197

Regional Value of Provisioning andRegulating Services from Water in Japan
Tomohiro OKADERA1* and Masataka WATANABE2
1

Center for Regional Environmental Research, National Institute for Environmental Studies,
16-2 Onogawa, Tsukuba, Ibaraki 305-8506, Japan
2
Keio University,
5322 Endo, Fujisawa, Kanagawa 252-0882, Japan*e-mail: okadera@nies.go.jp

Abstract
This study aims to demonstrate factors of changes in ecosystem services in Japan by quantifying thevalue of those ecosystem services. We focus on ecosystem services related to water and evaluate their economic value by region in 1985, 1995 and 2005. Our results show their economic value in Japan to have nearly
doubled from 1985 to 2005. In addition, we found that regulating services, especially flood control, accountfor high percentages of the total economic value (TEV) and have become the major factor boosting TEV from1985 to 2005 in Japan.
Key words: economic value, ecosystem service, provisioning service, regulating service, water

1. Introduction
The Millennium Ecosystem Assessment (2005; MA)
explained the linkage of biodiversity to ecosystem services by identifying an asymptotic relationship between
biodiversity and ecosystem functions, and developed aframework for ecosystem assessment at the global andsub-global scales. Subsequently, the Japan Satoyama
Satoumi Assessment (2010; JSSA) applied that framework to the evaluation of ecosystem services in Japan,
divided into six regions. The JSSA concluded that theresiliency of ecosystem services had been declining due
to changes in the satoyama and satoumi over the last fifty
years and suggested the creation of a new “commons” forsustainable development. However, the JSSA did notassess the value of the ecosystem services, but posed it asa future issue. In addition, the MA also did not pay muchattention to the economics of ecosystem change, though
it mentioned the importance of the value of ecosystemservices. Therefore, an international initiative named the“Economics of Ecosystems and Biodiversity” (TEEB,
2010) developed an approach to evaluating the value of
ecosystem services.
For valuation of ecosystem services, it is necessary to
identify the processes, functions, services, benefits andvalue of ecosystems (TEEB, 2010). However, ecosystems consist of various elements and components, so it isnext to impossible to define all of them. Therefore thisstudy focuses on ecosystem services related to water,such as water supply, flood control and so on, for two
Global Environmental Research
16/2012: 197-203
printed in Japanreasons. The one is that water is suitable for evaluating
ecosystem services comprehensively because it is the
only component related to all classifications of ecosystem services such as provisioning, regulating, culturaland supporting services (Millennium Ecosystem Assessment, 2005). The other is that water is one of the mostimportant common properties in Japan, so it is beneficial
to analyze changes in water-related ecosystems for theconsideration of the new commons (Japan Satoyama
Satoumi Assessment, 2010).
Against this background, this study aims to evaluate
temporally (1985, 1995 and 2005) the value of ecosystemservices of water and analyze changes in them by prefecture in Japan. This paper first explains the methodology used to define ecosystem services and quantifies
them in multi-year intervals. Finally, we discuss our research and provide conclusions.

2. Methodology
2.1 The processes, functions, services, benefits andvalues of water ecosystems
Ecosystem services are defined by identifying processes and functions (TEEB, 2010), thus we first identify
them for water (Fig. 1). On the basis of hydrology, precipitation in forests is where the whole process of water
starts and some water goes into the evapotranspiration
process while the rest is stored by the forests. Then a partof the stored water is withdrawn for irrigation, industrial
use and tap water for households and livestock whereas©2012 AIRIES

198

T. OKADERA and M. WATANABE

Fig. 1 The processes and functions of water (based on annual water flow).

Table 1 The processes, functions, services, benefits and values of water ecosystems.
Ecosystem process
Precipitation to forests

Ecosystem function
Supporting primary
production and creatures inforests

Ecosystem service(Supporting service)

Benefit(Undefinable)
Saving from damage
caused by temperature(energy) change
Avoiding various losses
from floods

Value(Undefinable)

Evapotranspiration of forestsand farmland

Evapotranspiration

Temperatureadjustment

Water storage of forests

Water retention

Flood control

Precipitation onto farmland
and withdrawal

Provisioning water

Water supply

Net storage increase and net
increase of water resources

If the indices indicate a negative trend, we learn about a tendency toward water shortage. On the other
hand, if they indicate a positive trend, the water has a potential for other ecosystem functions andservices.

the rest is stored (net storage increase). The withdrawal
from farmland, industries, households and livestock andprecipitation into farmland are discharged via consuming
processes, such as production of crops, livestock andindustrial goods and daily life activities. Finally the discharged water is recharged as net increase of water
resources. Furthermore we define the linkage amongprocesses, functions, services, benefits and values of theecosystem (Table 1). Then we estimate their value, suchas that of water supply, flood control and temperatureadjustment by using the approach described below.
2.2 Quantification of the physical ecosystem services
of water
We define the physical ecosystem services of water
based on the water budget method as follows.

Water use

Energy price-basedvalue
Avoidance
cost-based value
Use value of water

2.2.1 Precipitation into forests and farmland
Precipitation into forests is calculated by multiplying
the forest or farmland area by annual precipitation. We
estimate the annual precipitation based on observational
data by prefecture. However, the annual precipitation
based on a simple average of observed values possibly
has issues with conformity because the numbers ofobserved points differ by prefecture and time of year.
Thus that has to be estimated on the basis of the meteorological data named “Mesh Climatic Data 2000”(Meteorological Agency, 2002), which are data on annual
precipitation in 1km grids based on observed values for
thirty years in Japan, by using the deviations between theobserved value of a monitoring point in a target year andthe data on the mesh where the monitoring point existed
in “mesh climatic data 2000.”

Value of Ecosystem Services from Water in Japan199

2.2.2 Evapotranspiration in forests and farmland
We define evapotranspiration by precipitation andevapotranspiration rates, which are parameters dividing
evapotranspiration (mm) by precipitation (mm), in forests and farmland. In general evapotranspiration data are
categorized into three groups: real monitoring data, estimated data and satellite data. The annual evapotranspiration of some forests in Japan was monitored at
twelve sites from 1931 to 1988 (Kondo & Watanabe,1991). The monitoring data are the most reliable, but they
are very local and it is impossible to apply them directly
to the whole of Japan, which of interest here. Furthermore, Kondo et al., (1992) has attempted to estimate adataset on regional evapotranspiration by the heat budget
method, based on the local monitoring data of 1986-1990,
but it is difficult to collect regional evapotranspiration
data of the same quality in Japan since the dataset lacks
data from eight prefectures. Thus we use satellite data
(MOD16) of MODIS (Sun et al., 2009; Wang et al.,2011) to avoid the issue of the regional gap in the data.
However, we can get MOD16 from 2000 to 2006. Thus,
we estimate the evapotranspiration in 1985 and 1995 byusing the rate of change of pan evaporation, for example
we estimate the rate in Hokkaido in 1985 as 1.2 since thedaily pan evaporations in Hokkaido were 2.3 mm in 2000
and 2.7 mm in 1985, for the year based on the targeted
years, (Meteorological Agency, 2001, 2007a), monitoredfrom 1961 to 2002, on the basis of the year 2000
(Meteorological Agency, 2007b).

industrial shipment by sector, then define tap water use,
industrial water use, withdrawal and recycled water by
their respective shares against water requirement. In asimilar way, the items of industrial water output are also
calculated by their share of evaporation, raw material
water, reclaimed water and industrial wastewater against
water requirement.

2.2.3 Water storage of forests and runoff fromfarmlandWater storage of forests and runoff from farmland aredefined by subtracting evapotranspiration from the precipitation into forests and farmland.

2.2.8 Net storage increase and net increase of water
resources
The net storage increase of forests is defined by subtracting withdrawal from the water storage of forests. In
addition, withdrawal is found by the summation ofirrigation water, industrial withdrawal from surface andground water, withdrawal by households and water for
livestock. Furthermore, the net increase of water resources is defined by adding the effluent to the net storage increase of forests. The effluent consists of runoff
from farmland, agricultural effluent, industrial wastewater, domestic wastewater and livestock wastewater.

2.2.4 Irrigation water flow
Annual irrigation water is estimated by multiplying
farmland area by the withdrawal per farmland area. The
withdrawals per farmland area are defined by the reported data (Water Resource Department, Water andDisaster Management Bureau, Ministry of Land, Infrastructure, Transport and Tourism, 2011). Then we assume
a part of the irrigation water goes into the evapotranspiration process and the other drains as effluent.
2.2.5 Industrial water flow
Water input to industries consists of tap water supplied by municipal waterworks (hereafter, called tap
water), industrial water supplied by industrial waterworks (hereafter called industrial water), recycled water
recovered in the companies’ own reclamation plants(hereafter called recycled water) and water withdrawn
from ground and surface water, whereas the output isdefined as evaporation, raw material water, reclaimed
water and industrial wastewater. On the basis of statistical data (Ministry of Economy, Trade and Industry, 2011),
we first estimate the total water input by multiplying thevalue of industrial shipment by water requirement per

2.2.6 Domestic water flow
The withdrawal volume for household use is calculated by multiplying the population by annual withdrawal
per capita. Annual withdrawal per capita is the effective
water amount per capita and the withdrawal ratio, whichis the ratio of the amount of water withdrawn against theeffective water amount, (Water Resource Department,
Water and Disaster Management Bureau, Ministry ofLand, Infrastructure, Transport and Tourism, 2011).
Furthermore, we assume the effective water amount isdischarged as domestic wastewater.
2.2.7 Water flow in the livestock sector
Water use for livestock is quantified by allocating thetotal water use of livestock in Japan (Water Resource
Department, Water and Disaster Management Bureau,
Ministry of Land, Infrastructure, Transport and Tourism,
2011) to each prefecture based on the number of livestock (Ministry of Agriculture, Forestry and Fisheries,2007). In addition, we assume the whole of water input
for livestock is discharged as livestock wastewater.

2.3 Valuation of the ecosystem services
Ecosystem services have ecological value, sociocultural value and economic value (Millennium Ecosystem Assessment, 2005). Numerous studies havedeveloped various valuation methods so far and they
reveal the difficulty of estimating ecological and sociocultural value (TEEB, 2010). Thus this study focuses on
the economic value of ecosystem services. Valuation
methods of economic value are categorized as direct
market valuation approaches, revealed preference
approaches and stated preference approaches, and weshould choose and apply a suitable method depending on
the kind of ecosystem services and the object of oursurvey since they each have advantages and disadvantages, such as uncertainties and limitations (TEEB,
2010). Here, we chose the direct market valuation

200

T. OKADERA and M. WATANABE

approach because it has the advantage of being easily
applied to multiple years by using time-series market
data and it suits the objective here. We subsequently
explain the valuation approach for temperature adjustment, flood control and water supply, as below.
2.3.1 Temperature adjustment
Evapotranspiration from forests and farmland serves
ecosystem services as temperature adjustment, and weassume that the people surrounding these forests obtainbenefits of being saved from damage caused bytemperature change. Thus this study defines the value oftemperature ecosystem services based on energy price:
EV TA = EP ×EH ×R (cp, ar)(1)

where EV TA is the economic value of temperature adjustment by prefecture (yen/m3), EP is the energy price(yen/ thousand kcal) of crude oil in Japan (The Instituteof Energy Economics, Japan, 2011) and EH is theevaporation heat of water (2,267MJ/m3). In addition,R(cp, ar) denotes a regional coefficient defined by energy
consumption pattern (cp) and the adjacent rate (ar) between residential or business areas and forests or farmland. The energy consumption pattern is set by statistical
data such as prefectural consumption prices of electricity
or gasoline (Bureau of Statistics, Ministry of Internal
Affairs and Communications, 2011). The adjacent rate is
calculated on the basis of the GIS database (National
Institute for Agro-Environmental Sciences, 2011).
2.3.2 Flood control
Water storage of forests has the function of water
retention and produces ecosystem services such as flood
control. As a result, the people downstream get thebenefits of avoiding loss of life, capital and various
opportunities. Thus the value of flood control is found by
avoidance cost which is one of the cost-based methods:
EVFC = AC × R(2)

where EVFC is the economic value of flood control byprefecture (yen/m3), AC is the avoidance cost of flood
control by dams by prefecture (yen/m3) and R is a regional coefficient. AC is based on the statistical data ofusable capacities and damage reduction amounts by flood
control dams (Japan Dam Foundation, 1987, 1996, 2006).
R is the adjacent rate between forests and residential or
business areas or farmland (National Institute for AgroEnvironmental Sciences, 2011).
2.3.3 Water supply
The economic value of water supply is defined by theuse value of water as shown in Table 1; however, thevalue differs depending on usage. Therefore, this study
estimates the value of irrigation water, industrial waterand tap water separately. The value of irrigation water iscalculated by the water charge and fee for water withdrawal called “ryusui senyuu ryou” (RSR) for farmland.

The water charge is estimated by using the farmland area
and water charge per unit farmland area (Ministry ofAgriculture, Forestry and Fisheries, 2004, 2011). RSR isenacted by regulations based on the River Law by
prefectures in Japan. Thus we built an RSR database bysurveys of literature on all of the regulations. In addition,
we assumed the value of precipitation onto farmland tobe the same as that of irrigation water.
The price of industrial water differs with the source ofwater. In the case of using tap water, we apply water rates
by prefecture (Ministry of Health, Labour and Welfare,
1987, 1997, 2007). When we use industrial water, we
adopt the unit price of water supply of an undertaking of
the industrial water system by prefecture (Ministry ofInternal Affairs and Communications, 1986, 1997, 2007).
The value of withdrawal by industries is defined by RYR
for industries based on the database as above. In addition,
the value of recycled water is assumed to be zero, because we could not obtain cost data on water recycling
systems.
The value of domestic water is calculated by water
rates by prefecture (Ministry of Health, Labour andWelfare, 1987, 1997, 2007). In addition, these water rates
are adopted as the value of water used by livestock, since
stock-raising farmers use tap water for their business.
2.3.4 Limitations and conditions
This study does not assess the value of precipitation
into forests because that has a lot of ecosystem services,
so it is impossible to define the value uniquely, though it
is one of the most important ecosystems in terms of supporting services. Furthermore, we don’t define the valueof net storage increase and net increase of water resources where they may have non-use value, since it isdifficult to identify their functions, services and benefits
as ecosystems. However, the indices are useful to theunderstanding of the physical impacts of regional water
shortages or droughts.

3. Results and Discussion
The total economic value (TEV) of ecosystem services of water in 2005 had increased about twofold from1985 to 2005 as shown in Fig. 2, where the TEVs were
12.8, 15.9 and 25.4 trillion yen in 1985, 1995 and 2005
respectively. During these two decades, the economic
value of flood control consistently accounted for large
shares of the TEV (44%-70%). The economic value oftemperature adjustment held second place in 1985 (36%)
and 2005 (24%) in the TEV whereas that of 1995 wasindicated at 9% because the price of crude oil in 1990
was very cheap, around 1.19 yen/thousand kcal in 1995,
as opposed to 4.34 yen/thousand kcal in 2005. The shareof the economic value of water supply against TEV was
13%-20%, and the economic value was nearly flat.
Table 2 shows that the spatial distribution of the TEV
in Japan changed in the period between 1985 and 2005.
In 1985, Oita Prefecture held first place in TEV with ashare of 7% of the whole of Japan, but the TEV ofValue of Ecosystem Services from Water in Japan

Kagoshima Prefecture in 1995 (9%) became the mostvaluable in Japan, and then that share expanded to 24%of the TEV in Japan by 2005.
At the same time, temporal changes in TEV also differed by prefecture. The temporal change rate is definedby average rate of change from the epoch (1985 or 1995).
In the period of 1985-1995 the TEV of Kochi prefecture
ballooned up with a growth rate of 121.1% per year,
whereas that of Okinawa Prefecture dropped down with adecreasing rate of –7.3% per year. Similarly during theterm of 1995-2005 the TEV of Saga Prefecture significantly grew, with a growth rate as 55.1% per year
whereas that of Oita Prefecture dropped, with a decreasing ratio of –8.6% per year.
Here, we itemize the TEVs of the five prefectureswith notable changes as above, i.e., Kochi, Saga, Oita,

201

Kagoshima and Okinawa, in Fig. 3. Our results show theprefectures to have common tendencies so that changes
in the economic value of flood control correlate closelywith the changes in TEV in all of the prefectures. Furthermore, it reveals that the TEV and changes in TEV as
shown in Table 2 are the result of changes in the value offlood control, because the value of flood control in thehighest prefectures, Oita in 1985 and Kagoshima in 1995
and 2005, was the highest in 1985, 1995 and 2005,
respectively. In addition, the highest growth rates in
Kochi in 1985-1995 and Saga in 1995-1985 were clearlycaused by rapid increases in the value of flood control,
whereas the most negative growth rates in Okinawa in
1985-1995 and Oita in 1995-2005 were caused by a sharp
decline of the same.

Fig. 2 The total economic value of ecosystem services from water in Japan (billions of yen).

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

1985 1995 2005 1985 1995 2005 1985 1995 2005 1985 1995 2005 1985 1995 2005
Kochi

Saga

Tempreture adjustment

Oita
Flood control

Kagoshima
Water supply

Fig. 3 Itemized TEV for five prefectures in Japan.

Okinawa202

T. OKADERA and M. WATANABE
Table 2 Distribution and temporal change of the TEV of ecosystem services from water in Japan.

Hokkaido
Aomori
Iwate
Miyagi
Akita
Yamagata
Fukushima
IbarakiTochigi
Gunma
Saitama
Chiba
Tokyo
Kanagawa
NiigataToyamaIshikawa
Fukui
Yamanashi
NaganoGifu
Shizuoka
Aichi
Mie
Shiga
Kyoto
Osaka
Hyogo
Nara
Wakayama
Tottori
Shimane
Okayama
Hiroshima
Yamaguchi
Tokushima
KagawaEhime
Kochi
Fukuoka
Saga
Nagasaki
Kumamoto
Oita
MiyazakiKagoshima
Okinawa
Total

1985
4%
2%
2%
2%
1%
1%
2%
3%
2%
2%
2%
4%
3%
2%
3%
1%
1%
1%
1%
3%
2%
2%
3%
3%
2%
1%
2%
4%
1%
1%
1%
1%
1%
2%
1%
1%
1%
1%
1%
7%
2%
2%
2%
7%
1%
3%
5%
100%

Distribution of TEV
1995
3%
2%
1%
1%
1%
1%
2%
4%
1%
1%
2%
2%
2%
2%
4%
1%
1%
8%
1%
2%
1%
1%
2%
2%
1%
1%
2%
4%
2%
2%
1%
1%
1%
1%
1%
1%
5%
1%
6%
4%
1%
1%
1%
7%
1%
9%
1%
100%

4. Conclusion
This study has investigated approaches to valuation of
ecosystem services and applied them to analyze ecosystem services of water by prefecture in Japan temporally.
Our results show the economic value in Japan has nearly
doubled from 1985 to 2005 and the values of regulating
services such as flood control and temperature adjustment have a large share in Japan. In addition, it reveals
that regulating services, especially flood control, accountfor high percentages of the TEV and have becomes the
major factor boosting the TEV from 1985 and 2005 in
Japan. Therefore it is important to reflect the value of

2005
2%
3%
1%
1%
1%
1%
2%
2%
1%
1%
3%
2%
2%
1%
6%
1%
0%
3%
2%
2%
1%
2%
2%
1%
1%
1%
1%
3%
1%
3%
1%
1%
1%
1%
1%
1%
2%
1%
1%
3%
4%
1%
1%
1%
1%
24%
1%
100%

Temporal change rate of TEV
1985-1995
1995-2005
-15%
45%
62%
120%
0%
52%
-34%
104%
44%
66%
-10%
73%
27%
14%
46%
7%
-50%
214%
-24%
122%
-21%
166%
-24%
55%
8%
37%
-5%
47%
75%
131%
-8%
20%
-32%
16%
973%
-47%
-14%
337%
-23%
87%
-34%
116%
-19%
192%
-20%
78%
-30%
-3%
-10%
-22%
45%
-27%
7%
17%
53%
13%
205%
-36%
147%
137%
30%
245%
-19%
130%
-28%
122%
4%
41%
-48%
39%
-6%
178%
479%
-31%
-32%
151%
1211%
-68%
-31%
19%
-23%
551%
-26%
-14%
-20%
15%
23%
-86%
-51%
211%
212%
339%
-73%
-1%
25%
59%

regulating services in the creation of the new commonsand decision making at the national and regional levels in
the future.

Acknowledgments
This study was supported by the Environment
Research & Technology Development Fund of the
Ministry of the Environment, Japan, entitled “Ecosystem
Services Assessment of Satoyama, Satochi, and Satoumi
to Identify a New Commons for a Nature-Harmonious
Society (E-0902).”

Value of Ecosystem Services from Water in Japan

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Tomohiro OKADERA
Tomohiro OKADERA is a researcher at the Center
for Regional Environmental Research, National
Institute for Environmental Studies (NIES). He
specializes in environmental economics withspecial interest in the interrelationship between
socio-economic activities and water ecosystems.
He has developed a water inventory method for the Yangtze River andTokyo Bay area using input-output analysis models, water footprint
analysis of energy production in Japan and China, and valuation of water
ecosystems in Japan to date. At present he is attempting to apply theseapproaches to other Asian countries such as Mongolia and Thailand.

Masataka WATANABE
Dr. Masataka WATANABE is a Professor at theGraduate School of Media and Governance, Keio
University, Japan. He is also a Visiting Professor
at the Institute of Advanced Studies, United
Nations University. He has been Chairman of the
UNEP Asia Pacific Adaptation Network since
October 2009. Prior to joining Keio University, he was Director of theDivision of Water and Soil Environment at the National Institute forEnvironmental Studies, Japan, and was also appointed Professor at theGraduate School of Agricultural and Life Sciences, the University ofTokyo. He participated in the UN Millennium Ecosystem Assessment from2000 to 2004 as Coordinating Lead Author of the Sub-Global Assessment.
He is a member of numerous National Councils and Committees in theJapanese Government. He was awarded the Tien Shan Prize from theGovernment of China in 2003 for his scientific contributions. He received
his PhD in Civil and Environmental Engineering from the Massachusetts
Institute of Technology. He has authored more than 120 peer-reviewed
international journal articles and two books.

(Received 10 May 2012, Accepted 1 August 2012)