Niche Markets for Economic Revitalisation of Satoyama Forest ...

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
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