Table5-4-1 Environmental Industry Promotion and Export Strategies of Other Countries

Country	Denmark	Finland	Spain	Germany
Name	Eco-efficient technology promotion strategy	Technological development program: Business opportunities in mitigating climate change	Technological research promotion program (priority areas in environmental innovation)	German environmental technology master plan
Description	○ Nine initiatives to promote eco-innovation
① Building up partnerships for innovation
② Specific and active export promotion linked to the government's diplomacy, etc.
③ Promotion of environment-friendly R&D at research institutions/universities
④ Ministry of the Environment's initiative to promote eco-efficient technology
⑤ Promotion of eco-efficient technology at the EU level
⑥ Promotion of introduction of climate-related and energy technologies
⑦ Promotion of livestock farm-derived technology to reduce environmental loads
⑧ Qualitative and quantitative conservation of the water environment
⑨ Promotion of technology to reduce contamination in the environment	○ Program to identify and maximize opportunities for Finnish companies in the international market in technologies and services related to climate change mitigation
○ Prioritized budget allocation to clean energy fuel, technology to enhance energy efficiency and technology to reduce greenhouse gases other than carbon dioxide (budget of 70 million euros executed between 2004 and 2008)	○ 5 areas of climate change, sustainability of cities, improvement of production processes, water management/conservation and energy designated as priority areas, and identified under the technology research promotion plan, etc.
○ The plan's targets include the participation of Spanish companies in international R&D cooperation	○ In order to enhance Germany's position in the environmental technology market, the master plan shows the direction of environmental technology development policy for each area, including water-related technology, technology for enhancing resources productivity, and technology to prevent climate change
○ The master plan emphasizes the high level of environmental regulations as Germany's competitive edge in the global market, showing the policy of creating demand for environmental technology by "exporting" Germany's advanced environment policy within the framework of support for system construction in developing countries not limited technological development in each area
○ Government-led export promotion structures have been formed (water: German Water Partnership; waste and recycling: ReTECH), backing up German firms' advances into overseas markets as the country as a whole

Source: Prepared by Ministry of the Environment based on OECD Environmental Outlook to 2030, OECD ENVIRONMENTAL INNOVATION AND GLOBAL MARKETS, and governmental websites of countries concerned

bring significant opportunities for the Japanese economy.

As seen in water-related businesses, developing countries, in increasing instances, place comprehensive project orders covering a whole range of construction, fund-raising and operations. While Japan has the world's most advanced element technologies and knowhow, major overseas players are currently controlling the global water business market because Japanese technologies cannot be accepted in most developing countries due to cost reasons and also because Japanese companies owning advanced element technologies and knowhow are not necessarily in full partnership for development of overseas businesses. To cope with such a situation, the "Global Water Recycling and Reuse System Association, Japan" was established in January 2009 to consolidate Japanese firms' excellent technologies and knowhow as a "system" and acquire cost competitiveness. This initiative is beginning to display a successful showing.

As seen in this example, in order for Japan to strengthen the international competitiveness in the global environmental market that is expected to grow further centering on developing countries, it appears important for individual companies to create new environmental technologies through green innovation and for the public and private sectors and companies to cooperate to bring together their environmental technologies as the “system” to win out international competition.

## 2 Idea of New Economic Development in Consideration of the Global Environment

## (1) Economic development indicators in consideration of the global environment

The root cause for the emergence of global environmental problems lies in that economic activities have grown enormous to overwhelm the capacity of the natural environment that has been previously thought to be infinite. Therefore, in order to realize sustainable development, we need to recognize the finiteness of available resources and environmental capacity and consider how we should conduct economic activities within the limitations. We believe that the environmental industry is capable of not only developing new technologies but also becoming the driving power to transform the economic society into a sustainable one by bringing about changes in conventional production methods and our lifestyles.

The traditional indicator we use in Japan is gross domestic product (GDP) that covers only goods and services traded on the domestic market and does not evaluate the loss or improvement in environment values that do not go through the markets, and thus is not necessary an appropriate indicator to measure the quality and sustainability of life such as welfare and the sense of happiness. Given these considerations, the Organization for Economic Cooperation and Development (OECD), the European Union (EU), the World Bank and some other international institutions as well as NGOs are developing sustainability indicators to supplement GDP for the realization of a low-carbon society and further a sustainable society. In France, the “Commission on the Measurement of Economic Performance and Social Progress” (CMEPSP) was established at the request of President Nicholas Sarkozy under the chairmanship of Professor Joseph Stiglitz of Columbia University. The Commission, noting that GDP has its limitations as an indicator to reflect the well-being, considered an