27

共同研究：低炭素社会の構築に向けて

Global Warming Policy and
Local Environment Taxes :Focusing on the Development of Forest andWater Resource Environment Taxes in Japan
Kaori FUJITA
1. Present Situation of Global Warming Policy and Local Environment Taxes
In recent years, Japan has been giving increasing attention to the linkages between environment, economy and society and Japan’s environmental policy, at both national and international
levels, had a strong focus on climate change and energy efficiency, sound waste and materials
management and more recently, biodiversity conservation (OECD (2010)).
However, Japan has not yet introduced a carbon tax, although Japans Ministry of the Environment announced its intention to develop a detailed plan for an environment tax that taxes fossil
fuels as a measure against global warming for the first time in three years 1). Specifically, the ministry plans to set up an “Expert Committee for a Green Tax System and Related Economic
Analysis” under the Comprehensive Policy and Earth Environment Joint Sub-committee of theCentral Environmental Council, and this expert committee is to analyze the restraining effect of
a new environment tax on consumption of fossil fuels and the effect of such a tax on the international competitiveness of industry, in light of the current high price of oil 2). The committee is also
to prepare a plan for the Ministry of the Environment regarding the overall “green tax system,”including alleviation of the tax burden of purchasers of energy-saving automobiles and housing.
1) Ministry of the Environments press release, “Holding of the First Meeting of the Expert Committee
for a Green Tax System and Related Economic Analysis under the Comprehensive Policy and EarthEnvironment Joint Sub-committee of the Central Environmental Council” (August 26, 2008). http : // www.
env.go.jp / press / press.php?serial＝10098
2) The specific items scheduled to be researched and studied by this expert committee are (1) the specificposition of the tax in the overall policy for global warming, (2) effectiveness of taxation given the current
economic conditions including soaring oil prices, (3) the impact on the national economy and the international competitiveness of industries, (4) the relation with existing energy-related taxes, (5) the current
state of initiatives in other countries, and (6) study and analysis of coordination of the relevant separate
green taxes.
キーワード：地球温暖化, 環境政策, 森林・水源環境税, 日本, 神奈川県, 参加型税制

28

桃山学院大学総合研究所紀要

第37巻第２号

At the national level, the Kyoto Protocol Target Achievement Plan approved by Japans Cabinet
in March 2008 states that environment tax should be given further study with reference to theimpact on the national economy and the international competitiveness of industries as well as thecurrent initiatives in other countries. In keeping with the “Honebuto policy” (honebuto means“robust” in Japanese) approved by the Cabinet in June 2008 and the “Fukuda vision” (named forthe then Prime Minister Fukuda) which proposed to cut greenhouse gas emissions by 60％ to
80％ of the current level by 2050, the “Action Plan for Building a Low-Carbon Society” 3) which
was approved by the Cabinet in July 2008 stated that, in this autumn when the scheduled overhaulof the tax system takes place, study will not be restricted to the issue of whether road-related
revenue should be used for general purposes but will also review the entire tax system broadly
from the viewpoint of promoting lower carbon usage, including the handling of the environment
tax, and thereby promote the greening of the tax system. The “Basic Stance Toward
Fundamental Reform of the Tax System” prepared by the governments Tax Commission in
November 2007 states that the environment tax is an issue that should be studied with reference
to its relation with existing energy-related taxes. The Ministry of the Environment has sought
the establishment of an environment tax during tax revisions for the past five years, but it has
been unsuccessful due in part to opposition from industry. In 2005, the ministry announced a concrete measure to levy a tax of 2,400 yen per ton of carbon in fossil fuels4).
3) The “Action Plan for Building a Low-Carbon Society” includes a process chart for the development anddissemination of environmental technology, etc., to enable a large reduction in greenhouses gases as approved by the Cabinet. It gives concrete shape to the comprehensive proposal announced by the thenPrime Minister Fukuda prior to the G8 Hokkaido Toyako Summit in July 2008. The plan states that “whenfundamental reform of the tax system is studied in the autumn of 2008, the overall tax system will be reviewed broadly, and the greening of the tax system will be promoted” and a domestic emission trading system will be put into trial operation. In the future, the relevant ministries and agencies will initiate global
warming policy based on this action plan. The plan specifies “60％ to 80％ of the current level by 2050”
as Japans long-term objective for reduction of greenhouse gases. In 2009, UN talks will begin in earnest
on the post-Kyoto Protocol period which starts in 2013, and countries are to announce their national emission reduction target for the medium term. To introduce new economic a procedure for preparing the design of a domestic integrated market for emission trading in September this year and launching trial
operation in October, and the plan specifies that an environment tax be covered in the study on fundamental tax system reform in the autumn of 2008. means of achieving reduction of emissions, the plan also sets
forth.
4) For detailed examination of the discussion up to now on the environment tax, see “Economic Analysisof the Environment Tax−Review of the Discussion Heretofore” (September 13, 2005) (in Japanese) by
the Expert Committee (launched in May 2005) for Economic Analysis of the Environment Tax under theComprehensive Policy and Earth Environment Joint Sub-committee of the Central Environmental Council.
This committee conducted an economic analysis and study of the environment tax from a technical, specialized viewpoint, in response to the preparation of the Kyoto Protocol Target Achievement Plan. This report
is an interim review of the analysis conducted from a technical, specialized viewpoint concerning the environment taxes cost incentive effects and announcement effects, impact on the national economy and theinternational competitiveness of industry, and cost shift of the environment taxes. This report also calculates the tax revenue produced by the tax of 2,400 yen per ton of carbon at 360 billion yen, which amounts
to an annual burden of 2,000 yen per household (or approximately 170 yen per month).

Global Warming Policy and Local Environment Taxes

29

Meanwhile at the local government level, prefectures are increasingly introducing independent
forest and water source environment taxes6) for the purpose of forest development and water
source environment conservation. This is occurring in a context where water issues are growing
increasingly serious around the world and the worlds forests continue to decrease and deteriorate ; it has been pointed out that these phenomena are closely linked with the global warming
problem, and so attention is being paid to the role filled by forests, as absorbers of CO2, in the
resolution of the global warming problem as well as to the public benefits provided by forests7).
The first to implement a forest and water source environment tax8) in Japan was Kochi
Prefecture, in 2003, and since then 29 prefectures have imposed such a tax. All forest and water
source environment taxes are imposed as amount (or rate) added for conservation and restoration of forest and water source environment to the prefectural residents tax, but they differ by
prefecture in their content, name, objective, circumstances leading to their implementation, design, items taxed, and distribution of the tax burden, etc. The tax proceeds are used to develop
diverse projects that reflect the needs and the awareness of the issues in each region, and projects include those to promote forest-thinning, those that encourage growth of coniferous andbroadleaf forests and broad-leaf forests, and those that support forest-building activities with theparticipation of prefectural residents.
However, there are numerous points of dispute that need to be settled, including the relationship between global warming policy and forest conservation policy, the relationship between thenational government and local governments involved in the promotion of decentralization, andhow to apportion the tax burden and participation in the forest and water source environment
taxes. Much discussion has been held on these points9).
5) OECD (2006), The Political Economy of Environmentally Related Taxes (Also published in Japanese.
OECD (2006) Kankyouzei no seiji keizaigaku. Chuohoki Publishers) and the OECD database.
6) The Science Council of Japan (2001) (Assessment of the Multifaceted Functions of Agriculture andForests Involving the Global Environment and Human Lives (report) November 2001 (in Japanese)), divides the multifaceted functions of forests into economic functions and public-interest functions, with theformer consisting of the material production function and the latter consisting of the biological diversity
preservation function, earth environment conservation function, landslide disaster prevention and soil conservation function, water source development function, comfortable environment formation function, publichealth and recreation function, and cultural function.
7) In this paper, water source environment taxes are defined as local environment taxes which are borne
equally and widely in small amounts by the residents (e.g., prefectural residents), who are recipient of thebenefits in a broad sense, in view of the public-interest aspects of forests and with water source environment conservation in mind. Local environment taxes may be understood as taxes collected by local governments mainly for local environmental management.
8) In legal terms, this tax is an “excess burden added to the prefectural residents tax,” but because the object of the tax is not only water source development but also preservation of the various public-interest
functions of forests, it is referred to herein as the “forest and water source environment tax.”
9) In that regard, the forest and water source environment tax, as a form of policy tax by local governments,
raises the issues of how to best organize local government and how to regard the public nature of govern
ment finances. See Fujita (2008) for the development of the discussion on the forest and water source en-

30

桃山学院大学総合研究所紀要

第37巻第２号

In Japan, while debate continues on the usage of economic measures in the national environmental policy by introducing a carbon tax as a global warming countermeasure or creating of anemission trading system, it is the local governments that are taking the lead in actual implementation of economic measures by introducing industrial waste taxes, forest and water source environment taxes, and so forth.
In this paper, we discuss about forest and water resource environment taxes, especially
Kanagawa Prefecture.

2. Local Environment Tax Concept and the Spread of Forest and Water Source
Environment Tax
The context behind the “local environment tax” concept in Japan is local governments search
for ways to enable residents participation and autonomy, ways to stimulate the local economy
and society, and ways to take action for regional regeneration and environmental regeneration,
given the deepening and diversifying environmental problems on one hand, and on the other hand,the decline of local revenue and the progress of decentralization. As the discussion on decentralization progresses, the demand for decentralization in the areas of administration, finance, and policy is growing stronger than ever before as local self-government grows along with the growth inresidents options, cost sharing, and participation, under the auspices of local governments withadequate operational authority and autonomous revenue sources, so that each local area can build
a local society in keeping with its own needs and desires. Currently, many local governments are
instituting various kinds of discretionary taxes as policy experiments in response to the revenue
crisis and as means to actualize policies. A particularly rapid increase has been seen in the introduction of local environment taxes such as industrial waste taxes10) and forest and water source
environment taxes which are imposed to secure funds for environmental policy.
The forest environment tax which was first introduced by Kochi Prefecture in April 2003 has
subsequently been implemented in 29 prefectures, including Okayama (April 2004), Tottori,
Kagoshima, Shimane, Ehime, Yamaguchi, and Kumamoto (April 2005), Fukushima, Hyogo, Nara,
Oita, Shiga, Iwate, Shizuoka, and Miyazaki (April 2006), Kanagawa, Wakayama, Toyama,
Yamagata, Ishikawa, Hiroshima, and Nagasaki (April 2007), Fukuoka, Tochigi, Akita, Saga
Nagano, and Ibaraki (April 2008) (Table 1).

vironment tax.
10) An ordinance for industrial waste tax (a tax which uses the volume of industrial waste that is emitted or
disposed as the standard for taxation) has been established by 28 local governments and is enforced by 27
local governments (as of the end of March 2007). The tax proceeds are applied primarily to suppress production, promote recycling, and reduce the volume of industrial waste and to other costs for measures forproper waste disposal.

Global Warming Policy and Local Environment Taxes

31

Table 1 : Prefectures with Forest and Water Source Environment Taxes source(as of May 2008)
Tax Mechanism
Extra Assessment Rate
Corporate
Individual Prefectural
Prefectural
Residents’ Tax
Residents’ Tax(annual)(annual)Flat rate Income rate
Flat rate

Scale of
Tax
Revenue(100
millionyen)

Fund

Prefecture

Name of Tax(name of ordinance)

Date
Introduced

Main Purpose and Usage

Kochi

Forest Environment Tax (Kochi
Prefecture Tax Ordinance)

April-04

New revenue source for forest environment
conservation projects to prevent decline inforests’ public-interest functions

Extra
assessment toprefecturalresidents’ tax

500 yenNone

500 yen

1.8

Forest Environment
Conservation Fund

OkayamaOkayama Forest Creation
Prefectural Residents’ Tax(Ordinance concerning Special
Case of Prefectural Residents’Tax for Forest Conservation

April-04

Extra
Forest conservation projects in light of the im- assessment toportance of forests’ public-interest functions
prefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

5.4

Utilization of existing“Okayama Forest
Creation Prefectural
Residents’ Fund”

Tottori

Forest Environment
Conservation Tax (Tottori
Prefecture Tax Ordinance)

April-05

Extra
assessment toprefecturalresidents’ tax

300 yen

NoneStandard tax
3％ (600 yen24,000 yen)

1.1

Forest Environment
Conservation Fund

Kagoshima

Kagoshima Prefecture Forest
Environment Tax (Kagoshima
Prefecture Forest Environment
Tax Ordinance)

April-05

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

4.3

？

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

2.1

Fund for Creation ofForests with Water
and Greenery

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

3.7

Forest Environment
Conservation Fund

April-05

Extra
Expenses related to forest maintenance inassessment toview of the importance of sustained expression
prefecturalof forests’ multifaceted functions
residents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

4.1？

April-05

Extra
Costs for measures to promote theassessment tomaintenance and furtherance of forests’ publicprefecturalinterest functions
residents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

4.8

Fund for Creation ofForests with Water
and Greenery

Forest Creation Tax for Water
and Greenery (Shimane
Prefecture Forest Creation Tax
for Water and Greenery
Ordinance)
Ehime Prefecture Forest
Environment Tax (Ehime
Ehime
Prefecture Forest Environment
Tax Ordinance)
Yamaguchi Forest Creation
Prefectural Residents’ Tax(Ordinance concerning Special
Yamaguchi
Case of Prefectural Residents’Tax for Application to Costs Related
to Development of Forests)
Kumamoto Prefecture Forest
Creation for Water and Greenery
Kumamoto Tax (Kumamoto Prefecture Forest
Creation for Water and GreeneryTax Ordinance)
ShimaneApril-05

April-05

Expenses necessary for forest environment
conservation to sustain forests’ public-interest
functions as well as to create awarenessconcerning protection and nurturing of forests
Costs for promotion of forest environment
conservation projects and for measures related
to creation of awareness concerning protection
and nurturing of forests, in light of the importance of public-interest functions of forests
Expenses for measures for creation of forests
with water and greenery, for the purpose ofpassing on to the next generation green
forests which foster water through theregeneration of devastated forests
Expenses for measures related to forest
conservation and creation of a culture in
symbiosis with forests, in view of forests’
public-interest functions.

Form

Fukushima

Fukushima Prefecture Forest
Environment Tax (Fukushima
Prefecture Forest Environment
Tax Ordinance)

April-06

Costs for measures related to forest
environment conservation as well as creationof awareness concerning protection andnurturing of forests, in light of the importanceof forests’ public-interest functions

Extra
assessment toprefecturalresidents’ tax

1,000 yen

NoneStandard tax
10％ (2,000 yen80,000 yen)

8.4

Forest Environment
Fund

Hyogo

Prefectural Residents’ Green
Tax (Prefectural Residents”
Green Tax Ordinance)

April-06

Costs for projects to fully exhibit the diverse
public-interest functions of greenery

Extra
assessment toprefecturalresidents’ tax

800 yen

NoneStandard tax
10％ (2,000 yen80,000 yen)

18.7

Prefectural Residents’Green Fund

Nara

Nara Prefecture Forest
Environment Tax (NaraPrefecture Forest Environment
Tax Ordinance)

April-06

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

2.8

Forest Environment
Conservation Fund

Oita

Forest Environment Tax(Ordinance concerning Special
Case of Prefectural Residents’Tax for Forest Environment
Conservation)

April-06

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

2.4

Forest Environment
Conservation Fund

Shiga

Lake Biwa Forest Creation
Residents” Tax (Lake Biwa
Forest Creation Residents’ Tax
Ordinance)

April-06

Extra
assessment toprefecturalresidents’ tax

800 yen

NoneStandard tax
11％ (2,200 yen88,000 yen)

4.8

Lake Biwa Forest
Creation Fund

Iwate

Iwate Forest Creation
Prefectural Residents’ Tax(Iwate Forest Creation Prefectural
Residents’ Tax Ordinance)

April-06

Extra
assessment toprefecturalresidents’ tax

1,000 yen

NoneStandard tax
10％ (2,000 yen80,000 yen)

5.6

Iwate Forest Creation
Fund

Shizuoka

Forest Creation Prefectural
Residents’ Tax (Shizuoka
Prefecture Forest Creation
Prefectural Residents’ Tax
Ordinance)

April-06

Costs for measures related to regeneration ofExtradevastated forests, in light of the importance if assessment tosustained expression of forests’ public-interest
prefecturalfunctionsresidents’ tax

400 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

7.0

Forest Resource
Regeneration Fund

MiyazakiMiyazaki Prefecture Forest
Environment Tax (Miyazaki
Prefecture Forest Environment
Tax Ordinance)

April-06

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

2.2

Forest Environment
Tax FundKanagawa

Water Source Environment
Conservation andRegeneration Prefectural
Residents’ Tax (stipulated by
the Kanagawa Prefecture
Prefectural Tax Ordinance(Supplementary Provision))

April-07

Extra
assessment toprefecturalresidents’ tax

300 yen0.025％

None

38.2

Water Source
Environment
Conservation andRegeneration Fund

Wakayama

Wakayama Forest Creation
Tax (Wakayama Forest
Creation Tax Ordinance)

April-07

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

2.6

Wakayama Forest
Creation Fund

Costs for measures for forest environment
conservation as well as creation of awarenessconcerning protection and nurturing of forests
among all prefectural residents, in light of theimportance of forests’ public-interest functions
Costs for measures for forest environment
conservation and creation of awarenessamong all prefectural residents concerning
protection and nurturing of forests, in light of
the importance of forests’ public-interest
functions
Costs for measures for forest creation so thatan advanced level of public-interest functions
will be realized, in light of the importance offorests’ public-interest functions
Expenses for measures for measures related
to forest environment conservation
implemented for maintenance and furtherance
as well as sustained expression of forests’
public interest functions

Expenses for measures related to conservationof forests in which the prefecture andprefectural residents engage collaboratively, inlight of the importance of forests’ public
interest functions
To promote enhancement of projects that
contribute to conservation and regeneration ofwater source environments by having
prefectural residents bear the cost as the water
users, in consideration of the relation between
beneficiaries and costs, for the conservation
and regeneration of water sources
Expenses for measures related to forest
environment conservation and creation of aculture in symbiosis with forests, for the
purposes of protecting and nurturing forests as
an asset of the prefectural residents andpassing them on to the next generation

32

桃山学院大学総合研究所紀要

ToyamaForest Creation for Water andGreenery Tax (Toyama
Prefecture Forest Creation
Ordinance)

April-07

Yamagata

Yamagata Green Environment
Tax (Yamagata Green
Environment Tax Ordinance)

April-07

Ishikawa

Ishikawa Forest Environment
Tax (Ishikawa Forest
Environment Tax Ordinance)

April-07

Hiroshima

Hiroshima Forest Creation
Prefectural Residents’ Tax(Hiroshima Forest Creation
Prefectural Residents’ Tax
Ordinance)

April-07

NagasakiNagasaki Forest Environment
Tax (Nagasaki Forest
Environment Tax Ordinance)

April-07

Fukuoka

Tochigi

Fukuoka Prefecture Forest
Environment Tax (Fukuoka
Prefecture Forest Environment
Tax Ordinance)
Tochigi Healthy Forest
Creation Prefectural Residents’Tax (Tochigi Healthy Forest
Creation Prefectural Residents’Tax Ordinance)

April-08

April-08

Expenses for basic measures related to forest
creation, for the purposes of shaping aprefecture blessed with water and greeneryand contributing to the realization of richenvironment for prefectural residents
Costs for implementation of measures related
to the maintenance and furtherance as well as
the sustained expression of forests’ publicinterest functions
Costs for measures that contribute tomaintenance and promotion of forests’ publicinterest functions, for the purpose of protecting
and nurturing forests as common assets ofprefectural residents and passing them on insound condition to the next generation

第37巻第２号

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

3.3

Fund for Creation ofForests with Water
and Greenery

Extra
assessment toprefecturalresidents’ tax

1,000 yen

NoneStandard tax
10％ (2,000 yen80,000 yen)

6.0

Yamagata Green
Environment Tax
Fund

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

3.6

Ishikawa Forest
Environment Fund

Costs for measures that promote theExtramaintenance and furtherance of forests’ public- assessment tointerest functions and contribute to the shaping
prefecturalof a prefectural environment full of greenery residents’ tax

500 yen

NoneStandard tax
5％ (1,000 yen40,000 yen)

8.1

Hiroshima Forest
Creation Fund

None

Standard tax
5％ (1,000 yen40,000 yen)

3.2

Nagasaki Forest
Environment Fund

None

Standard tax
13
Fukuoka Prefecture
5％ (1,000 yen- (Average Forest Environment
40,000 yen)FY)Tax FundNone

Tochigi PrefecturalStandard tax
8
Residents’ Fund for
7％ (1,400 yen- (Average
Healthy Forest
56,000 yen)
FY)Creation

None

Akita Fund forStandard tax
4.8
Creation of Forests
8％ (1,600 yen- (Averagewith Water and
64,000 yen)
FY)Greenery

NoneStandard tax
2.3
Saga Prefecture
5％ (1,000 yen- (Average Forest Environment
40,000 yen)FY)Tax Fund500 yen
Expenses for measures for forest environmentExtra(seniorconservation and for promotion of awareness ofassessment to citizens pay
protection and nurturing of forests, in light ofprefectural
300 yenthe importance of forests’ public interest funcresidents’ tax in the first
tions
FY)
Expenses for measures to promoteExtraregeneration of devastated forests, in light of assessment to
500 yenthe importance of forests’ public-interest
prefecturalfunctionsresidents’ tax
Source of costs for measures to pass healthy
Extra
Tochigi forests on to the next generation withassessment tothe understanding and cooperation of prefectural
700 yenprefecturalresidents, in light of the importance of forests’
residents’ tax
public-interest functions
Expenses for measures related to forest
environment conservation, for the purpose ofExtraprotecting and nurturing, in a sound manner, assessment to
800 yenforests which have public-interest functions
prefecturaland from which prefectural residents benefit, residents’ tax
and passing them on to the next generation
Expenses for implementation of measures
Extra
related to forest environment conservationassessment towhich the prefecture, mayors, and prefectural
500 yenprefecturalresidents engage in collaboratively, in light ofresidents’ tax
forests’ public-interest functions

Akita

Akita Prefecture Forest
Creation for Water andGreenery (Akita Prefecture
Forest Creation for Water andGreenery Ordinance)

April-08

Saga

Saga Prefecture Forest
Environment Tax (Sage
Prefecture Forest Environment
Tax Ordinance)

April-08

NaganoNagano Prefecture Forest
Creation Prefectural Residents’Tax (Nagano Prefecture Forest
Creation Prefectural Residents’Tax Ordinance)

April-08

To secure a revenue source for measures forsustained expression of the multifaceted
benefits which prefectural residents receivefrom the forests

Extra
assessment toprefecturalresidents’ tax

500 yen

NoneStandard tax
6.8
Nagano Prefectural
5％ (1,000 yen- (Average Residents’ Tax Fund
40,000 yen)FY)for Forest Creation

Ibaraki

Forest and Lake Environment
Tax (Ibaraki Prefecture Forest
and Lake Environment Tax
Ordinance)

April-08

Expenses for measures that contribute to theenvironmental conservation of forests, lakes,
and marshes, in light of the importance of the
public-interest functions of forests, lakes,
marshes, and rivers

Extraassessment toprefecturalresidents’ tax

1,000 yen

NoneStandard tax
16
10％ (2,000 yen- (Average
80,000 yen)
FY)

Forest and Lake
Environment Tax
Fund

Source : Prepared by the author using interviews and the prefectures websites.

In nearly all prefectures, forest and water resource environment tax is stipulated as a tax to belevied broadly on the prefectural residents, with the provision that prefectural residents are able
to enjoy the public-interest functions of the forests. As usages of the tax proceeds, many prefectures state “raising awareness that forests are protected and nurtured by prefectural residents,”
in addition to “forest environment conservation.” The proceeds of Hyogo Prefectures“prefectural residents green tax” are managed in a “prefectural residents green tax fund” which
is maintained separately from other revenue sources in recognition of the importance of wideranging conservation and regeneration of greenery, and the fund is used for projects which promote “creation of forests that are resistant to disasters” and “urban greenification for disasterprevention and environmental improvement.” Okayama Prefecture is applying some of the revenue from the “Okayama forest-creation prefectural residents tax” to projects to replant trees
toppled by typhoons. Thus, while the generic name for these taxes is “forest and water source
environment tax,” the contents vary widely depending on the prefecture.

Global Warming Policy and Local Environment Taxes

33

3. Three Types of the forest and water source environment taxes
All the prefectures that levy such a tax implement it as an extra assessment for the prefecturalresidents tax, but broadly speaking, there are currently three different methods of implementation. The first is Kochi Prefecture’s method. Kochi Prefecture, which was the first prefecture in
Japan to introduce a forest environment tax, is instituting an extra assessment of 500 yen annually
as a flat-rate tax on individual prefectural residents tax and corporate prefectural residents
tax11). The second method is the Okayama Prefecture method (Table 2). This method charges
individuals an extra assessment at a fixed amount of a flat rate on their individual residents tax
and charges corporations an extra assessment at a fixed percentage of a standard tax amount. The
flat-rate assessment for individuals ranges from 300 yen in Tottori Prefecture to 1,000 yen in
Fukushima, Iwate, Yamagata, and Ibaraki prefectures. The standard amount of the corporate tax
ranges from 3％ in Tottori Prefecture to 11％ in Shiga Prefecture. Among the prefectures thathave introduced a forest and water source environment tax, 27 of them adopt Okayama Prefecture’s extra assessment method, with Kochi Prefecture and Kanagawa Prefecture being the exceptions. Of these 27, some prescribe exemptions for low-income earners and senior citizens.
The third method is Kanagawa Prefecture’s method. Under the “water source environment
conservation and regeneration prefectural residents tax,” individuals are charged an extra assessment of 0.025％ of their income, in addition to a flat amount of 300 yen on their residents
tax annually ; corporations pay nothing under this system (Table 3). The revenue, at 3.8 billion
yen, is the largest of any prefecture implementing such a tax. It is necessary to bear in mind that
Table 2 : Okayama Forest-creation Prefectural Residents’ Tax (Corporate Residents’ Tax)
Amount of Corporate Capital

Conventional Flat-rate Amount(A)(annual amount)

Additional
Amount (B)(B＝A×5％)

Amount of Tax
Paid (A＋B)(annual amount)More than 5 billion yen

800,000 yen

40,000 yen

840,000 yen

More than 1 billion yen,
up to 5 billion yen

540,000 yen

27,000 yen

567,000 yen

More than 100 million yen,
up to 1 billion yen

130,000 yen

6,500 yen

136,500 yen

More than 10 million yen,
up to 100 million yen

50,000 yen

2,500 yen

52,500 yen

Up to 10 million yen

20,000 yen

1,000 yen

21,000 yen

Source : Okayama Prefecture’s website.

11) The amount of the extra assessment in the case of the individual prefectural residents tax is 500 yen,which together with the current annual flat rate of 1,000 yen results in a tax of 1,500 yen. The uniform rateof 500 yen is based on the idea of having everyone participate equally in conservation of the forest environment by assuming an equal burden regardless of amount of income.

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Table 3 : Extra Assessments for Individual Prefectural Residents’ Tax for theConservation and Regeneration of the Water Source Environment
System introduced in FY2007Type

Standard tax rate(a)Additional amount(b)

Extra assessment(a＋b)

Flat rate

1,000 yen

300 yen

1,300 yen

Income rate

4％ uniformly

0.025％

4.025％

Source : Kanagawa Prefecture’s website.

the tax’s purpose, mechanism, and size of revenue differ greatly from those of other prefectures.
Kanagawa Prefecture, which has levied an extra assessment for the individual prefectural residents tax for conservation and regeneration of the water source environment since FY2007, isa unique case in Japan because it presents a new cost-sharing mechanism through prefecturalresident participation for the improvement of the water source environment, which is becoming
increasingly degraded. The concept of Kanagawa Prefecture’s water source environment tax
originated as a new “living environment tax” in a study on expansion of independent revenue
sources spurred by the prefecture’s critical financial condition12).

4. Kanagawa Prefecture’s water source environment tax
Kanagawa Prefecture’s water source environment tax is a system for collecting, through extra
assessments, the revenue required for the 12 projects in the “Five-year Plan for Conservation
and Regeneration of Kanagawas Water Source Environment.” This plan and its general policy outline specify special measures for engaging in enhancement and strengthening of initiatives forwater source environment conservation and regeneration in order to promote the plan effectively
and steadily during the first five years (FY20072011) of a twenty-year period (Figure 1). Thisinitiative, which is expected to have direct effects on conservation and regeneration of water
source environments, will construct new arrangements which are necessary to promote measures centered on water source conservation areas in the prefecture to promote water source environment conservation and regeneration, and so new funds in the amount of approximately 3.8
billion yen per fiscal year, or approximately 19 billion yen over the five-year period, are necessary. For this, Kanagawa Prefecture has levied flat-rate and income-based extra assessments for12) The living environment tax is classified into four types depending on its nature and object of taxation, andthe types are environmental conservation tax, water source environment tax, urban living environment tax,
and urban disaster prevention tax. The water source environment tax is utilized for (1) conservation andregeneration of the natural water-recycling function, (2) reduction of the burden on water source environments, and (3) specific project content and project costs in the overall basin for creating mechanisms to
support water source environment conservation, and Kanagawa Prefecture is making proposals to upstream prefectures concerning water source countermeasures projects.

Global Warming Policy and Local Environment Taxes

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12 Programs of the Five-Year Action Plan
Conservation and Restoration of Forests
１. Promotion of the water catchment forest
development progtam
To
conserve
andrestoreforests
thatnurturerichwater

２. Conservation and restoration measure forthe special protection area of the
Tanzawa-Oyama mountain range
３. Valley forest development program
４. Promotion of removal of the thinned wood
５. Support for regional water catchment
forest development
Conservation and Restoration of the Rivers
６. Promotion of improvement measures fornatural purification functions of the rivers
and channels

To
conserve
andrestoreclean
watersources

Conservation and Restoration of the Ground Water
７. Promotion of ground water conservation
measures
Reduction of Load on Water Source Enviroument
８. Promotion of the public sewer system in thewater catchment areas around the prefecture’s dams
９. Promotion of individual sewage treatment
tank installation in the water catchment areas around the prefecture’s dams

Review of the programs
Examination of the effectsof the programs
10. Joint research on the environment of the Sagami
River system
11. Monitoring of the water
enviroment
Evaluation of the programs
12. Creation of a new system for conservation and restoration of the water source
environment with the public participation

Programs that support conservation and restoration of thewater source environment

Stable supply of quality water

Public participation andreflection of their will

8.7 million citizens of Kanagawa Prefecture
Source : Kanagawa Prefectures website

Figure 1 : Five-year Action Plan and 12 Projects

residents tax since FY2007. The prefecture established the Kanagawa Prefecture Water Source
Environment Conservation and Regeneration Project Account as a new special account to maintain transparency in the usage of the tax revenue, and in this special account, created the
Kanagawa Prefecture Water Source Environment Conservation and Regeneration Fund.
Compared to other prefectures engaged in projects using tax measures for the purpose of forest
conservation, etc., Kanagawa Prefectures initiatives are distinguished by their promotion of comprehensive efforts for water source environment conservation and regeneration, such as household wastewater policy and groundwater conservation, in addition to forest conservation.
Moreover, the initiative is structured around three pillars−the plan, the tax and prefectural resident participation, and with regard to prefectural resident participation in particular, the intention
is to protect the water source environment with diverse involvement by the prefectural residents
by starting “prefectural residents meetings.” In the plan that is being promoted at the prefecturalresidents meetings, a stance of adaptive management is consistently applied.

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The first outstanding characteristic of Kanagawa Prefecture is that it produced a specific proposal for a living environment tax as a result of its own study on how to design such a prefectural
tax. Secondly, the scale of the financing is enormous compared to that of other prefectures. Thisis the result of calculation of the tax revenue required for implementation of the necessary projects on the planned scale, and this was a pioneering undertaking in the sense that residents wereclearly shown the basis for the tax calculation and then requested to pay. Thirdly, the tax includes
an extra assessment for the residents tax as a percentage of income. Because the tax has thenature of an earmarked tax, it is impossible not to note the benefit-reflecting relationship, but tothe extent that it is a tax, the taxpayers ability to pay was necessarily taken into considerationin establishing this tax. Fourthly, a consensus was reached within the prefectural government on
the policy by working out differences among the departments in a horizontal fashion rather than
through conventional vertical relationships, and by involving all departments, with the planning
coordination bureau at the center, rather than having a specific department in charge of, for example, forestry policy. Fifthly, “prefectural resident participation” was instituted not only in the policy and the tax introduction stage but also following that as well by creating prefecturalresidents meetings as places for discussion. In light of these outstanding characteristics,
Kanagawa Prefecture has been highly praised for its initiatives in actively creating a model for a“participatory tax.”
Because the residents of Kanagawa Prefecture view the water environment problem as theirown problem and know the actual condition of the water source environment, it is important tothem to discuss what sorts of costs to bear for water usage as well as the necessity of bearing thecosts on the benefit-reflecting principle, while remaining particularly aware of water source environment conservation for residents in downstream areas who are distant from water sources.
The term of the taxation is three to five years (approximately five years) so that the progressof the projects can be checked at fixed intervals and a comprehensive review of the system canbe carried out, based on the condition of the forest environment and the demand for financing13).
Many local governments pass ordinances to establish a management fund which reserves the tax
revenue, simultaneous with the enactment of the forest and water source environment tax.

5. Cost-sharing and Participation through Tax and the Future
Forest and water resource environment tax is a new source of tax revenue which seeks to secure part of the cost of forest and water source environment conservation from the local resi13) This applies the idea that “it is appropriate to establish a period for a given tax, as a rule, given the possibility of changes in socioeconomic conditions or the national economic policy”, which are matters to beconsidered when establishing a new discretionary tax.

Global Warming Policy and Local Environment Taxes

37

dents. How should we interpret the significance of this tax, which has spread to prefectures
across the country ? First, it appears that the devastated condition of the forests and the need forconservation has come to be widely recognized by the people. Moreover, the deepening of residents understanding of the tax during the process of instituting it played a large role in the formulation of “participatory tax.” Second, following the effectuation of the Omnibus Decentralization
Act, the forest and water source environment tax and the industrial waste tax have become typicalexamples of new local taxes. Third, these taxes indicate the progressiveness of local areas withregard to environmental measures.
The forest and water resource environment tax may be understood as a tax that is aligned withthe actual conditions of the local area, with the goal of protecting the forests through prefecturalresident participation. The discussion on the introduction of the forest and water resource environment tax provided an opportunity to boost residents sense of participation in self-government
because the residents who themselves bear the tax became more aware of the significance of thetax, the relationship between benefits and costs, and the role of local administration as well as therole of the residents themselves in problem solving. To secure this “participatory tax,” first theusage of the tax revenue is disclosed by setting up a “Forest and Water Resource Environment
Conservation Fund” as a fund for forest and water resource environment conservation projects
newly implemented using proceeds from the forest environment tax to separate the new projects
from the existing projects and by establishing a new budget item for fund reserves, appropriations, and expenditures. Second, by establishing a steering committee for the forest and water resource environment conservation fund, the system incorporates the participation of prefecturalresidents from the set-up stage through the fund usage stage because resident participation issought when determining the usage of the funds and residents opinions are reflected, via thesteering committee, in the forest and water resource conservation projects and in improvementsin the new tax system. The significance of this “participatory tax” in Kanagawa Prefecture is thatit incorporates transparent discussion and mechanisms for each process, from decision-making on
the usage of tax revenues to ex-post evaluations, and residents are able to “participate” in those
processes.
And more distinctive features are discernable in Kanagawa Prefecture’s water source environment tax than in such taxes in other prefectures. Because Kanagawa Prefecture’s initiative ispremised on prefectural resident participation, it is important that discussion proceeds only after
disclosure of information that will enable the residents themselves to select the tax and decide on
the best way to apportion the burden and after demonstration of a need for the projects, the necessary amount of funds, and the grounds for having taxpayers bear the cost burden. Kanagawa
Prefecture’s initiative is pioneering in that it asks residents to bear the cost only after clearly38

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demonstrating the basis for calculation of the tax amount, which was arrived at by calculating thecost of the projects deemed necessary and the anticipated revenue from the new tax. Kanagawa
Prefecture’s initiative for the participatory tax can be said to represent a turning point for local
governments because it represents a new type of policy formation and is positioned as an administrative reform which emphasizes information disclosure and participatory processes, including
the policy formation process.
In Japan, the Omnibus Decentralization Act has become a driving force for the establishmentof independent local taxes across the country. Local environment taxes boost resident
taxpayers sense of participation in local government administration because they are aware of
the tax mechanism and revenue usage on a regular basis and there is a clear relationship between
the beneficiaries and the payers, and as a result, this contributes to the formation of a democraticsociety in regional areas. The forest and water resource environment tax is one economical system for applying environmental conservation and environmental management that is grounded in
the inherent characteristics of the prefectures, cities, towns, and villages, and it transcends thelimitations of conventional regulatory-type environmental policies. It also represents a new effort
to take a basin-wide approach to water quality problems.
A benefit of the discussion on introduction of a new forest and water resource environment tax
is that it aroused awareness of the importance of sustainable basin governance through forest andwater resource conservation conducted by the residents. Discussions are held on the forest andwater resource environment tax in Kanagawa Prefecture under the name of “living environmenttax” This opening of the policy formation process to the public and seeking the opinions ofprefectural residents is no more and no less than an indication of true administrative and financial
reform toward a local area rooted in “participation.” In Kanagawa Prefecture in particular, talks
are held among stakeholders at town meetings to work toward the realization of a better society,and discussions start with the relationship between “choices and costs” in regard to participation
with its attendant responsibilities and fair cost-sharing within the overall framework. Residents
participation in specific policy formation processes can be regarded as a new turning point for local
government, as reforms for decentralization are promoted and interest grows even greater inlocal self-reliance and autonomous operation.
An important element in building a sustainable society in a local area is clarification of the costsharing and the rules of participation, which should be grounded in local revitalization and environmental regeneration. The discussions in Japan on forest and water resource environment tax
suggest new ways for local governments to involve residents in the mechanisms of cost-sharing,with government administration taking the lead.

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39

References
Fujita, Kaori. 2001. “Kankyou zeisei kaikaku no kenkyuu” (Research on environmental tax reform). Minerva
Publishing.
2005. ‘Evaluating Cost Sharing for Sustainable River Basin Management’. In Promoting
Sustainable River Basin Governance : Crafting Japan-U.S. Water Partnerships in China, edited by J. L.
Turner and K. Otsuka. IDE Spot Survey No. 28, IDE-JETRO.
2008. ‘Ryuuiki gabanansu notameno hiyoufutan to sanka − nihon ni okeru shinrin suigen
kankyouzei no kadai’ (Cost-sharing and participation for basin governance : Issues in forest and water
source environment tax in Japan). In “Ryuuiki gabanansu−chuugoku / nihon no kadai to kokusai kyouroku
no tenbou” (Basin governance : Issues in China and Japan and prospects for international cooperation), edited by Kenji Otsuka. Ajiken Series No. 9 : 173213. Institute of Developing Economies.
2009. ‘Ryuiki gabanansu to suigen kankyou hozen−shinrin suigen kankyouzei no ‘hiyou futan’ to‘sanka’ ga shisa suru mono’ (Basin governance and water resource environment protection−Suggestions
from ‘cost sharing’ and ‘participation’ in forest and water resource environment tax). In Kankyou seisaku
244, edited by Toru Torotomi, et al.,no porishii mikkusu (Policy mix of environmental policy), pp. 218Kankyou gabanansu sosho dai 7 kan (Environmental governance series vol. 7). Minerva Publishing.
OECD. 2010. “OECD Environmental Performance Reviews : Japan 2010”. OECD Paris.
Reference Websites
Websites of cities, prefectures, and government ministries and agencies in Japan.

This work was supported Grants-in-Aid for Regional study by Sustainable Society and the Future at St.
Andrew’s University.
(2011年５月17日受理)

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Global Warming Policy and Local Environment Taxes :Focusing on the Development of Forest andWater Resource Environment Taxes in Japan

Kaori FUJITA

For effective measures against global warming given the current demand to shift to a lowcarbon society and for policy measures that will simultaneously achieve the twin policy goals ofenvironmental conservation and economic development, we must implement a policy mix thatuses economic means by combining economic means with other policy means including autonomous means and regulatory means. Economic means, which are premised on market mechanisms, use economic incentives including tax treatment and subsidies to induce behaviors in eachactor, such as curbing of emissions, as a result of rational economic decisions, and it is anticipatedthat economic measures will provide effective economic support for global warming policy. In
many European countries, there are already taxes on gasoline, coal, and natural gas, etc., and acarbon tax has been introduced in order to restrain emissions of CO2 that result from consumptionof the above fuels.
In contrast, Japan has not yet introduced a carbon tax at the national level. In Japan, while debate continues on the usage of economic measures in the national environmental policy by introducing a carbon tax as a global warming policy or creating of an emission trading system, it is the
local governments that are taking the lead in actual implementation of economic measures by introducing industrial waste taxes, forest and water source environment taxes, and so forth.
At the local government level, prefectures are increasingly introducing independent forest andwater source environment taxes for the purpose of forest development and water source environment conservation. This is occurring in a context where water issues are growing increasingly
serious around the world and the world’s forests continue to decrease and deteriorate ; it has been
pointed out that these phenomena are closely linked with the global warming problem, and so attention is being paid to the role filled by forests, as absorbers of CO2 , in the resolution of the
global warming problem as well as to the public benefits provided by forests.
This paper discusses about the development of forest and water resource environment taxes atthe local government level in Japan, especially case of Kanagawa Prefecture.