compared with equivalent
fossil fuels. Collection, transport, storage, and handling are
therefore typically more costly per unit of energy (IPCC,
2007). These costs can be minimised if the biomass can be
sourced from a location where it is already concentrated.
One solution currently being explored in Japan relevant
for satoyama conservation is power generation through
the gasification of woody biomass. The Independent
Administration Institution of New Energy and Industrial
Technology Development Organization (NEDO) is conducting
a joint research program, “Verification Tests and Results
Survey for Biomass and Other Untapped Energy” with private
businesses and local public organisations to promote the use
of energies such as biomass. 26 In this project, data is collected
and analysed in various tests being performed in forty–six
locations throughout the country (NEDO, 2006).
Meidensha Corporation’s so–called “Verification Tests of a
Woody Biomass Gasification Power Generation System Using
a Rotary Engine” project located in Anamizu–cho, Ishikawa
Prefecture, is one such project. The verification test plant will
be operated for five years from April 2006 to 2010. According
to the “Verification Tests and Results Survey for Biomass and
Other Untapped Energy” (NEDO, 2006), this system reduces
the moisture content in 200 kilograms of wood chips from
60 per cent to 20 per cent per hour with a drying machine,
and then through a process of carbonisation of those wood
chips (thermal decomposition), generates gas which is used
as the fuel for the rotary engine in a co–generation system
setup. The amount of power generated is 36 kilowatt hours
and the energy reduction effect from both electric and heat
generation is equivalent to 31.8 kiloliters of crude oil per year.
Electricity and heat generated from power generation is used
inside and outside the facility, and the charcoal and wood
vinegar generated in the carbonising furnace are used as a
soil improvement additive and as a pest prevention agent.
There are several key advantages of to this system:
• Producing high calorie gas with a small amount of space,
through the use of a vertical furnace and rapid heating
system;
11

• Realising stable power generation through the use of a
rotary engine; and
• Utilising the wood tar generated with the wood gas,
as a fuel for the furnace, removing post processing
requirements.
The initial cost of this project is approximately 200 million
yen and the running costs are scheduled to be calculated
from the verification test results (NEDO, 2006). As for
the wood chips used for fuel, a large amount of bark and
material waste from the processing of wood products is
being provided free of charge by the neighboring Noto
Forestry Association. However, full data and other detailed
results from this verification test have not yet been disclosed
to the public.
Of the energy verification test projects being performed in
forty–six locations throughout the country, there are ten
tests using woody biomass for cogeneration of heat and
electricity. This is the first location that is using a rotary
engine system, and a high level of efficiency and stability are
anticipated. However, a comparison with other systems that
use gas engines and micro gas turbines is difficult at present
as there are differences in size, fuel quality, and location
conditions, and uniform data is not available.
1.3.2 Biomass Energy Supply
Of the various types of biomass, it is estimated that the total
amount of primary woody biomass that is generated every
year in Japan amounts to 37,000,000 cubic meters (Forestry
Agency edition, 2004). This figure can be broken down into
biomass left in forests as forest thinnings, branches and
leaves, and damaged trees amounting to 10,000,000 cubic
meters; log ends and sawdust generated at production
plants amounting to 15,000,000 cubic meters; and waste
material produced from home construction and demolition
amounting to 12,000,000 cubic meters. Considering that
yearly domestic supply of biomass power generation in
Japan amounts to 16,560,000 cubic meters (Forestry Agency
edition, 2006a), there is still room for growth, with existing
forest residues alone, and conceivably a further range of
supply if forest thinning and management are enhanced.
In 2004, biomass accounted for approximately 1.4 per cent of
electricity generation in Japan—the total renewable power
generation was 11 per cent. Coal–fired power plants generated
29 per cent followed by natural gas (24 per cent), nuclear (23
per cent), and oil (13 per cent), and renewable (11 per cent) (see
Figure8). Nine per cent of the renewables capacity was hydro.
Oil comprised about half of Japan’s total primary energy
supply in 2004, followed by coal 20 per cent, gas 14 per cent,
nuclear 12 per cent and renewables and wastes, around 4 per
cent. Japan is entirely dependent on oil imports, relying on
the Middle East for about 90 per cent of its crude oil imports
in 2005. In 2001, woody biomass accounted for about 1 per
cent of total primary energy supply in Japan, relative to 16
per cent in Sweden which has a comparable forest cover and
is an advanced economy like Japan (IEA, 2004b)
1.3.3 Demand for Wood Biomass Fuel
In recent years, various initiatives have been started with
respect to the use of woody biomass. For example, according
to a survey implemented by the Forestry Agency in 2003,
the number of boilers used for wood resources by the forest
industry was 324 units or approximately double the number
in 1999. In addition, the number of biomass power generation
units installed and pellet production facilities 27 have both
increased by approximately threefold, and initiatives such
as installing pellet boilers and wood material chip boilers at
schools, and burning of wood material chips together with
coal as a fuel for power generation, are being undertaken
(Forestry Agency edition, 2005).
1.4 Enhancing Carbon Sinks in Satoyama
1.4.1 Financing Management Projects through Carbon Markets
Carbon emissions trading is one of the primary instruments
developed worldwide
to help reduce greenhouse gas (GHG)
emissions and mitigate global climate change. 28
Emissions cap
and trade systems create a market for pollution rights where
none previously existed. 29 Governments set an aggregate
level of pollution for a given number of regulated units and
then allocates permits or allowances to participating firms
(or potentially individuals) and participants must reduce
emissions according to allowances (allocated on the basis
of production
output, historical emissions or auctioning) or
buy
allowances from other firms if they choose not to reduce
emissions.
The primary rationale for such schemes is to exploit
differences in marginal costs of emissions abatement
among regulated units. In theory, those firms with the
lowest abatement costs will undertake most of the
abatement in the short term, at lower costs overall, while all
firms over the long–run will have incentives to invest in new
technologies and marketing strategies. The United States
Sulfur Emissions Trading programme during the 1990s is
often cited as a successful emissions trading initiative. 30
Since the 1990s a number of OECD countries including Japan
have experimented with carbon emissions cap and trade
systems. The most advanced regime is the European Union’s
Emissions Trading System, which started in 2005.
Along with cap and trade systems there are also “baseline
and credit systems”, which can involve particular investment
projects to earn emissions credits by undertaking some
abatement activity in a specified time period, which, once
certified can count as a credit under a concomitant cap and
12

trade system. The most developed international baseline and
credit system to date is the Clean Development Mechanism
(CDM), administered by the United Nations. With the
assistance of carbon funds arranged by the World Bank,
the CDM market according to the World Bank in 2005 was
worth $US 2.65 billion or 359 megatons of carbon equivalent,
although forestry and land use change projects are not
prominent in the CDM. While carbon emissions trading is
only at experimental stages in Japan, there is a potential to
incorporate forestry management and carbon sequestration
projects into a national emissions trading scheme. 31 While
Japan’s voluntary emissions scheme has not yet developed
a system to include forestry based off–set projects which
could bring financing to such activities, most industrialised
countries at a similar stage of experimentation with emissions
trading to Japan—like Canada and Australia, for example,
will likely include such project types in their national
schemes. The IPCC Mitigation Working Group describes
forest–related mitigation activities as low cost projects
that can be designed to create synergies with adaptation
and sustainable development and can have “substantial
co–benefits in terms of employment, income generation,
biodiversity and watershed conservation, renewable energy
supply and poverty alleviation” (IPCC, 2007). Under the Kyoto
Protocol Joint Implementation mechanism, which outlines
carbon offset projects between industrialised countries,
Kyoto eligible projects include activities that lead to : avoided
deforestation, and improved management of croplands,
grasslands, forests, and peat lands.
1.5 Ecotourism or
Green Tourism
Ecotourism, which primarily combines recreational and
educational excursion, is a growing niche market in Japan as
it offers many urban–based people retreat from the stress,
noise and pollution associated with living in the city. Across
Japan, there are rural–based, small–scale family–owned
initiatives on sustainable or organic agriculture and livestock
management which serve as businesses, training centers,
tourist attraction and technology demonstration sites. These
draw visitors and patrons from within and abroad. This trend
has presented opportunities for local residents, small–scale
businesses and non–profit organisations (NPOs) to participate
in business activities related to tourism, environmental
education, and sustainable or organic agriculture. Other
related opportunities include food production—mushrooms,
local rice varieties (e.g. kamo–mai) and local rice wines (e.g.
maizokin), or conservation activities through ecotourism,
green tourism, furusato (nostalgic values of past era type of
landscape) and cultural (spiritual) retreats.
1.6 Role of Non–governmental Organisations
and Other Local Stakeholders
Notwithstanding the recent rise in legal provisions related
to satoyama protection in Japan, many policies remain
at a theoretical level, without strong tools or resources
to adequately reestablish and maintain management
practices. In the late 1980s, local movements began to
appear that focused on satoyama management. There is
now a large citizen participation effort in Japan focusing
on the recovery and utilisation of satoyama. As of 2003,
there were approximately 1,100 satoyama activity groups
registered with the Ministry of the Environment, and 58 per
cent of these were established after the 1990s (Miyamae,
2003). Furthermore, according to an investigation performed
by the Forestry Agency, there were 1,165 volunteer groups
performing forest building activities in 2003, which is double
the number in 2000 and four times the number in 1997
(Forestry Agency edition, 2006a). Thus the volunteer and
community based effort is growing rapidly throughout the
country.
1.7 Summary of Niche Markets
Utilising forest residues in energy production represents a
significant opportunity for commercial projects in satoyama.
The low level of biomass use in Japan’s total energy supply
(1 per cent) compared to a similarly forested country like
Sweden, which sources around 16 per cent of its energy
from biomass in 2001 illustrates the potential size of the
opportunity. In 2001 Sweden had around 1800 megawatts of
biomass electricity capacity, compared to the 330 megawatts
target for 2010 in Japan’s Biomass Strategy (IEA, 2004b).
Notably, biomass in Sweden received the highest level of new
energy research and development investment (about 47 per
cent of the total) in the period from 1974–2001 following the
first oil shock and has received favourable tax treatment.
Table 2: Summary of Niche Markets
Market Opportunity Market Challenges Policy Issues
Wood Blocks
Significant:
Driven by consumer preference,
significant domestic supply of
wood material.
Expensive, inefficient collection
and distribution of forest residue
material, lack of stable supply of
forest residues, lack of supplier
awareness.
How can stakeholders coordinate
to reduce distribution costs, what
sources of public funding to augment
financing, how to educate and
disseminate information on market
opportunities.
Biomass Energy
Significant:
Demand and policy support for
New Energy, higher international
oil prices and foreign dependence
Expensive, inefficient collection
and distribution of forest residue
material, lack of stable supply of
forest residues, bias in favour of
other new technologies
How can stakeholders coordinate
to reduce distribution costs, what
sources of public funding can augment
financing
Carbon Finance
Emergent
Driven by domestic climate
change regulations, international
climate law and policy
Political risk associated with policy
development, complex rules for
forestry projects
How to channel domestic climate
change budgets and instruments into
domestic carbon sink management.
13

In Japan, the priorities have been geothermal and photovoltaic
(PV). The continued emphasis on PV is reflected in the
2007 Japan Renewables Portfolio Standard (RPS) report
that recommends PV receive double credit over other
power sources. While biomass energy production may not
reflect the same level of industrial development of export
opportunity as in Japanese PV, there is still a significant
market opportunity to boost the technology especially
considering Japan’s ongoing challenges with foreign energy
dependence, high international energy prices and nuclear
power safety concerns. Utilising forest residues in wood block
construction for wood building construction represents an
emergent opportunity for commercial projects in satoyama.
While housing construction in Japan is generally expected
to decline there are indications that many Japanese people
prefer wood construction homes, which could lead to an
increasing market share for such products. As the Cabinet
Office opinion poll discussed above shows a 60 per cent
preference for wood construction among those surveyed,
there are expectations that Japan’s aging population will
increasingly appreciate wood buildings and renovations, and
some recent data for one part of the country—Ishikawa—
show an increasing number of wood construction starts.
Arguments to invest in wood block construction on the
supply side are enhanced by the recurring annual forest
build–up in Japan (approximately 64 million cubic meters)
and the cost advantage of local forest products over foreign
ones. Still, sourcing local wood products has not been the
normal procedure in Japan for many years.
One of the main challenges with bioenergy and wood block
construction is how to distribute forest residues from diffuse
sources to diffuse end production facilities, especially in
a mountainous country like Japan. Certainly there are cost
advantages with using forest residues in the locations where
they can be sourced. Indeed, this local use was part and parcel
of the economically advantageous system of harvesting
charcoal and fertilisers from the forests that supported forests
thinning practices in the first part of the twentieth century.
However, wood block construction and power generation
represent new opportunities that require a greater degree of
centralised collection and distribution. A key question is how
to minimise these costs. As discussed, forestry associations,
timber companies, processing companies and housing
construction companies are collaborating in Ishikawa
to establish distribution and processing centers in key
regions to support supply to wood block construction. The
development of a center for the distribution and processing
of wood materials is, in fact progressing in that prefecture
based on efforts by the Kaga Forest Association. Such
techniques could be replicated in other parts of the country,
or even in the biomass energy sector. Forest residue suppliers
could even explore the integration of coordinated supply to
power generation and wood block construction buyers.
Undertaking thinning and management projects in satoyama
to enhance Japanese carbon sinks and earn tradable
pollution rights is only a possible commercial opportunity
at present, although public funding for such projects may
well be available under the government current climate
change policy. Such a system would likely provide new
opportunities for helping finance satoyama management,
since, as Japan is quite heavily forested, there would be little
room for competing afforesting or reforestation projects.
Forestry sink projects in Japan would primarily be limited to
maintaining the estimated 35–70 MtCO2/y sequestration
potential through enhanced management. Moreover, the
35–70 MtCO2/y potential is not an insubstantial natural
resource. By comparison, New Zealand is estimated to have a
total potential of 10–42 MtCO2/y.
Unlike wood block construction and biomass energy,
however, the development of a domestic carbon market is
almost entirely dependent on political forces that influence
the decision to institute a cap and trade system with forestry
offset provisions in Japan. A national carbon trading scheme
remains contentious, as do other strong instruments like
the long–discussed carbon tax. Nevertheless mounting
global concern over climate change and the prospect of
greater United States involvement in international climate
cooperation, point to the likelihood of increasing pressure
to reduce emissions substantially in Japan in coming
years. Given the high efficiency of Japanese industry, and
the relatively high cost of abatement in that sector, offset
projects—including forestry based ones—will likely be
attractive to companies with emissions caps. This pressure
will also result in further promotion of renewable energy
sources like biomass.
However, Japan to date, as in many sectors, is oriented toward
overseas investment in carbon reduction projects—it is a
significant buyer of UN certified emissions reductions under
the Kyoto Protocol’s CDM and is intent on seeing a similar
international offset system carried through to any climate
treaty system after Kyoto. The government’s 2005 climate
budget allocated 9,599 million yen to Kyoto mechanisms
(essentially CDM credit purchases), up from 4,999 in 2004
or a 92 per cent increase on the year. At the same time
forestry sink budget allocations in Japan fell by 7 per cent
from 2004 to 2005. So there is a clear emphasis on overseas
carbon emissions reduction projects in the recent budget. A
key question for satoyama is how to attract some of these
investments into forestry sink project in Japan.
Whether domestic carbon trading opportunities emerge
or whether carbon sink enhancement funding remains in
government budgets, climate change policy and regulation
clearly offers opportunities to draw resources into satoyama
enhancement. It is likely most accurate to view such a
resource as augmenting or supporting other commercial
initiatives like the biomass energy and wood block
construction opportunities mentioned above. Indeed, such
projects themselves are clear candidates for national funding
in support of emissions reductions as well as potential offset
projects in a carbon trading scheme. Biomass energy displaces
fossil fuel consumption and wood block construction reduces
the amount of carbon emissions associated with other
construction materials such as concrete. 32
14

2 EXISTING AND EMERGING CHALLENGES
Despite the enormous economic potential of the various
niche markets identified and discussed in chapter one,
there are a number of challenges to be overcome before
the economic revitalisation of satoyama forest resources
in Ishikawa Prefecture can be achieved. The challenges
can be grouped into three dimensions, namely; policy and
institutional; product development and technology diffusion/
proliferation; and market development. A random list of the
issues would include high equipment and transportation
costs on forest thinnings, lack of cost–saving technology for
processing the various wood products at competitive prices
relative to imports, policy and technical issues relating to
carbon markets, market constraints for wood blocks, and
unfavorable national import policy on wood materials.
Many of these issues are identified within the context of
satoyama in Ishikawa Prefecture, but bear similarity to other
local contexts across Japan.
2.1 Challenges Relating to Viability of Market
for Wood Products
Japan has successfully pursued an aggressive policy and
implementation of forest expansion over the last four
decades, and currently has an approximately 70 per cent
forest cover. Over the same period, however, Japan maintained
a highly liberalised import regime on wood products, thereby
undermining the economic development of the domestic
forestry sector, and the prices of domestic wood materials
plummeted under pressure from the imports. The low
prices, coupled with the high costs of wood processing and
transportation in Japan, appear to have eroded the economic
incentive for investors to locally produce timber and forest
thinnings.
Distribution and Processing System for Forest Thinnings:
In order to promote methods for the use of forest thinnings
such as wood block construction, efforts are needed on the
local level to reduce costs in the collection and transport of
the thinnings. Under the current distribution system, it is
often the case that the processor will receive an order from
a housing construction company and will saw and process
raw wood purchased on the market. With wood blocks, it is
generally necessary to dry the wood to less than 20 per cent
moisture content. Drying methods include artificial drying
and natural drying, and while artificial drying possesses are
shorter, they incur drying equipment and fuel costs. While
natural drying does not incur these costs, a two year period
and a very large stockyard are required. If a processor is small
scale and has low production capabilities, product costs will
be high and variability in standards and quality may result.
On the other hand, construction companies that require
large supply sources strongly desire a stable supply of high
quality material at low cost. 33
In response to these needs, forestry associations, the raw
wood market, and processing companies are collaborating to
establish distribution and processing centers at key regions,
and a distribution network with housing construction
companies is starting to form (Agriculture, Forestry and
Fisheries Department, Ishikawa Prefecture Government
edition, 2002). If high quality and low cost wood can be
supplied in a stable manner through performing purchasing,
managing, drying, materials processing, and product control
of raw wood in an integrated and rational manner, an
expansion in the use of forest thinnings, which were largely
avoided by housing construction companies, can be achieved.
These efforts could open the way for further exploration of
new requirements and the development of technologies for
the use of these materials in various fields such as residential
construction technology like the wood block construction
method that utilises forest thinnings.
Establishing Stable Supply:
There are challenges relating to successful scale–up of
small scale, high efficiency plants to provide a stable supply
to meet woody biomass demand, thereby permitting the
development of more robust fuel supply systems, with lower
overall costs. For example, the use of wood pellets for heating
(which effectively utilises various leftover and discarded
materials and are relatively easy to transport), would be
enhanced if uniform demand could be established year–
round. It is, therefore, desirable to develop and introduce
not only stoves for heating, but also functional boilers for
heating water which could meet the large demand from
public facilities and businesses, and if possible, also cater to
residential homes.
2.2 Challenges Relating to Biomass
Reducing Equipment Costs:
Costs associated with the installation and operation
of boilers and stove equipment need to be reduced.
Furthermore, various types of devices and systems to respond
to diverse biomass collection and use must be developed
and introduced. Of these, there is a high need to promote
the development of innovative technologies involving the
gasification and liquification of woody biomass, which is
easier to use and has greater energy conversion efficiency
than direct burning.
Reducing Collection and Transport Costs:
Woody biomass resources are generally located in
mountainous areas and are dispersed over large areas. As
this material is high in volume and weight, the reduction
of costs associated with collection and transportation is an
important challenge associated with promoting biomass
based energy in Japan. Wood collection is considered the
primary reason why wood material remnants, including
forest thinnings, have not been used in energy production
in the country.
The use of high performance forestry equipment to improve
labor productivity and road improvements are considered
important steps in reducing costs (Forestry Agency edition,
2006a). In addition to shortening the distance between
production, processing, and consumption sites the beneficial
use and integrated applications for timber and woody
biomass need to be explored at the local level. It will be
necessary to establish a distribution system and methods
which take into account the balance of demand and
supply of targeted wood resources in specific locations. The
Anamizu–cho gasification power generation system is a
good example.
15

2.3 Challenges Relating to Carbon Markets
Potential Supply of Forestry Projects:
According to the IPCC (2007) sequestration potential in
Japan is estimated in the range of 35–70 MtCO2/yr and
planted forests account for more than 60 per cent of the
carbon sequestration. While assessments cited in the IPCC
report show that there is little potential for afforestation and
reforestation in Japan, forest management and practices for
planted forests including thinning and regeneration have
been identified as necessary to maintain carbon sequestration
and to curb saturation. There is, therefore a potential supply
of ongoing carbon sequestration management projects
compatible with satoyama conservation goals.
Emerging Demand for Forestry Projects:
Unlike other market oriented solutions discussed in this
brief, carbon finance opportunities which depend primarily
on government policy and demand for sequestration
management projects in forestry will be driven primarily
by regulatory developments in Japan. At present there is no
mandatory national scheme that would prompt a demand
for such projects, although there is a voluntary scheme.
Future carbon markets in Japan, if they are to arise, would
most likely flow from Japan’s engagement with the Kyoto
Protocol and future agreements under the United Nations
Framework Convention on Climate Change. 34
Under the current Kyoto Protocol Japan is a major purchaser
of carbon emissions rights from overseas project under
the United Nations’ CDM. The demand for offset projects,
whether domestic or otherwise will likely remain high in
Japan due to the country’s high level of energy efficiency and
high marginal abatement costs in its industrial sector relative
to other Kyoto signatories with reduction commitments.
The World Bank estimated at the end of 2006 that Japan
possessed 84 megatons of demand for Kyoto Mechanism
credits in addition to the 266 megatons it had already
purchased at that point (World Bank, 2007).
While it is not clear what international cooperation regime
will emerge after the Kyoto Protocol expires in 2012, carbon
markets are likely to play a role. The G8 at Heiligendamm
in 2007 agreed to aim to half CO 2
emissions by 2050. The
International Emissions Trading Association’s recent Market
Sentiment Survey indicate that more than 90 per cent of
respondents believe that the GHG Market is an established
instrument that will continue post 2012. In addition, more
than 65 per cent of those surveyed anticipated that a global
market will be established in the next ten years. Still, how
and whether these trends will result in a domestic offset
market in Japan for forestry projects is an open question.
2.4 Technical Challenges of Forestry Projects
• Carbon Measurement:
Estimating carbon emissions to a uniform standard
from forest preservation activities is more difficult than
for energy–related projects because the carbon content
of forests varies significantly depending on the density,
age and type of trees, and the soils. Detection of forest
degradation, as opposed to actual deforestation, is
particularly challenging.
• Natural/Accidental Deforestation:
Forests can be reduced through natural or accidental
causes, such as fires or disease, causing unplanned
fluctuations in emissions, and markets would need to
allow for this in some way. The Chicago Climate Exchange
dealt with this for their Forestry Carbon Emissions
Offsets by creating a carbon reserve pool of 20 per cent
of emissions to allow for catastrophic loss, released at
the end of the programme. The way in which this issue
is handled will affect credibility and could influence the
price at which units are traded.
• Ensuring Climate Benefits:
A key challenge is to ensure that emissions reductions
are additional. The nature of the drivers of deforestation
implies a substantial risk that, if small areas are
protected, leakage to other areas could take place and
overall emissions would not be reduced, although this
is certainly a more acute problem with international
emissions trading and offset projects in countries where
deforestation is a major problem, unlike Japan.
• Agreeing on an Equitable Basis for Participation and
Incentives:
Determining the baseline of emissions from deforestation
beyond which tradable credits would be earned can
be challenging, although this is less the case with a
national programme than an international one. Getting
the level right may involve assessment of the historical
trend and is a technical challenge given the variability in
deforestation rates year by year. A particular challenge,
when setting baselines, is how to treat activities that
have already enhanced carbon sinks. Focusing only on
current activity alone would mean the management
entities currently neglecting satoyama the most could
benefit the most.
Since carbon finance opportunities depend primarily on
government policy the primary barriers to a domestic
emission trading in Japan at this point are political. At
present, Ministry of Environment and Ministry of Economy,
Trade and Industries (METI) are divided over the development
of an emissions trading scheme in the Kyoto compliance
period. Nevertheless there are technical challenges 35 that are
specific to forestry and sinks in emissions trading that are
worth mentioning.
16

3 POLICY RESPONSES
This chapter identifies and examines policy issues related
to the niche market opportunities and challenges discussed
in the preceding chapters. The analysis highlights some of
the key policy responses on these issues and the gaps to
be addressed in order to achieve economic revitalisation of
satoyama in Ishikawa Prefecture in particular and across
Japan as a whole.
3.1 Satoyama and National Forest Policies
in Japan
As in many industrialised countries, forest cover in Japan has
increased significantly over since the 1960s. In fact, coverage
has roughly doubled over the past 30 years as a result of the
active planting in the 1960s and due to the fact that wood
demand in Japan has stabilised recently (at about 90 million
cubic meters per year). About 66 per cent of Japan’s land area
is forested, and about 31 per cent of that is nationally held
forest and the remainder is privately or communally held.
Forty–one per cent of the total is planted and 59 per cent
is natural. Eighty per cent of the planted forest is under 45
years old, considered immature and requires tending and
thinning (Government of Japan, 2006).The precise amount
of satoyama in Japan depends on the definition of satoyama
and method of calculation. According to the Ministry
of Environment approximately 40 per cent of national
land is considered satoyama (2001a), on the basis of land
assessments that consider woodland cover and population
density.
A multitude of reasons could be attributed to the increase
in forest cover in the past three decades. The first reason
is connected with the replanting of forests to prevent
natural disasters such as floods, erosion and landslides. A
second reason has been the impact of global trade on the
forest commodities of Japan. In recent years Japan has been
importing cheaper timber from Southeast Asia and Russia.
This has had an impact on Japanese timber. The shift by
consumers to cheaper timber from abroad has impacted the
value of domestic timber and the subsequent abandonment
of the forestry sector in satoyama.
Such increase in forest cover can be seen to have
consequences which are both positive and negative. The
negative sides are apparent in the decline of economic value
of forests in Japan and the impact on creation of jobs in the
forest sector. On the positive side, Japan achieved its purpose
to prevent natural disasters with the considerable forest
cover. There is also potential for the development of its
forests in terms of new opportunities such as bio–resources,
carbon sequestration and other opportunities which Japan
can explore to revitalise the declining value of forests in
satoyama.
3.2 Satoyama and Environmental Policy
in Japan
Up until the 1990s satoyama did not fit within Japan’s legal
system for nature conservation (Takeuchi et al., 2001). The
two main national laws at issue are the Nature Conservation
Law (1972), which protects uniqueness, rareness and
academic value and the Natural Parks Law (1957), which
aims to protect areas of high scenic value. However, in the
past two decades in Japan there has been more emphasis
in policies that promote coexistence between humans
and nature, which is more amenable to the conservation
of satoyama. For example, the Basic Environmental Law,
enacted in 1993 that combined the Environmental Pollution
Control Law and the above mentioned Natural Conservation
Law emphasises this concept of coexistence. Article 14 in
particular of the Basic Environmental Law seeks to conserve
satoyama and Article 15 emphasises public involvement in
conservation efforts. The 1999 Basic Law of Food, Agriculture,
and Rural Community also regulates satoyama with regard
to agricultural landscapes.
Legal regimes governing river protection also offer potential
frameworks for enhancing satoyama. A 1997 amendment
of the 1896 River Law promotes a management and
development approach that is area–specific and relies on
participatory, bottom–up processes. This river basin approach
also extends to sustainable forest management, in preventing
landslides and flooding, and in protecting headwater quality.
In particular, the river basin approach allows links between
upstream and downstream communities so that equitable
sharing of benefits and burdens can be developed. Opinion
polls show that disaster prevention, particularly protection
against flooding, maintains its long–held place as Japanese
citizens’ top forest management priority (OECD, 2002).
Also, in the 1990s the former Environment Agency (now
the Ministry of Environment) provided municipal planning
guidelines, which refer to satoyama and advocate that
planning “…go back to the basics and reexamine how to
appropriately manage and use the woodland and agricultural
land, while improving the health of local economies and
minimising impacts on the natural environment” (Takeuchi
et al, 2003, pp 37). In municipal plans themselves, some
prefectures have made specific provisions for satoyama. For
example, the 1997 Miyazaki Prefecture Basic Environmental
Plan, the 1997 Gunma Prefecture Environmental Plan and
the Aichi Prefecture Basic Environmental Plan all designate
satoyama as a particular land use classification (Takeuchi et
al, 2001).
3.3 Policy Responses to Degradation of
Satoyama in Ishikawa
Starting around 2000, Ishikawa Prefecture saw the start of
activities such as the Prefecture’s “Satoyama Conservation
Working Holiday” 36 and Kanazawa University’s “Kakuma
Satoyama Nature School” 37 , together with the establishment
of various types of satoyama–related groups. Furthermore, in
2004, the Prefecture established the system of “Agreement for
the Conservation and Restoration of Satoyama” 38 as a method
for supporting citizen groups. So far, the prefecture has
allocated subsidies to four groups as initial activity expenses.
In addition, as activities for social contribution, the number
of companies working to preserve satoyama has increased in
recent years. Such activities undertaken by government and
citizenry have served to provide opportunities for people to
become involved in satoyama conservation. This is fulfilling a
very important role in the widespread education of the need
to conserve satoyama. As satoyama is representative of land
areas where people lived in close association with nature,
and based their livelihood on the sustainable use of this
17

nature, satoyama should be accorded worldwide attention.
As the keywords “coexistence”, “recycling”, “sustainability”
and “ensuring biodiversity” which are necessary for resolving
environmental issues are all applicable to satoyama, this
is good ground for focusing on satoyama as a field for
environmental education.
3.4 Forest Thinning Progress in Ishikawa
Prefecture
In 2000 Ishikawa Prefecture set a goal to increase areas
that receive forest thinning from 2,333 hectares in 2000 to
2,600 hectares in 2010 (Agriculture, Forestry and Fisheries
Department, Ishikawa Prefectural Government edition,
2002). Through initiatives such as promoting the use of forest
thinnings in public works projects, 39 thinning areas have
increased since 1996. According to the Forestry Management
Division, Agriculture, Forestry and Fisheries Department,
Ishikawa Prefectural Government (2006b), area receiving
forest thinning grew from 3,337 hectares to 3398 hectares
from 2004 to 2005 and supply of thinned logs increased
from 16,251 cubic meters to 22,360 cubic meters. According
to the government, this demand is driven by use of forest
cedar thinnings in the manufacture of plywood (Forestry
Management Division, Agriculture, Forestry and Fisheries
Department, Ishikawa Prefectural Government, 2005). Still,
the area of artificial forest in Ishikawa Prefecture requiring
thinning (approximately 16–45 years growth) amounts to
as much as 59,000 hectares. While there is considerable
progress in recent years, then, there is still considerable room
for growth.
3.5 Policy on Wood Block Technology
In order to expand the use of domestic materials and
wood block construction, it is necessary for national and
local public organisations to take the initiative in forming
various policies toward their utilisation, to develop basic or
advanced technologies, and to promote the establishment
of distribution systems. In addition, it is also important
for government to support and promote these activities
performed by citizens among others.
Kizukai–Undou:
In 2005 the Ministry of Agriculture, Forestry and Fisheries
started the “Kizukai–
Undou (Wood Products Use Campaign)”
in conjunction with the carbon sink enhancement goals
under the Kyoto Protocol (see section 5). The plan calls for
increasing the current amount of domestic wood use from
17 million cubic meters to 25 million cubic meters (Forestry
Agency edition, 2006a). 40 Specific measures include the
development of technology to improve material performance
in resistance to fire and pests, the promotion of the use of
local materials for public facilities, the development of reform
materials to respond to interior remodeling requirements, the
development of a supply system, development of advanced
technology related to new woody materials, biodegradable
polymers, and ethanol fermentation, and the execution of
market surveys to discover new areas of demand (Forestry
Agency edition, 2004, 2005, 2006a).
Activities in Ishikawa:
In the “21 st Century Ishikawa Vision to Promote Forest,
Forestry and Wood Materials Industry”, Ishikawa Prefecture
has set a goal to increase the supply of wood materials
produced within the prefecture to 220,000 cubic meters (40
per cent of prefecture produced materials) by the year 2010.
Also, to establish a stable supply system for source wood
and a supply system for homes using prefecture–produced
materials, the prefecture is organising a “Network for Home
Building Using Hometown Lumber”, as well as implementing
policies for the proactive use of prefecture based materials
in public facilities through the “Project for the Promotion
of Prefecture Materials Utilisation”. 41 As an example, the
development of a center for the distribution and processing
of wood materials is moving forward based on efforts by the
Kaga Forest Association. If two further scheduled centers
are established within the prefecture, it is expected that the
use of prefecture materials and forest thinnings will take a
dramatic leap forward.
18

Under the prefecture’s support plan related to the use of
local materials, if a newly built or purchased residence
was built using more than a prescribed amount of locally
produced material, a portion of the construction costs will
be subsidised. 42 This system is currently been implemented
in Kanazawa city, Komatsu city, Hakusan city, Nomi city,
wajima city, and Anamizu-cho and its further expansion is
under consideration.
3.6 Policy on New Energy Products
New Energy Market Development Policy in Japan:
Japan has a significant history of research and development
for new and renewable energy that began with the oil
shocks in the 1970s. Soon after the first energy crisis in
the 1970s, METI (then Ministry of International Trade and
Industry (MITI)) launched various research activities on
new and clean energies leading to the Sunshine Project
(R&D on New Energy Technology) in 1973 and the Moonlight
Technology (R&D on Conservation technology) in 1978.
The New Energy and Industrial Technology Development
Organization (NEDO) was established in 1980 after the
second oil shock to develop new, oil–alternative energy
technologies, and activities to promote new energy and
energy conservation technology were subsequently
added in 1993. Due to these and related industrial
efficiency programmes, Japan decreased energy intensity
considerably from 1974.
The primary focus for new energy research and development
from the 1990s in Japan has been PV 43 and geothermal
energy. In 1994 Japan adopted the “Basic Guideline for
New Energy Introduction” as a Cabinet decision, calling for
government–wide efforts to introduce new and renewable
energy. In May 1997, the Cabinet adopted an “Action Plan
for the Reform and Creation of Economic Structures” to
initiate structural reform of the Japanese economy. The
Action Plan positioned “new energy” as one of the new
industrial sectors with future growth potential. In June
1997 the Law Concerning the Promotion of the Use of
New Energies was enacted. The law clarified the role of
various entities such as end–users and the government,
and incorporated financial assistance measures. Under this
law PV, wind power, solar heat, thermal energy conversion,
waste power, and waste heat were defined as “new energy”.
Biomass was added to this list in 2001, with a focus on R&D
for co–firing technology, small scale distributed power
generating systems, biomass gasification, biodiesel fuel,
and fuel ethanol production from cellulostic biomass.
As illustrated by the Meidensha project described above,
the projects are contracted to private entities and have
typically been small scale, as mountainous terrain makes
it difficult to collect large amounts of wood.
The 2003 Law Concerning Special Measures for Promotion
of the Use of New Energy, which introduced a renewable
portfolio standard requiring retailers to supply 1.35 per cent
of electricity generated from renewable sources by 2010
12.2 terawatt hours), included biomass as well as wind,
PV, geothermal, and small–scale hydropower. Under the
standard, utilities can produce the renewable electricity,
buy it from others, or purchase credits from other producers
through certificates. Utilities need to conform to annual
interim targets established by METI based on a baseline
for each company, i.e. the initial percentage of renewable
generation in their sales volume. Non–compliance with
the interim and final targets will be subject to fines. The
law aims to promote investment in new energy sources
with climate change mitigation and fuel diversification
as underlying policy goals. By international standards,
however, the 1.35 per cent target is relatively low.
A report on the Renewables Portfolio Standard (RPS) was
made in March 2007, which endorsed an expansion of
the target to 16 terawatt hours by 2014—the government
revises its RPS targets every five years. In terms of biomass
power generation, the report recommended an application
standard be added to the use of wood chips that would
require the government to examine how supply for
biomass power generation would be sustained over the
next decades. The report noted wood chips and waste from
construction and maintenance were in brisk demand to be
reintegrated as building materials (IEA, 2004a). 44
Biomass Nippon Strategy:
In December 2002, the Japanese government started the
“Biomass Nippon Strategy”. Several ministries participated
in formulating the Strategy, including the Ministry of
Agriculture, Forestry and Fisheries, the Ministry of the
Environment and METI. Under this strategy, the use of
biomass is aimed at the prevention of global warming,
the formation of a recycling society, the fostering of a
competitive new strategic industry, and the revitalisation
of the agriculture, forestry, and fisheries. The strategy
defines biomass as a “renewable, organism–derived
organic resource, excluding fossil resources”, and include:
waste biomass (paper waste, livestock waste, food waste,
construction–derived wood residues, black liquor, and
sewage sludge), unused biomass (unused portions of
farm crops, such as rice straw or rice husk, and forestry
residues), and energy crops and new crops (marine plants
and genetically modified crops). The strategy sets a goal of
raising the current use rate of unused biomass to 25 per
cent from 20 per cent by 2010, and to use 10 per cent of the
material remains in forests in particular. The plan aims by
2010 to have 330 megawatts of solid biomass generation,
up from 71 megawatts in 2001 (IEA, 2004b).
Activities in Iwate Prefecture:
Iwate Prefecture is undertaking initiatives to expand
woody biomass energy. As part of the Master Plan of
Iwate Prefecture which is the basic plan in the prefectural
policy intending to become the “environmental capital”,
they are conducting research into reducing the burden
on the environment and into the environmental fields
and are promoting advanced initiatives in the area of
industrialisation. As an example, the “Iwate Woody Biomass
Energy Utilisation Expansion Plan” was established with
the objective of achieving coordination between the
prefecture, industries, and NPOs for the development
and introduction of pellet stoves and chip boilers,
the development of a pellet distribution system, and
implementation of promotional events and environmental
education among others. Through such activities, the
prefecture intends to expand the use of these resources by
19

the public (Forestry Agency edition, 2005).
A significant resource to sustain cooperative efforts at
industrial development projects is the many NPOs and
citizens already involved in satoyama conservation.
Ishikawa Prefecture has also adopted a policy to
collaborate and coordinate with citizens to promote
the use of wood materials and the development of
infrastructure such as the aforementioned center for
distribution and processing. Forest supporters and
leaders in satoyama conservation are being trained who
will act as leaders in forestry development operations and
satoyama conservation activities with participation by
prefecture citizens. Furthermore, the prefecture decided
to introduce an “Ishikawa Forest Environment Tax” from
FY 2007. It will establish a fund based on annual tax
proceeds of 360 million yen, which will be used for the
thinning of neglected artificial forests that are important
to the public; the support of volunteer activities to protect
forests (Mainichi Shinbun, 16 December 2006 morning
paper); and the support of satoyama conservation
activities (Hokkoku Shinbun, 21 November 2006, morning
paper).
3.7 Policy on Carbon Markets
Japan and the Kyoto Protocol:
Under the Kyoto Protocol of the United Nations Framework
Convention on Climate Change (UNFCCC) Japan is
required
to reduce greenhouse gas emissions such as
carbon dioxide by 6 per cent in 2008–2012 compared with
1990 levels. 45 Total greenhouse
gas emissions in FY 2003
was 1,339 million tons (in CO 2
equivalent), an increase
of 8.3 per cent compared to emissions in the base year
(1990) under the Protocol (Government of Japan, 2006).
While, CO 2
emissions per unit of GDP decreased by 5.2
per cent since 1990 (IGES, 2006), Japan has a significant
challenge in reducing its emissions to levels stipulated
by the Protocol, which the country ratified in 2002. The
energy sector accounted for the most emissions (89.5
per cent), followed by industrial processes (5.6 per cent),
agriculture (2.5 per cent), and waste (2.4 per cent). Japan’s
marginal cost to achieve the Kyoto target is the highest
among Kyoto signatories, with a median abatement costs
at US$ 300 per ton in carbon (tC) (IGES, 2006), pointing to
the important role for offset projects and carbon trading
for the country.
In 1997 Japan established the Global Warming Prevention
Headquarters and drafted abatement guidelines under
the “Measures to Prevent Global Warming” in 1998,
which were revised in 2002. Based on a 2004 review of
those measures and with the entry into force of the Kyoto
Protocol in February 2005, the government initiated the
“Kyoto Target Achievement Plan”, which will be reviewed
in 2007. Under the 2005 plan the government will meet
its 14 per cent Kyoto gap through reductions of GHG
emissions (6.5 per cent), through removals in forest sinks
(3.9 per cent) and through Kyoto’s flexible mechanisms
(1.6 per cent).
Forest Sinks under Japanese Kyoto Target Plan:
Article 3, paragraph 3 of the Kyoto Protocol requires
developed
countries like Japan to account for the balance
between afforestation, reforestation and deforestation
since 1990. In other words Japan must take account of
forestry activities that increase or decrease forest carbon
stocks (or cause other GHG emissions) since the base year
of the Protocol. Current data on Japan’s sink removal rate
is not available. The latest data—for 1995—shows that
removals in that year in the land–use change and forestry
sector were 96.6 million tons, an increase by 15.2 per cent
from 1990, and a 3.4 per cent enhancement in comparison
with the previous year (Government of Japan, 2006).
There have been a steady increase in removals by forestry
and parks, a decline in emissions from harvested wood,
and and an increase in emissions from forestry and
grassland conversion. On balance there has been a steady
increase in sink removals a since 1990. Removals by forests
were the biggest removal category (see Table 3).
20

Table 3: Trends in Emissions and Removals of GHGs from Land–Use Change and Forestry (LUCF) Sector
Category 1990 1991 1992 1993 1994 1995
Removals by Forestry -146.056.09 -142,032.48 -142,061.31 -142,090.14 -142,118.97 -142,147.79
Removals by Parks -90.65 -94.28 -103.41 -106.82 -111.55 -114.49
Emissions Harvested
from Wood
Forestry and Grassland
Conversion
61,664.52 57,352.68 55,680.02 51,193.14 47,758.15 44,614.75
637.61 999.46 1007.09 1014.72 1022.35 1037.61
Total -83,844.62 -83,774.63 -85,477.60 -89,989.10 -93,450.01 -96,609.92
Source: Government of Japan, 2006
The target of the Government of Japan is to ensure removal
of the 13 million ton in carpon (tC) (47.67 million ton in CO 2
,
approximately 3.9 per cent compared to the total emissions of
the base year). 46 According to Japan’s Fourth Communication
to the UNFCCC, the 2001 Forests and Forestry Basic Plan under
the Forests and Forestry Basic Law provides the framework in
which Japan plans to achieve this target. Specific measures
include:
• Developing sound forests through: the promotion
of efficient and effective thinning of forests by
strengthening collective thinning operations and
promoting greater use of thinned wood; engineering
a shift toward forests with longer cutting cycles and
multistoried forests; developing countermeasures to
eliminate the land allowed to be left denuded; and
promoting programs to secure and foster essential
personnel responsible for forest development.
• Promoting appropriate management and conservation of
protected forests through: appropriate operation of
land use conversion regulations and logging regulation;
planned designation of protected forests; promotion of
appropriate forest conservation management; planned
promotion of forest conservation projects in mountain
regions with a high disaster risk and denuded forests in
the hinterland; promotion of countermeasures to prevent
and control damage caused by pine weevils and other
forest pests and wild birds and animals; countermeasures
to prevent forest fires; and expansion and enhancement
of natural parks and nature conservation areas.
• Promoting the participation of citizen groups and a
wider range of actors by: improving the skills of forest
volunteers and and safety systems; promoting forest
environmental education; and promoting a green worker
program in national parks that aims to protect flora and
fauna, including forests.
• Promoting of the use of timber and wood biomass by:
promoting the utilisation of locally supplied timber
in houses and public facilities; promoting consumer–
focused programs to expand the user base for locally
supplied timber; developing production, distribution
and processing systems; and promoting the utilisation
of low–grade timber and wood biomass for energy and
products.
The total value of the budget related to the Outline for
Promotion of Efforts to Prevent Global Warming for FY
2005 is 1.1428 trillion yen. In that year 408,063 million yen
were budgeted to the Ministry of Agriculture, Forestry and
Fisheries. Sectorally, 356,673 million yen was budgeted
for the promotion of forestry, with a relatively significant
allocation if considered next to nuclear power allocations,
for example, which received 206,644 million yen in the same
year (Government of Japan, 2006).
Carbon Emissions Trading in Japan:
As mentioned above to date, Japan has not developed
a national carbon emissions trading scheme or related
forestry–based project system in its effort to meet its Kyoto
targets. A number of Japanese industries are participating
in a voluntary scheme—the Voluntary Emissions Trading
Scheme—launched in May 2005 by the Japanese Ministry
of the Environment and several private companies.
Thirty–four companies are participating in a trial scheme,
covering trading of 27 MtCO 2
. At this stage the Japanese
CO 2
emissions trading programme is small and excludes key
actors like power utilities. Under the current 2007 review of
the 2005 Kyoto Target Achievement Plan, the government
is investigating the development of a mandatory scheme
to meet its Kyoto targets, although the proposal remains
contentious at the time of writing of 2007, particularly as an
issue between the Ministry of Environment and METI (Point
Carbon, 9 July 2007).
3.8 General Discussion on Policy
As graphically illustrated below, the price per cubic meter
of locally produced cedar wood in Japan was lower relative
to the price of imported larch during the 1995–2000
timeframe. However, the price of imported larch continued
to decrease, while that of domestic cedar increased during
next five–year period (2000–2005). This trend suggests that
although the argument that cheaper prices of wood imports
is one of the key factors affecting the economic uncertainty
in satoyama forest products in Japan, the price of domestic
wood substitute (cedar) has, in fact been competitive until
after the year 2000. Assuming parity in the quality of these
two products thereby making them close substitutes, and
given the fact that Japan’s forest build–up increased by 450
million cubic meters of wood, domestic market has been
advantageously positioned to perform better than the
import market. In this context, the regional trade regimes
and other trade agreements within which wood is imported
into Japan, may explain why the domestic wood market
has not out–performed its import counterpart. A targeted
review of the trade pacts might reveal the policy responses
to be effected from the point of view of Japan in addressing
this issue.
21

Figure 11: Price by Year Comparison: Domestic Cedar versus
Imported Larch
An integrated analytical approach is necessary in the
conceptualisation and development of effective incentives
for economic revitalisation of satoyama forest resources.
For example, Swallow, Leimona, Yatich, Velarde and
Puttaswamaiah (2007) use both inductive (i.e. institutional
and policy innovations) and deductive (i.e. drawing from
what experiences in other parts of the world) approaches in
analysing and proposing the conditions for effective market–
based mechanisms for ecosystem services. In general,
institutional change occurs in line with either an economic
logic or a political logic, or a combination of these two.
satoyama forest resources are a part of the overall Japanese
forest resources whose stakeholders include national,
provincial and local governments, and communities, private
corporations, and individual citizens as owners. Swallow et
al (2007) hypothesise that changes in scarcity of inputs, new
technologies available to transform inputs into outputs, and
output markets are drivers of institutional change in the
development of effective economic incentives environmental
services. Based on this theoretical proposition, it can be
pointed out that (a) satoyama has ample supply of wood
resources and (b) new technologies such as wood blocks and
biofuels are emerging. However, new output markets have
not sufficiently evolved for these new products, while the
traditional domestic market for wood materials is still less
than twenty per cent of total consumption in Japan (Forestry
Agency, 2006a).
As already stated, political logic can also lead to institutional
change, resulting in the desired impact on Japan’s forestry
sector in general and satoyama in particular. Jordan,
Wurzel, Zito and Bruckner (2003) identify three models of
institutional change consistent with political logic. These
they term, respectively, as ideas dominant,
settings dominant,
and chaos dominant. The ideas dominant model states that
policy change could occur if stakeholders collectively exert
pressure and influence on the policy process. Thus, satoyama
stakeholders may need to coalesce with other economic
stakeholders to leverage their impact as policy advocates on
Japan’s policies on the importation of wood materials. The
settings dominant
model states that policy change occurs
within a political context which, at least partly, influences
the policy makers’ choices. This implies that any policy
change in Japan in respect of the economic revitalisation of
forest resources will have to be pursued within the context
of the regional and other trade protocols that Japan has
ratified over the past several decades. This is likely to involve
delicate negotiations with the countries that are currently
supplying substantial quantities of wood materials to
Japan, as well as Japan–based business that thrives on such
imports. Furthermore, supply–side policy responses, such as
public expense on research and development of the wood
block technology, might be perceived by international trade
partners as subsidy, if the trade protocol prohibited such a
subsidy by member countries. This point leads us to briefly
consider the chaos dominant
model of institutional change
(Jordan et al, 2003), which recognises the policy process
as fluid and sometimes unpredictable. Other related or
unrelated problems could be encountered during the policy
process (Swallow et al 2007; Jordan
et al 2003; Kingdon,
1984). Hence, the objective of economic revitalisation of
satoyama forest resources in a particular prefecture might
have to compete with other economic interests and actors
within the Japanese forestry sector or regional trade status
quo. Ultimately, the question might be one of the overall
national interests of Japan, a question that would involve
considerations other than purely the economic.
We mentioned above that institutional change can also be
pursued through a deductive approach, in this case involving
a search and adaptation of experiences from other countries
or places to address the current economic stagnation of the
Japanese rural forestry sector. This approach involves asking
the question: what is Japan doing differently from other
Asian or developed countries in terms of forestry resources
governance? In other words, what are key differences in
terms of the ownership, application of technology, goods and
services, market institutions and actors in Japanese forestry
sector relative to other countries?
The effects of historical factors on the current economic
stagnation of the sector in Japan are not too hard to imagine.
For centuries, satoyama was part of the way people lived in
many rural communities, and that way of living has largely
eroded with urbanisation, industrialisation, and demographic
transitions over time. While there can be no reasonable
expectation that life will or should return to the “good old
days”, it is realistic to seek ways of adapting satoyama to the
twenty–first century conditions and assure the continuance
of the multi–functionality of satoyama ecosystems across
Japan.
Research 47 shows that managed ecosystems such as
satoyama generates a greater multi–functionality than
secondary forests, although less so than primary forest,
especially tropical rain forests. In other words, since both
biodiversity and multi–functionality are degraded in
abandoned satoyama, the policy problem is how to increase
the human interaction with the satoyama ecosystem
resources in a way that increases the multi–functional
capacity of the ecosystem while addressing the economic
interests of the stakeholders. In this context, the market
for wood materials constitutes only one part of the issue.
The greater the number of stakeholder groups based on the
multi–functional capacity of the ecosystem, the greater the
potential stakeholder leverage over the policy change process
under the ideas dominant model institutional change. The
22

current stakeholder groups seem to revolve mainly around
only a few ecosystem services markets: timber and other
wood materials consumed in a range of economic subsectors;
application of forest thinnings in products (e.g. wood blocks);
new energy products (e.g. biomass/biofuels); ecotourism
and green tourism. In many developing countries, non–
timber forest products (NTFPs) form a significant part of the
local food chain, unlike in Japan. Therefore the provisioning
services of satoyama ecosystems in the twenty–first century
has to be viewed from the perspective of the living conditions
and life style of the present day Japan.
Market–based approaches to environmental management
evolved at theoretic and policy levels in the 1960s in an era
in which the works of scholars such as Crocker (1966), Hardin
(1968) and Dales (1968) were seminal. While Hardin’s work
centered on collective action problems involved in the use
and management of natural resources, Dales and Crocker
proposed policy mechanisms to address problems related
to the management of urban/industrial pollution. In the
place of so–called ‘command and control’ approaches
which characterised the centralised state management of
environmental resources, policy started evolving cap–and–
trade mechanisms to deal with environmental problems.
Present New Environmental Policy Instruments (NEPIs) which
have evolved in Europe (e.g. eco–labels, business certification
schemes, voluntary industry–public environmental
agreements, and other market–based mechanisms) evolved
out of these 1960s ideas.
Economic incentives for satoyama management, in the
context of the foregoing historical perspective, would
imply alternatives to ccommand and control or integrated
conservation and development project (ICDP) approaches
which are traditionally associated with policy responses
to natural resources depletion problems. Satoyama forest
resources may be facing degradation in terms of reduced
multifunctionality of the ecosystems, but this is different
from the problem of resource depletion. Consequently,
market–based mechanisms that have been effective in other
environmental resources management in Asian, African and
Latin American contexts do not seem to be readily applicable
to satoyama.
Forest cover and the associated resources in Japan have,
indeed, increased rather than decreased over the last twenty
years, and the current economic stagnation and uncertainty
of the satoyama stems largely from under utilisation rather
than over–exploitation of the available resource base.
Therefore, policy responses need to target both the supply
and demand sides of the market for the potential goods and
services related to the forestry sector.
Nevertheless, the role of policy in evolving market–based
mechanisms for environmental management has to fit
within the macro and local contexts of the problem to
be addressed. Various logics of institutional change have
already been identified and discussed in this paper, and it
is important to point out that market–based mechanisms
for environmental management are essentially so called
because they are not driven by state decree as are command
and control mechanisms. Rather, market–based mechanisms
evolve out of the innovations among the sector stakeholders
and actors. It is also pointed out elsewhere in this paper
that although Japan and Sweden have comparable forest
cover, Japan now sources only about 1 per cent of its energy
from biomass while Sweden sources about 16 per cent. At
the national level, Japan’s current priority appears to be on
geothermal and PV energy options, thereby illustrating the
point made earlier about various logics driving the policy
process and options.
Despite a divergence between national and prefectural
priorities, it should be possible for local government
policies to reflect local priority on aspects that represent
local economic and strategic interests. Local governments
could still pursue supply–side and demand–side policy
interventions to promote markets for forest–derived goods
and services in order to respond more directly and quickly to
the economic interests of local forestry sector stakeholders,
including stakeholders related to the satoyama sector. The
key questions would then be: which products and services
should the local policy promote?; what specific constraints
should be targeted by policy?; who are the actors in the
market arena?; and what incentives do the actors want?
Perhaps a local (i.e. prefectural or regional) stakeholders
meeting could be used to articulate and discuss these
questions to inform the policy process.
Due to the uniqueness of satoyama as managed ecosystems
which suited human needs within the context of particular
socioeconomic, environmental, technological and demographic
conditions of Japan, cases are scarce on comparable conditions
in other countries 48 or contexts where comparable economic
problems could have been addressed. For Japan being an
advanced market economy, it is not difficult to imagine that
many entrepreneurs would have entered the downstream
sector (i.e. satoyama) if there were prospects of profitable
ventures around forest products.
Therefore, policy intervention in the forest products sector
will need to aim at long–term economic development
objectives, even while establishing indicators for monitoring
short–term progress toward the desired goals. Policies that
emphasise product and market research and development
(R&D), including the current private–sector led wood blocks
and new energy applications, would perhaps serve as the
most appropriate intervention at this point in time. For
economic actors and intermediaries within the satoyama
sector, expectation of a future sector boom would serve as
the economic incentive for increased input into their part.
Aspects of the R&D will need to focus on environmental
impact assessment of the various forest–derived products
and services undergoing research and development, thereby
helping to redefine satoyama in the twenty–first century
Japan.
There are currently many unanswered questions relating to
the supply side of the wood materials market, specifically the
domestic cedar versus import larch. For example, why are
domestic wood materials more expensive than the imported
ones? Where does the problem lie in the value chain? Would
technological innovation lead to greater cost efficiency
and lower prices for domestic wood materials relative to
imports, and thereby increase the market competitiveness
of the former? What needs to be done in Japan to achieve
23

such technological innovation in the shortest possible time?
Are there ongoing innovations that need to be encouraged
through appropriate compensation mechanisms for private
sector–led investment and management in the R&D
process?
Some of the flexible, market–based mechanisms that have
evolved in other parts of Asia under the Rewarding Upland
Poor for Environmental Services (RUPES) may be promising if
appropriately adapted to the satoyama institutional context.
Of particular relevance would be mechanisms that target
either the development of local communities’ capacity to
respond to and benefit from integration with wider social
and economic systems, or adaptive learning with emphasis
on identifying and analysing various flexible approaches,
including compensation for investment and management
(Raju, Puttaswamaiah, Sekher and Rumley, 2007).
Another area that seems in urgent need of policy intervention
is related the redefinition of roles for Third Sector (i.e. non–
governmental and non–profit organisations) and other
small– to medium–scale enterprises and households involved
in the local satoyama forestry sector. This is pertinent to
the emergence and sustainability of flexible, market–based
mechanisms to address local economic issues through the
forestry sector, and develop the capacity of intermediary
entities which are crucial in most effective compensation and
rewards mechanisms for environmental services. These local
actors may not fully understand or directly participate in the
United Nations’ CDM, but their involvement as local economic
actors would serves as incentives and guarantees for the
long–term sustainability of market–based arrangements, as
well as the attainment of local environmental conservation
agendas.
The issues of importance in terms of local economic
development in the abutting satoyama forests would
depend, in part, on the community’s history, perceived
developmental needs, and priorities. The needs could range
from inadequate public infrastructure, household poverty and
rural unemployment, to a scarcity of individuals with skills
in business development and satoyama management, to an
aged countryside population due to rural–urban migration
which occurred in the wake of Japan’s rapid industrialisation,
urbanisation, and economic transformation in the twentieth
century, especially after World War II. Addressing each of these
problems would call for specific policy responses at the local,
prefectural and perhaps national levels. The policy responses
will have to be also context specific, thereby varying from one
prefecture to the next. This is why an understanding of the
local context and its institutional arrangements is so crucial,
accentuating the need for a trans–sectoral collaborative
approach (i.e. involving government, business, non–profit,
education and research, and even cultural organisations).
forest expansion policies and programmes pursued by both
national and prefecture governments in Japan since the early
1960s could be viewed as part of the long–term strategies for
the economic revitalisation of the forestry sector in general
and satoyama in particular.
A long–term view of the process makes more economic sense
than a short–term view. An analogy can be drawn between
investing in satoyama revitalisation and investing in a sports
stadium or a highway: under normal conditions, the initial
public and private financial investment on such projects
can be fully recouped over time, plus a profit and a secured
future net revenue flow. Now that Japan has attained a 70
per cent forest cover, the next phase in the process toward
economic revitalisation is investment in the development of
niche products and the related markets. This would involve
adopting aggressive policies for enhancing the development
of the technologies for the proliferation of the identified
niche products, and the necessary bureaucratic systems to
address the needs of various stakeholders who will emerge
in the process.
Taking the lead in terms of investing in the development
of technologies and policy responses for economic
revitalisation of satoyama will position the Ishikawa
Prefecture as a pioneer and leader, thereby enabling the
prefecture to benefit economically from future national or
international diffusion of the technologies and business
innovations developed in Ishikawa. Therefore, while the
Ishikawa Prefecture might have to deal with the challenges
of pioneering the satoyama revitalisation effort, there are
potential future economic and political gains from such an
investment.
Perhaps the Ishikawa Prefecture could convene and facilitate
a series of stakeholder meetings to discuss the definition
of roles, responsibilities and expectations of participants,
as part of an effective strategy–development process to
boost a renewed momentum at the policy and partnership
collaboration level. Such a forum should be represented
by all stakeholders groups: government, business, NPOs,
informal organisations (small–scale family–owned businesses,
including local organic farmers), interested research and
educational institutions, and local residents. At the national
level, there is a strong need for the government of Japan to
review the existing import regime on wood materials, in
order to provide incentive for technological innovation on
the various products identified and discussed in this paper.
3.9 Investment in Satoyama Economic
Revitalisation
The economic decline of satoyama occurred in phases over an
extended period of time (in fact over nearly 6 decades) and,
therefore, any sustainable economic revitalisation will need
to follow a long–term process. In this regard, the successful
24

CONCLUSION
It is already evident that returning to the hay days of
satoyama is not a preferable measure to take in modern
day Japan. This is simply due to the fact that time changes
in society have occurred to the extent that it is not feasible
to return to the past. However, what is possible is to adapt
to the current trends of society and adopt measures in the
modern day context to revitalise satoyama. This policy brief
has concerned itself with the contention that in order to
revitalise and conserve satoyama in the face of depopulation
and deterioration, strategies must be developed that enhance
the economic value and utilisation of satoyama. As such the
paper has described three specific market opportunities
in commercial terms. These opportunities could form the
backbone of enhanced utilisation of satoyama, among other
commercial opportunities and incentives not discussed here
related to food production, traditional fertilisers, tourism
and so forth. It is important to recall that although these
opportunities are derived from larger market forces and
trends, they are still new market opportunities that have
high costs and uncertainty and require public support and
coordination. This is especially the case in promoting new
sources of biomass energy and most certainly the case with
any future carbon market opportunities.
development in Japan in general.
Marketing and Public Relations: It will be important to
conduct public relations activities to market the superior
characteristics of wood materials. It should also be noted,
however, that 40 per cent of the wood materials consumed
in Japan is sawn timber, a large portion of this is used as
construction materials for private homes (Forestry Agency
edition, 2006a) and the Japanese forestry has been inclined
to place emphasis on the production of materials for pillars
and posts, rather than the use of small diameter materials
and short materials from forest thinnings (Forestry Agency
edition, 2005). To this end, it will be important to provide
information and take various initiatives to promote the use
of local materials. Also, in order to widely disseminate the
wood block construction method it will be important to
give consideration to the protection of intellectual property
rights.
Notwithstanding the importance of developing incentives,
however, such projects and efforts need to be understood
in the larger context of satoyama protection and the
diverse array of benefits associated with that cause. In
order to conserve the satoyama ecosystem while using
its resources, a larger plan needs to be established, which
clarifies conservation and usage policies and establishes
maintenance methods for various environmental factors
in a given region. Such plans should also include efforts to
diversify forests while exploiting particular opportunities.
For example, the development of artificial forests—where
wood block materials are produced—should be augmented
with deciduous broad–leaved trees (where conifer and
deciduous trees can be mixed) in order to improve biological
diversity, watershed conservation, and prevention of soil
runoff. As such, natural broad–leaved forests can be used
as sources for firewood and charcoal, and efforts can be
made to protect and restore rare species, cultivate edible
wild plants, mushrooms, medicinal plants, and develop and
commercialise new species.
The formation of this multi–faceted grand design for
satoyama and its execution requires cooperation from actors
in agricultural and forestry as well as natural ecosystems
management. Conservation of satoyama can be promoted
through the formation of partnerships among various
entities, such as property owners and citizens in the area,
forestry associations, university and research institutions,
government, and NPOs, through open cooperation from
planning to monitoring. Furthermore, people living in
urban areas have the chance to participate in satoyama
conservation activities through ecotourism, and green
tourism. Interaction with the local people not only
promotes increased activity in the region, but provides an
opportunity for citizens to appreciate the existence and
importance of satoyama. The hope is that such diverse
and novel forms of human interaction with satoyama will
not only establish economic and environmental value in
a sustainable fashion but act as models for sustainable
25

ENDNOTES
1. In recent years, the import of cheaper logs, food and
vegetables into Japan from Russia, China and Southeast
Asia have caused people to abandon satoyama as it is
not economically beneficial to produce the same goods
from satoyama. For instance, a report by the Ministry of
Agriculture, Forestry and Fisheries indicates a decline in
Japan’s self–sufficiency rate. The rate of vegetables in
Japan declined from 100 per cent in 1965 to 82 per cent in
2003, and that of mushrooms does from 115 per cent to 77
per cent in the same period (The Mnistry of Agriculture,
Forestry and Fisheries of Japan, Wagakuni no Shokuryou
Jikyuuritsu (The Food Self–Sufficiency Rate in Japan), 2004,
p57–58).
2. See Kambu, A. and Nishi, M. “Human Well–Being and the
Restoration of Satoyama”, July 20, 2006, Available at .
3. According to Tsunahide Shidei, Professor Emeritus of Kyoto
University, who originated the term of satoyama around
1960, it means woodlands tied to agriculture as a word
taking the place of “agricultural woodland” and does not
include woodlands used for the purpose of production of
fire– wood and charcoal (Shidei, 2006).
4. The term “satoyama” first appeared in the 5th edition of
“Kojien” published by Iwanami Shoten in 1998.
5. “Ordinance for Protecting and Fostering the Environment
in Hometown Ishikawa Prefecture” was the first
comprehensive environmental ordinance declaring the
“conservation of satoyama ” in Ishikawa Prefecture. The
main constituents of the regulation relating to satoyama
can be found in the “Agreement for the Conservation and
Restoration of Satoyama”. See for details.
6. It should be noted that most evaluation of forests in Japan
are done in the general context rather than from the
specific satoyama context.
7. The forests discussed here include “okuyama”—remote
forests—such as beech forests and oak forests.
8. “Natural forest” is a contrary term to “artificial forest” and
describes a forest that is naturally regenerated, regardless
of the influence of human activity. See for details.
9. Under the definition of satoyama as “environments
primarily made up of forests established through human
interaction”, this would include, in fact, the secondary
forests formed through making firewood and charcoal
and Japanese cedar trees planted as high as 1,000 meters.
However, the altitude (upper limit) of satoyama applied
here is the range following the distinction between hilly
districts—Camellia–japonica region—and mountainous
districts— Fagetea–crenatae region— categorised in the
zonation of vegetation, in addition to the above definition
of satoyama. The upper limit of the targeted area in the
study of “Satoyama Ecosystem Conservation Report” is
also the altitude of 350 meters (Japan Wildlife Research
Center, 2004).
10. However, as data limited to satoyama in Ishikawa
Prefecture is not available, the natural forests and artificial
forests discussed later are based on total forestry figures
for the prefecture.
11. Also called evergreen broad–leaved forests or laurel
forests. They consist primarily of evergreen broad leaved
trees such as Castanopsis sieboldii, Quercus salicina, and
Camellia japonica.
12. This is the policy of cutting of natural deciduous broad
leaved trees and planting conifer such as Japanese cedar
and Japanese cypress. This policy has also been spurred by
innovations in the paper manufacturing industry and the
use of broad leaved trees as a raw material for pulp.
13. This problem can also be confirmed from looking at the
Red Data Book of wildlife in Ishikawa under threat of
extinction (Nature Conservation Division, Environment
and Safety Department, Ishikawa Prefectural Government,
2000). Of the 460 types of plants and animals listed as
type I or type II endangered species, approximately 60 per
cent are species that inhabit satoyama environments.
14. The number of Asiatic black bears that were caught or
died in Ishikawa Prefecture from mid–September, 2004
to mid–November was approximately 170 (Hayashi and
Nozaki, 2004).
15. Blight to pine trees caused by pine wood nematode
transmitted by the Japanese pine sawyer beetle and
generally called pine tree woodworm damage.
16. The proportion of tree types in artificial forests is 71 per
cent Japanese cedar and 12 per cent Japanese cypress
(Forestry Management Division, Agriculture, Forestry and
Fisheries Department, Ishikawa Prefectural Government,
2005).
17. Although there are various definitions, the Ministry of the
Environment defines it as “while experiencing and learning
about the natural environment and cultural history,
tourism which teaches responsibility for the conservation
of the natural environment and cultural history in the target
areas”. In a lot of cases, the definition must necessarily
include how a ripple effect be provided to the regional
economics in order to conserve regional resources. Refer to
.
18. A form of tourism advocated by The Ministry of Agriculture,
Forestry and Fisheries for the purpose of “co–existence and
exchange between urban and rural areas”. This is defined
as “extended–stay leisure activities for enjoying nature,
culture, and interaction with people in rural areas. Refer to
.
19. This condition is described in a “FY 2005 Annual Report
on Trends of Forest and Forestry” (Forestry Agency edition,
2005): “Japan has previously confronted the dangers of
forest deterioration through lumbering practices which
exceeded the regeneration capacity of forests. But this is
the first time in our history where, because the cycle of
logging, planting, and nursing of artificial forests has not
functioned smoothly, we have been faced with a possible
hindrance to the realisation of public functions. The largest
issue we are currently facing is how to proceed with the
maintenance and conservation of artificial forests that
have been grown, in light of the increasing feasibility of
using them as wood resources.”
20. A summary is also provided at .
21. Wood block production is a construction method
(patent currently being applied at patent application
2001–182632) developed by Junji Deguchi, Representative
Director of Deguchi Construction Ltd. located in Hakusan
City, Ishikawa Prefecture. In 2003 it was recognised as a
“wood siding wall filled in frame (WSF)” which would
satisfy “frame requirements for structural strength”
in accordance with section 4, article 46 in the Building
26

Standard Law Enforcement Order. Wondering if there was
some way to make effective use of cedar trees thinnings
that were simply rotting away, Mr. Deguchi came up with
this method after numerous trials. It can be said that forest
thinnings were the starting point for this invention.
22. Refer to the web site of Deguchi Construction at
for details.
Compared to the double scaling factor in shear wall
strength achieved by placing 45 mm x 90 mm struts as
indicated in the Building Standard Law, this production
method has been recognised to achieve a scaling factor of
2.37 times and therefore has higher earthquake resistance
compared to standard wall construction methods.
23. Refer to the Japan Log House Association Website at
for details.
24. The current cost for a residential construction with
average scale and specifications using the wood block
construction method is 400,000 to 500,000 yen per tsubo
(roughly 3.3 square meters). This is roughly equivalent to
conventional construction costs, but if costs associated
with transportation, drying, and processing of forest
thinnings can be reduced, it is highly likely that wood
block construction will become less expensive.
25. Firewood, which is the most simple and traditional wood
based fuel, does not require production or processing
equipment. However as it requires significant labor to fell,
cut, and transport and takes up space during transport,
its costs are quite high. Currently, in Ishikawa Prefecture,
purchasing broad–leaved firewood suitable for wood
stoves from a dealer costs 40,000 to 50,000 yen per ton,
including transport—about twice as much as kerosene.
In recent years, in the backdrop of increased interest
in the so–called “slow life” movement together with
sudden hikes in crude oil prices, there has been a renewed
interest in firewood stoves. While users are increasing,
the popularisation of wood stoves is likely impeded by
high cost stoves, firewood and limited firewood supply.
Enhanced supply and better use of forest thinnings could
help expand satoyama sources firewood for modern
heating stoves.
26. Refer to for details.
27. Solid wood fuel formed in cylinder shapes of roughly 15
mm from sawdust, etc.
28. See HM Treasury, 2006; IPCC, 2007; and IGES, 2006.
29. J. Dales. Pollution, Property and Prices (Toronto: University
of Toronto Press, 1968).
30. Mark Jaccard, Sustainable Fossil Fuels: The Unusual
Suspect in the Quest for Clean Energy (New York:
Cambridge University Press, 2005).
31. See World Bank, State and Trends of the Carbon Market,
2007.
32. The amount of carbon emissions is only 25 per cent that
of steel frame and concrete, and the amount of carbon
storage is approximately 4 times that of steel frame and
concrete.
33. Also, according to the building standards law, in fire
prevention districts where fireproof construction is
required, there are cases where wood block can not be
used as is as there are restrictions on the material and
structure of external walls.
34. Japan has several climate change related vulnerabilities,
according to Stern (2006). Climate change will exacerbate
Japan’s existing vulnerability to typhoons and coastal
storms. Tokyo which extends over a flat coastal plain
will be vulnerable both to typhoons and rising sea levels.
Higher temperatures will make rice more difficult to
grow in the south. Fish are vulnerable to rising ocean
temperatures and increased acidity. Major cities will be
increasingly affected by the urban heat island effect and
rising temperatures will make a fast ageing population
more vulnerable both to heat and the spread of infectious
diseases such as malaria and dengue fever.
35. As summarised by HM Treasury (2006).
36. Satoyama conservation activities with Prefectural citizen
participation to protect rare plants and animals through
weeding, thinning, and making paths in mixed tree
thickets. This is being performed several times a year at
the Yuhidera Natural Park in Kanazawa city.
37. As one of the regional contribution projects performed
by Kanazawa University, in addition to the education and
research activities utilising the satoyama of the Kakuma
campus, they are undertaking various activities such
as education and exchange activities for citizens and
development of satoyama educational programs. Refer to
< http://www.Satoyama-ac.com/> for details.
38. An agreement between satoyama land owners and
satoyama activities groups and recognised by the
Prefecture and which establishes a system of support
through subsidies. For details, refer to .
39. “Project Team for Promoting Utilisation of Wood Material
supplied within Ishikawa Prefecture” composed of the
related Departments and Divisions has been established in
Ishikawa Prefecture to promote the use of forest thinnings
by public–works projects such as the construction of public
buildings and other public works.
40. Details can also be reviewed at .
41. In recent years, local wood is being integrated into the
construction in schools, daycare centers, and preschools.
Prefecture based materials were used for most of the
interior of the Bujyo Elementary School located in Hakusan
City, for example, which was completed in 2006. Such
practices enable children to come in contact with woody
materials from an early age.
42. For homes that have a floor area of at least 80 square
meters and where at least either 50 or 75 per cent of the
materials used are produced within the prefecture, aid
(decided by drawing lots) is 200,000 yen for each house.
Refer to for details.
43. Japan has the second largest solar PV market in the world,
supported by the Subsidy Programme for Residential
PV Systems, 1994–2002. Although the subsidy is being
phased out, PV still has opportunities in Japan due to the
high electricity prices in the country.
44. Also, electricity generated by solar PV generation is to be
recognised as twice its value for the period between fiscal
2011 and 2014, because of the relatively high costs of PV,
especially compared to wind. PV generating 1 kilowatt will
be counted as 2 kilowatts to encourage power suppliers to
purchase more electricity from solar PV generation.
45. Refer to for details.
46. Calculation methods in Japan for the volume of carbon
27

emovals of forests are under development based on
the IPCC Good Practice Guidance for Land Use, Land–Use
Change and Forestry formulated in 2003. The preliminary
estimation is based on the numerical targets for 2010
in the Basic Plan on Forest and Forestry, calculated by
subtracting the losses by felling and land–use conversion
from the amount of total annual increment of forests
assumed as subject to activities under Article 3 paragraph
3 and 4 of the Kyoto Protocol, and then multiplying this
by the coefficient and converting this to the amount of
carbon dioxide.
47. See for example ICRAF Working Paper no. 32, 2007;
Scherr and McNeely, 2003; and ASB–Partnership for
Tropical Margins, Available at .
48. There are a lot of foreign areas in Indonesia (Java), the
Philippines and other Southeast Asian countries similar to
satoyama landscape.
28

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30

United Nations University
Institute of Advanced Studies (UNU-IAS)
6F International Organizations Center
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Tel: +81 45 221 2300
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Email: unuias@ias.unu.edu
Website: www.ias.unu.edu
The United Nations University Institute of
Advanced Studies (UNU-IAS) is a global think
tank whose mission is “advancing knowledge
and promoting learning for policy-making to meet
the challenges of sustainable development”.
UNU-IAS undertakes research and postgraduate
education to identify and address strategic issues
of concern for all humankind, for governments
and decision makers and, particularly, for
developing countries.
The Institute convenes expertise from disciplines
such as economics, law, social and natural
sciences to better understand and contribute
creative solutions to pressing global concerns,
with research focused on the following areas:
• Biodiplomacy,
• Sustainable Development Governance,
• Science Policy for Sustainable Development,
• Education for Sustainable Development, and
• Ecosystems and People
Ishikawa International Cooperation Research
Centre (IICRC)
The Ishikawa International Cooperation
Research Centre (IICRC) is a Special Programme
of UNU-IAS. It was jointly formed by the United
Nations University (UNU), Ishikawa Prefectural
Government, and Kanazawa City Government
in 1996. IICRC conducts research and related
activities aimed at providing local and regional
inputs into UNU’s efforts on sustainable
development and international cooperation. The
Centre’s main activities include analytical
research and organizing international conferences,
seminars and lectures in the fields of
environment, science, and technology.