Overview of Long-Term Trends of the Economy-Environment Nexus in Japan

Abstract

This chapter, as a first step of this book’s analysis on Japanese history of economy-environment relationship, overviews its long-term trends. First, we look at the trends of economic growth, environmental burdens, and environmental legislation. Then, to understand more clearly the relationships among them, we conduct a long-term estimation of three kinds of environmental costs: the costs of environmental measures, rents, and latent environmental costs.

By comparing these data and information, we divide the history into three periods—that is, from the 1960s to around 1970, from around 1970 to the mid-1980s, and from the mid-1980s to around 2010—and specify the economy-environment nexus for each period. In short, in the first period, latent environmental costs rose while rents and environmental-measure costs stayed low, showing a delay in the formulation of institutions against pollution. In the second period, environmental-measure costs and rents rose and latent environmental costs decreased, showing strengthened institutions against pollution, as well as impacts of the oil crisis. In the third period, there were no significant changes in environmental-measure costs and latent environmental costs, showing that strict institutions such as regulations were not formulated.

Using the estimations and observations in this chapter as a starting point, we proceed with a more detailed analysis in the following chapters.