Niche Markets for Economic Revitalisation of Satoyama Forest ...

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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
Page 1 and 2: Niche Markets for Economic Revitali
Page 3 and 4: IICRC Report Niche Markets for Econ
Page 5 and 6: CONCLUSION 25 ENDNOTES 26 REFERENCE
Page 7 and 8: Foreword Satoyama has always provid
Page 9 and 10: The first refers to the current and
Page 11 and 12: a) Working Definition Working Defin
Page 13 and 14: 1 EMERGING NICHE MARKETS FOR SATOYA
Page 15 and 16: 1.2 Commercialisation of Wood Block
Page 17 and 18: • Realising stable power generati
Page 19 and 20: In Japan, the priorities have been
Page 21 and 22: 2.3 Challenges Relating to Carbon M
Page 23 and 24: nature, satoyama should be accorded
Page 25 and 26: the public (Forestry Agency edition
Page 27: Figure 11: Price by Year Comparison
Page 31 and 32: ENDNOTES 1. In recent years, the im
Page 33 and 34: emovals of forests are under develo
Page 35 and 36: Nature Conservation Bureau, Ministr

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