Figure 1-3-32 Status of Environmental Business DI and Outlook of Environmental Business

Overseas Demand DI

Environmental Business Expected in Six Prefectures in Tohoku Area Top 5 Businesses (by business/by site of headquarters)

(by industries)

All industries	%	Manufacturing	%	Non-manufacturing	%
1	Renewable energy	21.4	1	Renewable energy	15.2	1	Renewable energy	26.0
2	Purification device/plant for soil or water (including purification of groundwater)	11.1	2	Purification device/plant for soil or water (including purification of groundwater)	9.7	2	Purification device/plant for soil or water (including purification of groundwater)	12.2
3	Purification service for soil or water (including purification of groundwater)	10.0	3	Solar power system (associated equipment manufacturing)	9.0	3	Smart grid	12.2
4	Smart grid	10.0	3	Recycled material	9.0	4	Purification service for soil or water (including purification of groundwater)	11.7
5	Solar power system (related equipment manufacturing)	9.1	5	Other business for global warming measures	8.3	5	Solar power system (installation, maintenance, etc.)	11.7

Source: Ministry of the Environment, Survey of the Environmental Economy December 2011

Note: Number of valid responses is 4,176 companies; response rate was 35.1%

and corporations as a whole, the environmental business DI exceeded that of all industries in every timeframe: "right now," "in six months," and "in ten years." This suggests a tendency for further growth in the next decade (Figure 1-3-32).

Regarding environmental industries as a whole, the majority of companies continued to have positive views on development in the days ahead. Currently the field of energy-saving vehicles is considered to be the most developed, both "right now" and "in six months." In the next 10 years, potential was seen in energy-related industries such as renewable energy, smart grids, and rechargeable batteries. The DI of countermeasures against climate change, which is a driving force of environmental businesses, was lower than it was in the previous survey. In particular, in terms of overseas supply and demand, the DI in December 2011 was +9, a decrease from the previous two surveys (+14 in December 2010, and +18 in June 2011), showing the impact of diminishing government support for renewable energy businesses in Europe.

Of all companies, 341 companies, or 8.2%, replied that they want to newly operate or expand their business

in six prefectures in the Tohoku region, indicating 662 environmental businesses. Among the businesses they want to operate, renewable energy (excluding solar power generation) was ranked first, followed by businesses for remediation and cleanup of soil and water including underground water in relation to decontamination and desalination. Also included are energy-related businesses such as smart grids and solar power generation systems.

Critical business judgments are required in industrial firms for decisions on R&D, equipment spending, or employment. Future forecasts always contain uncertainty; therefore, information for mid-term or long-term forecasts should be useful for companies entering into environmental businesses. In addition, in order to realize robust growth of environmental businesses, presentations of policy guidelines for the future, and total support by affiliated industries and the financial sector, are considered to be important.

## 4 Evaluating Interactions between Quality of Life and the Environment

Various parties have pointed out the necessity of evaluating quality of life sustainability in addition to environmental and economic indicators for achieving a sustainable society. Countries around the world have worked to establish indicators that address quality of life. These indicators are actually ranked high among those used to measure environmental, economic, and social sustainability, together with two other indicator groups: indicators related to quality of life, as defined in the OECD's How's Life? published in 2011; and the Green Growth Indicators (GGI) released in 2011. In Japan, consideration of a happiness indicator was included in the New Growth Strategy (approved in a July 2010 Cabinet meeting). In response to this, the government announced a preliminary draft of a happiness indicator in December 2011. The draft is designed to study the feasibility of creating a Japanese

Table 1-3-3 Trial Calculations Reviewing Indicators and Calculation Methods of the OECD's Better Life Index

Revaluation using the 21 OECD indicators	Evaluation using 29 indicators (adding 8 indicators to the 21 OECD indicators shown on the left)
Australia	6.04	Australia	5.87
United States	5.91	Belgium	5.85
Canada	5.88	Japan	5.72
New Zealand	5.85	Canada	5.66
Netherlands	5.6	Sweden	5.66
Belgium	5.55	Switzerland	5.65
Switzerland	5.55	United States	5.57
Sweden	5.55	Denmark	5.56
Iceland	5.34	Netherlands	5.47
Denmark	5.29	New Zealand	5.46
Finland	5.22	Finland	5.46
United Kingdom	5.19	France	5.42
Austria	5.12	Norway	5.3
Norway	5.06	Germany	5.29
Germany	4.99	Iceland	5.22
France	4.99	Austria	5.22
Ireland	4.99	United Kingdom	5.03
Japan	4.86	Ireland	4.79
Spain	4.75	Israel	4.66
Israel	4.75	Korea	4.58
(…)

Calculation formula for the environment and economic policy research:

Indicators in the right-hand column with $ \textcircled{1} $

Standardized value

$ =\left(\text{each evaluated indicator value} - \text{min}\right)/\left(\text{max} - \text{min}\right) \times 10 $

Indicators in the right-hand column with ②

Standardized value

= 10 - {(each evaluated indicator value - min)/(max - min) × 10}

Source: Ministry of the Environment Policy Research on the Environmental Economy 2011

Study of new socioeconomic systems for sustainable development and research for developing indicators that exemplify such a system

Kyoto University (Toru Morotomi), Sophia University (Masaharu Yagishita), and others

Evaluation item
Indicator	21 indicators	29 indicators
Disposable income	①	①
Purchasing power parity (dollars)	①	①
International competitiveness	—	①
Employment rate in the 15-64 age bracket	①	①
Long-term unemployment rate	②	②
Stressful job or not	—	②
Return home exhausted or not	—	②
Number of rooms per capita	①	①
Ratio of homes without bath/shower or toilet facilities (per capita)	①	①
Average life expectancy at age zero	①	①
Self-reported health condition	①	①
Population ratio having BMI 30 or more	—	②
Prevalence of mental illness per year	—	②
Ratio of workers working 50 hour or more weekly	②	②
Time spent for leisure or private care per day	①	①
Employment rate of women with children of compulsory education age	①	①
Rate of adult high school graduate or more	①	①
PISA points in reading ability	①	①
Number of patents (renewable energy)	—	①
Ratio of person meets friends or families once in a week or more	①	①
Ratio of person have reliable friends or families	①	①
Voter turnout rate	①	①
Official/public process of involvement for decision-making process in an assembly	①	①
Ratio persons belonging to a block association/community activities	—	①
Air pollution	②	②
Ratio of persons concerned about the environment, caring about nature	—	①
Murder rate	②	②
Ratio of persons reported to have suffered violence in the past 12 months	①	①
Life satisfaction	①	①