# Chapter 2

# World Trends in the Creation of a Low Carbon Society

As we have seen in Chapter 1, global warming is threatening the very foundation of human existence. In the search for a solution to this problem, countries in the world found themselves at a tipping point in human history. They have started to make deep cuts in GHG emissions resulting from fossil fuel consumption, to keep the world's overall emissions at the same levels that can be absorbed by nature, and to create a truly affluent society. In other words, they have taken their first step towards the creation of a low carbon society. Our economic society, which was founded on material expansion, is now headed in a very different direction. This chapter examines how countries in the world are working towards the creation of a low carbon society, from the perspectives of a market-oriented economy and people's livelihoods.

## Section 1 Global Warming and Market-oriented Economy

The Stern Review, published in the United Kingdom in 2006, gave a thorough analysis of the relationship between global warming measures and the economy. The report pointed out that climate change was the consequence of emitters' failing to pay the cost of GHG emissions and that change to the economic system is inevitable. It said that global warming has the characteristic of being "...global in its causes and consequences," and that recognition of the problem by the world and collective, cooperative measures will bring substantial economic benefits. The report also warned that if countermeasures were delayed, the cost would be tremendous. It underscored the importance of taking immediate action.

Today, as the world is gaining more awareness of global warming and other environmental problems, the framework of a sustainable society is gradually taking shape. Countries everywhere are making efforts to add economic values without imposing additional impact on the environment. Using a more proactive approach, some countries started to pursue activities aimed at creating a beneficial cycle between the environment and the economy. In other words, improving the environment can stimulate economic growth and revitalizing the economy can improve the environment. This section will explore such trends in the world.

## 1 Expansion of the Eco-business Market ___

## (1) Growth of the Eco-business Market

In recent years, environment-related businesses are booming. According to an estimate by the Environmental Business International (EBI) in the United States, the global eco-business market was approximately 692 billion dollars in 2006. It has grown about 1.4 times in the decade since 1996 (Figure 2-1-3). Eco-business has a long history in the developed world (including the United States, Western Europe, and Japan), which makes up more than 80% of the market. Eco-businesses in these regions saw much growth in the 1980s, especially in the areas of air pollution, water treatment, and waste, due to the enactment of environmental laws and regulations. In recent years, while these areas have had only relatively moderate growth, areas in energy efficiency and renewable energy aiming at global warming mitigation have become the driving force of growth. Eco-businesses have also made inroads in developing countries, such as in Asia, to offset the growing environmental impact that accompanies the countries' economic growth. Their eco-business market is expected to grow at about 10% annually from now on. According to the EBI estimate, the world's eco-business market has grown 4.7% in 2006 and it will continue to expand in the future.

Based on the OECD environmental categories, the Ministry of the Environment conducts a survey of the sizes of the market and the workforce of eco-businesses in Japan. The result shows that the size of the eco-business