Development Bank of Japan
Research Report
No. 45

How Life Cycle Assessment (LCA)Can Enhance the Fight against Global Warming

Overview
Life cycle assessment (LCA) is now entering the practicalstage. This report describes the current state of LCA, focusing
in particular on the Type III ecolabel. It also analyzes the
structural obstacles impeding implementation of global
warming measures that are in the interests of society as awhole. From an LCA standpoint, it recommends total optimization of global warming measures.

August 2004

Economic and Industrial Research Department
Development Bank of Japan
This report was originally published in Japanese as Chosa
No. 64 in April 2004.

Contents
Summary............................................................................................................................. iii
Introduction........................................................................................................................vii
I

Measures to Combat Global Warming and Life Cycle Assessment (LCA) ................ 1
1-1. What Is Global Warming?...................................................................................................... 1
1-2. The Transportation and Commercial/Residential Sectors: Emissions Up
Dramatically .............................................................................................................................. 3
1-3. Importance of the Life Cycle Approach and Structural Challenges.............................. 4
1-4. Difficulty of Cutting Emissions at the Manufacturing Stage and Importance ofLifecycle Emissions Analysis..............................................................................................11
1-5. Progress of LCA Efforts in Japan .......................................................................................14II

The State of LCA Today and Cases of LCA in Use ................................................... 18
2-1. What Is LCA? .........................................................................................................................18
2-2. Types of Ecolabels .................................................................................................................21
2-3. EcoLeaf and EPD Compared ...............................................................................................23
2-4. Japanese Action in the LCA Field ......................................................................................25
2-5. Overview of the Database.....................................................................................................26

III Challenges to Overcome in Promoting LCA Use ....................................................... 29
3-1. Problems with the LCA Database.......................................................................................29
3-2. Major Problems with LCA and Solutions to Them.........................................................32
IV Utilizing LCA to Achieve Total Optimization of Global Warming Measures .......... 37
4-1. Concrete Steps Taken by the Private Sector to Overcome Obstacles to LCA Use ..37
4-2. Advantages of and Caveats to Using LCA .......................................................................40
4-3. The Case of the Hybrid Vehicle..........................................................................................424-4. Utilizing LCA to Achieve Total Optimization of Global Warming Measures .........45
Conclusions ......................................................................................................................... 50
References........................................................................................................................... 51

Development Bank of Japan Research Report/ No. 45iHow Life Cycle Assessment (LCA) Can Enhance the Fight against Global
Warming
Summary
1. Japan's greenhouse gas emissions are on theincrease, diverging sharply from the emissions
reductions target prescribed in the Kyoto Protocol. With emissions expected to go on rising in
the transportation, domestic, and commercial
sectors, additional measures are essential.
Japan's present strategy for fighting global
warming is underpinned by the Guidelines for
Measures to Prevent Global Warming. Listingover 200 measures, these Guidelines basicallycomprise a potpourri of measures designed as
local optimums in the individual sectors of industrial, commercial/residential, and transportation. There is a mismatch between management
capacity within each sector and the incentives for
implementing the measures. For example, say acompany in the manufacturing sector reduces
emissions by developing and marketing more
efficient equipment, or reduces emissions generated through distribution of its products. Thoseamounts are not factored into reductions under
its voluntary action plan stipulated for industry
sector emission reduction.
In the transportation sector, private automobiles contribute the largest percentage of CO2
emissions. Not only do they account for over half
overall emissions; their emissions have risen
sharply since FY 1990. In the residential sector,
electric power etc., where emissions have grown
dramatically since FY 1990, accounts for thebiggest piece of the pie. But the exact breakdown
within that category has changed considerably.
Refrigerators, though still one of the biggest
sources of emissions, account for far fewer emissions than they used to. On the other hand,"washlet" toilet seats (toilet seats with built-in
automatic bidet), which did not even exist before,
have assumed a 5% share. In the commercial
sector, too, electric power etc. has experienced adramatic rise, in part due to the progress of officeautomation.

2. The usage stage accounts for the overwhelming percentage of CO2 emissions from private
automobiles, as shown by an examination of theemissions generated over the course of the whole
life cycle; direct emissions by the assembler area mere 3% of the total. It would be best if car
assemblers optimized choice of materials whilebolstering energy efficiency at the usage stage,
but under current circumstances incentives do
not work properly. While consumer behavior isimportant, there are also other problems in theform of lack of incentives and limitations of information and capacity. There are cases of, forexample, photocopiers whose life cycle emissions have been more than halved by slashingemissions at the usage stage, when the CO2
emissions load is heaviest. Greater effort hasgone into reducing emissions at the production
stage than at the usage stage, but achieving
quantitatively significant reductions at that stage
is difficult. The CO2 emissions reduction strategies currently being pursued at the production
stage are often relatively speaking fairly expensive. Many of Japan's industries boast the highest
levels of production energy efficiency in theworld; hence there is not that much room left for
further reductions. On the other hand, there arecertain products that reduce overall emissions bydramatically cutting emissions at the usage stage,
but greatly increase emissions at the materials
production and manufacturing stages. Suchproducts are to the benefit of society as a whole,
yet their manufacture is discouraged by a sector-by-sector approach. The stage at which theemissions load is heaviest varies considerablyfrom item to item; the usage stage is not necessarily the most emissions-intensive. It is important to conduct a life cycle assessment (LCA) on
each product and properly identify problem areas.
Limited number of companies as yet perform LCAs; a mere handful make the results
public. Approximately half of companies withsales of over ¥500 billion perform LCAs, but few

Development Bank of Japan Research Report/ No. 45iii

companies with sales of under ¥500 billion do so.
A survey of recent corporate action in the LCA
field reveals that manufacturers of electricalequipment are taking a wide range of measures,
including steps for environmental accounting
purposes. Certain general equipment and chemical manufacturers have taken steps to disclose
information on environmental load by for example obtaining Type III ecolabel certification.
3. LCA is a method of quantitatively assessing
the ecological impact that a product has over thecourse of its whole life cycle: resource inputs,
environmental load, and so forth. It originated in
an attempt to gauge the environmental impact ofbeverage packaging circa 1970, and took a major
step forward when work began in 1993 on establishing ISO standards on principles for LCA.
Japan, which once lagged behind Europe andNorth America, has been rapidly catching up.
For example, it made progress in constructing a
database under Phase I of the LCA Project, anational project launched in 1998 involving industry, academia, and government.
Phase I of the LCA Project succeeded inconstructing a database consisting of some 550
items of inventory data. With the cooperation of
54 industry associations, extensive and deep database was constructed like no other in theworld; moreover, the task of collecting data in
itself raised the level of LCA knowledge among
companies.
One way to utilize LCA is the Type III ecolabel, which presents environmental informationfrom an LCA in quantitative terms. The Type III
ecolabel, for which an international standard is tobe established in 2006, promises to come into
widespread use. In Japan the EcoLeaf and EPD
are currently in use. Many final products, such as
officeequipment
andcameras,are
EcoLeaf-certified, but the EcoLeaf is not in very
extensive
use
in
the
materials
andnon-manufacturing sectors. EPD is typicallyused for intermediate products.
4. The current database is limited in terms ofdata accuracy and use because of problems inmaking adjustments for overlapping and missing
data and such constraints on data collection as
corporate secrecy. The relative difficult of comiv

Development Bank of Japan Research Report/ No. 45

piling data varies due to differences in the valueof LCA data depending on the product and technical obstacles such as variations in product design and method of manufacture. Only a small
amount of the data can currently be put to practical use, even at the level of the individual firm,and even that is not of high quality; therefore thedatabase will need to be further refined.
A host of challenges remains to be overcome in promoting LCA use: ensuring comparability of data, obtaining outside data, shortening
the time LCAs take, a dearth of personnel qualified to use LCA, lack of understanding on thepart of consumers, restrictions on Type III ecolabel use, ensuring compliance with legal regulations, etc. But, while such problems do exist,
they can each be dealt with. An environment has
emerged where the LCA can be put to gradualuse. It is to be hoped that use of LCA will expand through provision of appropriate public
support, such as assistance to medium and small
businesses in the materials and components
fields when conducting their first LCA.
5. Firms in the private sector are taking various
ingenious approaches to overcoming these problems. There are examples of medium and small
businesses obtaining Type III ecolabel certification, or of companies developing systems for
efficiently collecting and processing LCA data.
Gradual progress is also being made in what
would appear to be more challenging areas, suchas taking steps to utilize LCA in so-called designfor environment (DfE). There are numerous reported cases of global warming measures in theindustrial sector contributing to reductions in thetransportation or commercial and residential
sector. Further progress can be expected as longas planned, systematic support is provided.
LCA offers a wide range of advantages. For
example, it allows companies to manage environmental load effectively and efficiently in all
aspects of their operations. But there are caveats,such as the discrepancy between who bears thecost and who enjoys the benefits, or the time lag
until LCA benefits are realized. As the exampleof hybrid vehicles demonstrates, estimated benefits vary greatly depending on such factors asconditions of use. It is to be hoped that the scopeof the LCA will expand to cover all major envi-ronmental impacts from overall corporate operations on a global scale, rather than merely CO2emissions at home.
Implementing global warming measures thatare effective from an LCA standpoint can only
be accomplished to a limited extent by private-sector firms on their own, which after all do
not enjoy all the benefits. Progress can be madein harnessing LCA as a means of achieving total
optimization of global warming measures if thegovernment, with its capability to make adjustments over time and between sectors, develops
proper infrastructure and provides appropriate
incentives.
[Takao Aiba (e-mail: taaiba@dbj.go.jp)][Hiromichi Kunimi]

Development Bank of Japan Research Report/ No. 45v

Introduction1
On March 19, 2002, Japan adopted the Guidelines for Measures to Prevent Global Warming(below termed simply the "Guidelines") in a session of the Global Warming Prevention Headquarters.2 Then, in June 2002, it ratified the
Kyoto Protocol following unanimous endorsement by both houses of the legislature. The
Guidelines call for a review of progress in lightof future emissions trends at certain key junctures (2004, 2007) as Japan strives to fulfil its
Kyoto obligations. The first review falls in 2004.
The Guidelines comprise a potpourri of measuresdesigned as local optimums in the individual
sectors of industrial, commercial/residential, andtransportation. Each measure is self-contained
within the confines of a particular sector,
whether industrial, commercial/residential, ortransportation. For that reason there is a mismatch between management capacity withineach sector and the incentives for implementing
the measures. For example, companies in the
manufacturing sector possess considerable management capacity. But that sector is basicallyrequired to implement rigorous steps to conserve
energy only on the factory floor. Even if companies in the sector reduce emissions by developing
and marketing more efficient equipment, or reduce emissions generated through distribution of
their products, those amounts are not factored
into reductions under voluntary action plans,
which lay out the measures to be taken by factories in the manufacturing sector. So incentives totake such steps are lacking.
Life cycle assessment (LCA), a techniquethat first emerged around 1970, has evolved rapidly over the past decade. It is now entering thestage of practical use. LCA is a tool for quantitatively assessing and interpreting, for a specificpurpose, the environmental impact of a productor service over the complete course of its life
cycle from resource extraction through disposal
1

Takao Aiba wrote Chapters I, II, and IV of this report, as
well as overseeing the whole. Hiromichi Kunimi wrote
Chapter II.
2
Headed by the Prime Minister, with the Chief Cabinet
Secretary, the Minister of Economy, Trade and Industry,
and the Minister of the Environment as his deputies. Allother Ministers of State are members.

and recycling. It shows promise for a wide range
of applications. ISO14040, which defines theprinciples and framework for LCA, took force in1997. International standards for Type III ecolabels, which objectively disclose LCA information as certified by a third party, are formally tocome into effect in 2006.
An LCA-type analysis of CO2 emissions
from private automobiles, which produce hugeamounts of greenhouse gases, reveals that 85%of those emissions are generated during the usage stage (the stage at which the consumer actually uses the car; in Japan this is generally assumed to be ten years and 100,000 km). By contrast, the assembly stage, when emissions reductions are imposed fairly rigorously, accounts fora mere 3%. It would be best if car assemblers
optimized choice of materials while bolstering
energy efficiency at the usage stage, but undercurrent circumstances incentives do not work
properly. Cutting emissions at the manufacturing
stage often costs more relatively speaking,though they account for only a small percentageof the total; conversely, certain technologies that
reduce lifecycle emissions overall actually increase emissions at the manufacturing stage considerably. The manufacturing sector has the capacity and management resources to cut overall
life cycle emissions from products and services,
but as things now stand that potential is not being
properly tapped.
From this perspective, the present paper
examines how LCA might be harnessed as a wayof effectively achieving total optimization of
global warming measures. It then considers whatchallenges stand in the way, and what role government should play.
Chapter I, "The Fight against Global
Warming and Life Cycle Assessment (LCA),"
describes the state of the fight against global
warming (sectoral emissions and so forth), andsummarizes the reasons why an LCA-type approach is needed. Chapter II, "The State of LCA
Today and Cases of LCA in Use," examines thehistory of LCA, looks at instances of it in use -as in the Type III ecolabel -- and surveys what
progress is being made on the national project ofdeveloping LCA infrastructure. Chapter III,
"Challenges to Overcome in Promoting LCA
Use," provides a systematic overview of the obDevelopment Bank of Japan Research Report/ No. 45viistacles that stand in the way of LCA use basedon a wide range of specific examples collected
through extensive interviews etc. Also discussed
is the need for public support in overcoming
these challenges. Chapter IV, "Utilizing LCA to
Achieve Total Optimization of Global Warming
Measures," surveys recent efforts by the private
sector to overcome these challenges. It also iden-

viii

Development Bank of Japan Research Report/ No. 45

tifies caveats to LCA use and presents a scheme
for promoting global warming measures utilizing
LCA.
In preparing this report we have benefited
from the assistance and advice of many individuals representing a wide range of companies
and organizations. We would like to take thisoccasion to express our gratitude to them all.

I Measures to Combat Global
Warming and Life Cycle Assessment (LCA)
1-1.

What Is Global Warming?

COP33, which convened in Kyoto in December
1997, adopted the Kyoto Protocol as the first
step4 in a sustained, long-term strategy to cut
emissions of greenhouse gases. The Kyoto Protocol committed the developed countries to legally binding numerical targets for reducing
emissions. Japan ratified the Kyoto Protocol inJune 2002, thereby assuming an international
obligation to reduce greenhouse gas emissionsfor 2008-2012 by at least 6% as compared to thebase year (basically 1990) (Fig. 1-1).
Yet Japan's greenhouse gas emissions, likethose of most of the developed world, continue
to rise. Despite an array of measures and theslump in the economy, emissions for FY 2002
stood 7.6%5 above those for the base year, whichmeans that the country is already 13.6% in excess of its Kyoto target. By sector, emissions ofcarbon dioxide (CO2), which account for 94% of
overall greenhouse gas emissions, were, as compared to the base year, down 1.7% in the industrial sector, up 20.4% in the transportation sector,
up 36.7% in the commercial sector, and up
28.8% in the residential sector.
Emissions of greenhouse gases can be ex3

The third session of Conference of Parties to the United
Nations Framework Convention of Climate Change.
4
Even if the world's countries -- including the United States-- were to abide by the Kyoto targets for reducing emissions,the net benefit, it is said, would be to curtail the rise in average temperature by a mere 0.2˚C or so; thus further dramatic reductions will be required in the future. Count theworld's total greenhouse gas emissions flow as 100. The US,
which accounts for roughly one quarter of that amount, haswithdrawn from the accord; the developing countries, which
account for another 40%, do not have a target for cutting
emissions at all. That being the case, the reductions targets
prescribed by the Kyoto Protocol cover a modest 30% or soof the world's total emissions flow, with in effect a mere
10% being subject to significant cuts. It will be necessary totake truly effective steps to combat global warming by preventing carbon leakage to countries not required to reduce
emissions. See Aiba (2003).
5
Emissions fell between FY 2000 and 2001 but then shotup again in 2002. There thus appears to be no change in theoverall upward trend.

pected to rise further in the run-up to the Kyoto
commitment period of 2008-2012. Future levelsof CO2 and other emissions are extremely difficult to predict with certitude, since so many different factors come into play: not just forecasts
relating to economic trends, industrial structure,and energy prices, but also for example progressin installing various types of new equipment. Fig.
1-1 gives a rough forecast of how emissions are
expected to rise, with the transportation, residential, and commercial sectors accounting for the
lion's share of the increase.
Japan's strategy for fighting global warming
is underpinned by the Guidelines for Measures toPrevent Global Warming (below termed simply
the "Guidelines") adopted on March 19, 2002 by
Global Warming Prevention Headquarters. The
Guidelines particularly emphasize measures tocurtail emissions of CO2, which account for sucha large proportion of the total. It lists over 200
measures particularly in three separate sectors:
industrial, commercial/residential, and transportation. These consist mainly of energy-saving
measures on the demand side. In quantitative
terms, voluntary action plans and in-plant measures in accordance with the Energy Conservation
Law6 predominate. In the commercial/residential
and transportation sectors, the main focus is on
improvements in equipment efficiency throughthe pursuit of Top Runner standards or the like,with few measures to curtail energy demand. On
the other hand, a fair amount of importance isalso attached to measures on the energy supply
side, such as increased use of nuclear power andnew energy sources mainly related to renewableenergy.
Just as it is difficult to forecast future
greenhouse gas emissions, it is also difficult toforecast the effectiveness of measures to combat
global warming. The Guidelines therefore callfor measures to be evaluated and revised in 2004
and again in 2007. Thus 2004 is the year of thefirst evaluation and revision process. The Guidelines prescribe reductions targets for FY 2010 ineach of the three sectors -- industrial, commercial/residential, and transportation. When thosetargets are compared to the latest figures for actual emissions, the two appear to diverge
6

Law Concerning the Rational Use of Energy.

Development Bank of Japan Research Report/ No. 45

1

1450
(m tons of CO2)

Levels represent actual emissions through FY 2002. Emissions for FY 2003 and beyond have been calculated
by using the Ministry of the Environment AIM P roject Team's latest forecast for FY 2010, then extrapolating
linearly from FY 2002 .

1400
Transport
37%

1350
19%

13%

Residential
34%

1300

7.6%
1250
6%

Com m ercial
24%

13.6%

Energyconversion
6%

Level of emissions for base year

1200

Share of increase
from base year:
P ercentage of
Reduction target for 2008-2012

1150

total forecast
increase from thebase year

Note : Reduction target under the Ky oto Protocol: Reduce em issions for 2008-2012 by 6% com pared to the base y ear.
For three gases, HFCs, PFCs, and SF6, the base y ear is 1995. Because no data about HFCs, PFCs, and SF6 have been released forthe five y ears 1990-1994, the graph gives the im pression of a m aj or drop in em issions between the base y ear and 1990.

accounted for by
the forecast
increase in each

1100

field

Base 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
year

Figure 1-1. Japan's Greenhouse Gas Emissions: Actual and Predicted Levels
Notes:

Sources:

1. As of FY 2002, Japan's actual greenhouse gas (GHG) emissions stood at 7.6% above those for the base year, this despite the slump in theeconomy. Emissions rose 2.2% over FY 2001 as nuclear power plants suspended operations, production increased, and number of households
and commercial floor space both expanded. According to an estimate made by the Ministry of the Environment in summer 2002, emissions
will increase some 13% by FY 2010. The increase could be even greater depending on how quickly construction of nuclear power plants proceeds and the state of the economy.
2. By individual sector, actual emissions as of FY 2002 were, compared to the base year:
Down 1.7% in the industrial sector, Up 20.4% in the transportation sector, Up 36.7% in the commercial sector,
Up 28.8% in the residential sector
3. Japan can claim a maximum deduction of 3.9% for absorption by forests and other sinks if 1.2 trillion yen is invested over the next decade.
4. There are six greenhouse gases covered by the Kyoto Protocol: CO2,methane, N2O, and HFCs and two other gases.
Compiled by DBJ from government data, Central Environment Council documentation, etc.

Table 1-1. Overview of the Guidelines for Measures to Prevent Global Warming(m tons of CO2)

EnergysavingmeasuresNew
energyNuclearpower etc.
Emissionslevels
Note:
Sources:2

Commercial/residential
sectorIndustrial sector
Transportation sector• Voluntary action plans and• Enhance improvements in equip- • Improve efficiency of vehicles etc. (approx. 21: 17 for vehicles
in-plant measures in accordance
ment efficiency through pursuit ofin general, 2 for clean-energy vehicles, 1 for anti-idling vehithe Energy Conservation Law
Top Runner standards etc.
cles, 2 on improving efficiency of airlines and trains)(approx. 61)(approx. 37)• Install high-performance indus- • Improve energy-saving perform• Management of transport demand (approx. 10: 4 on promoting
trial furnaces (approx. 3)
ance of homes and buildings
ITS, 3 on transport alternatives like teleworking, 2 on regulation(approx. 36)
of vehicle traffic demand etc., 1 on restricting road speed of• Promote commercial and residenlarge trucks)
tial energy management (approx. • Switch modes of transport (approx. 10: 5 on promoting use of11)
public transport, 4 on modal shifts)• Streamline distribution (approx. 5)
Adopt new energy technologies (approx. 34: 4.82 million kW of solar power [1 million units for home use], 4.17 million kW generated fromwaste, 3 million kW of wind power, 4.94 million kl from black liquor and scrap wood, 4.39 million kl from solar heat [9 million units forhome use], etc.)
Increase nuclear generated power approx. 30% by FY 2010 compared to FY 2000 (approx. 50). Switch fuels for generating electric powerfrom coal to natural gas etc. (approx. 18).
Target, FY 2010
462
Target, FY 2010
260
Target, FY 2010
250
Actual emissions, FY 2002
468
Actual emissions, FY 2002
363
Actual emissions, FY 2002
261
Divergence
6
Divergence
103
Divergence
11This chart includes only measures to curtail energy-derived CO2 emissions, which represent approx. 90% of Japan's total emissions.
Compiled by DBJ from Global Warming Prevention Headquarters, Guidelines for Measures to Prevent Global Warming and Greenhouse Gas
Emissions in FY 2001.

Development Bank of Japan Research Report/ No. 45

particularly dramatically in the commercial/residential sector.7 If additional measures areto be considered within the framework of thecurrent Guidelines, they will be required particularly in the commercial/residential andtransportation sectors, which have a long way to
go to meet their targets.
As a look at the details of specific measuresreveals, the Guidelines basically comprise apatchwork of measures designed as local optimums in the individual sectors of industrial,commercial/residential, and transportation. These
measures are all self-contained within their respective sectors; there are virtually no
cross-sectoral measures except with respect toenergy supply. There is a mismatch between
management capacity within each sector and the
incentives for implementing the measures. For
example, say a company in the manufacturingsector contributes to reducing emissions by developing and marketing more energy-efficientequipment, or reduces emissions generated
through distribution of its products or duringcommuting by its employees. Those amounts are
not allowed for the company to factor into reductions under its voluntary action plan. This mismatch between management capacity and incentives will be examined further in Section 1-2.

1-2. The Transportation and Commercial/Residential Sectors: Emissions Up
Dramatically
We analyze CO2 emissions trends in the transportation sector using easily available data onenergy consumption levels, since CO2 emissions
and energy consumption are virtually synonymous. As the pie graph shows (Fig. 1-3), in FY
2000 passenger transport accounted for 64% of
total energy consumption; private automobiles inparticular dominated overwhelmingly, accounting for 55% of the total. Energy consumption by
private automobiles rose 40% compared with FY
1990; thus private automobiles account for the
lion's share of the increase in the transportation
7

The Japanese government changed the classification ofemissions data from FY 2001; that makes it difficult to draw
strict comparisons between the sectoral targets prescribed in
the Guidelines and currently available data on sectoral
emissions.

Marine cargo
5.9%(47.0%)

Rail cargo
0.2%(-14.1%)

Air cargo
0.6%(36.7%)

Cargo

T ruck
29.4%

Passenger

transport: Totaltransport: Total

36.0%

64.0%

(3.0%)(8.7)(31.1)

Privateautomobiles
54.6%(39.7%)Air passenger
3.8%(22.3%)

Marine passenger
0.2%(64.6%)

Rail passenger
2.1%(2.1%)

Business vehicles
1.7%(-35.9%)Bus
1.5%(-13.9%)Figure 1-2. Energy Consumption in theTransportation Sector by Mode of Transport,
FY 2000
Notes:
Source:Figures in brackets give the percentage increase
1990-2000.
Compiled by DBJ from data contained in Energy Data
and Modeling Center, Institute of Energy Economics, Japan, EDMC Handbook of Energy & Economic Statistics
in Japan (2002 edition).

sector as well.
CO2 emissions trends in the residential sector can, as in the transportation sector, be examined based on energy consumption. Electric
power etc. accounts for the biggest piece of thepie, as well as displaying the highest rate of increase from FY 1990. Heating, with a 28% shareof the total, also shows a high rate of increase, at
28%8 (Fig. 1-3).
Let us examine the breakdown of the electric power component of the pie in greater detail.
Refrigerators, at 19%, constitute the biggest single power-consuming appliance, although theirrelative share has declined dramatically since FY
1990, when it stood at 27% of the total. On theother hand, "washlet" toilet seats (toilet seatswith built-in heated warter shower bidet), whichhardly even existed in 1990, have assumed a 5%
share; likewise, dishwashers have climbed fromvirtually zero to over 1%. Thus things havechanged considerably. There has also been an
increase in the share of "Other," probably attributable to the spread of information and computer
8

This seems to a large extent due to an increase in thenumber of air conditioners.

Development Bank of Japan Research Report/ No. 45

3Air
conditioning
2.2%(14.0%)

Electric
power etc.
35.2%
(48.4%)

Air conditioning
8.8%(42.6)

Heating
27.6%(28.2%)

Electric
power etc.
40.0%
(55.9)

Hot water
28.3%(8.9%)

Heating
21.5%(-4.3%)

Hot water
21.7%(16.9%)

Kitchen use
6.7%(-10.3%)

Kitchen use
8.0%(59.8%)

Figure 1-3. Energy Consumption in the
Residential Sector by Type of Use,
FY 2000
Figures in brackets give the percentage increase
1990-2000.
Sources: Compiled by DBJ from data contained in Energy Data
and Modeling Center, Institute of Energy Economics,
Japan, EDMC Handbook of Energy & Economic Statistics in Japan (2002 edition).

Figure 1-5. Energy Consumption in theCommercial Sector by Type of Use,
FY 2000

Note:

Other
32.8%
(+11.6%)

Refrigerators
19.2%(-7.5%)

Clothes dryers
2.3%(+0.2%)"Washlet" toilet
seats
4.7%
(+4.7%)

Lighting
16.4%(-2.6%)
Kotatsu (table withbuilt-in electricheater)4.2%(-1.9%)
Warm air heaters
0.0%(-1.1%)T Vs (total)
10.0%(-1.5%)

Washing machines
1.2%(-0.3%)
Vacuum cleaners
3.8%(-0.7%)

Dishwashers
1.2%(+1.2%)

Electric blankets
0.0%(-1.4%)

Electric carpets
4.2%(-0.6%)

Figure 1-4. Energy Consumption for Powerand Lighting per Household, by Type of Appliance, FY 2000
Note:
Sources:Figures in brackets give share in 1990 minus share in
2000. The minus sign indicates a reduction in share.
Compiled by DBJ from data contained in Commercial/Residential Section, Energy Data and ModelingCenter, Institute of Energy Economics, Japan, Surveyof State of Energy Consumption.

Note:

Figures in brackets give the percentage increase
1990-2000.
Sources: Compiled by DBJ from Energy Data and ModelingCenter, Institute of Energy Economics, Japan, EDMC
Handbook of Energy & Economic Statistics in Japan(2002 edition).

technologies (Fig. 1-4).
In the commercial sector, electric power etc.
not only accounts for the largest share; it has also
displayed the most dramatic rate of increase,having risen 56% since FY 1990. This can be
attributed to such factors as the progress of officeautomation.
As this analysis of energy consumption
trends in the transportation and commercial/residential sectors demonstrates, it is especially important that energy-saving measures betaken with respect to automobiles, office equipment, and the like.

1-3. Importance of the Life Cycle Approach and Structural Challenges
Let us analyze the structure of private automobile emissions, which account for a large percentage of the increase in CO2 emissions since1990 and can be expected to continue to rise.9 As

9Among the primary reasons for the increase in CO2 emissions from private automobiles (accounting for 86% of theincrease between FY 1990 and 2001) is growing car ownership due to a combination of increased rate of ownershipper household and an increase in number of households.
4

Development Bank of Japan Research Report/ No. 45

A 1500 cc sedan thattravels 100,000 km over
10 y ears generates a
total of approx. 20 tonsof CO2 .

Material extraction/production
1.0%

Parts

Disposal/recycling
0.1%

P layer vested with primary control:
The consumer, who has the right to choose the piece of equipment, enjoys ownership of it, and can control its usage and disposal⇒Bears ultimate responsibility (for what model to choose and how to use it)
P layers vested with secondary control:
The manufacturer and government, which can both influence the behavior of the primary player in control
But the manufacturer cannot bear ultimate responsibility; therefore the most effective approach is the use of positive incentives to
induce it to act of its own accord

Industrial
sectorVoluntary actionplans, Energy
Conservation Law

Recycling company

Assembler

85.3%

Parts manufacturers

Material producers

Player vested with directcontrol over emissions
Core
policies

Usage

3.3%

10.3%

Emissionsassigned to

Assembly

T ransportation sector

Disposal

T op Runnerstandards

Figure 1-6. Breakdown of CO2 Emissions over the Course of a Vehicle's Life Cycle,
and Player Directly in Control of Emissions at Each Stage
Sources: Compiled by DBJ from, inter alia, data contained in Environmental Industries Office, Ministry of Economy, Trade and Industry, Current State of the LCA Project and Approaches for the Future, handout distributed at the LCA Five Year Project Briefing, Jun. 20, 2003.

evident from an examination of the emissions
that an automobile generates over the course of
its whole life cycle, from extraction and production of materials to disposal and recycling, theusage stage accounts for the overwhelming percentage of emissions (Fig. 1-6). Direct emissions
by the assembler, which actually determines theautomobile's design and performance, are a mere
3% of the total; parts production accounts forjust 1%; even extraction and production of materials generate no more than 10%.
Refrigerators, which account for a highpercentage of energy consumption in the home,
likewise generate most of their emissions during
the usage stage. In the case of a refrigerator, 92%of emissions occur during usage; assembly acThis is according to the analysis by the Energy Efficiency
and Conservation Subcommittee, Advisory Committee for
Natural Resources and Energy, Ministry of Economy, Tradeand Industry (Handout 1, Energy Efficiency and Conservation Subcommittee Session 3, Feb. 24, 2004). However,since restricting car ownership would be problematic, here
we focus on emissions structure per vehicle.

counts for a mere 0.6% (Fig. 1-7).
Here, taking the automobile as an example,
we consider the relationship between the party
exercising direct control over emissions at eachstage, the sector to which those emissions are
assigned, and the core policies being pursued.
The industrial sector faces strong pressure to cut
emissions, these being fairly rigorously controlled under the provisions of the Energy Conservation Law and through voluntary actionplans; hence material producers, parts manufacturers, and the assembler together account for amodest 15% of overall emissions.
The players vested with control over emissions during the usage stage, which accounts for
85% of all emissions, can be divided into primary and secondary players. The player vested
with primary control is the party that has theright to choose the piece of equipment, enjoys
ownership of it, and can control its usage anddisposal -- in other words, the consumer. Players
vested with secondary control are those parties

Development Bank of Japan Research Report/ No. 45

5A 400l refrigerator
generates a total of approx. 3
tons of CO 2 over the course

Material extraction/productionof 12 years of usage.

0.6%

Assembly

Disposal/recycling

0.3%

P layer vested with primary control:
The consumer, who has the right to choose the piece of equipment, enjoys ownership of it, and can control its usage and disposal⇒Bears ultimate responsibility (for what model to choose and how to use it)
P layer vested with secondary control:
The manufacturer and government, which can both influence the behavior of the primary player in control
But the manufacturer cannot bear ultimate responsibility; therefore the most effective approach is the use of positive incentives

Recycling company

Assembler

91.7%

Distributor

Material producers

Usage

0.4%

7.0%

Player vested with directcontrol over emissions

T ransport

to induce it to act of its own accord

Emission s

Industrial

Transpor-assign ed

sectortation sector

Comm ercial/industrial
sector

DisposaltoT op Runner standards

Volu ntaryCore
policies

actio n plan s,
Energ yBoost

Co nservation

efficiency

Law

etc.

Figure 1-7. Breakdown of CO2 Emissions over the Course of a Refrigerator's Life
Sources: Compiled by DBJ from, inter alia, data contained in Environmental Industries Office, Ministry of Economy,
Trade and Industry, Current State of the LCA Project and Approaches for the Future, handout distributed at
the LCA Five Year Project Briefing, Jun. 20, 2003.

able to influence, in some form or another, thebehavior of the primary player. In this case thatmeans the automobile manufacturer and thegovernment.
The Energy Conservation Law requires any
party in the business of manufacturing or importing energy-consuming machinery andequipment to make an effort to boost, by a specific target year, the energy consumption efficiency of the machinery and equipment it makes
and sells, this in line with Top Runner standards.
As Table 1-2 illustrates, the Top Runnerprovisions of the Energy Conservation Law arecharacterized by their broad scope,10 as well as
by the flexibility with which they are applied: forexample, the weighted average method has been
adopted to ascertain attainment of targets.11 And
10

Currently 18 items are designated under the program,including passenger cars, trucks, space heaters, and unit air
conditioners. Around 80% of energy intensive devices arecovered in some form or another. Even where specific items
are subject to the program, in certain cases 30-40% of devices in that category may remain outside its scope; thus its
effective coverage would appear to be less than 80%.
11This creates flexibility by, e.g., enabling manufacturers tobring out cheap models to cater to market needs as long as
6Development Bank of Japan Research Report/ No. 45

the program does appear to be yielding definite
results. In its evaluation of the measures andpolicies contained in the Guidelines for Measures to Prevent Global Warming, a process
which it commenced in 2004, the Central Environment Council has forecast that the targetedenergy efficiency of equipment will indeed besatisfactorily attained by the respective target
years. The Top Runner program has won highpraise in Germany and elsewhere in Europe, anda move is reportedly afoot to adopt a similar setof regulations there. A mechanism is also inplace to ensure that targets are met. If a manufacturer fails to attain a target, the Minister of
Economy, Trade and Industry can in principle
advise the manufacturer to take steps to boost
performance; if it fails to abide by the advisory,
the Minister can then make that fact public andorder the manufacturer to comply. If the manufacturer fails to obey that order as well, a maximum fine of one million yen may be imposed.12
they also ship large volumes of equipment with a level ofenergy efficiency that matches or exceeds the target level.
12
Law Concerning the Rational Use of Energy, Article 19,
Article 28.2.

Table 1-2. Annual Energy Consumption Etc. of Energy-Using Equipment (1999 Estimates)

DeviceOwnership('000s)Energy-saving target for designated Top Runner devices

EnergyUnits shipped,
consumption
1997('000s kl, crude('000s)equivalent)

Year
set
Gasoline

1999

2010

23%

1995

2005

15%

1995

LP gas

2003

2010

11.4%

2001

Gasoline

1999

2010

13%

1995

Diesel

1999

2005

7%

1995

Gas

2002

2006

1.4%

2000

Oil

2002

2006

3.8%

2000

1999

2007 (partial
achievementin 2004)

63%

1997

2

Trucks(Top Runner program covers trucks with grossvehicle weight of under 2.5 tons)

8,553

1,739

34,350

3

Space heaters

45,877

6,281

9,439

4

Unit air conditioners

80,874

7,888

Benchmark
year

1999

Passenger cars

7,128

Energysavings

44,094 Diesel

1

40,998Target year

8,392

Air conditioning/heating
Air conditioning
only

1999

2007

14%

1997

5

Fluorescent lighting fixtures

422,466

50,959

7,956

1999

2005

16.6%

1997

6

Gas water heaters

28,937

3,386

7,539

2002

2006

4.1%

2000

Electric
2,945 refrigerators

1999

2004

30%

1998

7

Electric refrigerators and freezers(for household use)

54,825

5,540

1999

2004

30%

1998

8

Oil water heaters

4,628

597

2,784

2002

2006

3.5%

2000

9

Cooking appliances (gas cooking appliances)

Electric freezers

32,358

4,986

2,449

2002

2006

13.9%

2000

10 Televisions

102,189

9,792

1,589

1999

2003

16.4%

1997

11 Incandescent lighting fixtures

210,639

23,025

1,474

12 Electric cooking appliances for kitchen

67,23011,748995

13 Warm air space heaters

2,630

291

954

Gas

2002

2006

1.4%

2000

Oil

2002

2006

3.8%

2000

14 Electric heating appliances (electric toilet seats)

35,883

5,792

757

2002

2006

10%

2000

15 Central processor units and personal computers

24,258

7,118

706

1999

2005

83%

1997

2002

2005

33.9%

2000

1999

2003

58.7%

1997

1999

2005

78%

1997

1999

2006

30%

1997

Transformers (oil immersed)

2002

2006

30.3%

1999

Transformers (cast resin)

2002

2007

30.3%

1999

16 Vending machines (beverage vending machines)
17 Ventilation fans

2,597

431

705

144,094

9,649

509
358

18 Showcases

2,137

334

19 Motorcycles

14,5371,188

312

20 Videotape recorders

50,402

6,831

307

21 Input/output devices (printers and displays)

24,463

10,307237

22 Secondary storage devices (magnetic disk units)

28,585

8,287

215

Refrigerators/freezers, refrigerators and freezers(commercial)

1,074

211

203

23

24 Stereo sets (incl. CD radio cassette recorders)

36,990

4,966

166

25

Imaging devices (incl. facsimiles and multifunctional
facsimile systems)

13,620

2,998

136

26

Photocopiers (incl. multifunctional photocopiers;
Top Runner program does not cover color, largeformat, and high-speed copiers, nor multifunctional
copiers with fax function)

3,997

1,350

127

27,594

3,583

124

31,093

4,858

93

29 Vacuum cleaners

39,0636,529

80

30 Video deck players (incl. DVD players)

8,417

260

66

31 Clothes dryers

2,794

405

60

8,410

1,210

4

1,965

445

0.07

Telephones (telephones with answering machinefunction)
Fully automatic washing machines and twin-tub
28
washing machines
27

32 Word processors
33

Electronic instruments (electronic keyboards andkeyboard synthesizers)

Note:
Sources:

Hatching indicates devices already designated under the program.
Compiled by DBJ based on Handout 3 from Session 1 of the Energy Efficiency and Conservation Subcommittee(Advisory Committee for Energy), Dec. 25, 2003. This handout was compiled based on discussions during Session 4 of the Energy Saving Standards Subcommittee (Advisory Committee for Energy) in June 1999.
Development Bank of Japan Research Report/ No. 45

7However, there are concerns as well. Target
levels and deadlines end up being frozen, anditems tend to be designated under the program all
too slowly.13 Take photocopiers, for example.
Conventional analog machines are subject to Top
Runner standards, but as measured in energy
consumption around 35% of all photocopiers are
not covered, including the increasingly popular
multifunctional photocopiers, color copiers, large
format copiers, digital copiers, etc.14 Then there
are cases such as that where the liquid crystal
television is replacing the cathode ray tube: since
the two are not directly comparable, Top Runnerstandards have difficulty in applying to thetechnology shift. So the Top Runner standards
are well adapted to mature products, but problems may crop out when they are applied toitems whose technology is currently in transition
or evolves rapidly. In setting the target year for
attaining a particular target, consideration is
given to such factors as product development
lead times and the prospects for future advancesin technology. But predicting the future with total accuracy is no easy task. Therefore, the more
sober-minded the industry, the more likely it is toset itself a conservative target that it can be sureof attaining. Global warming is triggered by the
cumulative buildup of CO2 emissions, and thatmakes prompt gains in efficiency (i.e., attainment of targets) desirable. But the Top Runnerprogram is not very good at providing incentives
to that end. It is best suited to situations in which
the list of subject devices is largely fixed andthere are reasonable prospects for improvementsin the technology.
Thus regulation has its difficulties. Still, thegovernment, with its power to enforce, and the
manufacturer, with its prerogative to determine
13
The Top Runner program does not apply to devices thatare used for special applications, devices for which it isdifficult to set targets per se because technology has notbeen developed for gauging and evaluating their performance, and devices that are in only extremely restricted useon the market. Thus items fail to come under the program
until they have achieved a certain degree of market penetration. Where change is relatively frequent, such as in the caseof household devices, the program may find it hard to keepup.
14
Global Environment Council of the Central Environment
Council, Session 14 (Mar. 10, 2004), Handout 1-4.

8

Development Bank of Japan Research Report/ No. 45

product design and performance, can exert anindirect impact on emissions during the usage
stage through improvements in product efficiency and the like. Even so, only the player
vested with primary control -- the consumer -has the right to choose the product and decide
how to use it; hence the government and manufacturer cannot really bear ultimate responsibility.
For instance, it would be difficult to completely
prevent, through regulation alone, a small-scale
importer from selling a cheap but inefficient appliance. If one item requires even a slightly larger initial investment than another, though thatinvestment may be recoverable in a few years,
consumers may still go for the cheaper option. It
is even more difficult to regulate consumer use.
For example, in FY 1998 air conditioner power
consumption per household had increased 63%
compared to 1990. Yet a look at the figures
shows that improvements in equipment efficiency resulted in 12% energy savings. Nonetheless, an increase in the number of air conditioners owned, in combination with such usage
factors as hours and conditions of use, led conversely to a 75% increase in power consumption.15 In cases like this it is necessary for the
primary player in control, the consumer, who has
the best grasp of energy needs, to show a commitment to reducing CO2 emissions. That means
forming an accurate understanding of the state of
CO2 emissions associated with energy use andselecting and using appliances in sensible fashion. It may be possible for outside parties to provide advice to consumers and furnish them withappropriate product choices. But unless the primary player in control acts with a commitment to
reducing CO2 emissions, measures are not likely
to prove effective. Conversely, the lion's share ofenergy use by consumers is for essential purposes; that makes it difficult to provide effective
incentives for reducing CO2 emissions, short of
imposing a fairly heavy carbon tax.16
15

Reference Sheet 2, Session 1 of the Energy Efficiency
and Conservation Subcommittee (Advisory Committee for
Natural Resources and Energy, Ministry of Economy, Tradeand Industry), Dec. 25, 2003.
16
The short- and long-term price effects of a carbon tax
need to be separately considered. A low carbon tax, it has
been estimated, should possess a more pronounced
long-term than short-term price effect, but the issue is notconducive to analysis on the assumption of an absoluteTable 1-3 provides a rough overview of therelationship between emissions sector and theplayers in control. The horizontal axis lists emissions sectors; the vertical axis lists the different
players in control. The energy conversion sector
is omitted here in order to simplify discussion,
since energy differs considerably in nature fromordinary goods and services: for example, underbusiness law providers are actually required tosupply customers. The level of control capacity
possessed by each player is indicated next to that
player. As a general rule households do not havethat much capacity to accurately monitor state ofenergy use and take appropriate energy-saving
measures, but control capacity in other sectors isfairly high, albeit with differences of degree.
Consider the emissions sectors listed on thevertical axis. In the industrial sector, the emissions control structure is simple indeed. The
emissions sector and player in control coincide,
incentives are strong, and control capacity ishigh. This is consistent with the definite progress
being made by the industrial sector in reducing
emissions.
In the residential sector, no effective regulations exists requiring households, the player
vested with primary control, to reduce CO2

emissions. Thus there is no player with a strong
incentive to cut CO2 emissions except, it might
be argued at a stretch, the government itself inthat it has ratified the Kyoto Protocol and promised to abide by it. In the commercial and transportation sectors, there is a highly complex interaction of players, many of which do not necessarily possess strong incentives. With so manydifferent players monitoring is difficult, and a
regulatory approach is not well suited to thesetwo complex sectors, where in many cases aplayer has little incentive to reduce CO2 emissions despite being primarily in control. These
structural observations would seem to accountfor the fact that the traditional approach with thecentral role of regulation does not appear to beworking very well in the residential, commercial,
and transportation sectors.
The behavior of consumers is of the utmost
important. However, not only do they lack incentives; they are also hampered by a dearth of
information on efficient devices. Even when they
do possess such information, they frequently lackthe ability to make proper judgements and haveneither the capacity nor financial resources topurchase such devices and put them to appropriate use.

Table 1-3. Relationship between Emissions Sector and Players in Control

Players in control

Control
capacity

Emissions sector
Industrial

Residential

Primary(strong)

Secondary(weak)

Commercial
Secondary (weak) +Own emissions:Primary (weak)Transportation
Secondary (weak) +Own emissions:Primary (weak)Own emissions:Primary (weak)Own emissions:Primary (weak)Industrial

High

Residential

Low

Commercial

High

Primary (strong)

TransportationHigh

Own emissions:Primary (weak)Primary (strong)

Government

High

Secondary (strong)

Secondary (strong)

Primary(weak)

Secondary(strong)

Secondary(strong)

Note:
Notations in brackets indicate strength of incentives to reduce greenhouse gas emissions.
Sources: Compiled by DBJ.

price level, for outcomes vary depending on the method of
measurement employed. Generally speaking, energy consumption for essential purposes displays little price elasticity, and a rise in price does not result in that much of a decline in short-term volume of demand.
Development Bank of Japan Research Report/ No. 45

9In fields like this where the primary player
in control is unable to exercise that control effectively, a sensible approach would be to efficiently harness the capacity of manufacturers, thesecondary players in control. That means providing assemblers, which can control productperformance, choice of materials, and so forth,with ongoing positive incentives17 to reduce
emissions at the materials production stage whileboosting energy-saving performance at the usage
stage. It also means encouraging proper information disclosure. Such extra effort often leads toincreased costs. If negative incentives are employed, such as regulations and fines, it may
prove impossible to completely prevent businesses that dodge the regulations from making a
profit, with the result that honest companies end
up losing out. The sensible thing would be tolure manufacturers in the right direction withpositive incentives designed to reward themfairly for any extra effort to make a long-term
contribution to the fight against global warming.
There are instances of pioneering manufacturers
dramatically reducing overall emissions during
the product life cycle, including the us-

age/consumption stage. A case in point is thedigital photocopier in Fig. 1-8. Digital photocopiers are not subject to Top Runner standards.
But in this case the manufacturer decided to cut
lifecycle emissions of its own accord with thegoal of obtaining Type III eco-label certification.18 As well as achieving a 70% cut in emissions at the usage/consumption stage, which accounted for the biggest chunk of lifecycle CO2
emissions, it also reduced emissions at the materials production stage by over 30%. It thus succeeded in reducing overall emissions by 60%
compared to conventional models. It has beeneven more zealous about cutting emissions at the
product manufacture stage than at the usage
stage; in the present case, it achieved a 20% reduction. The fact is that, generally speaking, industry is barely managing to keep emissions at
the manufacturing stage in check, when theymight actually be expected to rise due to the proliferation in functional and ecological requirements facing products today. Reductions at the
product manufacturing stage equal less than 2%of those achieved at the usage/consumption stage.
Virtually all the reductions thus belong to the(kg-CO2)
Conventional models
1,050

30%

Conventional models
Materials production
P roduct manufacturing
Distribution

850

Usage/consumption
4%

66%

0.1%

650

New model

New model
46%

47%

0.2%

7%

70%
reduction

Total 670 kg-CO2

Total 1669 kg-CO2

450

250

50

-150
M aterials production

Product manufacturing

Distribution

Usage/consumption

Disposal/recycling

Figure 1-8. Improved CO2 Emissions in a Digital Photocopier
Sources:Compiled by DBJ from Canon Inc., Sustainability Report 2003: The Case of the imageRUNNERiR3300.

17
Incentives, that is, that function as a carrot, to use thefamiliar metaphor of the carrot and the stick.

10

Development Bank of Japan Research Report/ No. 45

18

See Chapter II.

usage/consumption stage; achieving quantitatively significant reductions at the productmanufacturing stage appears to be tremendously
difficult.
This
exampleishighlythought-provoking in that it suggests where
manufacturers can most effectively concentrate
their management resources. Moreover, this fact
would never have come to light if a pioneering
manufacturer had not invested extra money andlabor in processing data and then released them.

1-4. Difficulty of Cutting Emissions at
the Manufacturing Stage and Importanceof Lifecycle Emissions Analysis
Steps taken today to cut CO2 emissions at the
manufacturing stage often prove fairly expensive,in part because considerable progress has alreadybeen made on this front since the oil shock. Fig.
1-9 gives estimates of the unit cost of reducing
CO2 emissions based on data pertaining to theelectrical and electronic industry available, forexample, in follow-up documentation on voluntary action plans. Such data are not generally
available to the public. A small circle as far as

possible to the upper left-hand side of the graphwould indicate a minimal investment resulting ina large reduction in emissions at a low unit cost.
But no such cases are to be found. Conversely, alarge circle to the lower right indicates a large
investment resulting in a small reduction inemissions at a high unit cost. That may seem
unappealing, but there are a fair number of suchcases nonetheless. According to this set of estimates, the average unit price of reducing emissions is around ¥7,300/CO2 ton,19 which tentatively works out to 10-20 times what the cost isin the developing world. Other industries too
find themselves having to resort to measureswith high unit costs, which may range from
¥10,000 to over ¥100,000/CO2 ton.
In the Seventh Eco-management Survey
conducted by the Nihon Keizai Shimbun, forecasts of what the unit cost of cutting emissions
per CO2 ton would be in FY 2010 averaged¥90,900 among the 206 companies from which
responses were received. The average unit cost
per company varied widely between industries,
from a low of ¥10,300 for electric power to¥187,600 for machinery, though in all cases the155

Reduction in CO2 emissions ('000 CO2 tons/yr)

135
115
Weighted average
unit cost:¥7300/CO2 ton

95
75
55
35
15
-5

0

5,000

10,00015,00020,000
Unit cost of CO2 emissions reductions (yen/CO2 ton)

25,00030,000Figure 1-9. Investment in Reducing CO2 Emissions by the Electrical andElectronic Industry
Notes: 1. Size of circle represents amount of investment (in millions of yen).
2. Unit cost of reductions was estimated assuming three years to recover investment, except in the case ofstrengthened management procedures, when a two-year period to recover investment was assumed.
3. In certain cases unit cost of reductions was estimated at over ¥100,000. However, all investments with an estimated unit cost of over ¥30,000 are omitted, the equivalent of 16,000 tons in reductions, or 2% of the total.
4. Investment in the two fiscal years 2001-2002 totaled ¥43 billion, with emissions reduced by roughly 680,000
CO2 tons per year.
5. Compiled by DBJ from FY 2001 and 2002 follow-up documentation on voluntary action plans being pursued
in the electrical and electronic industry.

19

Roughly US$70/CO2

Development Bank of Japan Research Report/ No. 45

11amount cited was fairly high. This confirms that
cutting CO2 emissions at the manufacturing stage
is a very expensive prospect in Japan. Compare
the situation in Europe, where companies caneasily achieve their targets by pursuing measureswith a unit cost of less than ¥2,500,20 or in thedeveloping world, where cutting emissions has aunit cost of ¥400-800.

In some cases CO2 emissions may be reduced dramatically over the course of the whole
product life cycle, yet emissions at the manufacturing stage take a massive leap. A classic example is provided in Fig. 1-10, which compares liquid crystal displays and CRT21 monitors. In thecase of liquid crystal displays, as with the newmodel of photocopier mentioned above, emissions at the usage stage lowered by 70%, resulting in a total emissions reduction of an estimated
45% over the whole course of the product life
cycle. But there is one big difference from thephotocopier: emissions at the materials production and product manufacturing stages jump awhopping 122% to over twice those associatedwith CRT monitors. At the manufacturing stage
in particular, emissions jump more than sixfold
in the case of a liquid crystal display. Because ofincreased production of liquid crystal displays,
along with other factors, CO2 emissions generated at the manufacturing stage by the companies
affiliated with the four big electronic and electrical industry associations had as of FY 2002
risen 28% over 1990.22 It is estimated that as of2003 76% of the personal computers in use inJapan had liquid crystal displays. If they had all
had CRT monitors instead, power demand would
have increased by an estimated 3 billion kWh or

Table 1-4. Cost of Reducing CO2 Emissions in
Major Industries, FY 2010
Industry
Machinery
Pharmaceuticals
Automobiles/automobile parts
Electrical equipment
Pulp and paper
Chemicals
Steel
Petroleum
Gas
Electric power
Total
Sources:

Average cost of reductions
per company(yen/CO2 ton)
No. of companies responding
187,60018
175,200
8
158,600
17
99,30061
64,000654,80030
41,5006
22,0001
15,5003
10,300790,900206(incl. electrical power)

Excerpted from the Seventh Eco-management Survey(Nikkei Sangyo Shimbun, Dec. 16, 2003), (2) "CO2emissions, reduction costs, and projected purchaseprice of emissions rights in major industries, FY
2010"（ kg-CO2 ）
400
320
240

17" CRT monitor

45%
reduction

15" liquid crystal display

With liquid crystal displays, CO2
emissions increase 122% at thematerials and manufacturing stages.

72%
reduction160
80
0Materials(production of glass)

Manufacturing

Usage

Disposal

T otal(power consumption over 5 yrs.)

Figure 1-10. Lifecycle CO2 Emissions for Liquid Crystal Displays and CRT Monitors
Sources:Compiled by DBJ from Association for the Promotion of Machine Systems and Electronic Industries Association ofJapan, Research Survey Report on Environmental Impact and Recycling of Liquid Crystal Displays (March 2000).
21

Cathode ray tube.
Handout distributed at Session 3 of the Working Groupon Electronics, Electrical Equipment, and Industrial Machinery Etc. (Joint Follow-up Subcommittee on Voluntary
Action Plans on the Environment, a joint subcommittee of
the Industrial Structure Council and Advisory Committee
for Natural Resources and Energy, Ministry of Economy,
Trade and Industry), Feb. 10, 2004.
22

20
See for example Kornelis Blok, David de Jager, and Chis
Hendriks (2001), "Economic Evaluation of Sectoral Emission Reduction Objectives for Climate Change"
http://www.europa.eu.int/comm/environment/enveco/climat
e_change/sectoral_objectives.htm

12Development Bank of Japan Research Report/ No. 45

the equivalent of two one-million-kW nuclear
power stations, enough electricity for a million
households.23 Increased ownership of items likeliquid crystal displays is in the best interests ofsociety as a whole, yet the current approach,wherebytheindustrialandcommercial/residential sectors take action in isolationfrom one another, could actually end up discouraging production of such devices.
If reducing emissions at the usage stage
were all that mattered, then there would be noneed to conduct an LCA. Companies could simply focus exclusively on the usage stage and takethe necessary action. But the fact is that thesituation differs greatly from device to device,
and a significant level of emissions is not necessarily confined to the usage stage alone. As
shown in Fig. 1-11, Konica Minolta is an enthusiastic practitioner of the LCA. It conducts LCAs
for all its major products and releases the information so obtained. We cannot reproduce thishere in full, but the results of the company's estimates at least should prove highly instructive.
With certain items, such as automatic color film

processors, the lion's share of emissions are generated at the usage stage, but then there are otheritems where materials production plays a big role,such as film cameras, digital cameras, andfilm-in single-use cameras. In the case of plastic
lenses for CD products and color negative film,
the processing stage is a major source of emissions.
In the case of a notebook PC, combined
emissions at the materials production and product manufacturing stages actually exceed those at
the usage stage, as shown in Fig. 1-12 The main
reason for this is the use of components such as
liquid crystal panels that have a large CO2 emissions load at the manufacturing stage. In instances like this, action focusing on productmanufacture and choice of materials should
prove effective.
Thus the stage on which a company should
primarily focus in the quest to reduce emissions
varies depending on the product. That makes it
crucial to conduct an LCA on each item and beaware of what stage is most important in order tobe able to implement effective, efficient

(%)
100
80
60
40
20
Usage

Color negative
Color
negative
film
film

Color paper
Color
paper

Processing
Processingsolution
solutioncolor film
film
forforcolor

film

Medicaldry
Medicaldry film

Plastic lenses
Plastic
lensesforfor
CD products
CD
products

Inkjet paper
Inkjetpaper

Film-in single-use
Film-insingle-use
camerascamerasDigital cameras
camerasDigitalFilmcameras
camerasFilm

Processors for
Processors
formedical dry
dry film
film
medicalDigital processor
Digitalprocessorforphotosensitive
for photosensitive
printing
printing materials
materials

DigitalDigitalphotocopiers
photocopiersAutomatic color
Automatic
color
filmprocessors
processors
film

0

Processing
Materials
Transport
Disposal

Figure 1-11. CO2 Emissions at Each Stage of the Life Cycle by Product Type:The Case of Konica Minolta
Sources:Compiled by DBJ from Konica Minolta Holdings, Inc. data.

23

According to Association for the Promotion of Machine
Systems and Electronic Industries Association of Japan,
Research Survey Report on Environmental Impact and Recycling of Liquid Crystal Displays. March 2000.
Development Bank of Japan Research Report/ No. 45

13

50

(%)
41.2

40
32.3
28.3

30

Total greenhouse gasload over the whole
life cycle (4 yrs.): 138
kg in CO2 equivalent

20
10
0.4
0
-2.2

-10
Materials
素材製造
production

Product
製品製造
manufacturing

Distribution

物流

Usage
使用

Disposal/recycling

廃棄・ﾘｻｲｸﾙ

Figure 1-12. Percentage of CO2 Emissions Generated at Each Stage of
the Life Cycle of a Notebook PC
Sources:Compiled by DBJ from Fujitsu Limited, FMV-718NU4/N EcoLeaf Product Environmental Information
Sheet No. AS-03-001.

measures. Preferably there should be a system ofappropriate incentives to that end. If there areconsiderable emissions at, say, the materials
production or disposal stage, which are today
largely overlooked, then incentives that encourage, for example, the use of materials that entail
lower emissions should be offered in an appropriate form to the player entitled to make suchchoices. Positive incentives that reward companies for grappling seriously with the challenge
constitute an effective means of encouraging
them to make an extra effort in the interests ofsociety as a whole. An approach that relies onfines and regulations could end up placing companies that make a serious effort at a disadvantage.24
24

In order for fines and regulations to work effectively,
objective data must be available and easy to monitor, andcompanies that engage in abuses must be appropriately
punished. LCAs are still only just starting to gain currency,
and not all companies have the means to implement them.
Moreover, if a company makes the results of an LCA lookbetter than they really are by omitting key data or failing togather data properly, there is no easy way for an outside
party to conduct an accurate check and set matters straight.
Given this state of affairs, a punitive approach is not likely
to succeed.
14Development Bank of Japan Research Report/ No. 45

1-5.

Progress of LCA Efforts in JapanLet us review the progress of LCA efforts among
Japanese companies, turning to the Findings ofthe 2002 Survey of Environmentally Friendly
Corporate Activities published by the Ministry of
the Environment. This survey, to which 2,781
companies nationwide responded, is the mostextensive of its type in Japan. Options (1) "We
release the results" and (2) "We do not release
the results as we are still at the implementation/study stage" may be taken to indicate thatthe company in question conducts LCAs in someform or another. On this evidence, it appears thatroughly half of companies with sales of over¥500 billion conduct LCAs in some form or another. However, only 154 of the responding
firms had sales of over ¥500 billion; that creates
doubts about how representative this sample is.
Only a small percentage of firms with sales ofunder ¥500 billion conduct LCAs, judging notjust from the aforementioned Options (1) and (2)but from (5) as well: "We are taking no particularaction." It is thus fair to conclude that across-section of companies, albeit most of themlarge, have begun to implement LCAs.

（％）
30
20
10
0

(1) We release the①実施結果
resultsを公表(2) We do not release②実施、研究theresults as we arestill at the
段階でありimplementation/study
非公表
stage

Less than ¥10 billion

100 億円未満(3) We are③実施にconsidering
implementation
向けて検討中(4) We are interested④関心がand currently
collecting
information
あり、情報(5) We are taking no⑤特別なparticularaction

対応せず(6) Don't know

⑥よく
知らない

収集中

¥10 billion -100 億～1 千億¥100 billion¥100 billion -1 千億～5 千億¥500 billion(7) We have no⑦評価
products
to evaluate

回答なし等

すべき
製品等
はない

¥500 billion -５千億～No response etc.

Overall

全体

Figure 1-13. Corporate Implementation of Product LCAs, by Sales Volume
Note:
Sources:

A total of 2,781 companies responded, of which 154 had sales of over ¥500 billion.
Compiled by DBJ based on data from Ministry of the Environment, Findings of the 2002 Survey of Environmentally Friendly Corporate Activities (July 2003).

Next we review the question of what specific action companies are taking in the LCA
field based on recent articles in the newspapers.
Table 1-5 summarizes the main reports on corporate action in the LCA field that have appearedin the media, classifying these efforts by industry
and sorting them into five stages: implementation, information disclosure, ecolabeling, systems, and applications. Generally speaking, thefirst stage involves implementing an LCA on an
experimental basis and referring to the findingsin the conduct of in-house environmental management. When the LCA information is of highenough quality for external release, and releasing
it makes sense, the company will make it available to the outside. The next stage entails obtaining Type III ecolabel25 certification, if itmakes sense to incur the additional costs of obtaining outside certification for a product so thatit can publicly display the label. As the numberof such products proliferates, the company will
put in place systems for gathering and releasing
LCA data. A further step will be the applicationof LCA data to the company's environmental
accounting procedures and such. Although matters do not necessarily proceed in exactly this25
A label that shows environmental impact in quantitative
terms based on an LCA.

order, it is reasonable to assume as a rough principle that a company engaged in activities falling
into the categories of systems and applications isfurther on in its LCA efforts than is one that ismerely at the implementation stage.
What about the progress of LCA efforts
within particular industries? The electricalequipment, general equipment, chemicals, andtransport equipment industries are all engaged in
LCA efforts in the categories of Type III ecolabeling, systems, and applications. Electricalequipment manufacturers have undertaken an
impressive array of pioneering programs. These
include developing a yardstick of eco-efficiency
known as Factor X by using LCA data;26 factoring into environmental accounting procedures
the benefits of alleviating environmental load as

26

Factor X is a means of evaluating eco-friendliness. Intothe numerator is plugged a figure representing the affluenceand ease of use resulting from enhanced performance andfunction; into the denominator is plugged environmentalload data obtained from LCAs and the like. A base year isset, and the fluctuation in eco-efficiency is determined byobserving how the ratio has changed. This method of assessing eco-friendliness is a refined version of Factor Four,a formula for doubling affluence and halving the environmental load advocated by Dr. Ernst von Weizsacker of the
Wuppertal Institute in Germany in the early 1990s. Calculating Factor X has been made possible by the aggregationof LCA data.
Development Bank of Japan Research Report/ No. 45

15quantitatively calculated using LCA methods;
and adopting LCC,27 which enables one to convert to a monetary value the environmental loadof a product or service. If, for example, a company adopts LCC, a product's environmental load
can be expressed as a monetary value that can becompared with, say, manufacturing costs. That, it
is hoped, will help in determining the overall
costs of environmental measures, developing
eco-friendly products, and making decisions withrespect to investments in environmental conservation. Certain manufacturers in the generalequipment and chemical sectors have taken steps
to disclose information on environmental load byfor example obtaining Type III ecolabel certification. Progress is likewise being made in thetransport equipment industry. A system is being
developed to facilitate the design of more
eco-friendly vehicles by creating a special database with the cooperation of parts suppliers. This27

LCC (life cycle costing) is a method of expressing theenvironmental load of a product in monetary terms. The
things analyzed are the same as in the case of an LCA; thedifference is that, while an LCA expresses the environmental load in quantitative terms, the LCC represents it as amonetary value.
16

Development Bank of Japan Research Report/ No. 45

database incorporates information on fuel consumption, exhaust emissions, and noise producedby all models of car during the usage stage, as
well as recyclability at the disposal stage andcarbon dioxide (CO2) emissions at all stages.
Another system is also being developed, this one
for managing the environmental load associatedwith all aspects of business operations. As forother industries, most media reports are of companies starting to implement LCAs, which constitutes the prior stage to systems and applications; companies in these sectors have thus not
yet made that much headway in harnessing
LCAs for other applications. As this brief survey
shows, different industries and firms have undertaken a diverse range of actions in the LCA
field. The cases covered in the media no doubt
constitute the mere tip of the iceberg: it is fair toassume that the actual array of efforts being pursued is far broader.

Table 1-5. Major Newspaper Reports on Recent Corporate Action in the LCA Field

Electrical equipment

Industry

Company

Implementation

Description

Information disclosure

Ecolabeling

Systems

Applications

Hitachi, Matsushita
Electric Industrial,
Mitsubishi Electric,
Fujitsu

Begin formulating standards for Factor X, a yardstickof eco-efficiency that adopts an LCA perspective.

c

Sony

Factors into environmental accounting procedures thebenefits of alleviating the environmental load fromrecycling home appliances.

c

NEC

Starts offering Internet service for retrieving environmental information that incorporates LCA results.

c

Fujitsu

Implements LCC (life cycle costing) on notebook
PCs.

c

Obtains the first ever EcoLeaf certification for a PC.
Pioneer

Sets up a system that pools LCA data so that it can beshared on line by the firm's product design arms.

Matsushita ElectricIndustrial

Calculates the total environmental load of its main
products and releases tentative LCA data results.

cccTransport equipment

General equipment

Sets company-wide environmental managementtargets based on LCA data.
Canon

c

Obtains EcoLeaf system certification in four fields.

cBecomes the first company certified to implement
EcoLeaf certification procedures exclusively in house.

c

Ebara

Launches a program for gauging CO2 emissions using
LCA methods and recycling used pumps.

Brother Industries

Obtains the first ever EcoLeaf certification for a home
fax machine.

Daikin Industries

Brings in LCA assessments for all models of air
conditioner, the firm's flagship product.

ToyotaDevelops the new Eco-VAS system and brings in
LCAs for all car models to be developed in 2005 andbeyond.

c

Honda

Gets the Honda LCA System fully up and running as ameans of gauging the environmental load of a car over
its life cycle.

c

c
c
c

Begins trading of emissions rights between groupfirms based on their volume of CO2 emissions ascalculated using LCA methods.

Other

Chemicals

Konica Minolta

Sources:c

Obtains system certification allowing it to implement
EcoLeaf certification procedures exclusively in house.

c

Obtains the first ever EcoLeaf certification for a
photocopier, film-in single-use camera, and film
camera.

c

Maruzen Petrochemical

Obtains EPD certification for chemical products.

c

Fuji Photo Film

Obtains the first ever EcoLeaf certification for adigital camera.

cToshiba Engineering

Launches LCA proxy service using LCA software.

Takara Shuzo

Obtains the first ever EPD certification for a seasoning.

c

Dai Nippon Printing

Obtains EPD certification for a dye-sublimation
thermal-transfer ink ribbon.

c

NTT East

Releases results of LCAs conducted on communication networks etc.

House Foods

Verifies benefits of lighter packaging using LCA
methods.

c

Shimizu

Adopts LCA methods in designing buildings.

cKawasaki Heavy
Industries

Conducts LCAs on major models of carriage manufactured at its rolling stock plant.

c

c

c

Compiled by DBJ from newspaper reports for 2002-2003, company materials, etc.

Development Bank of Japan Research Report/ No. 45

17II The State of LCA Today andCases of LCA in Use
2-1. What Is LCA?
Chapter I looked at the importance of LCA in thefight against global warming and surveyed what
progress companies are making in the LCA field.
Chapter II steps away from the issue of global
warming and delves further into the question of
the state of LCA today and how LCA is actually
being used.
LCA is a tool for quantitatively assessing
and interpreting, for a specific purpose, the environmental impact of a product or service overthe complete course of its life cycle from themoment it comes into being until it is discarded-- in other words, from resource extraction
through disposal and recycling. By conducting
an LCA, a company can quantitatively comprehend the environmental load imposed at eachstage of the life cycle not just by a specificproduct or service, but in certain cases by all its
business operations. A knowledge of what typeof environmental load occurs to what degree at

each stage of the life cycle enables the company
to determine, when manufacturing a product, thestage at what improvements can most effectively
be made in order to alleviate the environmentalload overall. This allows the company to implement environmental impact management in efficient fashion when designing a product or making business decisions.
The LCA is believed to have originated in astudy conducted at the Midwest Research Institute in the United States in 1969 that was designed to assess the environmental impact of
Coca-Cola's beverage packaging. This was thefirst time that the idea of quantitatively assessing
the environmental impact of something over thecourse of its life cycle was applied. This study
assessed the environmental load imposed by returnable bottles28 as opposed to disposable containers and compared the results. At that time
littering was a problem in the US because people
would indiscriminately discard used beveragecontainers everywhere, and reducing garbage had
become an important policy objective. In thestate of Oregon a 1969 bill prohibiting the sale ofbeverages in non-reusable bottles was defeatedin the face of opposition by the beverage indus-

A tool for quantitatively assessing and interpreting life-cycle environmental
impact for a specific purpose

Input(resources used)

Product life cycle
Resource extraction

Output(product, emissions)
Emissions into atmosphere

Resources
Manufacture
EnergyDischarge into hydrosphere
Solid waste
Product,
coproducts

Use
Disposal

Environmental impact (on the planet and ecosystems)

Figure 2-1. What Is LCA?
Sources:Compiled by DBJ from materials from the Seminar on LCA Database Use organized by the Japan Environmental Management Association for Industry.

28
A bottle that has been used, returned, and washed and isthen refilled.

18

Development Bank of Japan Research Report/ No. 45

try, but then in 1971, following the above study,a similar bill passed.29 This ushered in the world's
first bottle deposit system. The Oregon Bottle
Bill was primarily designed to reduce garbage,
but it also had the goal of encouraging the spreadof returnable bottles. After all, returnable bottles
are more conducive to saving energy and natural
resources than are disposable containers, since
they can be collected, washed, and refilled repeatedly. The returnable bottle is a case in pointof government policy incorporating life-cycle
thinking.
LCA research made further headway in the
US thanks to the Society of Environmental
Toxicology and Chemistry (SETAC), which wasestablished in 1972 as a forum through which
various environmental scientists (biologists,chemists, toxicologists, etc.) and corporate managers could conduct interdisciplinary studies.
SETAC is a non-profit, public-interest organization with balanced involvement by industry,
academia, and government. It has contributed tothe progress of LCA research by setting up acommittee of experts with LCA knowledge andpublishing an information magazine on LCA
issues.
In Europe LCA research commenced
around the same time as in the US. In 1972, in
the United Kingdom, an LCA-type approach wasused to make a rough assessment of the total energy expended in manufacturing beverage containers from materials such as glass, plastic, steel,and aluminum. In 1979 a methodology was unveiled that enabled this assessment technique tobe applied to a wide range of materials. In 1985
the European Commission brought into force theLiquid Food Container Directive, which requiredcompanies to monitor consumption of energy
and raw materials and generation of solid waste
by liquid food containers. This directive obliging
companies to implement life-cycle resource
management helped foster the spread of an
LCA-type approach among European firms. In
1990, building on a methodology and databasedeveloped by the Swiss Agency for the Environment, Forests and Landscape (BUWAL),
computer software was developed and put to use
in product development at co-ops and the like.
29

The Oregon Bottle Bill.

Meanwhile, in the Netherlands, the Centre ofEnvironmental Science at Leiden University unveiled a Dutch version of an LCA methodology
manual, complete with the associated computer
software, around 1991.
The first reported instance of an LCA-type
approach being employed in Japan was in 1981,
when the Chemical Economy Research Instituteimplemented an analysis of the energy-saving
benefits to be gained from adopting new materials. This analysis compared new materials suchas plastics and fine ceramics with conventional
industrial materials by quantitatively assessing
the life-cycle energy consumption of both. But
little subsequent LCA-type research on productenvironmental load was to be conducted in Japan
until the 1990s. On the other hand, in the late1980s, studies began being conducted in the nuclear energy field on the costs and environmentalload imposed by generating plants over thewhole course of their life cycle. One independent
development in Japan during the 1980s was the
progress of research on CO2 emissions from different industries, including their spillover effect;
this made use of input-output tables. In 1992 thefirst LCA-type study organized by the government was carried out, "A Preliminary Study on
Assessing the Load on the Environment." Implemented under the direction of the Ministry of
the Environment, this study summarized the stateof LCA in Japan at the time. Nonetheless, by thelatter half of 1993, when work began on establishing standards for ISO14040, which defines
the principles and framework for LCA, it became
clear that Japan had fallen vastly behind theEuropean countries with their advanced databases and arsenal of techniques. In 1995 the
LCA Japan Forum was established as a clearinghouse for discussion of LCA issues by LCA
researchers in industry and academia. Thus began serious discussions on the databases andstandardized methods required to underpin LCA
implementation. In June 1997 a policy statement
was released summing up the outcome of these
discussions. This contained the following fiverecommendations:(1) Industry should actively adopt an LCA approach: determine the soundness of productplans, assess the need for product development projects, set priorities for taking

Development Bank of Japan Research Report/ No. 45

19eco-friendly measures at the product design
stage and when upgrading the production
line, and so forth.
(2) If the LCA is to assume its proper role as
one means of sustainable development, it isessential that it achieve recognition as anunbiased, dependable tool for assessing
eco-friendly concerns; that will require developing LCA methods and constructing
LCA databases.
(3) If LCA is to come into widespread use,well-stocked databases of various types willneed to be developed, which will require
industry to make available reliable databases
and actively release LCA results. To thatend an umbrella organization should be set
up to oversee a standard database for Japan.
(4) LCA methods are still at the developmental
stage; no comprehensive assessment techniques have yet been established. Therefore
caution is required when conducting an
LCA in order, say, to make a comparative
assessment of the environmental impact of
substitute materials or substitute products.
Prioritization of environmental factors andissues will vary depending on the specificsociety, place, and time, for which reason it
must be recognized that there is a danger
inherent in relying on LCA methods alone
as a basis for decision-making.
(5) Adoption of LCA methods by industry is
not enough on its own. People at all levels,
including the general public, need to adopt
life-cycle thinking and reassess their own
lifestyles.
In response, the Ministry of Economy,
Trade and Industry launched Phase I of the
Product Life Cycle Environmental Impact Assessment Technology Development Project(generally known as the LCA Project). This
five-year program (1998-2002) was designed tolay the foundations for LCA technology in Japan.
The outcomes from this phase of the project include not merely putting together an LCA database consisting of some 550 items of inventory
data,30 but also formulating a proposal for a30

Inventory data are data on inputs in the form of materials
and energy and outputs in the form of end products andenvironmental load at each stage in the life cycle of the
product or service subject to the LCA.
20

Development Bank of Japan Research Report/ No. 45

life-cycle impact assessment method based on
endpoint modeling. Japanese companies have, it
is claimed, now been able to catch up to their
European and American counterparts in the levelof their LCA activities.
In 2001 the European Commission released
a green paper on integrated product policy(IPP),31 which is designed to minimize the environmental impact of products at every stage ofthe life cycle. Although IPP has not yet borne
fruit in the form of concrete policy steps, European LCA research has surged ahead on a wide
range of fronts now that Europe has set a clear
direction for its LCA policies. The Johannesburg
Summit Implementation Programme, which was
published as the accomplishments of the 2002
World Summit on Sustainable Development(WSSD),32 or Johannesburg Summit, calls whereappropriate for implementation of life cycle
analysis and identification of national indicatorsfor measuring progress, this in order to promote
development of a ten-year framework of programs to accelerate the shift towards sustainableproduction and consumption. It was expressly
stipulated that LCA would continue to be pursued within an international framework. Thatsame year the decision was made to adopt theType III ecolabel -- a label that lists environmental information in quantitative terms basedon an LCA -- as an international standard under
ISO14025 by the end of 2006; meanwhile, theJapan Environmental Management Association
for Industry began administering Japan's firstType III ecolabel, the EcoLeaf. In 2003 the Ministry of Economy, Trade and Industry launchedPhase II of the LCA Project with the goal of,among other things, database expansion.

31

Integrated product policy (IPP) is a policy that demands
the most effective action for minimizing environmental load
over the course of the life cycle. It requires comprehensive
measures at each stage of the product life cycle -- measuresharnessing such policy techniques as economic tools, ecolabeling, and product design.
32
The World Summit on Sustainable Development (WSSD)
was a global conference on sustainable development dedicated to the basic themes of "Economic Growth and Equity," "Conserving Natural Resources and the Environment," and "Social Development." Government officials,
NGO personnel, and media representatives from 191 countries attended -- a total of more than 21,000 people.

Table 2-1. History of LCA
Year

Country/entity

1969

US

1972

UK

1979

USA

1981

Japan

1992

Japan

1993

ISO

1995

Japan

1997

ISO

1998
1999
2000
2001

Japan
SwedenGEDnet
ISO
EU
World

2002

2003

Sources:

ISO
Japan
Japan

Details
Midwest Research Institute conducts environmental impact assessment of Coca-Cola's beverage packaging.
Assessment of energy expended in manufacturing beverage containers.
Society of Environmental Toxicology and Chemistry (SETAC) established. An independent, non-profit
body, SETAC takes an interdisciplinary approach to developing LCA methods, with balanced involvement
by industry, academia, and government.
Chemical Economy Research Institute conducts quantitative analysis comparing energy consumption of
new and conventional materials.
Ministry of the Environment conducts Preliminary Study on Assessing the Load on the Environment.
Work begins on establishing standards for ISO14040, which defines the principles and framework for
LCA.
LCA Japan Forum established as a clearinghouse for discussion of LCA issues by LCA researchers inindustry and academia. (It presents a set of policy recommendations in 1997.)
ISO14040 published.
Ministry of Economy, Trade and Industry launches Phase I (1998-2002) of the Product Life Cycle Environmental Impact Assessment Technology Development Project (LCA Project).
Begins administering EPD.
Network of Type III ecolabel certification bodies launched.
Releases Type III ecolabel technology report (ISO/TR14025).
Releases green paper on Integrated Product Policy (IPP).
World Summit on Sustainable Development (WSSD) convenes.
Basic program defines LCA as having a role to play in the shift towards sustainable production and consumption.
Decides to adopt an international standard of Type III ecolabel (official publication slated for Dec. 2006).
Begins administering EcoLeaf.
Ministry of Economy, Trade and Industry launches Phase II (2003-2006) of the LCA Project.

Compiled by DBJ from the Society of Non-Traditional Technology and Ecomaterials Forum (eds.), All about LCA
etc.

2-2.

Types of Ecolabels

An ecolabel is any written description, symbol,
design, or diagram, whether appearing on a
package label or in a user's manual, technicalreport, advertising, publicity materials, etc., thatconveys to the purchaser information about theenvironmental aspects of a product or service.
Ecolabels are classified into three types becauseof differences in the type of environmental datathat they provide and so forth. Of late the TypeIII ecolabel, which shows environmental impact
in quantitative terms based on an LCA, has become the focus of much interest, for there is a
growing awareness of the importance of quantitatively managing the environmental load at eachstage -- materials production, assembly, transportation, use, and so forth.
A Type I ecolabel is a label that a company
is permitted to use with respect to a product orservice that is found to meet certain criteria set

by a neutral, impartial third-party agency. A
Type 1 label makes comparison easy, since you
can determine whether the item in question has asmall or large environmental impact based onwhether or not it bears the label, which certifies
conformity with certain standards. But the Type1 ecolabel has a drawback: it does not allow you
to compare the environmental load of two products that both carry the label, because it merely
indicates that an item clears a certain level. Japan's sole Type I ecolabel is the Eco Mark,33
which conforms with ISO standards (ISO14024).
Eco Mark eligibility is assessed by a third-party
33

The Eco Mark is administered by the Japan Environment
Association. It is a Type I ecolabel awarded to products
certified by a third party as being conducive to environmental conservation because they meet certain conditions,such as being highly beneficial in helping to preserve theenvironment. For example, the environmental load that they
impose over their life cycle might be smaller than for comparable products, or using them may alleviate the load on
the environment imposed by other factors.
Development Bank of Japan Research Report/ No. 45

21agency using a set of certification criteria embracing all stages of the life cycle from productmanufacture through disposal. As of September
2003, 5,618 products in 59 categories had obtained Eco Mark certification. Products madefrom recycled materials predominate: items ofrecycled plastic top the list -- 985 items in total -followed by apparel made from recycled polyethylene terephthalate resin -- 735 items in total.
Further progress is set to be made in promoting
cross-certification34 with overseas labels andstrengthening coordination with other labels,
such as Type III ecolabels.
A Type II ecolabel is self-declared. The
company establishes its own environmental
standards and determines for itself whether aparticular product meets them. This type of ecolabel is used for external promotion purposes,
appearing in pamphlets and other materials or
being applied as an actual label. One example is
Toshiba's Global Environment Mark, which
identifies products, services, technologies, andprograms that alleviate environmental load,
whether by conserving energy to reduce CO2
emissions, recycling, or reducing use of substances that put a burden on the environment.
Another example is Fujitsu's Eco Symbol Mark,
which is designed to get out the message about
how hard the company is working to recycle,
save energy, and employ eco-friendly materials.
Such labels are awarded by the company itself inaccordance with criteria that it sets in house;hence they involve relatively little expense, since
there is no third party to pay, plus the authorization process is swift, since there is no need foroutside certification. As with Type I ecolabels,
an item either passes or fails; that makes it easy
to compare a certified product with other items
for environmental load. You can determine
whether an item has a small or large environmental impact based on whether or not it bears
the label.
Type II ecolabels differ from their Type I
counterparts in that administration and certification are handled by the company releasing theinformation itself rather than by a third-party
agency. Type II ecolabels thus tend to compare
unfavorably to Type I ecolabels in terms of objectivity. Moreover, criteria for Type II labels
vary from company to company, and whether aparticular product is awarded a label or not isdetermined based on voluntary criteria set by thecompany itself on a subjective basis. That makes
it difficult to compare different makes of product.
A Type III ecolabel shows environmental
impact in quantitative terms based on an LCA.
Its presence or absence is not meant to indicatethat a particular item has a small or large environmental impact. Rather, the label provides objective data in a manner designed to enable directcomparison, and the consumer viewing it is left

Table 2-2. Types of Ecolabels

Description
Administrated by…
International standard

Type I
Label certifying compliancewith environmental standards
set by a third-party agency
Third-party agency
Prescribed under ISO14024(published Apr. 1, 1999)

Environmental data provided

Essential items only

Cases of implementation

Eco Mark (Japan)
Energy Star (US)Blue Angel (Germany)

Sources:

Type II
Self-declared company label
Releasing party
Prescribed under ISO14021(published Sept. 15, 1999)
Items selected by releasing
party
Global Environment Mark(Toshiba)
Eco Symbol Mark (Fujitsu)

EcoLeaf (Japan)
EPD (Sweden)

Compiled by DBJ from the web site of the Japan Environmental Management Association for Industry etc.

34
For example, in the case of photocopiers there is partial
cross certification with the Nordic Swan. Thus a photocopier that has obtained Eco Mark certification is exemptedfrom screening for certain items that the Nordic Swan
shares in common.

22Type III
Label showing environmental
impact in quantitative terms
based on an LCA
Third-party agency
Currently under discussion(ISO14025)
Quantitative environmental
information on life cycle

Development Bank of Japan Research Report/ No. 45

to decide for himself or herself the degree of environmental impact. Like Type I ecolabels, TypeIII ecolabels are administered by third-party
agencies; this guarantees objectivity. Type I and
II ecolabels indicate by their presence that the
products carrying them clear specific criteria.
But in the case of Type III ecolabels, the quantityof environmental information to be shown is so
great that it will not all fit onto the product; data
are therefore posted on a web site or the like.
Typically, certified products carry a registeredlogo giving, say, a web address, and the consumer or whoever is referring to the label accesses that site to obtain the requisite information.
International standards for Type I and II ecolabels have been formally issued by the ISO, but
Type III ecolabels are currently only governedby ISOTR14025; the promulgation of an international standard will have to await official publication of ISO14025, which is slated for 2006.
Use of Type III ecolabels is becoming rapidly
more common, and the introduction of an official
ISO standard can only be expected to increase
the momentum.

2-3. EcoLeaf and EPD ComparedType III ecolabels, then, give environmental information in quantitative terms based on an LCA.
Japanese companies use mainly two kinds ofType III ecolabels: the EcoLeaf and the EPD(Environmental Product Declarations). A brief
overview of these follows (Table 2-3).
The EcoLeaf, which is administered by theJapan Environmental Management Association
for Industry, is a Type III ecolabel that focuses on
widespread usability and comparability. System
certification35 is permitted as a prompt, economic
35

Normally, obtaining EcoLeaf certification requires thefollowing steps. The company planning to release the ecolabel formulates the label in line with LCA methods. The
label is then screened by an outside auditor, following
which an adjudication is made by an adjudication committee consisting of academics, LCA experts, consumers, andso forth. System certification enables a company issuing theecolabel to have an internal auditor handle the job ofscreening it in place of an outside auditor, and exempts itfrom the need for adjudication by an adjudication committee. Awarding system certification involves screening thecompany to certify that it has in place the necessary systems
for data collection etc. and runs them properly and efficiently. This screening is carried out in accordance with theway of obtaining EcoLeaf authorization: once acompany acquires system certification, products
need only pass testing by an inside auditor employed independently by the organization in order to be authorized to carry the label. This has
several advantages. It allows a company to obtain EcoLeaf certification quickly and flexibly instep with its new product development and release schedule. It also makes the unit cost percertification fairly low if the company is going to
be obtaining more than a certain number of certifications. The EcoLeaf program prescribes a setof standards, known as Product Specification
Criteria (PSC), through agreement among theparties concerned. These standards govern gathering of data on inputs in the form of materials
and energy and outputs in the form of end products and environmental load at each stage of thelife cycle of the product or service in question;
this is in order to guarantee comparability between products. In gathering LCA data, an important consideration is the data quality requirements: i.e., what type of data can be omitted (cutoff), and to what extent is it permissible to use
background data36 not directly pertaining to the
product. The EcoLeaf program prescribes nouniform standards in this regard; instead, separate standards are established for each PSC set.
Data quality requirements vary widely depending
on product category; this results from the belief
that setting requirements by product better enables the formulation of appropriate rules. What
the EcoLeaf program stresses is comparability.
Discrepancies in the numbers within productRequirements for Product Environmental Data Collection
Systems released under the EcoLeaf program. Once a company has system certification, it can quickly and economically obtain EcoLeaf certifications for large numbers of
products of the same type. A company acquiring system
certification must, depending on its size, pay a certification
fee of anywhere between ¥1.6-2.7 million at the time certification. But once it is system-certified, it no longer has topay a data screening fee to an outside auditor when obtaining EcoLeaf certification for a particular product using thecertified systems. Thus, if it wishes to get large numbers of
products EcoLeaf-certified, it can do so at a relatively lower
cost per product.
36
In an LCA, the term foreground data is used to refer todata pertaining directly to the product in question; the term
background data is used to refer to data pertaining indirectly
to the product in question, such as data on materials, electric
power, fuel, and so forth. It is preferable that most foreground data be based on actual measurements.
Development Bank of Japan Research Report/ No. 45

23categories are minimized by, for example, standardizing the principal basic units (specifying thenumerical values) used for LCA data. The cost of
EcoLeaf certification is relatively low, averaging
around ¥300,000-500,000 per product, and thelabel has spread rapidly in the year and a halfsince it became available in 2002. So far 110
products have been certified.
EPD, which is administered by the Swedish

Environmental Management Council, is a TypeIII ecolabel that focuses on internationality andreliability. The program is global in scope, being
used to certify products and services in fivecountries: Sweden, Italy, Finland, Poland, andJapan. Three of those countries -- Sweden, Italy,
and Japan -- have third-party certification agencies. The Japan Gas Appliances Inspection Association has been accredited by the Swedish

Table 2-3. EcoLeaf and EPD Compared
Administering country
Administering body

EcoLeaf
Japan
Japan Environmental Management Association
for Industry

EPD (Environmental Product Declarations)SwedenSwedish Environmental Management Council
Certified by 8 third-party agencies in Sweden, Italy, and Japan (1 agency in Japan: theJapan Gas Appliances Inspection Association)
Product certification as per ISO/IEC Guide
65

Certifying body

Japan only
Japan Environmental Management Association
for Industry

Method of certification

Label certification, system certification

LCA rules (assumptions upon which
standards set for product use, scopeof assessment, work process methods
and conditions, methods of calculation, etc.)

Employs Product Specification Criteria (PSC)

Employs Product Specification Requirements (PSR)

Basic units

Standardized

Methods standardized for each productgroup within scope of PSR

Data quality

Country where registered
No. of products registered (as of 31
January 2004)

Standard lead time for certification

Term of validity
Official language
Average cost of certification per
product
Characteristics

Note:

Sources:

24

Separate cutoff (rule allowing omission of dataon processes with negligible environmental
impact) and data quality requirements (conditions governing percentage of data not specificto the product being certified that can be used)
are established for each PSC set.
Japan

Sweden, Italy, Finland, Poland, Japan

110 (Japan: 110 representing 22 companies)

67 (Japan: 7 representing 3 companies)

Preparation, discussion, and approval of draft
PSC: 2-4 mos.
Preparation, verification, and approval of label:approx. 2 mos.

Can be renewed every year (3 yrs. for system
certification)
Japanese (information available in English)

Preparation, discussion, and approval ofdraft PSR: 2-4 mos.
Preparation, verification, and approval oflabel: approx. 2 mos. (In case of
pre-certification, the PSR does not needapproval. This reduces lead-time by 1-2
mos.)
Can be renewed every 3 yrs. (every year incase of pre-certification)
English (information available in Japanese)

Approx. ¥300,000-500,000

Approx. ¥600,000-800,000

Focuses on widespread usability and comparability

Focuses on internationality and reliability

Items representing 1% or more of the environmental impact cannot be cut off.
Data not pertaining specifically to the product must constitute less than 10% of total.

Pre-certification is a form of certification available under the EPD and similar programs as a way of speeding up thecertification process. The assumption is that pre-certification will be upgraded to formal certification at some point.
It enables a company to obtain certification for a limited one-year term even without formal PSR certification.
Compiled by DBJ from the web sites of the Japan Environmental Management Association for Industry and theJapan Gas Appliances Inspection Association (JIA), as well as from interviews.

Development Bank of Japan Research Report/ No. 45

Environmental Management Council as the certification agency for Japan. The EPD program is
the first Type III ecolabel certification system to
employ a product certification regime based on
the ISO/IEC Guide 65.37 Thus the screening
agency to an extent guarantees the reliability andaccuracy of the data used, as well as the conformity of the product, process, or service in question in so far as it has been able to verify it.38
That has the advantage for the applicant ofguaranteeing the reliability of the data released.
But the data quality requirements are fairly
stringent. Only items that represent less than 1%of the total index of life cycle impact are allowed
to be omitted from the calculations (cut off); also,
in order to enhance data reliability, data not pertaining specifically to the product being certifiedmust constitute less than 10% of the total.

2-4.

Japanese Action in the LCA Field

Table 2-4 provides an overview of action undertaken nationally by Japan in the LCA field.
In October 1995 -- by which point the country had fallen over a decade behind Europe andNorth America -- the LCA Japan Forum waslaunched. This served as a clearinghouse fordiscussion of LCA issues and the future of LCA
by members of industry, academia, and government; it also acted as a hub for pooling and exchanging relevant information. As we saw in
Section 2-1, in June 1997 the Forum released a
policy statement that identified LCA as an effective means of conducting environmental assessments on products. The policy statement also
underscored the need to construct reliable databases and develop environmental impact assessment tools if LCA was to come into widespreaduse in Japan. In response, in 1998 the Ministry of

37
I.e., the ISO/IEC Guide 65 compiled by the ISO/IEC in
1996, General Requirements for Bodies Operating Product
Certification Systems. This standardizes the requirements towhich certifying agencies are to conform in order to ensure
the soundness of the product certification process.
38
In the case of system certification such as ISO14001, thescreening agency guarantees the conformity of the environmental management system in question in so far as it has
been able to verify it. However, the reliability of the products and data that constitute the output from the system lies
outside the scope of the guarantee. See the ISO/IEC Guide
66-1996 etc.

Economy, Trade and Industry launched afive-year national program, Phase I of the Product Life Cycle Environmental Impact Assessment Technology Development Project (generally known as the LCA Project). This was a truly
massive project. The budget for Phase I of the
LCA Project totaled ¥1.28 billion over five years.
But the real cost was several times that amount,for the above figure does not include the personnel and other expenses incurred for the programs
undertaken by the 54 industry associations thattook part and cooperated. Nonetheless, the companies affiliated with the participating industry
associations appear to have derived benefits fromthe project commensurate with the amount ofmoney that they invested: they were able to absorb LCA knowledge, develop requisite skills,
and so forth. Thus the project was implemented
in very well thought out fashion such as to curtailnet government expenditures.
Phase I of the LCA Project was executedwith such objectives as (1) establishing LCA
methods for shared use in Japan, (2) developinga public database accessible to anyone, and (3)developing a network system that ensures ease ofdata use etc. The outcomes included putting together a database consisting of some 550 items
of inventory data, as well as formulating a proposal for a life-cycle impact assessment method
based on endpoint modeling.
In the following year, FY 2003, Phase II of
the LCA Project began. The main objectives ofthis phase are (1) promoting the widespread
adoption of LCA methods in society by, e.g.,
applying them in regional policy, and (2) supporting private-sector firms in their independent
efforts to build a sustainable socioeconomic
system through the advancement of research on
LCA products and on 3R39-LCA. Specifically,
the goals are to compile a manual of regional
LCA procedures, expand data and upgrade techniques of analysis, and create a standardized
3R-LCA assessment method and model. Phase IIof the LCA Project is to run for three years, fromFY 2003 through FY 2005, on an annual budgetof approximately ¥300 million. It will involve
participation by local governments and ordinary
companies rather than industry associations.
39

Reduce, Reuse, and Recycle

Development Bank of Japan Research Report/ No. 45

25

Table 2-4. Overview of the LCA Project
LCA Project, Phase I
Establishing LCA methods for shared use in Japan
Developing a public database
Developing a network system that ensures ease ofdata use etc.
54 industry association etc.

Objectives

Participants
Duration
Themes

1998-2002
Gathering inventory data
Designing specifications for an LCA databasesystemDeveloping a life-cycle impact assessment method
suitable for Japan based on endpoint modeling

Outcomes(expectations)

Some 550 items of inventory data gathered
Database compiled
Proposal formulated for a Japanese version oflife-cycle impact assessment method based on
endpoint modeling
Ministry of Economy, Trade and Industry - NEDO
¥1.28 billion (for 5 yrs.)

BudgetNote:
Sources:

2-5.

Ministry of Economy, Trade and Industry - NEDO Approx.
¥300 million (annually)

Inventory data are data on inputs in the form of materials and energy and outputs in the form of end products
and environmental load at each stage in the life cycle of the product or service subject to the LCA.
Compiled by DBJ from materials from the Seminar on LCA Database Use organized by the Japan Environmental Management Association for Industry.

Overview of the Database

The database compiled during Phase I of the
LCA Project was put together by the Project
Administration Committee and several bodies
under it: the Inventory Study Group, the Impact
Assessment Study Group, and the Database
Study Group. Figure 2-2 provides an overview ofthe database, which includes inventory data thatcan be shared as background data, as well as an
impact assessment list for use with the life-cycle
impact assessment method based on endpoint
modeling.40
40

The life-cycle impact assessment method based on endpoint modeling is divided into fate analysis, characterization,
damage assessment, impact aggregation, and consolidation.
Fate analysis involves correlating inventory with densitychanges in an environmental medium; for example, CO2 isanalyzed as being related to density of greenhouse gases.
Characterization involves correlating density of an environmentally harmful substance in an environmental medium
with potential magnitude of impact in the impact category;for example, density of greenhouse gases is correlated with
global warming. Damage assessment involves correlating
impact category with damage magnitude at the category
endpoint; thus global warming is correlated with heat/coldstress, infectious disease, malnutrition, disaster damage,26

LCA Project, Phase II
Promoting the widespread adoption of LCA methods in society
Through LCA methods, supporting private-sector firms in their
independent efforts to build a socioeconomic system with anenvironmentally-sound material cycle
Mie, Chiba, and Iwate Prefectures, firms helping in gathering
data, etc.
2003-2006
Developing LCA methods for regional industry
Promoting LCA research and development on downstream
products
Classifying venous data
Increasing reliability and versatility of the life-cycle impact
assessment method based on endpoint modeling
Compile manual of regional LCA procedures
Expand data, upgrade techniques of analysis
Create standardized 3R-LCA assessment method and model

Development Bank of Japan Research Report/ No. 45

The Inventory Study Group started out by
defining inventory items and scope of data collection for 14 substances discharged into the environment (CO2, CH4, HFCs, PFCs, N2O, SF6,
NOx, SOx, dust/particulate matter, BOD, COD,
total phosphorus, total nitrogen, and suspended
matter). It then proceeded to collect relevant data,
as well as verify data quality and determine
methods of data release and management. On theso-called venous side of the cycle, it assessed
unit environmental load during waste disposal -incineration, landfill operations, and so forth. It
then compiled the findings as inventory data oneach process and stored them as background data.
The Inventory Study Group thereby collected
245 items of industry association data on sometimber production, agricultural production, land loss, energy
consumption, and land ecosystems. Impact aggregation
involves aggregating damage magnitudes at a wide range ofcategory endpoints into four protected areas: human health,social assets, biodiversity, and primary production volume.
Consolidation involves uniformly indexing the damage
magnitudes for the four protected areas. A characterization
factor list is used during the characterization process, adamage factor list is used during the damage assessment
process, and a consolidation factor list is used during theprocess of uniform indexing.

200 products with respect to the 14 substances,prime among them CO2, NOx, and SOx. It alsocollected 247 items of arterial survey data on
resource extraction, overseas transport, etc., aswell as 59 items of venous survey data on ordinary waste disposal processes. The rectangularboxes in the lower half of Fig. 2-2 represent theinventory of industry association data. On theleft-hand side are listed resource and energy inputs; on the right-hand side, products and services.
The Impact Assessment Study Group considered (1) methods of quantitatively assessing
the extent of damage that the protected entity
would incur from an environmental load. It also
discussed (2) the question of how much importance the assessor should attach to each protectedarea exposed to environmental impact. As a result 11 impact categories were defined (urban air
pollution, harmful chemical substances, ozone
layer destruction, global warming, ecotoxicity,
acidification, eutrophication, photochemical
oxidants, land use, waste, and resource con
sumption), along with 4 protected areas (humanhealth, social assets, biodiversity, and primary
production volume). Then a life-cycle impact

assessment method based on endpoint modeling
was proposed; this is capable of assessing impact
at each step from characterization to uniform
indexing, as will be described below. As indicated in Fig. 2-2, three types of list have been
proposed as part of this life-cycle impact assessment method: a characterization factor list, aprotected-area damage-magnitude list, and aconsolidation list. These are for use during thecharacterization, damage assessment, and uniform indexing processes.
The Database Study Group developed software for inputting collected data. It also developed an LCA database system. It thereby laid thegroundwork for collection and release of industry association data and survey data. This database was actually made available for public access on a test basis between August 2003 - February 2004. A total of 1,354 users registered forthis pilot program, most of them members of the54
industry
associations.
Duringtheseven-month period the database received some
8,100 logins, and there were roughly 5,100
downloads of inventory data. The site thus
proved busy indeed.

Development Bank of Japan Research Report/ No. 45

27

Thanks to the input and cooperation of 54 industry associations, the database incorporates a total of 551 items of inventory data. These consist of 245 items of industry association
data, 247 items of arterial survey data, and 59 items of venous survey data. Data on CO2, NOx, and SOx have been gathered from virtually all industry sectors.
Proposed: a form of environmental impact assessment that incorporates inventory data on the environmental load from 14 discharged substances, and that utilizes a life-cycle impact
assessment system based on endpoint modeling.
The database incorporates environmental load data on the following 14 discharged substances:CO2, CH4, HFCs, PFCs, N2O, SF6, NOx, SOx,
Discharged into atmosphere:
dust/particulate matter
Discharged into hydrosphere:
BOD, COD, total phosphorus, total nitrogen, suspended
matterMaterials

247 items of
inventory data

551 items of
inventory data

Iron ore, coal, etc. /steel products
Bauxite, heavy oil, electric power, etc. /aluminum plating etc.

Arterial survey
data＿＿＿＿＿＿＿＿
Resource extraction
Processing of metals
Inorganic processing-- / limestone

Refined ore, coke,etc. / copper etc.

Ilmenite etc. /titanium oxide

Titanium ore etc. /coil

Limestone, gypsum, etc. /Portland cement etc.
Xylene etc. /acrylic plastic

Alumina etc. /burnt brick etc.

Methanol etc. /chloroform etc.

Silica sand, soda ash
etc. / sheet glass

Heavy oil etc. /carbon black

Naphtha etc. /urea

Powder etc. /alumina ceramics

Cullet etc. /glass fiber

Naphtha etc. /ethylene etc.

Caustic soda etc. /fatty acid soap

Natural gas etc. /methanol

Terephthalic acid,
LPG / tire cords etc.
Naphtha, oxygen,etc. / pellets

Parts

Assembly

Usage

Disposal/
recycling

Steel, aluminum, plastic, compactor, coolant, electric power, city gas, heavy oil, etc. /refrigerator
Copper, plastic, etc. /equipment wiring

Plastic, printed-wiring board,condensers, etc. / TV, PC

Carbon black, plastic, etc. /lithium batteries etc.

Plastic, printed-wiring board,condensers, etc. / cell phone

SO2 gas etc. /sulfuric acid etc.

Chassis (plastic, steel), ICs, circuitboards, etc. / photocopierCast iron, steel products /pump etc.

Steel, sand, sashes, sheet glass, etc. /office bldg. of reinforced concrete

Titanium oxide, plastic, etc.
/ auto paint etc.

Steel, aluminum, plastic /oil pump, etc.

Steel, aluminum, zinc, etc. /disk wheel etc.

Steel, aluminum, auto tires, plastic,
auto parts, lead batteries / 1500 cc
automobile

Nylon etc. /auto tires etc.
Phenol /ink

Air / oxygen,nitrogen, etc.

Energy use

Extraction

Life-cycle impact assessment system based on endpoint
modeling
Characterization factor list
Protected-area damage-magnitude list
Consolidation list

Industrial salt etc. /chlorine

Crude oil, electric power/ heavy oil, naphtha, etc.

Crude oil, coal,
LPG / electric
Natural gas, LPG /City gas

Venous survey data
Incineration of ordinarywaste
Landfill disposal ofincinerated ash
On-site demolition ofbuildings
Pulverization of construction
debris etc.

59 inventory
data items-- / cargo transport
Naphtha etc. /MDIIndustry
association data

Gasoline
245 inventory
data items
Electric
powerCity gas

Figure 2-2. Overview of the LCA Project Database
Notes:

1. The left-hand side of each item of industry association data represents resource and energy inputs; theright-hand side represents products and services.
2. Inventory data relating to the same energy inputs or products, but at different stages, are counted separately.
3. Life-cycle impact assessment based on endpoint modeling is a method of quantitatively assessing environmental impact in individual categories, such as global warming and resource consumption, based on inventorydata.
Sources: Same as Table 2-4.

28

Development Bank of Japan Research Report/ No. 45

are categorized into three types: data accuracy,increased difficulty of use, and restrictions on
disclosure.
A frequently cited problem in the area ofdata collection is that of boundaries between adjacent data. The data boundary marks the limits
within which specific LCA data are collected.
The unit work processes included within thescope of an LCA are specified in accordancewith its particular objectives; in the case ofprocesses that are not that significant, upstream
data may be omitted. Therefore the range of datacrucial to assessing one product may differ fromthat crucial to assessing another, even if thecomponent in question is the same. Strictly
speaking, then, data should be collected in accordance with the particular objective. Phase I of
the LCA Project had the goal of constructing apublic database that could be used by anyone fordiverse products and services. Therefore, rather

III Challenges to Overcome in
Promoting LCA Use
3-1.

Problems with the LCA Database

Phase I of the LCA Project produced one of theworld's largest LCA databases, a significant
achievement. But at the same time a wide arrayof problems have emerged.
Table 3-1 gives a brief rundown of problems with the LCA database. On the vertical axis,
problems are classified into two categories -data collection and data use -- depending on thestage at which they occur. On the horizontal axis,
specific examples of the chief problems are
given; the nature of each is identified, along withthe constraints it imposes. Under "Nature of
problem," the problem is classified as eithertransitional or intrinsic. "Resulting constraints"

Table 3-1. Problems That Have Emerged with the LCA Database compilation
Nature of problem

Stage atwhich
occursTransitional

Intrinsic

Data accuracy

Increaseddifficultyof usecccc

Because multiple products are manufactured simultaneously,
allocating energy use and so forth can be difficult (case-by-caseallocation etc.).

c

c

c

Concerns that corporate secrets (costs and manufacturingknow-how) could leak out limit ability to collect data and verify
their accuracy.

ccDifferences between companies in setting of boundaries (e.g.,
distinction between internally manufactured and outsourced
parts) and in manufacturing techniques can cause considerable
discrepancies in the data. (Often figures vary by several times, oronly incomplete data can be collected.)

c

c

c

It is difficult to obtain external data or data from abroad -- e.g.,
from suppliers of materials and parts.

c

c

c

Chief problems

Data collection

Boundaries between adjacent data are often not adjusted; therefore it takes considerable practice to use the database properly.

There is a shortage of data on intermediate products and components, e.g., data on general-purpose electronic components
and devices used in a relatively large number of products.

Use

Resulting constraints

c

c

c

It is difficult to process data to match variations in product size.

ccConstant updating is required in the case of cell phones and thelike, which quickly become outdated.

ccSources:

Restrictions on
disclosure

Compiled by DBJ from materials from the Seminar on LCA Database Application organized by the Japan Environmental Management Association for Industry.

Development Bank of Japan Research Report/ No. 45

29than being gathered with a specific product inmind, the data collected pertained only indirectlyto specific products (i.e., it is background data),
and the data were aggregated with the boundaries
as set by the respective industry associations inaccordance with their own criteria. In consequence, if one simply uses the data as recordedin the database, some processes may end up being duplicated, while others get omitted. Nonetheless, the information appears sufficiently accurate to be usable as background data, and tothat extent there is no problem with using it. As
is always the case when implementing an LCA,
it is necessary to have a good understanding of
the different types of data and realize their natureand limitations. The data boundary problem, it
can be argued, is a transitional one, which can be
expected to fade away gradually as the databaseis upgraded. On the other hand, setting appropriate boundaries can be difficult due to circumstances peculiar to specific materials and products, and in that sense the problem is more intrinsic. Companies all tend to differ on how they
define the scope of different processes, and it isoften necessary to expand or contract databoundaries in accordance with the purpose forwhich the data are being used.
A truly intrinsic problem is that of allocation. Matters would be perfectly straightforward
if each factory only manufactured a single product. But the fact is that factories manufacture allkinds of things at the same time. In many cases,
then, gauging input and environmental load foreach product requires performing an allocation
based on some criterion or another, such as
weight or production value.
Another obstacle is corporate secrecy. In
some industries there are concerns that disclosing actual amount of energy used might betray
how a product is manufactured or reveal thecosts involved. Similarly, in cases where, say,composition of a certain material is a corporate
secret, disclosing LCA data could result in key
know-how leaking out. The upshot is that in certain cases only data of questionable accuracy canbe collected, or disclosure of data is limited.
One of the primary achievements of Phase Iof the LCA Project, made possible in part by theguiding role played by the government in theprocess of data accumulation, was the collection
30

Development Bank of Japan Research Report/ No. 45

of large amounts of broad-ranging data on materials and energy. But problems remain. There is a
dearth of data on intermediate products, such as
electronic components and devices, which have awide range of applications; this is to an extent
because collection of data has yet to make much
headway among manufacturers of materials andcomponents. The lack of data on general-purpose
products like these is described as an urgent issue. But it is a transitional problem, and sooner
or later definite progress should be made in rectifying it.
When it comes to actually using data, there
is another problem. Data may only be available
on products and components of a certain size,
and if you are looking for data on, say, a component of a different size or with different specs,
it can be difficult to process existing data tomatch your requirements. Then there are items
such as cell phones and electronic devices thatquickly become outdated: by the time they are
entered in the database such that you can accessinformation on them, they are already old andhave largely gone out of use. Manufacturing
techniques may also change; this again necessitates constantly updating the data.
The relative difficulty of compiling and releasing LCA data varies greatly from product toproduct. Releasing LCA data is easier for someitems than for others, as Table 3-2 shows. This
table classifies products according to two criteria: the value of the LCA information itself, andthe relative technical difficulty of collecting
LCA data. Collection of data progresses rapidly
in the case of items for which LCA information
is of high value -- for example, things like photocopier toner and disposable cameras, where theavailability of recycling tends to become an issue
and can be a way to differentiate your product.
Or say it is clear in what direction regulation isheading, such as in Europe, where use of particular harmful substances is to be banned atsome point in the future. A manufacturer may inthat case choose to make a preemptive move by
proclaiming on, for example, a Type III ecolabelthat its products contain no such substances.
Disclosing LCA data is also of greater value if
users adequately understand such data and canmake effective use of them; products typicallysubject to green purchasing programs of the typerun by public bodies constitute a case in point.
On the technical front, collection of LCA
data tends to proceed more smoothly in the caseof products that are of simple design, or products
whose technique of manufacture does not vary
greatly from manufacturer to manufacturer, forthen it is easy to reach agreement on data collection standards. It costs a fair amount to collect
LCA data, obtain third-party certification, andrelease the relevant information, and the productor manufacturer in question needs to be able toafford those costs.

Figure 3-1 presents a schematized diagram,based on the foregoing analysis, showing state ofprogress in compiling LCA data. The verticalaxis indicates the value of the LCA information:
the value increases the higher up one goes. The
horizontal axis indicates level of technical difficulty: the difficulty increases the further to theright one goes. Technical difficulty translates
directly into cost of data collection; it may also
be thought of as the quality of data. A variety ofcompanies are today running in-house LCA programs and collecting relevant data, though their

Table 3-2. Relative Difficulty of Compiling and Releasing LCA Data

Level of technical difficulty

Value of LCA information

Category

Disclosing LCA data helps differentiate it (e.g.,
photocopier toner or a disposable camera, whererecycling is an issue), and it is difficult to differentiate otherwise.
Availability of LCA data makes it easier to ensurecompliance.
It is designed for professional buyers like companies and government agencies, which can interpretthe LCA data. Green purchasing programs etc.
The design is simple, making it easy to collect
LCA data.

Differentiation of products
European environmental regulations etc.
Users’s capacity
Product design and structure
Method of manufacture andsetting of boundaries

There is little difference between companies.

Corporate secrecy and competitiveness

Neither is affected by disclosure of LCA data.

Profitability of the productCycle of new product introduction
Labour and Cost bearing capacity

Sources:

An item is difficult to release LCA
data on when…

An item is easy to release LCA data on when…

It is highly profitable.

Other factors are more important than
LCA data (e.g., materials, parts, etc.).
LCA data are irrelevant. It contains
no harmful substances.
It is designed for consumers, who do
not understand LCA data anyway.
The design is complex, making it
difficult to collect LCA data
There is considerable difference
between companies.
Disclosure of LCA data directly
affects corporate secrecy and competitiveness.
It is not that profitable.

The cycle is long.

The cycle is short.

The manufacturer can afford LCA implementation
cost.

The manufacturer can ill afford thecost.

Compiled by DBJ.
High
Value of LCA
information

Database constructed during
Phase I of LCA Project

Area where data still await compilation

Level of technical difficulty

＝

Low

High

＝

Cost of data collection
Data collected by companies
through in-house LCA programs
Quality of data
(largely outside the public domain)

LCA information
released in the form of aT ype III ecolabel

Low

Figure 3-1. State of Progress in Compiling LCA Data
Sources:Compiled by DBJ.

Development Bank of Japan Research Report/ No. 45

31

absolute number is still not that great. But mostsuch internal data are not released to the publicdomain. The only corporate data released in theform of a Type III ecolabel are those that are of
the level of quality required to obtain the necessary certification and that are worth spending extra money on to release in that form. In manycases, it would seem, the data currently available
in the form of Type III ecolabels consist of information that is relatively easy to collect. In the diagram, therefore, Type III ecolabels occupy a
broad diagonal swathe to the lower left. Then
there are the data collected during Phase I of the
LCA Project, which is noteworthy for having collected a broad array of previously unavailable dataon materials and such under the guidance of various industrial associations backed by the government. Although considerable progress has been
made in putting together a database, there are still
many fields where data has yet to be properly
compiled. Constant updating is also needed. It
costs a considerable amount to collect LCA dataof a high degree of accuracy and usability, nomatter how valuable for society as a whole thosedata may be. It may also happen that, dependingon the data collected, manufacturers may not be
happy with the results. Things that individual
manufacturers do not wish to reveal may become
public knowledge, though for society as a whole
LCA data are of tremendous value. Thus it is advisable for society as a whole to collect such data
as a form of infrastructure. After all, without public intervention, there is the danger that only datathat are to the advantage of certain manufacturers
will make it into the database.

3-2.

Major Problems with LCA and Solutions to Them

Problems are not confined just to the database.
There is a host of problems with corporate LCA
use overall. Fig. 3-4 lists the issues that came tolight in a series of interviews with a wide rangeof firms in many different industries.
On the horizontal axis are listed examples ofproblems along with sample remedial measures.
Along the vertical axis these are classified into
three: data collection, method of data use, andexternal environment.
Problems with data collection are broadly
32

Development Bank of Japan Research Report/ No. 45

divided into three: comparability, outside data,
and time and cost. In collecting LCA data forbusiness use, a key question is how to collectcomparable data of high quality across a broad
front -- encompassing subcontractors and overseas firms as well -- in minimal time and at
minimal cost. The problems in this area, while
often identical to those that crop up with the database, in many cases directly relate to
day-to-day business operations, perhaps because
implementation of individual LCA programs is amore practical matter. These problems include
collection of data from outside, including subcontractors, collection of overseas data, and thetime and cost constraints imposed by competition to develop new products. The most important single remedial measure is raising level ofknowledge among materials and parts manufacturers and among medium and small businesses.
Where corporate secrets are involved, it would
be worth considering the possibility of having aneutral, impartial agency intervene between medium and small suppliers and manufacturers.
Problems relating to using data are no lessdiverse than those relating to collecting them.
Here problems with methods of use are divided
into three: techniques of use, consumer response,
and Type III ecolabels. Some problems in thisarea are of a technical nature, such as shortagesof skilled personnel, errors in LCA results, thedifficulty of channeling feedback into the design
process, and so forth. There are other issues as
well, such as inadequate understanding on thepart of the consumers to whom LCA data is
made available, as well as the question of who
enjoys the resulting benefits. Problems exist too
with Type III ecolabels, which are now coming
into widespread use, in the areas of costs and ofinterpreting and assessing data. Type III ecolabels disclose large volumes of extremely detailed data, but it is difficult for the average consumer to understand and assess that informationin its entirety. As for remedial measures, several
come to mind. These include developing humanresources by organizing public training programs
and offering subsidies, harnessing data for the
purpose of green procurement programs run by
public bodies, and enabling manufacturers toreap some of the benefits of their LCA activities

Table 3-3. Specific Problems with LCA That Came to Light in Interviews
Comparability

Category

Example of problem

Sample remedial measures

Differences in methods of manufacture and setting of boundaries are so great that it is difficult to stan- Refine methods of collecting and verifying data. Accumulate
dardize conditions for collection of data. Imposing rough uniformity could end up obscuring firms' experience. Restrict use.
individual efforts.
Collecting comparable data requires disclosure of all that happens on the production floor, which would Refine methods of collecting and verifying data. Accumulatemean revealing everything from production efficiency to how well the company is run. What happens on experience. Restrict use. Make use of a neutral agency.
the production floor is a corporate secret: it cannot be disclosed.
Producers of materials and parts have no incentive to participate, since the manufacturer of the final Refine methods of disclosing information. Develop and expand
product will end up getting all the credit for their hard work.
public databases.

Outside data

Data collection

In data collected from outside, products are only roughly classified (merely as typical products).

Accumulate experience. Systematize.

Outside information accounts for the lion's share of data, yet collecting data from parts manufacturers Raise level of LCA knowledge among materials and partsetc. is difficult unless there are financial ties.
manufacturers and medium and small businesses. Systematize.
LCA data directly affect competitiveness and corporate secrecy.

Make use of a neutral agency. Use data from input-output
tables.

It is difficult to collect data from abroad of the same quality as domestic data.

Establish an international data collection regime. Provide
assistance to developing countries. Systematize.

Time/cost

When a company tries to tap outside databases, they tend not to have much data. Even when they do, Develop and expand a public database devoted primarily todata may vary by several times from database to database, or the information may be fairly old.
basic materials and components. Accumulate experience.
Collecting data takes time (it can occupy several people for anywhere from a few days to half a year). In Accumulate experience. Systematize.
product development, time is of the essence. There is little inclination to spend time on extra tasks.
Costs are an obstacle -- and that holds for parts manufacturers etc. as well. While not huge, they cannot Accumulate experience. Systematize.
be ignored.
Companies have few employees with the ability to understand and make effective use of LCAs. There is Accumulate experience. Public training programs and subsidies,little written on the subject. Consultants are expensive.
etc.

Consumer response

Methods of data use

Techniques of use

Acquiring LCA data takes time, so they cannot be used at the product design stage. At the design stage Compile data and enhance accuracy. Systematize. Develop
you have to resign yourself to using more or less provisional figures rather than actual measurements.
simplified LCA techniques.
Identifying a bottleneck is not the same thing as finding a remedy. Determining the difference in size of Accumulate experience. Develop systems.
environmental load between components does not necessarily translate into an instant remedy, sincesome components cannot be replaced.
Diverse forms of LCA data cannot easily be managed on an integrated basis. Although progress is being New research and development. Accumulate experience. Refine
made in developing methods of assessing environmental impact, they are still only of limited use.
and restrict use. Get users to improve their knowledge.
Processing data takes time, but that is unacceptable from the viewpoint of product development, where Accumulate experience. Systematize. Develop simplified LCA
time is of the essence.
techniques.
There is no adequate mechanism for third-party evaluations. Every company uses data as it likes.

Develop rules of use. Conduct proper monitoring.

LCA results end up serving purely as background information, since margins of error are so great.

Enhance data accuracy. Refine use.

Consumers do not properly understand the information and fail to use it as a decision-making tool when Harness data for the purpose of green procurement. Get users topurchasing an item. Consumer needs are unclear.
improve their knowledge. Make use of Type I and II ecolabels.
Refine methods of information disclosure, e.g., rate the data.
Even if a company reduces a product's environmental load through an LCA program, it fails to reap any Accumulate experience. Allocate benefits in a manner that
benefit. There is no clear means of allocation with the consumer.
reflects the balance of risks and returns from improvements at
the LCA level and also takes account of the impact of environmental regulations.
Even if data are tabulated as the standards dictate, they may still not be comparable, since differences Revise standards. Accumulate experience. Refine and restrict
may remain in how boundaries are set between, say, internally manufactured and outsourced parts.
use. Standardized basic EcoLeaf units.

Type III ecolabels

The process of verifying and approving a Type III ecolabel takes over a month. That is a big problem for Expenditures and required time for second and subsequent
LCAs are dramatically slashed. System certification for
product development, where every second counts.
EcoLeaf.
Initial acquisition of Type III ecolabel certification requires that industry representatives get together to Expenditures and required time for second and subsequent
set standards for the product in question. That can take up to six months because so many different LCAs are dramatically slashed. Adopt the EPD pre-certification
processes are involved.
system.
It costs several million yen in outside fees to obtain certification, and the internal manpower costs are Expenditures and required time for second and subsequentalso considerable. Yet only a limited number of products can carry the label. (This applies to cases where LCAs are dramatically slashed. Conduct LCAs and disclose
costs are relatively high.)
information at public expense.
It costs several tens of millions of yen to obtain certification, but there are no tangible returns on the Expenditures and required time for second and subsequent
investment. (This applies to cases where costs are very steep.)
LCAs are dramatically slashed. Promote green procurement, getusers to improve their knowledge.

Government policy
Miscellaneous

External environment

The Type III ecolabel is merely a vehicle for disclosing objective data: assessing the relative merits of Harness data for the purpose of green procurement. Get users to
the product in question is difficult. It does not do a good job of highlighting areas where fresh improve- improve their knowledge. Make use of Type I and II ecolabels.
ments have been made. Nor can it be used as a motivator for product development in house.
Refine methods of information disclosure, e.g., rate the data.

Sources:

The Kyoto Protocol lacks an LCA perspective. Thus efforts to reduce emissions on an LCA basis are not Incorporate an LCA approach into domestic policy. Adopt an
given the credit they deserve.
LCA perspective in international negotiations, one that builds
on successes at home.
The Recycling Promotion Law and Green Purchasing Law are only concerned with the usage phase: they Make systemic improvements, e.g., choose items with favorable
lack an LCA perspective. Other policy measures are similarly inadequate or inconsistent.
LCA data when purchasing. Accumulate experience.
Response to, say, European environmental regulations varies from company to company. Therefore Make systemic improvements to ensure that leading companies
medium and small suppliers tend to end up being at the mercy of whatever the big companies that are take a standardized response. Also discuss the possibility of
their customers decide to do.
standardizing environmental regulations at some point, as these
could turn into a trade barrier.
Demand for products that offer greater safety and comfort is growing, increasing the load on the envi- Further boost LCA management efficiency.
ronment.
An LCA system for assessing a company's operations per se would be welcome, but it is difficult to Accumulate experience.
define boundaries and so forth.

Compiled by DBJ based on interviews.

Development Bank of Japan Research Report/ No. 45

33

in a manner that reflects the balance of risks andreturns from improvements at the LCA level.
With respect to Type III ecolabels, methods of
disclosing information could be refined: LCA
information might be disclosed at public expense,
for example, or products and services could be
rated/interpreted by third-party rating agency
regarding LCA environmental load. Furthermore,
the important thing for LCA data providing
companies is to actually carry out an LCA. Perform an LCA once, they say, and from the nexttime on there will not be so much labor and cost
involved. Thus the key question is how to inducecompanies to execute that first LCA. One effective approach would be to provide some form of
public funding to help cover the cost of the first
LCA performed by a manufacturer of a key material or component, particularly if it is a medium-sized or smaller firm.
Problems relating to external environment
are classified into two: government policy andmiscellaneous. One problem is the lack of an
LCA perspective in the Kyoto Protocol and related domestic legislation, as well as in the Green
Purchasing Law. Then there is the problem of theoverall business climate: in the case of so many
products and services, demand for greater safety
and comfort is constantly rising, and that ends up
increasing the load on the environment. A moveis afoot in green purchasing to get legal controls
to incorporate an LCA perspective -- a move that
one hopes will make further headway.
Table 3-4 analyzes the sample remedial
measures identified in Table 3-3, classifying
them according to whether the private sector canhandle them or public intervention should beconsidered.
Even left to its own devices, the private
sector can be expected to achieve reasonable
progress in, for example, accumulating experience and streamlining the process of setting
standards for individual products. But on its own,
it is not likely to make much headway in implementing LCAs and disclosing information withrespect to basic components/devices and the like,or again in developing human resources. Afterall, while such steps are of great value in developing public assets, they do not offer very muchof an advantage to the manufacturers that mustbear the costs of data collection etc. These steps
34

Development Bank of Japan Research Report/ No. 45

relate essentially to the development of public
infrastructure, and government intervention
should thus be considered. In order to eliminate
concerns about revealing corporate secrets or
worries that disclosing data could lead customers
to haggle for lower prices from suppliers, itwould be worth considering the possibility ofintervention by a third-party data collection
agency that is impartial, neutral, and able to keep
information confidential. Then there is the needto raise level of knowledge among materials andparts suppliers and medium and small businesses.
The absolutely crucial thing here is to get companies to implement their first LCA. An effective
way of accomplishing that would be to lower the
initial hurdle by providing some form of publicfunding to help cover the cost of the first LCA.
For example, assistance could be provided withreleasing the LCA results.
As for data use, the private sector can on its
own be expected to make fair progress in many
areas, such as enhancing comparability, cutting
LCA implementation costs, and making use ofdata to design more eco-friendly products. But
there are some things that cannot very well beaccomplished without public intervention: forexample, enabling manufacturers to reap the
benefits of their LCA activities in a manner thatreflects the balance of risks and returns from improvements at the LCA level. Also worth considering is public intervention where a neutral
stance is required, such as when rating and interpreting LCA data.
Another area where public intervention
should be considered is the imposition of rules
through legal regulations, since here neutrality
and enforceability are required, and such rules
constitute a form of public infrastructure in theirown right.
LCA implementation is important, but thequestion of whether to impose a legal requirement to perform LCAs is one that should be approached with caution. After all, carrying out an
LCA costs a fair amount of money, yet the benefits that derive from pursuing better performanceat the LCA level accrue to society as a whole:they are not enjoyed exclusively by the individual company that performed the LCA. Rashly
making LCAs obligatory could well result inhonest companies losing out while more devious

Table 3-4. Analysis of Remedial Measures Designed to Promote LCA Use

Legal regulations

Methods of use

Data collection

Category

Sources:

Remedial measure
Accumulate experience; new research and development.
Streamline the process of setting standards for individual products(pre-certification etc.).
Put in place a data gathering system.
Set up a third-party data collection agency that is impartial, neutral,
and able to keep information confidential.
Develop and expand databases.
Implement LCAs and disclose information with respect to basic components etc. at public expense.
Establish an international data collection regime.
Develop LCA expertise (expand education and training programs formaterials and parts suppliers).
Raise level of LCA knowledge among materials and parts suppliers
and medium and small businesses.
Improve methods of information disclosure (such that materials andparts suppliers benefit as well).
Providing subsidies for the first LCA would be an effective move,since the expenditures and time required for second and subsequent
LCAs would then be greatly reduced. This would also allow companies to accumulate experience and raise quality, so that understandingof LCA would advance dramatically.
Enhance comparability (standardize basic units used).
Cut costs (system certification etc.).
Develop technologies for making use of LCA data in designing more
eco-friendly products.
Get consumers and users to improve their knowledge (education andtraining).
Harness data for the purpose of green procurement.
Take advantage of other types of ecolabels.
Refine methods of information disclosure, e.g., rate the data.
Enable manufacturers to reap the benefits of their LCA activities in amanner that reflects the balance of risks and returns from improvements at the LCA level.
Establish rules of use, put in place a monitoring regime.
Improve the legislative framework by incorporating an LCA perspective.
Standardize environmental regulations and requirements.

Can be handled
by private sector

Why private-sector
action difficultcPublic infrastructure

Considerpublic interventionUc

Neutrality

U

U

Public infrastructurecU

NeutralitycU

Public infrastructurecPublic infrastructurecPublic infrastructurecPublic infrastructurecPublic infrastructurecNeutralityc

Learning by doingcU

Public infrastructurecU

Ability to bear cost
Neutrality
Neutrality

U
U

c
c
c

c

U

c

Neutrality, enforceabilitycNeutrality, enforceabilitycPublic infrastructurecPublic infrastructurecCompiled by DBJ based on interviews.

companies gain the upper hand. It may also happen that the environmental load seems apparently greater when a company scrupulously
measures data that it has cost money to gather.
Conversely, companies might leave out information on processes that impose a heavy environmental load and only release data that is favorable to them, so that superficially the data will

look good. But proper outside monitoring would
cost the government a fortune. An LCA regime
that serves the needs of society is not going totake root unless it rewards those who play by therules. Positive incentives are to be preferred as
the way to guide industry in the right direction:that means giving carrots to pioneering companies that implement LCAs and put the results togood use.

Development Bank of Japan Research Report/ No. 45

35

in an attempt to differentiate itself from thecompetition on the environmental front. In thecourse of collecting LCA data it identified bottlenecks in its manufacturing processes, remedying which generated direct cost-saving benefits
in the form of cost reductions and the like. This
example demonstrates that even not very big
companies can pursue fairly sophisticated strategies if they set their minds to it. Other medium
and small businesses will, one hopes, follow suit.
Fujitsu's Virtual Product Simulator (VPS) is asystem for computing the data on environmentalload required to perform an LCA. It does so bycollating information on a product's design with
databases on environmental load etc. The Honda
LCA System is a system that uses intranets as away of efficiently collecting LCA data on overall
corporate operations in partnership with suppliers and sales firms. Particularly noteworthy is theway that suppliers and other parties that furnish
and input data are given incentives to cooperate
in the form of the benefits they gain in suchfields as waste management.

IV Utilizing LCA to Achieve Total
Optimization of Global Warming
Measures4-1. Concrete Steps Taken by the Private
Sector to Overcome Obstacles to LCA Use
Companies in the private sector are taking a hostof concrete steps to overcome problems with
LCA. While it is impossible to provide an overview of them all, Fig. 4-1 sums up some of themore prominent among them based on interviews, dividing them into two categories: datacollection and LCA use.
In the area of data collection, descriptions
are given of two types of approaches: a program
undertaken in the medium and small businesssector, and remedial steps involving system development. Osaka-based Nichigoh Communication Electric Wire Co., Ltd., not by any means alarge firm, is working to obtain EPD certification

Nichigoh Communication Electric Wire Co., Ltd. Works to Obtain EP D Certification
This Osaka-based company is a relatively small firm that manufactures electrical wire and cable. Capitalized at ¥20 million, it has a workforce of around ninety
and annual sales of ¥1.2 billion. It produces various types of cable, including instrumentation cables, robot cables, and power cables. Over half its sales are tooverseas -- 30% to the EU and 30% to the US as compared to 40% within Japan. Its forte is manufacturing cable that conforms with differing Japanese, US, andEU requirements.
Nichigoh plans to obtain EP D certification as a way of achieving conformity with EU environmental regulations and so forth. It is currently working to obtain
EP D certification during the first half of 2004. It will apply for certification for some 5,000 varieties of cable with differing specs. These cables are simple enoughin design and method of manufacture, but the sheer number involved, which is unprecedented, makes for a formidable task. Despite the difficulty of gathering datafrom suppliers and computing data on such a wide variety of products, the company's president is determined to see the project through, and three members of thetechnology department are to work on it full time on a half-year schedule. In the course of collecting LCA data bottlenecks have been identified in manufacturing
processes, and direct cost-saving benefits have been achieved in the form of cost reductions and the like.

Datacollection

Fujitsu's VP S

Figure 4-1.
Specific
Cases of LCA
Amelioration

The Honda LCA System

Fujitsu has independently developed the Virtual P roduct Simulator

Designed to streamline collection of LCA data, the intranet-based Honda LCA(VP S). Used in coordination with a 3D CAD system, this support

System came into full operation in June 2002. Its goal is to reduce thesoftware allows designers to verify a device's mechanical action,

environmental load imposed by Honda's overall operations.

assembly, and maintainability before making a prototype. In conjunction

The system embraces all dealerships handling four-wheel vehicles -- over 1,600

with databases on materials and environmental load, it can also be used

in total -- as well as parts suppliers and distributors whether in Japan or

to automatically calculate the device's environmental load in real time atoverseas. They can all access the system themselves to input data. Thosethe design stage; that includes CO2 emissions. In the case of a

inputting data gain benefits in that they can apply the information to their own

photocopier, VP S can compute around 70% of the data needed for a Typeenergy and waste management programs.

III eco-label.

Toyota's Eco-VAS

LCA useToshiba's LC P lanner

The Eco-Vehicle Assessment System (Eco-VAS) is an innovative environmental assessment

The LC P lanner integrates LCA into evaluation of product cost

system that strengthens chief car designers’ overall capabilities for new automobileand function. It promotes eco-friendly design by assisting indevelopment. It is slated to come into full operation in FY 2005.

the selection of appropriate life cycle options depending on the

At the planning stage, car designers will set a wide range of environmental load reduction

exact components and materials with which the product is madetargets (including life cycle CO2 emissions) for the model under development. The Eco-VAS(these options include upgrading, maintenance, extending

system will then allow them to check target attainment at various stages of the development

product life, reuse, recycling, etc.). This software thus parlays

process, as well as repeatedly verify assessment results and feed them back into the design

LCA findings into actual improvements in design.

process.

Figure 4-1
Source:Compiled by DBJ based on interviews.
Development Bank of Japan Research Report/ No. 45

37

In the area of LCA use, there is a trend toward seeking solutions through system development. Toyota's Eco-Vehicle Assessment System(Eco-VAS) is intended to facilitate developmentof cars that impose a low environmental load in
LCA terms by enabling car designers to perform
LCA data estimates at various stages of the design process. This system deserves particularnote as a pioneering effort in the field of carbuilding, where several tens of thousands ofcomponents are involved. Toshiba's LC Planneris intended to promote eco-friendly design bymaking available LCA data and assisting in theselection of appropriate remedial strategies.
Thus wide-ranging action is being pursued
even in areas where the large number of components used greatly complicates the task of gathering and utilizing LCA data. Moreover, somemedium and smaller firms are taking pioneering
steps as well.
The FY 2003 follow-up report on the Keidanren Voluntary Action Plan describes the maincases of particular industries contributing toemissions reductions in other industries or sectors.
The automobile industry expects to be five
years early in attaining the fuel efficiency targets
set for FY 2010 under the Energy Conservation
Law Top Runner standards. It makes sense toachieve emissions reductions as quickly as possible regardless of the deadline prescribed in the
Kyoto Protocol, since the problem of global
warming boils down to a question of greenhousegas stocks. The volume of emissions in
2008-2012, the period set in the Kyoto Protocol,
will be affected too: achieving improvements infuel efficiency five years ahead of schedule will
make a huge difference in the level of progress
as of FY 2010, since by then the automobile fleet
will have largely been replaced. Assuming salesof roughly four million vehicles a year, in five
years twenty million vehicles, or around half thepassenger car fleet, will be replaced by cars
compatible with Top Runner standards. A decrease in gasoline consumption of 200 liters per
vehicle per year41 will save a total of four million

kiloliters annually, which translates into approximately nine million tons of CO2. That
represents a reduction in emissions equivalent toover 60% of the 14 million tons of CO2 generated overall in the manufacture of automobiles,
automobile components, and automobile bodies.42
The steel industry now manufactures
light-weight, high-efficiency, long-lasting steel
plate for use in vehicles, ships, and trains. It isestimated that, as of FY 2000, the use of suchplate cut CO2 emissions by 5.68 million tons due
to, e.g., improvements in fuel consumption fromreductions in vehicle weight. Producing this steel
plate increases CO2 emissions at the manufacturing stage by 170,000 tons, but the subsequent reductions more than make up for that amount.
In the oil refining sector, desulfurization43 ofgasoline and diesel oil promises to alleviate air
pollution, but at the refining stage it actually increases CO2 emissions by some two million tons ayear. Nonetheless, the potential gains are considerable when viewed overall. Desulfurization per
se reduces the load on the environment, and if
there is an increase in ownership of vehicles
equipped with high-efficiency direct-injectionengines, which are best suited to desulfurized fuel,it is estimated that the resulting improvements infuel efficiency could cut CO2 emissions by some
two million tons.
The automobile parts industry is implementing such steps as restricting employees from
commuting by private vehicle. It is significant thatcompanies are even taking measures like thesethat could well reduce sales of their own products.
The transportation sector is not the only
beneficiary; so too is the commercial and residential sector. Various appliances manufacturedby the electronic and electrical industry, such as
refrigerators, televisions, air conditioners, andpersonal computers, are subject to the Energy
Conservation Law Top Runner standards. Meeting these targets will shave an estimated 30 mil
lion tons off CO2 emissions as of FY 2010. A

41ronment Council of the Central Environment Council, Feb.
25, 2004).
42
Actual figure for FY 2002.
43
Reduction of sulfur content to less than 10 ppm.

On the assumption of a roughly 20% improvement overactual fuel efficiency for FY 2001, when average fuel efficiency was 8.65 km per liter for a car traveling 10,000 km ayear (handout distributed at Meeting 13 of the Global Envi38

Development Bank of Japan Research Report/ No. 45

Table 4-1. Examples of LCA-related Global Warming Measures in Industry
Beneficiary

Industrytaking theactionAutomobiles

Main cases of contributions to emissions reductions in other industries or sectors as described in
the FY 2003 follow-up report on the Keidanren Voluntary Action Plan
Will achieve Energy Conservation Law Top Runner targets ahead of schedule. Approx. 70% of domesticallysold vehicles in FY 2002 met the FY 2010 fuel efficiency target (23% improvement over FY 1995). By FY
2005 the number will be over 90%. Attaining the targets five years early will have a dramatic cumulative effect.
Participates actively in ITS (Intelligent Transport Systems).

Transportation sector

Steel

Oil refining

Cut CO2 emissions by 5.68 million tons as of FY 2000 by supplying light-weight, high-efficiency, long-lastingproducts (high-strength steel plate for vehicles, high tension steel plate for ships, stainless steel plate for trains).
Producing such plate increases CO2 emissions at the manufacturing stage by an estimated 170,000 tons.
Desulfurization of gasoline and diesel oil boosts fuel efficiency of vehicles (by approx. 5% for gas-powered
vehicles and 4% for diesel-powered vehicles; that may reduce CO2 emissions by as much as 2 million tons ayear, depending on conditions). CO2 emissions at the refining stage increase by an estimated 2 million tons ayear (1.3 million for gasoline, 0.7 million for diesel).
Aims to cut transport fuel consumption by 9% over FY 1990 by, e.g., sharing oil depots and swapping products. Achieved a 7.9% reduction as of FY 2002.

City gas

A million natural gas vehicles on the road would cut CO2 emissions by 470,000 tons a year.

Distribution,
papermaking,nonferrous
metalsIs streamlining distribution by, e.g., outsourcing or pooling deliveries, cutting number of delivery vehicles,
using larger trucks, switching to rail or ship, and forming business tie-ups.

Papermaking

Improves final unit CO2 emissions by 35% thanks to gains in transport efficiency from compacting tissue paper.

Automobile
parts

Restricts commuting by private vehicle.

Other

Commercial/residential sector

Reduction in CO2 emissions from appliances subject to Energy Conservation Law Top Runner standards (refrigerators, TVs, air conditioners, PCs, etc.): approx. 30.4 million tons as of FY 2010.

Sources:

Electronicand electrical

Improvements in office air conditioning and lighting, installation of cogeneration, ice thermal storage, andsolar generating systems: 1.82 million ton reduction in CO2 emissions in FY 2002.
Semiconductors and liquid crystal displays help save energy on many fronts. LCDs cut LCCO2 emissions byover 40% compared to CRTs.

City gas

By enhancing efficiency of gas-powered equipment such as stoves and water heaters and promoting the spreadof energy-saving devices such as cogeneration systems, the goal for FY 2010 is to improve efficiency at theconsumption stage by 13% compared to FY 1990. That would reduce annual CO2 emissions by some 10 million tons. Estimated reductions of 4.8 million tons were achieved in FY 2002.

Sheet glass

Is promoting use of double-glazed glass. Replacing windows in existing homes throughout Japan with low-e
double-glazed glass (low-emissivity glass with a metallic coating on the inside) would cut CO2 emissions by 17
million tons a year. It takes 10-20 years to recover the investment, the period being shorter the colder the climate (it takes more than 20 years if renovating an existing home).

Electricpower

Is developing high-efficiency water heaters and heat storage systems and promoting their use.

CementSaves natural resources by using waste and byproducts from industry and ordinary homes as alternative fueland raw material. In FY 2002 it used 27 million tons of such material. This alleviates the problem of the shortage of final disposal sites and reduces the environmental load from incineration or landfill disposal of waste. It
is more efficient than other waste disposal methods.
Supplies blast-furnace slag for cement. In FY 2002 blast-furnace cement accounted for approx. 20% of overall
cement production. This reduces CO2 emissions by 5.23 million tons a year.

Steel

Reduced CO2 emissions by an estimated 820,000 tons as of FY 2000 by supplying light-weight,
high-efficiency, long-lasting products (heat-resistant steel tubing for boilers, electromagnetic steel sheets fortransformers).

Automobiles

Takes prompt action to switch the coolant used in car air conditioning from CFC 12 to HFC 134a.

Compiled by DBJ based on, e.g., documentation from the Joint Follow-up Subcommittee on the Keidanren Voluntary Action Plan (a joint subcommittee of the Industrial Structure Council and the Advisory Committee for
Natural Resources and Energy).

Development Bank of Japan Research Report/ No. 45

39substantial portion of those reductions will comefrom the use of semiconductors and liquid crystal
displays, which however result in increased
emissions at the manufacturing stage. In the city
gas industry, estimated reductions of some 4.8
million tons in CO2 emissions were achieved in
FY 2002. These came from efficiency gains insuch gas-powered equipment as stoves and water
heaters, along with the spread of energy-saving
devices such as cogeneration systems.
Other contributions to emissions reductions
include that of the cement industry to waste disposal, and reduction of emissions from cement
manufacture through the use of blast-furnace
slag from the steel industry.
Thus even today some of the steps being
taken by industry are greatly helping to reduce
emissions in other sectors. Nevertheless, such
efforts are still sporadic, and it is difficult to assess them accurately. Putting in place a regime
for objectively evaluating results and providing
systematic support should stimulate further progress on this front.

4-2. Advantages of and Caveats toUsing LCALCA offers numerous advantages, as Table 4-2
shows. The first objective of implementing LCA
that may be cited is determining overall environmental load and identifying key points for
effectively and efficiently reducing it. Potential
benefits from an LCA performed for this purpose
include the design of eco-friendly products, andthe effective, efficient reduction of the environmental load imposed by a company's overall operations. Encouraging such steps is a good way
to efficiently harness the resources of private-sector companies, which have a considerably greater management capacity than do ordinary households, and thus alleviate the load on
the environment in the interests of society as awhole. If, rather than being urged to take measures that are beneficial from an LCA standpoint,
companies are simply required to make improvements at the production stage only or
merely boost the energy efficiency of theirproducts, the outcome may not be to the greater
good of society. Companies may concentrate
their limited resources on stages of the cycle
40

Development Bank of Japan Research Report/ No. 45

where it is difficult to take effective action, withthe result that they are unable to achieve quantitatively significant reductions. Or, by acting
without considering overall impact, they may
end up triggering an increase in emissions atsome other stage of the cycle. Requiring companies to make improvements from an LCA perspective, rather than just focusing on a single
stage of the cycle, will enable reduction of emissions to proceed efficiently and effectively, forthis approach grants far greater flexibility to
manufacturers in what strategies they can choose.
The important thing is to properly motivate thoseactors who possess management ability and givethem greater leeway to exercise it.
Table 4-2. Why Implement LCA
Objectives of LCA
Determine overall environmental load, identify
key points for effectively
and efficiently reducing
it.

Benefits of LCA
Effective, efficient managementof the environmental load imposed by a company's overall
operations, e.g., design of
eco-friendly products. Efficientharnessing of private-sector resources.

Provide information on
environmental load (e.g.,
to green purchasing program administrators).

Way to differentiate one's product,encourage sustainable consumption.

Achieve conformity with
EU environmental regulations etc.

Pre-emptive action.
Compliance.

Fulfil corporate social
responsibility.

Corporate image.
Socially responsible investment.

Sources:Compiled by DBJ.

Another objective of LCA is to provide theinformation on environmental load required forsuch purposes as green purchasing. In the case ofcertain items, like copying machine toner cartridges and disposable cameras, disclosing LCA
information is a way to distinguish oneself fromthe competition. Compiling LCA information isthus at the same time a means of encouraging
sustainable consumption.44
44

I.e., making consumption sustainable by getting consumers to choose wisely when buying products and reconsider
how to make better use of them. Examples include consuming recyclable resources only in so far as they can actually be recycled, and imposing only so much of a load as thenatural environment can handle. The United Nations Environment Programme (UNEP) is taking steps to support such
efforts.

EU environmental regulations require that
substances that impose an environmental load beproperly managed from an LCA perspective.
Also under discussion is a directive requiringthat products be designed in a manner consistent
with LCA thinking. For example, the RoHS directive restricts use of lead, mercury, hexavalentchromium, cadmium, and the like; companies
that now use these substances in manufacturing
electrical appliances and electronic devices soldin the EU market will be required to use alternatives in products shipped to market after July 1,
2006. Uncertainties remain about rules for complying with such directives; for companies
choosing to take preemptive action, one possible
strategy would be to get certified for a European
Type III ecolabel declaring that the product inquestion contains none of the prohibited substances. Companies will feel more confident
about purchasing and using materials and components for which suppliers have obtained such
ecolabel certification.
The European Commission is also pursuinga policy known as IPP,45 which demands taking
the most effective action for minimizing the environmental load imposed by all products andservices at all stages of the life cycle, frommanufacture and usage through disposal. Exactdetails are still being ironed out -- a green paper
was only released in February 2001 -- and specific steps have yet to be imposed as requirements or enshrined in law. Still, this development deserves attention as suggesting what the
future holds. On the subject of IPP, a draft version of a directive on energy-using products(EUP)46 was released in August 2003; this directive would establish a framework imposing requirements for minimum energy efficiency andeco-friendly design on energy-using products.
Future developments in this area will be watchedwith interest.
In recent years stakeholders (consumers,
local residents, employees, shareholders) havebecome increasingly vociferous about corporate
45

See Note 26.
"Proposal for a Directive of the European Parliament andof the Council on establishing a framework for the setting of
Eco-design requirements for Energy-Using Products andamending Council Directive 92/42/WWC," Brussels,
01.08.2003, COM (2003) 453 final, 2003/0172 (COD).
46

social responsibility (CSR). Performing LCAs
and managing the environmental load imposedby corporate operations overall is significant also
from a CSR standpoint. It has more than merely
the abstract virtue of burnishing one's corporate
image; it also offers a host of more concrete advantages that are only now coming to be recognized. It attracts socially responsible investment(SRI),47 for example, and has a favorable impact
on recruiting.
LCA is of great import in that it offers theseadvantages. But there are also certain caveats tousing LCA. Table 4-3 lists the primary of these.
Table 4-3. Caveats to Using LCA
CaveatDiscrepancy
between
who bears
cost andwho reaps
benefits

Uncertainty
of LCA data

Time lagand risk
involved inrealizationof benefits
at the LCA
level

Sources:

Benefits of LCA accrue tosociety as a whole, yet private-sector firms can only
partially enjoy them.
LCA figures are somewhat
uncertain and cannot betreated as equivalent to actual
reductions in CO2 emissions.
The numbers must be handled
on the assumption that they
may vary considerably, as theyoften differ by a factor of ten.
There is a risk as to the extent
to which benefits at the LCA
level, such as reduced emissions at the usage stage, will
actually be achieved. Conversely, achieving such benefits in the future may entail
incurring direct costs now(e.g., hybrid cars, LCDs, etc).

Solution
Government
should ensurethat gains are
fairly channeled back tocost-bearers.

Set appropriate
discount rates.

Set appropriate
discount rates.

Compiled by DBJ.

The first caveat that may be cited is the discrepancy between who bears the cost and who
reaps the benefits. The benefits derived from
LCA -- alleviating the environmental load imposed by extraction of materials, saving energy
47

I.e., when investing, taking into consideration not justtraditional investment criteria, such as financial situation,
but also whether or not the company is fulfilling its social
responsibilities on the societal, ecological, and ethical fronts.
There has long been an aversion to investing in companies
in the tobacco, gambling, and arms sectors, but more recently companies also face growing demand to furnish information on the degree to which they address environmental concerns and their level of legal compliancethroughout their operations.

Development Bank of Japan Research Report/ No. 45

41

at the production and consumption stages,
boosting recycling rates -- extend to many quarters of society. However, manufacturers andother private-sector firms can only partially enjoy those benefits, since most of the gains madein alleviating environmental load are not reflected in product prices. For manufacturers theadvantages are typically minuscule: lower
manufacturing costs, for example. Manufacturing costs and emissions at the manufacturing
stage may actually rise. Therefore the government, being in a position to manage the benefits
to the whole of society, including other sectors,
needs to intervene to ensure that the gains are
fairly channeled back to those who bear thecosts.
The next caveat relates to the uncertainty of
LCA data. LCA figures are extremely difficult tocompare, since they vary depending on how databoundaries are set and what the objectives are. In
the process of putting together the database,
there were many reported cases of the numbers
differing by as much as a factor of ten when different companies were asked to provide information on the emissions load from the manufactureof identical products. Comparing LCA data isdifficult unless meticulous care is taken to harmonize assumptions like boundaries. Nevertheless, comparing overall trends rather than exact
figures is possible; also relatively straightforward
is comparing old and new products made by thesame company. Steps such as setting appropriate
discount rates should go some way to ensuringthat the gains from LCA are channeled back tothose who bear the costs. Refining LCA methods
and data will, it is hoped, reduce margins of error
on this front.
A further caveat that should be noted is thetime lag and risk involved in the realization of
benefits at the LCA level. Environmental load at
the usage stage is calculated on the assumptionthat the product in question will be used for atypical length of time: 100,000 km over ten years
for a car, twelve years for a refrigerator, five
years for a PC display, and so forth. Therefore,
in working out progress in reducing environmental load at the usage stage, account is also
taken of emissions reductions five or ten years
down the road, not just those for the particular
year in question. It is uncertain how the product42

Development Bank of Japan Research Report/ No. 45

will be used in the future, and there is no guarantee that it will be used for exactly the length oftime assumed; in that sense there is a risk involved in the realization of environmental improvements at the LCA level. Note in particular
those cases in which achieving improvements at
the LCA level entails increasing current CO2
emissions at the production stage. Hybrid vehicles and liquid crystal displays are cases in point.
Requiring manufacturers to cut emissions at the
production stage alone could end up actually
thwarting the manufacture and spread of products like these that are desirable for society. In
the case of individual products, it is highly uncertain whether the projected benefits can reallybe achieved. Even so, in the case of items thatare fairly widespread throughout Japan, it should
be possible to estimate the benefits with a fairdegree of certainty, as long as data can be obtained on average number of years of use andconditions of usage. If environmental improvements at the LCA level can be properly assessed,with appropriate discount rates being set basedon sampling surveys, it should prove quite feasible to channel the gains back commensurately tocompanies whose CO2 emissions have increased
at the manufacturing stage.

4-3. The Case of the Hybrid Vehicle
The hybrid vehicle well exemplifies the caveats
to LCA use identified in Table 4-3.
The horizontal axis of Figure 4-2 indicateshybrid vehicle production. The vertical axis indicates CO2 emissions. Today annual production
stands at around 50,000 vehicles, but by 2010 it
could exceed the million mark worldwide. Japan's policy target as stipulated in the Guidelines
for Measures to Prevent Global Warming is tohave a cumulative total of 2.11 million hybrid
vehicles on the road by FY 2010. This figure of
2.11 million does not represent a single year's
production, but it is added to the horizontal axis
in order to demonstrate what its impact would be.
The vertical axis gives emissions reductions andincreases as a percentage of the total of 14.12
million tons of CO2 emissions generated in FY
2002 by three sectors: automobiles, automobile
components, and automobile bodies. The upper
half of the graph shows annual reductions inEmissions reductions

60%
Annual emissions
reductions during
operation (higher
estimate)

40%

Annual emissions
reductions during
operation (lower
estimate)

20%

0%Annual emissions
increases during
production (lower
estimate)

Emission-20%
Remarks Model

-40%

-60%

Materials/
production
stage

Fuel efficiency

Lower 1500 cc 10% emissions 30%
estimate sedan
increase
improvement
Higher 2400 cc 20% emissions 40%
estimate minivan increase
improvement

10
30
50
100
211
Annual production of hybrid vehicles

Annual emissions
increases during
production (higher
estimate)
Cumulative target
for hybrid vehicles
on the road in FY2010 as stipulated
in the Guidelines

Figure 4-2. Impact of Production and Use of Hybrid Vehicles
Notes:

Source:1. Emissions reductions and increases are given as a percentage of total CO2 emissions generated in FY 2002
from the manufacture of automobiles, automobile components, and automobile bodies (14.12 million tons).
2. Reductions over the whole lifecycle are tenfold (over ten years).
3. Emissions increases are large because materials other than automobile components are included.
Compiled by DBJ.

emissions from increased hybrid vehicle
ownership; the lower half shows increases inemissions at the manufacturing stage. Reductions
in emissions occur over a ten-year period and are
ten times the numbers shown here -- fifteentimes for cars driven in North America andEurope, where a figure of 150,000 km over ten
years is used; but here only figures for a single
year are shown. The lower estimate given in thegraph, based on a 1500 cc sedan, assumes a 10%
rise in emissions at the materials production andmanufacturing stages, but a 30% improvement infuel efficiency. The higher estimate, based on a2400 cc minivan, assumes a 20% rise in emissions at the materials production and manufacturing stages, but a 40% improvement in fuelefficiency. The figures in the lower estimate are
fairly firm: they have been worked out based on
the estimates of CO2 emissions calculated in an
LCA on a 1500 cc vehicle conducted during
Phase I of the LCA Project. The higher estimate
has been calculated on the assumption that, in thecase of a hybrid minivan, emissions at the materials production and manufacturing stages rise byapproximately 20%, which increase is roughly
equivalent to the emissions generated during11,000 km of travel.48
48
In certain cases a vehicle may have to travel some 20,000
km over two years before emissions reductions offset theincrease in emissions at the production stage. In these instances the emissions increase may be greater. However,there may be less of an increase in emissions at the produc-

Development Bank of Japan Research Report/ No. 45

43

In the case of the lower estimate, emissions
do not increase that much even when production
reaches the million vehicle mark. Conversely,
while emissions reductions do not appear that
great in single-year terms, remember that they
will increase tenfold over the total of ten years,
which yields a fairly impressive reduction of justunder 80% at the 2.11 million vehicle level. With
the higher estimate, on the other hand, both theincrease and decrease in emissions are quite
large. The emissions increase crosses the 10%
mark at an annual production volume of around
500,000 and rises to almost 30% once production
exceeds a million. Annual emissions reductions
are likewise fairly large: roughly 10% at the
500,000 vehicle level and over 20% at the million vehicle level. Work out cumulative emissions reductions over ten years, and you get afigure of 1.2 times at the 500,000 vehicle level,and 2.4 times at the million vehicle level. As
these estimates demonstrate, it should be possible to achieve emissions reductions that are considerably greater than the automobile industry's
total annual emissions.
However, under the current system automobile manufacturers are subject solely to stringent
regulations on reducing emissions at the production stage. Although automobiles are subject to
Top Runner standards, hybrid vehicles are exempt; so automobile manufacturers tend to beconcerned exclusively about the increase inemissions at the production stage. The upshot
could be to put a damper on the manufacture of
an item that is of benefit to society as a whole.
As pointed out in Table 4-3, there are real
uncertainties as to the extent to which emissions
reductions can be achieved at the usage stage,
since this will vary depending on conditions ofuse.
The horizontal axis of Figure 4-3 shows theenergy efficiency of private automobiles; thevertical axis shows average traveling speed. On
the horizontal axis Tokyo is plotted at 1.0, withother locations around the world being plottedtion stage due to the effects of mass production, in whichcase the emissions reductions will be greater. These factors
too must thus all be taken into account. In this analysis, anemissions increase of 20% is postulated at the production
stage, and it is assumed that the increase and decrease inemissions will even out after 11,000 km of travel.
44

Development Bank of Japan Research Report/ No. 45

relative to that city in order to enable clear comparison. As can be seen from the chart, according
to these statistics Tokyo is the least energy-efficient and Copenhagen the most energy-efficient location. The vertical axis gives
average speed. Tokyo, along with Paris, clocks
in at a mere 25 km per hour or so. Energy-efficient Copenhagen, on the other hand,clocks in at around 50 km per hour. As the chartshows, fuel efficiency and average speed areroughly in proportion: fuel efficiency improves
as speed rises. The size of each circle indicatesdistance traveled per year. The circle for Tokyo,
like those for Paris and Singapore, is fairly small;those for Sacramento and other US cities and forAustralia are several times larger. Gains in fuelefficiency from driving hybrid vehicles naturally
increase the greater the distance traveled per year,
but they are also affected by average speed. Hybrid vehicles are designed to keep the engine
constantly operating at a high level of efficiency
by making efficient use of both the battery andpower from the motor; when engine efficiency
declines, as during congestion, the motor kicks in.
Therefore improvements in fuel efficiency are
greater at lower average speeds. Hence hybrid
technology is well suited to a city like Tokyo
where average speed is low. Emissions reductions at the usage stage are thus affected not justby the amount the vehicle is driven but also by
how well the technology matches the particulardriving conditions; that makes it difficult to estimate micro level benefits in reducing emissions.
On the other hand, for Japan as a whole, the average distance traveled by a passenger vehicle
per year remains steady at around 10,000 km,
according to such sources as the Annual Statistical Report on Motor Vehicle Transport put out
by the Ministry of Land, Infrastructure andTransport. Thus it is possible to come up with anestimate, albeit a rough one, of the benefit in reducing emissions for the country as a whole. In
calculating effectiveness in reducing emissions at
the LCA level, therefore, one simply needs toproperly control such uncertainties.

70

km/h

65

Sacramento

60

Stockholm

Average travel speed

55

US average

CopenhagenMontreal
Australian
average50Frankfurt

Perth

45

Canadian average

Vancouver40

Munich3530

SydneyNew York

Brussels
Zurich European average
LondonAmsterdam

25

ViennaAsian average

Singapore
Hamburg
Paris

20
0.4
Efficiency: High

0.5

0.6

0.7

0.8

0.9

T okyo1.0

1.1

Efficiency: Low

Energy efficiency of private automobiles:
T ransport energy consumption / kilos driven per year T okyo = 1.0

Figure 4-3. Vehicle Traffic Conditions in Major World Cities
Note:
Sources:

The size of the circles represents yearly travel distance. The larger the circle, the longer the distance.
Compiled by DBJ from data in Japan Transport Policy Research Institute, Automobile Transport Research:
The Environment and Policy, 2003.

4-4. Utilizing LCA to Achieve Total Optimization of Global Warming Measures
Figure 4-4 is a conceptual diagram of a scheme
for promoting global warming measures thatutilizes LCA to achieve total optimization. The
vertical axis gives CO2 emissions; decreases areshown above and increases are shown below.
The horizontal axis indicates passage of time. As
already described, in the case of liquid crystal
displays and hybrid vehicles, emissions rise during production, but life cycle emissions drop
overall. Here we postulate an item of this sortthat generates increased emissions at the production stage. Those emissions are counted as anemissions increase in the industrial sector. Subsequently annual reductions in emissions areachieved as the product is used from one year to
the next. In most instances those reductions are
assigned to, say, the transport or commercial andresidential sector, rather than to the industrial
sector. Volume of emissions reductions at theusage stage varies depending on changes in conditions of use from year to year. It is also affected by errors in LCA data. It should, depending on the product, generally be possible to estimate the product's overall effect in reducing
emissions at the macro level based on the average number of years it is used and how it is used.
The spread of products that conform to the interests of society can be promoted by properly acknowledging a product's estimated effect in reducing emissions at the LCA level, and channeling back the gains to producers to just such an
extent as not to discourage activities that are
beneficial from an LCA standpoint. Note that theterm "producers" as used here includes manufacturers of components and materials as well as
manufacturers in the processing and assembly
fields. The gains need to be fairly channeledback to material and component suppliers who

Development Bank of Japan Research Report/ No. 45

45

Emissions reductions
Emissionsincreases

The gains must be channeledback to the producer to at least an
extent as not to discourage
activities that are beneficial froman LCA standpoint; that entails
using an appropriate discount rate
to determine present value.

Margin of error in LCA data

Emissions reduction interms of LCA
LCA calculation andverification

Gains channeledback to producer

t1

Emissions reductionin terms of LCA but
increase at production

Reductions,Year 1

t1

Year 2

t1

t1

Year 3

Year 4

Passage of timestage: t0

t1

Year 5Emissions
reductions intransport sector,
commercial/resident
ial sector, etc.
Emissionsincrease inindustrial
sectorOnly
government canadjust for thetime lag andreconcileinterests
between sectors.

Figure 4-4. Conceptual Diagram of a Scheme for Promoting Global Warming Measures that
Utilizes LCA to Achieve Total Optimization
Note:

Sources:

The amount of gains channeled back to the producer needs to be at the minimum >t0. However, if it exceeds t1,
the government will in effect be anticipating future emissions reductions until such time as those benefits are
realized at the usage stage. Care will then need to be taken to ensure conformity with international treaties.
Compiled by DBJ.

contribute to the manufacture of energy-saving
products.
Only the government sector, as the administrator of the emissions reduction regime, has theability to make adjustments between sectors andcalculate emissions reductions that are going tobe achieved in the future. Appropriate government steps are therefore called for. Various specific methods of channeling back gains to producers come to mind. For example, one possibility would be to count the amount in volume of
reductions when assessing attainment of targets
specified in voluntary action plans, which guideemissions reduction efforts in the manufacturingsector. Or the Top Runner standards could be
revised to take account of benefits achieved at
the LCA level. Or credits could be issued in theform of LCA emissions rights that could betraded. The emissions rights format would enhance flexibility, thereby further promoting efficient reductions. However, note that if emissions
reductions are counted conservatively on the low
side in order to eliminate the uncertainties associated with LCA, there will inevitably be a tendency to regard emissions reduction costs as being on the high side. Rather than making thegains tradable in the form of LCA emissions
rights, therefore, one conceivable alternative
would be to think of them as something else, this46

Development Bank of Japan Research Report/ No. 45

with the goal of properly assessing effect in reducing emissions at the LCA level. It would act
as an incentive to manufacturers simply to release a range of information on volume of reductions in emissions at the LCA level as computed
according to a fixed set of rules, in such a way as
to show how much of a contribution each manufacturer has made in quantitative terms. In thiscase two sets of figures could be posted: reductions in emissions as counted conservatively on
the low side, which would be tradable and could
be counted towards attaining the reduction targets stipulated in the company's voluntary action
plan; and non-tradable emissions reductions ascalculated simply without taking too much account of other factors.
Figure 4-5 illustrates the future of the LCA
as a means of enhancing the fight against global
warming. LCAs come in many shapes and sizes.
Today most LCAs concern themselves solely
with products, but there are also LCAs that cover
the full range of corporate operations. Some
LCAs confine themselves to Japan because ofproblems with collecting data and so forth; others gather data from far and wide overseas. Some
focus exclusively on CO2; others cover a wide
range of substances, including CFCs and particulate matter discharged into the atmosphere,
and BOD and other substances discharged intoWide range of substances in addition to CO2

Future of the LCA

Japan

Substances assessed

Will cover major substances released over the full range of corporate
activities -- not merely those associated with products and services -- andextend scope worldwide

Scope

Overseas

The LCA today
Focuses on CO2 emissions fromproducts and services and isconfined primarily to Japan

CO2 only

Figure 4-5. Future of the LCA as a Means of Enhancing the Fight against Global Warming
Sources:Compiled by DBJ.

the hydrosphere. This paper has concentrated
primarily on LCAs that collect data solely within
Japan and focus on CO2 emissions from products
and services, which at the present stage constitute the most straightforward type of LCA tohandle. However, the LCA of the future will ideally be as illustrated in Figure 4-5: it will cover
all major substances released over the full rangeof corporate activities -- not merely those associated with products and services -- and extend its
scope worldwide. Only then will it be possible toimplement a global warming strategy capable ofmanaging discharged substances in optimum
fashion. Today, with the economy becoming so
globalized, confining one's perspective to thedomestic scene is not going to produce truly
meaningful measures to combat global warming.
Rather than letting national borders get in theway, it is to be hoped that advantage can betaken of LCA to determine, from a global perspective, what efficient, effective measures exist
for reducing emissions at each stage; in that way
appropriate steps can be implemented to cut
emissions. Putting such a global strategy into
action will make it possible to prevent the prob-

lem of carbon leakage49 caused by the fact that
the Kyoto Protocol covers only 10-30% of theworld's total emissions flow. It will also reducethe distortion to competition caused by the waythat the need to take global warming measuresdiffers in degree depending on the location of thefactory.
Table 4-4 summarizes the primary LCA
activities being undertaken in APEC countries
based on the results of a questionnaire. While it
may be presumed that the answers are affected tosome extent by the subjectivity of the respondents, this chart does provide a general idea ofthe situation in each country.
A glance down the chart reveals that virtually all the countries in question have performedcase studies on LCA in some form or another.
Many of them have made progress in developing

49

The leakage of benefits in reducing CO2 emissions causedby the relocation of factories and production from regionsthat require reductions in greenhouse gases to those that donot (in the case of the Kyoto Protocol, the developing countries or the US, for example). See Aiba (2003).
Development Bank of Japan Research Report/ No. 45

47

databases,50 although a few simply take over EU
data wholesale. Government support is the exception rather than the rule, but it is provided inthose countries where LCA activities have madethe most headway; this shows that there is a certain correlation between progress in LCA andavailability of government support. Many countries are engaged in developing LCA techniques;some even attempt to conduct their own independent impact assessments. Then comes thequestion of use of LCA by industry. Although
there are not that many countries where LCA is
widely used by industry, large corporations inparticular do utilize it in many countries, including developing ones. Type III ecolabel certifica-tion is being sought even in Thailand, Malaysia,
and Indonesia, according to the survey responses.
In the areas of simplified LCAs, DfE,51 domestic
standards, and green purchasing, countries such
as Japan, Taiwan, and South Korea have been
making the most progress. Taiwan and South
Korea are in overall terms taking similar action
to Japan. Hence a wide range of LCA activities
are being implemented in the APEC countries,
including the developing ones. In the future it
should thus be possible to implement LCAs on a
global scale and execute effective, efficientmeasures to combat global warming from a
global standpoint.

50

Switzerland has constructed a fairly advanced national
database, which there is not space to describe in detail here.
The Ecoinvent 2000 database, which was put together between 2000 and 2003, contains some 2,600 data items onsuch matters as energy, construction materials, metals,
chemicals, pulp and paper, waste materials, agriculture, etc.
This is a fairly advanced database, even considering therelative ease of collecting data in such a small country.
48

Development Bank of Japan Research Report/ No. 45

51

Design for Environment.

Table 4-4. Primary LCA Activities Being Undertaken in the APEC Countries(Results of a November 2002 Questionnaire)
Country

Case studies

Japan

Assembled/finishedgoods, rawmaterials, energy,
services, etc.

TaiwanTrade goods, e.g.,
electricalappliances andelectronic devices
etc.

Assembled/finishedgoods, raw
South Korea
materials, waste
management, etc.

Using Type
When database
Developed
Govern- Developed Individual
DfE (Design
Greendeveloped, what Uses EU
LCA used by III ecolabel Simplifie
Domestic
LCA
ment
LCA
impactforpurstandards
information
database?
industry?
to promote d LCA
database?
support techniques? assessment
Environment)chasingcollected
LCA?

○

1998-2002
550 items
includingmaterials, energy,
assembly,
disposal,
recycling, etc.

○

○

○

In widespreaduse○

1996-2000
Water supply,
electric power,
petrochemicals,
steel, non-ferrous
metals, rubber,semiconductors,
etc.

○

○

○

In widespread
use

○

○

○

UnitedStatesNo response○

ThailandElectrical andmusical products
etc.

○

Malaysia

Wastemanagement, farm
products, rawmaterials, etc.

Indonesia

1998-2003
Materials,
energy, transport,
waste processing,etc.
2001-2005
Plastics, metals,
etc.

No
response

Mainly by large
corporations

○

○

○

No response

In majorindustries

○

○

×

Mainly by large
corporations○

Oil, coal, metals,
etc.

○

×

Not actively○

BrazilWaste
management, farm
products, etc.

×

China

Resources, e.g.,steel, aluminum,
nickel, glass,cement, chemicalcompounds,
services, etc.

No
response

Australia

Waste
management,
construction,assembled/finishedgoods, etc.

○

CanadaMetal products,
soil improvement,
etc.

○

○

MexicoFarm products,
plastic products,
etc.

○

×

Mainly by large
corporations

Chile

Metals, forestry,etc.

No
response○

Mainly by large
corporations

Singapore

Electronic
products, rawmaterials,
chemicals, etc.

○

×

Mainly bymultinational
corporations

India

Paper, waste
management,
power plants, etc.

××

Mainly by large
corporations

Philippines

Paper, detergent,etc.

No
response

×

×

×

○

○

○

○

○

○

○

○

○

○

○

○

○

×

○

○

○

○

○

In widespreaduse

Mainly by large
corporations○○

Mainly by large
corporations○

Sources: Compiled by DBJ from, among other sources, handouts accompanying two presentations: one by Dr. Sagisaka of the National Institute of Advanced Industrial Science and Technology (AIST), given at the Symposium on Current Status and Future Tasks for LCA Research in the World held Feb. 17, 2004, and the other by Dr. Atsushi Inaba of the AIST given at a
LCA Japan Forum seminar on Mar. 18, 2004.

Development Bank of Japan Research Report/ No. 45

49

Conclusions
As this survey has shown, the LCA perspective
is useful in fostering effective, efficient implementation of global warming measures. While
LCA techniques remain underdeveloped in certain regards, Japan's LCA infrastructure has
evolved dramatically in the past few years thanks
to METI-NEDO projects and the like; it is now
entering the phase where it can be put to practical use. Further government support would be
welcome, for public assistance is still needed topromote development of the required infrastructure in such areas as setting up a data collection
regime, making practical use of LCA, and implementing legal regulatory measures. Attempts
to implement LCAs and internalize externalcosts are in the interests of society as a whole,
but the private sector cannot really do the job
alone, since collecting and processing information entail considerable costs. The private sector
will take action of its own accord basically inthose cases where collecting, processing, anddisclosing data is consistent with its own aims.
Without prodding, therefore, it may make no
progress in disclosing data where it is in thegreater interests of society. LCA information isof the character of a public asset necessary toensuring that resources are allotted as best forsociety as a whole. It is to be hoped that a proper
system for gathering and utilizing information
will evolve.
The amount of LCA information that can bedirectly compared is increasing thanks to, forinstance, the advent of the Type III ecolabel.
However, LCA information is largely meaningless on its own. It only assumes true significancewhen harnessed by manufacturers to improve
product design or by consumers to make purchase choices. Efforts should be made to further
enhance utilization of LCA information on the
consumer side; companies releasing data should
for their part make the disclosed informationeasier to understand by, for example, using a
rating system. The most critical thing of all is for
manufacturers to make use of LCA informationin design for environment (DfE). Europe is putting legal regulations in place with that in mind.
But, given the nature of LCA information disclosure and utilization, and the additional costs
50

Development Bank of Japan Research Report/ No. 45that they entail, a regulatory approach could well
end up discouraging companies that are making aserious effort, especially under present conditions, where no system exists to ensure that thebenefits of improvements at the LCA level arechanneled back to the manufacturer throughproduct pricing or whatever. Indicators of environmental impact at the LCA level may in certain cases actually rise if a company seriously
spends money on gauging that impact across as
broad a front as possible. Conversely, a company
may maliciously underreport the results of its
calculations. Moreover, the data collection
methods involved are so complex that it is very
difficult to conduct exhaustive verification fromoutside. Given the fact that LCA information isof such a nature, the best way to encourage its
use would be a system incorporating positive
incentives that make it to a company's advantage
to be serious about disclosing and upgrading
LCA information.
As we observed in the case of hybrid vehicles and liquid crystal displays, there is a fairly
serious problem with the discrepancy between
who bears the cost of improvements at the LCA
level and who reaps the benefits. Reconcilinginterests over time and across different sectors is
not something that companies can do individually; it will require appropriate policy guidance.
Ideally, the costs to society as a whole of fighting global warming should be minimized by issuing LCA emissions rights for cuts in emissions
achieved at the LCA level; these would be tradable with other emissions rights obtained throughvarious cuts in emissions. That would encourage
innovation and development of more desirable
technologies.
Making appropriate use of LCA would give
manufacturers and other businesses far moreleeway to fight global warming and enable themto implement flexible, effective measures on thatfront. It would also fully tap the potential thatbusiness possesses in the form of its considerable
management capacity and wealth of management
resources. Action at the LCA level would also be
effective for society as a whole. The government
should develop the proper infrastructure and offer appropriate incentives. LCA, one hopes, willcontribute to the total optimization of global
warming measures on a global scale.

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Shakai ni Okeru Sho Enerugi Koken ni
Kakawaru Chosa (Sokatsu, Kakuron 1-6)
(Survey of the Energy-saving Contributionof Steel Products to Society from an LCA
Perspective, Summary and Specific Studies
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51

Society of Automotive Engineers of Japan, Inc.
(2002). Jidosha Gijutsu (Automobile
Technology), July 2002, Tokushu Kuruma
no LCA (Special: LCA on Cars)

Web Sites

Yanagisawa, Mamoru. (2003). LCA o Mochiita
Kankyo Joho Kaiji no Shin Senryaku (NewStrategy on Environmental Information
Disclosure Using LCA), Dai-ichi Hoki Kabushiki Kaisha

Japan Environmental Management AssociationforIndustry
Web
Site(http://www.jemai.or.jp/JEMAI_DYNAMI
C/index.cfm), especially the publicly accessible
LCA
database
test
site(http://LCAdb.jemai.or.jp/)

EnglishJapan Gas Appliances Inspection Association
Web
Site(http://www.jia-page.or.jp/jia/top.htm)

Commission of the European Communities.
(2001). Green Paper on Integrated Product
PolicyEuropean Commission. (2001). European Climate Change Programme Long Report
European Commission DG Environment.
(2002). Evaluation of Environmental Product Declaration Schemes-Final Report
Piper Lenert, S. O. Ryding, and C. Henricson.
(2003). Continual Improvement with ISO
14000, IOS press
Watson, T. Robert and Core Writing Team(eds.). (2001). Climate Change 2001: Synthesis Report - Contribution of Working
Group I, II, and III to the Third Assessment
Report of the Intergovernmental Panel on
Climate Change, Cambridge University
Press

52

Development Bank of Japan Research Report/ No. 45

Environmental Product Declarations EPD Web
Site (http://www.environdec.com/)

Ministry of the Environment Web Site
(http://www.env.go.jp/index.html),
especially the page on the ecolabel etc. database(http://www.env.go.jp/policy/hozen/green/ecolabel/)As well as corporate environmental reports andhome pages of relevant agencies and companies.

List of Back Numbers (Including JDB Research Report)
No. 45 How Life Cycle Assessment (LCA) Can Enhance the Fight against Global Warming (this issue)
No. 44 Recent Trends in the Japanese Economy: A Medium-term Scenario for the Japanese Economy
with Special Focus on the Flow of Funds and Finance, March 2004
No. 43 Survey on Planned Capital Spending for Fiscal Years 2002, 2003 and 2004 (Conducted in August 2003), November 2003
No. 42 Promoting Corporate Measures to Combat Global Warming: An Analysis of Innovative Activities in the Field, September 2003
No. 41 Prospects and Challenges for End-of-Life Vehicle Recycling, May 2003
No. 40 Survey on Planned Capital Spending for Fiscal Years 2002 and 2003 (Conducted in February2003), May 2003
No. 39 China’s Economic Development and the Role of Foreign-Funded Enterprises, May 2003
No. 38 Decline in Productivity in Japan and Disparities Between Firms in the 1990s: An Empirical Approach Based on Data Envelopment Analysis, March 2003
No. 37 Trends in Socially Responsible Investment: Corporate Social Responsibility in a New Phase,
March 2003
No. 36 Recent Trends in the Japanese Economy: A Medium-term Scenario for the Sustainability of theJapanese Economy, February 2003
No. 35 Concerns for the Future and Generational Consumption Behavior, February 2003
No. 34 Prospects and Challenges Surrounding Japan’s Electrical Equipment Industry: General Electrical
Equipment Manufacturers’ Restructuring of Operations and Future Prospects, November 2002
No. 33 Survey on Planned Capital Spending for Fiscal Years 2001, 2002 and 2003 (this issue)
No. 32 Behavior Trends of Japanese Banks toward the Corporate Sector and Their Impact on the Economy, October 2002
No. 31 Microstructure of Investment and Employment Dynamics: Stylized Facts of Factor Adjustment
Based on Listed Company Data, October 2002
No. 30 Recent Trends in the Japanese Economy: Globalization and the Japanese Economy, August 2002
No. 29 Corporate Financing Trends in Recent Years: Fund Shortages and Repayment Burden, August
2002
No. 28 Urban Renewal and Resource Recycling: For the Creation of a Resource Recycling Society, July
2002
No. 27 Labor’s Share and the Adjustment of Wages and Employment, June 2002
No. 26 Survey on Planned Capital Spending for Fiscal Years 2001 and 2002, May 2002
No. 25 Environmental Information Policy and Utilization of Information Technology: Toward a Shift inEnvironmental Policy Paradigm, March 2002
No. 24 The Changing Structure of Trade in Japan and Its Impact: With the Focus on Trade in Information Technology (IT) Goods, March 2002
No. 23 Microstructure of Persistent ROA Decline in the Japanese Corporate Sector: Inter-company
Disparties and Investment Strategies, March 2002
No. 22 Recent Trends in the Japanese Economy: The Japanese Economy under Deflation and Prospects
of Evolution, February 2002
No. 21 Survey on Planned Capital Spending for Fiscal Years 2000, 2001 and 2002, December 2001
No. 20 Current Situation and Challenges for Cable Television in the Broadband Era, October 2001

No. 19 Recent Trends in the Japanese Economy: The Japanese Economy under Deflation, August 2001
No. 18 Introduction of a Home Appliance Recycling System: Effects & Prospects: Progress towards
Utilisation of Recycling Infrastructure, June 2001
No. 17 Survey on Planned Capital Spending for Fiscal Years 2000 and 2001, June 2001
No. 16 Revitalization of Middle-aged and Elderly Workers in Japan’s Labor Markets: Requiring the
Expansion of the Vocational Training Functions, March 2001
No. 15 Risk-Averting Portfolio Trends of Japanese Households, March 2001
No. 14 Consumption Demand Trends and the Structure of Supply: Focus on Retail Industry Supply Behavior, March 2001
No. 13 Recent Trends in the Japanese Economy: Weakness of Current Economic Recovery and Its
Background, March 2001
No. 12 Empirical Reassessment of Japanese Corporate Investment Behavior: Features and Changes
since the 1980s, based on Micro-level Panel Data, March 2001
No. 11 Survey on Planned Capital Spending for Fiscal Years 1999, 2000 and 2001, October 2000
No. 10 Job Creation and Job Destruction in Japan, 1978-1998: An Empirical Analysis Based on Enterprise Data, September 2000
No. 9

Recent Trends in the Japanese Economy: Information Technology and the Economy, September
2000

No. 8

Trend of International Reorganization Affecting the Japanese Automobile and Auto Parts Industries, June 2000

No. 7

Survey on Planned Capital Spending for Fiscal Years 1999 and 2000, June 2000

No. 6

Current Status and Future Perspective of the Japanese Remediation Industry: Technology andMarket for Underground Remediation, May 2000

No. 5

Recent Trends in the Japanese Economy: The 1990s in Retrospect, March 2000

No. 4

Destabilized Consumption and the Post-bubble Consumer Environment, February 2000

No. 3

The Slump in Plant and Equipment Investment in the 1990s: Focusing on Lowered Expectations,the Debt Burden and Other Structural Factors, January 2000

No. 2

Survey on Planned Capital Spending for Fiscal Years 1998, 1999 and 2000, November 1999

No. 1

Corporate Strategies in Japan’s Semiconductor Industry: Implications of Development in Other
Asian Countries, November 1999

JDB Research Report
No. 96 Recent Trends in the Japanese Economy: Focused on Fixed Investment and Capital Stock, August 1999
No. 95 Efforts to Protect the Natural Environment in the United States and Germany: Environmental
Mitigation and Biotope Conservation, July 1999
No. 94 Survey on Planned Capital Spending for Fiscal Years 1998 and 1999, June 1999
No. 93 Towards the realization of ‘environmental partnership’: A survey of Japan’s environmental NPO
sector through comparison with Germany, June 1999
No. 92 The Impact of Demographic Changes on Consumption and Savings, March 1999
No. 91 Recent Research and Development Trends in Japanese Enterprises: Technology Fusion, March
1999
No. 90 Recent Trends in the Japanese Economy: Prolonged Balance Sheet Adjustment, January 1999

No. 89 Impact of Asset Price Fluctuations on Household and Corporate Behavior: A Comparison between Japan and the U.S., December 1998
No. 88 Survey on Planned Capital Spending for Fiscal Years 1997, 1998, and 1999, December 1998
No. 87 Foreign Exchange Rate Fluctuations and Changes in the Input-Output Structure, November 1998
No. 86 Structural Changes in Unemployment of Japan: An Approach from Labor Flow, November 1998
No. 85 Recent Trends in the Japanese Economy: Characteristics of the Current Recession, August 1998
No. 84 R&D Stock and Trade Structure in Japan, August 1998
No. 83 Survey on Planned Capital Spending for Fiscal Years 1997 and 1998, August 1998
No. 82 The Significance, Potential, and Problems of DNA Analysis Research: Establishing Public Acceptance is Essential, May 1998
No. 81 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996, 1997
and 1998 Conducted in August 1997, March 1998
No. 80 Recent Trends in the Japanese Economy: Growth Base of the Japanese Economy, January 1998
No. 79 Information Appliances: The Strength of Japanese Companies and Tasks for the Future, January
1998
No. 78 Challenges and Outlook for the Japanese Machinery Industries: Impact of ISO14000 Series andEnvironmental Cost, January 1998
No. 77 Current Conditions and Issues of Computerization in the Health Care Industry: For the Construction of a Health Care Information Network, January 1998
No. 76 Household Consumption and Saving in Japan, December 1997
No. 75 The Direction of Japanese Distribution System Reforms: Strengthening the Infrastructure to
Support Diverse Consumer Choices, November 1997
No. 74 Foreign Direct Investments by Japanese Manufacturing Industries and Their Effects on International Trade, October 1997
No. 73 The Impact of the Changing Trade Structure on the Japanese Economy: With Special Focus on
the Effects on Productivity and Employment, October 1997
No. 72 An Analysis of Foreign Direct Investment and Foreign Affiliates in Japan, August 1997
No. 71 Recent Trends in the Japanese Economy: Stock Replacement and New Demand as Aspects of
Economic Recovery, August 1997
No. 70 Corporate Fundraising: An International Comparison, June 1997
No. 69 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and1997 Conducted in February 1997, May 1997
No. 68 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and1997 Conducted in August 1996, August 1997
No. 67 An International Comparison of Corporate Investment Behavior: Empirical Analysis Using Firm
Data from Japan, France and the US, April 1997
No. 66 Housing in the National Capital: Analysis of the Market for Housing using Micro Data, March
1997
No. 65 The Environment for Locating Business Operations in Major East Asian Cities, January 1997
No. 64 Direction of Reconstruction of Business Strategy in the Chemical Industry, January 1997
No. 63 Reflection on Discussions Concerning Regulation of the Electric Power Industry: Deregulationof the Electric Power Industry in Japan and Implication of Experiences in the United States, December 1996

No. 62 Current Status and Future Perspective of the Japanese Semiconductor Industry, November 1996
No. 61 A Breakthrough for the Japanese Software Industry?: Responsiveness to Users’ Needs is the key,
October 1996
No. 60 Recent Trends in the Japanese Economy Focusing on the Characteristics and Sustainability of
the Current Economic Recovery, September 1996
No. 59 Analysis of the Primary Causes and Economic Effects of Information: Related investment in the
United States and Trends in Japan, August 1996
No. 58 Selected Summaries of Research Reports: Published in FY1995, June 1996
No. 57 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1995 and1996 Conducted in February 1996, May 1996
No. 56 Recent Trends in the Japanese Economy, May 1996
No. 55 Issues Concerning the Competitiveness of the Japanese Steel Industry, February 1996
No. 54 Changes in the Financial Environment and the Real Economy, January 1996
No. 53 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994, 1995
and 1996 Conducted in August 1995, October 1995
No. 52 Current Economic Trends: Focusing on the Appreciation of the Yen and its Effects, October
1995
No. 51 Problems Concerning the International Competitiveness of the Petrochemical Industry, October
1995
No. 50 An Economic Approach to International Competitiveness, October 1995
No. 49 Selected Summaries of Research Reports Published in FY1994, July 1995
No. 48 Strategies for Improving the Efficiency of the Japanese Physical Distribution System: Part 2,
July 1995
No. 47 Issues on International Competitive Strength of the Auto Industry, June 1995
No. 46 Problems Concerning the International Competitiveness of the Electronics and Electric Machinery Industry, June 1995
No. 45 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994 and1995 Conducted in March 1995, June 1995
No. 44 Strategies for Improving the Efficiency of the Japanese Physical Distribution System, March
1995
No. 43 Capital Spending Recovery Scenario Cycle and Structure, August 1994
No. 42 Progress of International Joint Development between Industrialized Countries on the Private
Level, May 1994
No. 41 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993, 1994
and 1995 Conducted in August 1994 , November 1994
No. 40 Selected Summaries of Research Reports Published in FY1993, June 1994
No. 39 Recent Trends in Japan’s Foreign Accounts, April 1994
No. 38 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993 and1994 Conducted in March 1994, April 1994
No. 37 Economic Zones and East Asia Prospect for Economic Activity Oriented Market Integration,
December 1993
No. 36 Japanese Corporate Responses to Global Environmental Issues, December 1993
No. 35 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992, 1993

and 1994 Conducted in August 1993, September 1993
No. 34 Structure of Profit to Capital in the Manufacturing Industry, September 1993
No. 33 Comparison of the Japanese and The U.S. Labor Markets, October 1992
No. 32 The Relative Competitiveness of U.S., German, and Japanese Manufacturing, March 1993
No. 31 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992 and1993 Conducted in March 1993, April 1993
No. 30 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991, 1992
and 1993 Conducted in August 1992, December 1992
No. 29 Flow of Funds in the 80s and Future Corporate Finance in Japan, November 1992
No. 28 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991 and1992 Conducted in February 1992, April 1992
No. 27 An Analysis of Foreign Direct Investment in Japan, March 1992
No. 26 Projection of Japan's Trade Surplus in 1995: Analysis of Japan's Trade Structure in the 80s,
February 1992
No. 25 Intra-Industry Trade and Dynamic Development of The World Economy, November 1991
No. 24 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990, 1991
and 1992 Conducted in August 1991, September 1991
No. 23 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990 and1991 Conducted in February 1991, March 1991
No. 22 Trends of the Petrochemical Industry and its Marketplace in East Asia, March 1991
No. 21 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989, 1990
and 1991 Conducted in August 1990, September 1990
No. 20 Deepening Economic Linkages in The Pacific Basin Region: Trade, Foreign Direct Investment
and Technology, September 1990
No. 19 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989 and1990 Conducted in February 1990, March 1990
No. 18 Petrochemicals In Japan, The US, and Korea an Assessment of Economic Efficiency, February
1990
No. 17 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1988, 1989
and 1990 Conducted in August 1989, October 1989
No. 16 Impact of the EC Unification on Japan’s Automobile and Electronics Industries, August 1989
No. 15 Industrial and Trade Structures and the International Competitiveness of Asia’s Newly Industrializing Economies, August 1989
No. 14 The Japan Development Bank Reports on Capital Investment Spending: Survey for Fiscal Years
1988 and 1989 Conducted in February 1989, March 1989
No. 13 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1987, 1988
and 1989 Conducted in August 1988, September 1988
No. 12 Growing Foreign Investors’ Activities and the Future of Internationalization, September 1988
No. 11 Futures Tasks and Prospects for the Japanese Machine-Tool Industry, July 1988
No. 10 International Division of Labor in the Machine Industries Among Japan, Asia’s NICs and
ASEAN Countries, June 1988
No. 9

Trends of the Petrochemical Industry and its Marketplace in East Asia around Japan, May 1988

No. 8

The International Competitiveness of Japan and U.S. in High Technology Industries, April 1988

No. 7The Japan Development Bank Reports on Private Fixed Investment in Japan, March 1988

No. 6

Economic Projections of the Japan’s Economy to the Year 2000, February 1988

No. 5

The Japan Development Bank Reports on Private Fixed Investment in Japan, September 1987

No. 4

Current Trends in the Japanese Auto Parts Industry in Overseas Production, July 1987

No. 3

Current Moves for Foreign Direct Investment into Japan, May 1987

No. 2

Overseas Direct Investments by Japanese Corporations, May 1987

No. 1

Current U.S. Consumption Trends, May 1987