Models Explaining the Levels of Forest Environmental Taxes and Other PES Schemes in Japan

Abstract

Between 2003 and April 2016, 37 of 47 prefectures (i.e., sub-national local governmental units) introduced forest environmental taxes—local payment for environmental services (PES) schemes. These introductions are unique historical natural experiments, in which local governments made their own political decisions considering multiple factors. This study empirically evaluates models that explain normalized expenditures from forest environmental taxes as well as other PES schemes (subsidies for enhancing forests’ and mountain villages’ multifunction, and green donation) and traditional forestry budgets for Japan’s 47 prefectures based on the median voter model. Results demonstrate that the median voter model can particularly explain forest environmental taxes and forestry budgets. Specifically, the past incidence of droughts and landslides is positively correlated with the levels of forest environmental taxes. The higher the number of municipalities in a prefecture, the lower the amount of forest environmental tax spent on forests. Moreover, the number of forest volunteering groups, possibly an indicator of social capital in the forest sectors, had strong positive correlations with the levels of forest environmental taxes and forestry budgets. Other PES schemes and forestry budgets had unique patterns of correlations with the examined factors.

Innovativeness of Japanese Forest Owners Regarding the Monetization of Forest Ecosystem Services

“…The activities of forest volunteer groups, however, may improve the environment for multifunctional payments as indicated by the positive correlation between the number of forest volunteer groups and the multifunctional innovation index. This finding reiterates that of another study, in which political processes, including spending associated with prefectural environmental tax schemes, were related to the number of forest volunteer groups in the prefecture [35].…”

“…These characteristics include the forest ratios of prefectures, 47 local jurisdictions in Japan, urban residents' population ratios, log production volumes, and numbers of forest volunteer groups in the prefectures. We assume that these variables representing natural and social conditions surrounding forests and forestry can be correlated to the innovativeness of respondents, based on a previous study [35].…”

Message for Solidarity: A Japanese Perspective on the Payment for Forest Ecosystem Services Developed over Centuries of History

“…The ecological economics perspective is broader and includes social aspects [4,17]. The former is considered mainstream [4], and many efforts have been made to evaluate actual examples of PES-like initiatives with reference to the "true PES" from the environmental economics perspective [7,12]. The most widespread definition of PES is the one by Wunder, i.e., "a voluntary transaction where a well-defined ecosystem service is being 'bought' by an ecosystem service buyer from an ecosystem service provider if and only if the ecosystem service provider secures ecosystem service provision" [1] (p. 3), which was modified by himself in 2015 to "voluntary transactions between service users and service providers that are conditional on agreed rules of natural resource management for generating offsite services" [5] (p. 241).…”

“…With the growing international interest in PES, a recently developed system in Japan known as the Forest Environmental Tax has been described as a PES-like scheme by some authors [10][11][12]. It has also been pointed out that the scheme deviates to some extent from the "ideal" PES proposed by environmental economists [12], because it was not designed purely for the application of market mechanisms. However, this scheme did not appear out of nowhere in Japan, as it includes aspects that have developed over hundreds of years of experience [13,14].…”