## (3) Growth potential as a member of the Asian region

The Asian region, which has close geographical and economic ties to Japan, accounts for over half of the world’s population and is seeing rapid economic growth, while it is confronted with serious environmental problems, including greenhouse gas emissions, air pollution, water contamination, inappropriate disposal of wastes and deforestation. If Asian countries under such conditions are to achieve sustainable development, Japan’s experiences and wisdom to have overcome pollution problems while sustaining economic growth should be shared by Asian countries and it is also necessary for Japan to serve as a bridge for growth in Asia. It is deemed feasible to apply the strengths of Japan’s environmental technologies in a proactive manner in this endeavor.

Figure5-1-5 Trends in Japan's Total Expenditure on R&D and Expenditure on R&D in the Environmental Field

Note: Of environmental R&D expenditures, those between 1998 and 2000 are figures under the category "environmental conservation" and those between 2001 and 2008 are figures under the category of "environment"

Source: Prepared by Ministry of the Environment based on "Survey of Research and Development 2009" of Ministry of Internal Affairs and Communications

## Section 2 Sound Material-Cycle Society Business for Sustainable Economic and Social Activities

## 1 Expanding Sound Material-Cycle Society Businesses

The Fundamental Plan for Establishing a Sound Material-Cycle Society, adopted in March 2008 by Cabinet decision, defines a sound material-cycle society as “a society in which the amount of new resource extraction is minimized at all stages of social and economic activities, from resource extraction through production, distribution, consumption and disposal, through a range of measures such as reduction of waste generation and use of circulative resources, thereby minimizing environmental loads.” Businesses contributing to the building of the sound material-cycle society are called sound material-cycle society businesses. This section looks at the expansion of sound material-cycle society businesses.

The idea of “decoupling” is drawing attention in the environmental field as well. The term decoupling means “separation.” When used in the environmental field, it indicates the desirable situation where the rate of increase in environmental loads is lower than the rate of economic growth. We can say that the world in the past, particularly during the $ 20^{th} $ century, has achieved economic growth by increased consumption of resources and intensification of environment loads through mass production, mass consumption and mass disposal. If we turn our attention to the separation of vectors of economic growth and environmental loads that have grown almost in tandem, or to materials and resources, it becomes evident that the important thing is to have lower increase in the input of natural resources than the economic growth rate to create a decoupling situation.

Figure 5-2-1 shows trends of Japan’s gross domestic product (GDP), the input of natural resources, etc. (quantity of domestically produced and imported natural resources and imported products), the cyclical use rate and final disposal amount indicator, the market size for sound

Figure5-2-1 Trends of Economic Indicators and 3R Indicators (1990=1.00)