The Japanese Environmental Industry - A Future Industrial Core?

The 1990s have been the decade to witness a sudden rise both in public awareness and official policies toward environmental issues. Although still considered an environmental newcomer by many, the Japanese government makes efforts to close the gap between Japan and Western nations. This can be seen as a result of pure necessity: Japan itself is experiencing severe cases of environmental destruction, and a shortage of natural resources. The lack of capacities for waste disposal is particularly problematic. A change in the way things are handled has become inevitable. The Japanese government has reacted by introducing a series of new laws for environmental protection. For a while, therefore, expectations regarding the development of a strong environmental industry were running high. However, the ongoing economic crisis may justify no small amount of skepticism. Environmental measures are costly and are still being avoided by many in favor of competitiveness. Even the role of the Ministry of International Trade and Industry (MITI) seems somewhat ambiguous. Support for the developing environmental industry is a claimed target of official MITI policy. However, the cost effectiveness of the other industries also has to be taken into account. As a result, measures essential for the protection of the environment are still being delayed or are carried out somewhat reluctantly.

All the above mentioned factors contribute to a rather blurred picture of the environmental sector in Japan. Optimistic projections and pessimistic evaluations quite often contradict each other, and the official policy with its definitely incremental approach further adds to the uncertainty. This lecture will analyze some of the influences on the development of the environmental sector in Japan such as public awareness, political trends and legislative novelties. It will start with a description of the present situation and the recent past. The main focus of the analysis will be on the innovative capacities of the Japanese environmental industry, given the restrictions of its socio-economic surroundings and its own structure. The presentation will also address perspectives for the future of the environmental industry in Japan, a question of fundamental importance for the future of the whole East Asian region.

Ilona Köster is a Ph.D. candidate at the Department of Economics at Marburg University, Germany.