Future Design: Incorporating Preferences of Future Generations for Sustainability [1st ed.] 9789811554063, 9789811554070

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Economics, Law, and Institutions in Asia Pacific

Tatsuyoshi Saijo   Editor

Future Design Incorporating Preferences of Future Generations for Sustainability

Economics, Law, and Institutions in Asia Pacific Series Editor Makoto Yano, Research Institute of Economy, Trade and Industry (RIETI), Tokyo, Japan

The Asia Pacific region is expected to steadily enhance its economic and political presence in the world during the twenty-first century. At the same time, many serious economic and political issues remain unresolved in the region. To further academic enquiry and enhance readers’ understanding about this vibrant region, the present series, Economics, Law, and Institutions in Asia Pacific, aims to present cutting-edge research on the Asia Pacific region and its relationship with the rest of the world. For countries in this region to achieve robust economic growth, it is of foremost importance that they improve the quality of their markets, as history shows that healthy economic growth cannot be achieved without high-quality markets. High-quality markets can be established and maintained only under a well-designed set of rules and laws, without which competition will not flourish. Based on these principles, this series places a special focus on economic, business, legal, and institutional issues geared towards the healthy development of Asia Pacific markets. The series considers book proposals for scientific research, either theoretical or empirical, that is related to the theme of improving market quality and has policy implications for the Asia Pacific region. The types of books that will be considered for publication include research monographs as well as relevant proceedings. The series show-cases work by Asia-Pacific based researchers but also encourages the work of social scientists not limited to the Asia Pacific region. Each proposal and final manuscript is subject to evaluation by the editorial board and experts in the field. All books and chapters in the Economics, Law and Institutions in Asia Pacific book series are indexed in Scopus. Editorial Board Aoki, Reiko (Commissioner, Japan Fair Trade Commission, Japan) Chun, Youngsub (Professor of Economics, Seoul National University, Korea) Dixit, Avinash K. (John J. F. Sherrerd ‘52 University Professor of Economics, Emeritus, Princeton University, USA) Fujita, Masahisa (Fellow, The Japan Academy, Japan) Kamihigashi, Takashi (Director and Professor, Center for Computational Social Science (CCSS), Kobe University, Japan) Kawai, Masahiro (Project Professor, Graduate School of Public Policy, The University of Tokyo, Japan) Lo, Chang-fa (Honourable Justice, The Constitutional Court, Taiwan) Matsushita, Mitsuo (Professor Emeritus, The University of Tokyo, Japan) Nishimura, Kazuo (Professor, Research Institute for Economics and Business Administration (RIEB) and Interfaculty Initiative in the Social Sciences (IISS), Kobe University, Japan; Fellow, The Japan Academy, Japan) Yabushita, Shiro (Professor Emeritus, Waseda University, Japan) Yoshino, Naoyuki (Professor Emeritus of Keio University; Director of Financial Research Center, Financial Services Agency, Government of Japan)

More information about this series at http://www.springer.com/series/13451

Tatsuyoshi Saijo Editor

Future Design Incorporating Preferences of Future Generations for Sustainability

123

Editor Tatsuyoshi Saijo Research Institute for Humanity and Nature Kyoto, Japan

ISSN 2199-8620 ISSN 2199-8639 (electronic) Economics, Law, and Institutions in Asia Pacific ISBN 978-981-15-5406-3 ISBN 978-981-15-5407-0 (eBook) https://doi.org/10.1007/978-981-15-5407-0 © Springer Nature Singapore Pte Ltd. 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface

Have you seen the Academy Award-winning film Green Book? It tells the story of Don Shirley—a genius pianist, whose talents were hailed by Stravinsky as “worthy of gods”—as he sets out on a concert tour across the Southern U.S. with his white driver, Tony. On the journey, Don, an African American is repeatedly confronted with racial discrimination; he manages to change Tony’s mind about racism, and the two of them struggle against it. The driver’s words hit home: “Genius is not enough; it takes courage to change people’s hearts.” It may indeed take courage to overcome the racism that has become rooted in so many different people from various walks of life, but do the people of today also have the courage to give due consideration to future generations, who do not yet exist? The Japanese movie Wood Job! follows a recent high school graduate Yuki (meaning “courage”), who fails his college entrance exams and takes a year-long forestry job in a village deep in the mountains of Mie Prefecture. At a lumber auction, he is told that “each of these trees is worth 800,000 yen” and muses: “If we all start logging this mountain, we could make a fortune!” Hearing this, the foresters admonish Yuki: “Our forefathers planted these trees. If we sold them all, what would happen to the next generation—and the generations after them? What we do in our work lingers after we die.” As Yuki continues his forestry work, he begins to understand the perspective of the forestry workers and becomes conscious of his ancestors and descendants. The film is a story of gaining the courage to take future generations into account. In truth, support for the “If we all start logging this mountain, we could make a fortune!” mentality is a hallmark of people dwelling in markets and democracies where nature is seen as hugely profitable. While the market may be a place where desired short-term gains can be achieved extremely efficiently, it is not meant for allocating resources with an eye towards the welfare of future generations. Even in a democracy designed to compensate for market failures, a method of realizing profits for people at present, by its very nature, does not take into account the welfare of the future generations. While there are honest politicians, the greatest concern of most democratically elected politicians is their own re-election, not the need to ensure that their actions consider future generations. Further, to increase their v

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chances of survival, the common people have also managed to forget negative events from the past, focus on pleasure in the moment, and establish an optimistic view of the future. Factors such as the market, democracy, and individual optimism lead to the “If we all start logging this mountain, we could make a fortune” perspective from the second half of the twentieth century to the present. In other words, the present generation is blithely stealing a cavalcade of resources from the next.1 If this is the case, then should we not emulate the forest workers and express gratitude to our ancestors while being mindful of our descendants? Almost no person in the present generation, however, is in a position to reflect on their place in the universe between their ancestors and their descendants. The Iroquois tribe of Native Americans has arrived at one method to overcome this problem. As we shall see in more detail in Chap. 1, when members of the Iroquois tribe make important decisions, they must place themselves in the shoes of people seven generations ahead of them. The term “seven generations ahead,” then, represents not a world in which one’s direct descendants live but a world that one cannot envision merely from the perspective of one’s own bloodline. In other words, the Iroquois take proper consideration of hypothetical future generations, treating them as real in the present day, before they make their decisions. The Iroquois have designed a social mechanism that does not direct the present generation towards the “If we all start logging this mountain” mentality. In other words, a sustainable mechanism for designing the future has been built into the Iroquois way of living itself. In neighborhoods, city councils, and national assemblies, which could be considered as similar mechanisms in our own societies, one never sees a scenario in which participants envision a generation, say, 100 years into the future, before they make decisions; in our society, the idea of present-day elected officials representing future generations is unthinkable. We have not designed a mechanism similar to that employed by the Iroquois. Making decisions while considering a society that will exist seven generations from now is not simple. What may seem beneficial to a society seven generations in the future could appear detrimental to people in the present. If we take the present generation to be all of us, who are “logging the forest,” then we see that it is not an easy choice for the present generation to stop this activity. From their perspective, stopping would mean a loss, giving something up. Thus, it is unlikely that both the present and future generations will profit through the skillful designing of a social mechanism. It may be possible to take decisions using a mechanism by which the present and future generations negotiate and agree upon the results; however, those future generations do not yet exist.

Complicating the matter are the people whose thinking is opposite to that of the “If we all start logging this mountain, we could make a fortune!” side: those who have resisted such thinking. The former are 1% of the population, the leisure-loving population that controls the world’s wealth; the latter are the impoverished 99% (see Joseph Stiglitz’s The Price of Inequality, 2012). A further complication: while there are some among the impoverished 99% who work at jobs provided by the rich and are thereby granted access to the leftovers of the innovations produced by their labor (in the form of abundant lifestyles), there are also those for whom this is not true.

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Future Design traces its origins to the summer of 2012. It was born when young researchers gathered at Osaka University’s Center for Environmental Innovation Design for Sustainability to tackle the question of how to create hypothetical future generations based on ideas drawn from the ways of the Iroquois. This group of researchers called themselves the “Seven Generations Research Society,” and encouraged themselves, in this debate experiment, not to cling to their individual backgrounds and be rooted in science or the liberal arts, but to consider how to introduce the concept of including hypothetical future generations to decision making on a variety of issues, such as energy (including nuclear power), water, forests, innovation, budget deficits, and so on, and ponder freely how the introduction of future generations changes matters. The research participants considered the possibility of creating panels of experts on hypothetical future generations and entertained the ideas of a Ministry of the Future and a Department of the Future. Thus, in this step, the name of the workshop changed from the “Seven Generations Research Society” to the “Ministry of the Future Project.” Their goal in doing so was not to create specific bureaucratic departments in society but to take future generations into account and become aware that it is such changes that could lead to the creation of resilient (self-stabilizing; resistant) and structurally stable systems. The project, ultimately, took the name of “Future Design.” Each chapter of this book illustrates how the future is designed. We are realizing that the potential for a new field of science, one that bridges the gap between traditional science and the humanities, is hidden in the designs of future social systems. Many members of the project even considered the possibility of creating an undergraduate or graduate department dedicated to the future, where future design would be studied from a scientific perspective. This might be optimistic, but we hope that graduates of these schools will find positions in a Ministry or Department of the Future and in companies’ Future Sections, and will envision a future worthy of envy. However, this book is only a small first step towards future design, an initial volume. Parts of its arguments may still appear unskillful or incomplete. For their support during the creation of this volume, I would like to thank Prof. Shinsuke Yamanaka (currently of the Japanese Atomic Energy Commission), Prof. Michihiko Ike and Prof. Yoshiyuki Shimoda, formerly of Osaka University’s Center for Environmental Innovation Design for Sustainability; Prof. Yasushi Umeda of The University of Tokyo; Prof. Junyi Shen of Kobe University; Prof. Shunsuke Managi of Kyushu University; Prof. Satoshi Taguchi of Doshisha University; Prof. Koichi Kuriyama and Asst. Prof. Yohei Mitani of Kyoto University; Prof. Naoki Yoshihara of the University of Massachusetts; Prof. Reiko Gotoh of Hitotsubashi University; Prof. Keiichiro Kobayashi of Keio University; Pres. Masahiko Isobe and former Pres. Taketo Sakuma of the Kochi University of Technology; all the researchers at the Research Institute for Future Design at Kochi

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University of Technology; Prof. Katerina Sherstyuk and Prof. Nori Tarui at the University of Hawaii; Dr. Daigee Shaw at the Academia Sinica; Mr. Matsuyoshi Nishimura at the Japan Institute of International Affairs; Ms. Maki Michinaka at Nippon Hyoronsha; Mr. Ritsuji Yoshioka in the town of Yahaba in Iwate Prefecture; and everyone in the Suita City Environmental Department, Department of Water and Sewer, and Highway & Parks Department. Further, this book is based on a 2015 anthology entitled Future Design, which was published by Keiso Shobo Publishing. New information and perspectives were added during the translation of the anthology from Japanese to English. I would like to express my gratitude to all authors who agreed to contribute and cooperated with the creation of the English edition, as well as to Keiso Shobo Publishing, who kindly saw the value in publishing an expanded English edition of the work. Kyoto, Japan

Tatsuyoshi Saijo

Contents

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Future Design: An Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . Tatsuyoshi Saijo

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2

Asymmetrical Reciprocity in Intergenerational Justice . . . . . . . . . . Matthias Fritsch

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Future Generations Correcting Markets and Democracy—Research Needs in Future Design . . . . . . . . . . . . Michinori Uwasu

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Backcasting for Envisioning Sustainable Futures Across Multiple Generations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yusuke Kishita

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Designing the Ministry of the Future . . . . . . . . . . . . . . . . . . . . . . . Masahiko Ozaki and Michinori Uwasu

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Science, Technology & Innovation and Future Design . . . . . . . . . . Reiko Aoki

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What Are Urban Development and Urban Design for a Sustainable Society? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hiroyuki Takeda

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Future Design for Sustainable Water Resource Use from the Perspective of Ground Water Management . . . . . . . . . . . . . . . 105 Keishiro Hara

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Sustainable Water Works and the Future Design of Yahaba . . . . . 121 Ritsuji Yoshioka

10 Looking to the Future Based on the History of Water and Atmospheric Environmental Issues in Japan . . . . . . . . . . . . . . 129 Masashi Kuroda and Hikari Shimadera

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11 Capitalism and Sustainability Dilemmas . . . . . . . . . . . . . . . . . . . . . 151 Raja Rajendra Timilsina, Shibly Shahrier, and Koji Kotani 12 Compassion for Future Generation Is Not Only for Others’ Benefit: Solving the Problems with Long-Term Fiscal Policies . . . . 169 Tatsuhiro Shichijo and Toshiaki Hiromitsu 13 Why Is Future Design Needed in Japan? Public Finance Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Takashi Oshio 14 The Need for a “Future Design” View of Forest Management: A Focus on the Current Situation of Forestry and Wood Utilization in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Yukari Fuchigami Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

Editor and Contributors

About the Editor Tatsuyoshi Saijo received a master’s degree in economics from Hitotsubashi University in 1978 and a PhD from the University of Minnesota in 1985. He was an assistant professor in the Department of Economics, University of California at Santa Barbara (1986–1991), assistant professor, associate professor, and then professor at the Institute of Socio-Economic Planning, University of Tsukuba (1988–1996), a post-doctoral fellow at the Center in Political Economy, Washington University at St. Louis (1989), professor at the Institute of Social and Economic Research, Osaka University (1995–2013), visiting scholar at the Rational Choice Center, Department of Economics, Duke University (1999), faculty fellow at the Research Institute of Economy, Trade and Industry (2001–2004), research associate at the California Institute of Technology (2002–2003), professor at the Research Institute for Sustainability Science, Osaka University (2006–2010), research professor and then specially appointed professor at the Center for Environmental Innovation Design for Sustainability, Osaka University (2011– 2015), and professor at the Institute of Economic Research, Hitotsubashi University (2015–2016) before assuming his present position at the Kochi University of Technology and the Research Institute for Humanity and Nature (RIHN). He has been a member of the Science Council of Japan since 2014, project leader for Experimental Social Science at the Ministry of Education, Japan (2007–2013), and vice–president of the Economic Science Association (2010–2014).

Contributors Reiko Aoki Japan Fair Trade Commission, Tokyo, Japan Matthias Fritsch Concordia University, Montreal, Canada

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Yukari Fuchigami Osaka University, Osaka, Japan Keishiro Hara Osaka University, Suita, Japan Toshiaki Hiromitsu Visiting Scholar, Policy Research Institute, Ministry of Finance, Tokyo, Japan Yusuke Kishita Department of Precision Engineering, The University of Tokyo, Tokyo, Japan Koji Kotani School of Economics and Management, Kochi University of Technology, Kami, Japan Masashi Kuroda Tokoha University, Shizuoka, Japan Takashi Oshio Institute of Economic Research, Hitotsubashi University, Kunitachi, Japan Masahiko Ozaki Yamato University, Suita, Japan Tatsuyoshi Saijo Research Institute for Humanity and Nature, Kyoto, Japan; Research Institute for Future Design, Kochi University of Technology, Eikokuji, Kochi, Japan; Tokyo Foundation for Policy Research, Tokyo, Japan Shibly Shahrier Research Institute for Humanity and Nature, Motoyama, Kyoto, Japan Tatsuhiro Shichijo Osaka Prefecture University, Sakai, Japan Hikari Shimadera Osaka University, Osaka, Japan Hiroyuki Takeda Osaka University, Suita, Japan Raja Rajendra Timilsina Research Institute for Future Design, Kochi University of Technology, Kami, Japan Michinori Uwasu Osaka University, Toyonaka, Japan Ritsuji Yoshioka Yahaba, Iwate, Japan

Chapter 1

Future Design: An Introduction Tatsuyoshi Saijo

1 Seven Generation Sustainability In March 2nd 2012, I held a seminar at University of Massachusetts about social dilemmas. During the dinner, I started talking about the problem of how future generations can be greatly affected by current actions, but have no means of negotiating with the current generation. I suggested that there ought to be a group, a sort of “Ministry of the Future”, which exists within the current generation that engages solely in the welfare of future generations. Then, Laura, the wife of John Stranland, one of my former students from University of California at Santa Barbara, said that the Iroquois Indians had been implementing such ideas for hundreds of years.1 The Iroquois Confederacy’s “Great Binding Law”, which is their constitution, there is a passage that says “in every deliberation, we must consider the impact on the seventh generation… even if it requires having skin as thick as the bark of a pine”.2 In the seventeenth century, the five nations living around the Great Lakes formed an alliance, creating the “Confederation”. By the early eighteenth century, a new tribe joined and this became the Six Nations. The “Great Binding Law” acts as the constitution of this confederacy. In fact, the Iroquois Confederacy had a considerable effect on the design of American political institutions.3 The thirteen colonies learned the idea of “Confederation” from the Iroquois to gain independence from the United Kingdom and construct a new kind of polity not found in Europe at the time. To 1 http://en.wikipedia.org/wiki/Seven_generation_sustainability. 2 http://en.wikipedia.org/wiki/Great_Law_of_Peace. 3 See

Grinde Jr. and Johansen (1991).

T. Saijo (B) Research Institute for Humanity and Nature, Kyoto, Japan e-mail: [email protected] Research Institute for Future Design, Kochi University of Technology, Eikokuji, Kochi, Japan Tokyo Foundation for Policy Research, Tokyo, Japan © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_1

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demonstrate this, I have quoted a rather long passage from Late Senator Daniel Inoue’s concurrent resolution from the 200th anniversary of the founding of the United States.4 Wednesday, September 16, 1987 100th Cong. SENATE CONCURRENT RESOLUTION 76 TO ACKNOWLEDGE THE CONTRIBUTION OF THE IROQUOIS CONFEDERACY OF NATIONS TO THE DEVELOPMENT OF THE U.S. CONSTITUTION AND TO REAFFIRM THE CONTINUING GOVERNMENT—TO—GOVERNMENT RELATIONSHIP BETWEEN INDIAN TRIBES AND THE UNITED STATES ESTABLISHED IN THE CONSTITUTION. Whereas, the original framers of the Constitution, including most notably, George Washington and Benjamin Franklin, are known to have greatly admired the concepts, principles and governmental practices of the Six Nations of the Iroquois Confederacy; and, Whereas, the Confederation of the original thirteen colonies into one Republic was explicitly modeled upon the Iroquois Confederacy as were many of the democratic principles which were incorporated into the Constitution itself; and, Now, therefore be it. RESOLVED BY THE SENATE (THE HOUSE OF REPRESENTATIVES CONCURRING), That: The Congress, on the occasion of the 200th Anniversary of the signing of the United States Constitution, acknowledges the historical debt which this Republic of the United States of America owes to the Iroquois Confederacy and other Indian Nations for their demonstration of enlightened, democratic principles of government and their example of a free association of independent Indian nations….

That is to say, it may be more appropriate to think of Iroquois ideas as part of a bigger flow of ideas in human history instead of as a diversion. Furthermore, the ideas of Future Design itself detailed in this article, although unfinished, is not some sort of far-fetched fantasy but a new challenge that we must all face. The following will survey democratic and market institutions that shape modern society, and how they steal the resources of future generations without any remorse. Next, I will investigate how optimism bias, a part of human nature, creates tensions between current and future generations (optimism bias dilemma). Therefore, it is necessary to create institutions to supplement these shortcomings. The framework from which to create these institutions will be “Future Design”.

2 Three Human Oddities According to Robert Sapolsky, a biologist and neuroscientist at Stanford University, humans have three oddities.5 The following might not be how Sapolsky imagined it but I will try to interpret them in my own way.6 4I

found this citation from the postscript by Jun Hoshikawa who translated the book by Grinde Jr. and Johansen (1991). 5 See Sapolsky (2012). 6 The description of the three oddities comes from a part of Introduction by Saijo et al. (2013).

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The first oddity is that of “contrasts” or “relativity”. Our five senses are more adept at gauging the relativities of each item rather than absolutes. For example, we are quite sensitive when it comes to detecting relative changes in light or sound. This is because change is likely to lead to danger, so having swift reactions to changes in our environment must have been necessary to raise the probability of survival. In this sense, reacting to the change of brightness is “relativity” instead of absolute brightness.7 Of course, this “relativity” is not restricted to our five senses alone. The human brain is said to react strongly to one’s own position relative to others. To survive in a group of humans being chased by a lion, it is not necessary to be absolutely fast, for all it takes is to not be at the back of the group. The second oddity is “sociality”. Humans are not physically more developed in any given physical trait compared to other animals. Humans cannot outrun dogs, let alone horses, nor can they smell better. So in order to survive vis-à-vis other mammals, humans must have had to have a deep understanding of interpersonal relationships. For example, it must have been impossible to hunt large game individually. Sociality was essential to in order for people to work together and communicate for a single goal, so it must have evolved that way. The third is “short-sightedness”. It is hard to, for example, resist eating something delicious when it is put in front of you. In order to increase one’s survivability, it must have been essential for one to eat something as soon as one finds it. That is to say, myopic strategies must have been reinforced by evolution.

3 What Are Markets? The three human oddities are closely related to the market. Let us first consider “relatively”. We are very sensitive to changes in prices. If there we see a petrol stand that is cheaper than the alternative by just a cent per gallon, we would undoubtedly choose the cheaper one. Relativity is related to the idea of marginality in economics. In economics, marginality is the idea of marginal revenue, the increased profit gained by manufacturing another unit of a product as well as the idea of marginal cost, which is the cost of manufacturing another unit of a product. Manufacturers change the volume of production depending on the difference of marginal revenue and cost, which is marginal profit. If marginal revenue is bigger than marginal cost, that is, if the marginal profit is positive, then the manufacturer will increase production. On the other hand, consumers will buy more of something if the marginal utility of buying it is bigger than the cost. This means that both producers and consumers react to relative measures, not absolute ones. The market is in fact a tool to erase sociality. Before the advent of markets, it was normal to treasure a sweater because your grandmother made it for you, but nowadays it is doubtful that somebody knows the individual who actually made anything that 7 In

fact, the reaction might be depending upon the second derivative as well as the first derivative such as “sudden darkness”.

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they wear. They probably wear garments mass-produced in places like China, and bought it based on one’s preferences and the price of the product, and ignored the sociality behind the garment. This fact is not limited to garments; the same can be said for most commodities these days. In this way, markets erase “emotions”.8 Markets are adept at expressing people’s sense of “relativity” while erasing “sociality”, and creating a balance between supply and demand. When supply matches demand, the sum of all marginal profits (producer surplus) and the sum of all marginal benefits (consumer surplus) are maximized.9 The fundamental theorem of welfare economics stipulates that markets maximize economic surplus (the sum of consumer and producer surplus). That is to say, markets do not create inefficiency. This theorem has been the cornerstone of pro-market thinking since the days of Adam Smith. Let us consider some of the assumptions behind the fundamental theorem of welfare economics. First, it does not take time into consideration. It may even be said that it is a model that takes instantaneous frames in time, so the participants are static. It only thinks of the people living at that point in time and there is no place for people in the future. Furthermore, the amount of resources to be traded and consumed is static as well. If one employs the market in this sort of situation, then the market will consume all of the available resources. In this situation, the equilibrium is at a point in which none of the participants are unable to increase their utility without decreasing the utility of somebody else (Pareto efficiency), that is, the situation does not create waste. Of course, there is production of goods and services, but this model assumes that production is instantaneous once the resources are implemented. Although somewhat extreme, let us think of a situation in which the fundamental theorem of welfare economics applies. In the early morning, fishermen catch all kinds of fish. At the moment that they return, the amount of fish (the amount of resources) is constant. The buyers assemble, and the fish are put on auction, and different fish will get different prices. Buyers can buy and all the fish are sold before noon. Supply and demand is balanced and no waste is created. In this way, the market is good at balance of supply and demand on a short term in which there is no element of time, and this changes once time is factored in. There are many types of models that include time, but here I will explain the results of an experiment involving investment.10 There are two elements of investment. One is the irreversible nature of investment. Once you are set on an investment and you put it into practice, it is not easy to go back to where you were originally. Another is the time lag inherent in investment. Even if you choose and invest now, the benefits will be reaped in the far future. For example, once one decides to build a fossil fuel power 8 On

the other hand, small lot production of many products makes explicitly who are the producers and how they produce them. That is, market started swallowing sociality. 9 Consider a producer behavior for a given product price. The produce compares the cost or the marginal cost and the price for the first unit. If the price is greater than the marginal cost, the producer will produce the first unit. The producer will do the same thing for the second unit and continue until the price is equal to the marginal cost and hence the marginal profit becomes zero. The sum of all marginal profit is called the producer surplus of the producer. 10 See Saijo and Kusakawa (2013).

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plant, it will take many years for the environmental inspection and construction to be completed. Quite a bit of time will be needed until the plant would be able to produce power. It is no surprise that investment implies irreversibility and time lags. With experiments that incorporate these elements, two general patterns are observed. The first is the bubble. When a higher price comes up than the balance of supply and demand suggests, then investors overestimate their profit and they overinvest. Once this occurs, then the good will be over-supplied and the price of goods will crash. That is, a bubble will grow and burst. The second outcome is success. If one starts with smaller amounts of investment at first, then it is possible to prevent an overinvestment and the price of the good is maintained, and a fairly good efficiency is achieved. However, it is impossible to know how it will turn out in the beginning. In this way, once there is investment, one cannot say that the market is stable. Furthermore, excess liquidity spurs on economic bubbles. When investment capital has low interest rates, then excess investment is more likely. However, with the fall of commodity prices, it becomes impossible to pay back the loans and companies that made excess investments become bankrupt. Investment itself is a method to increase future advantage by patiently forgoing current consumption. For example, by developing new medicines, the company can raise future profits and increase people’s happiness in the future. However, most investments do not take place over multiple generations and is focused on profit in the near future. As has just been described, markets are prone to fail with uncertain futures. This is reinforced by people’s shortsightedness. The farther in the future something is, the less people worry about it. Even if there is future uncertainty, some may say that one only needs to examine the discount value that connects present and future. For example, the discount rate in American public works is 7%. Let us imagine for example, that in 500 years, a disaster occurs in Japan that costs 500 trillion yen, roughly the current GDP of Japan. When one assumes a 7% discount rate, however, the current value becomes 1 yen.11 The bigger the discount value, the less people worry about the future because it costs less in present terms. Another problem is that the market lacks any mechanism that distributes resources between current and future generations. Instead, markets exploit future resources without hesitation. Probably, people do not even realize that markets are institutions that thoroughly exploit resources of future generations. In this way, a new mechanism to distribute goods and resources that does more than efficiently manage and control markets is necessary. The government does some of this already, but this is not always put into practice. The national debt of Japan for example, is more than 200% of GDP. In fact, governments too are actively involved in exploiting resources belonging to future generations. Even if markets exploit the resources of future generations without hesitation, why does the current generation not consume all the resources on earth? This is because 11 According

to HM Treasury (2011), the discount rate in England used to be 6%, but now it recommend to use 3.5%.

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exploitation is limited by technology and labor. For example, we do not immediately deplete the world’s oil supplies is because we do not have the technology or the labor to do so. Furthermore, even though the desire of the current generation is boundless, it cannot live simply on oil. In order to meet demands, a diverse array of goods and services must be produced and consumed using a multitude of resources. Even if the current generation used the market to exploit future resources, if the amount exploited is small enough then it would not be problematic to keep exploiting that resource until humanity dies out. However, with regard to fossil fuels we already know that we do not have enough left to last until extinction. Here, important issues arise in terms of how we ought to think about future generations. Another problem is that of externalities. Markets do not control NOx and Sulfur Dioxide emissions, and companies can emit them for free, but they still affect the welfare of current and future generations. The problem for current generations is generally thought of in terms of short-term or in the near future. However, these actions can affect future generations decades or even hundreds of years in the future. Both problems cannot be solved through markets alone.

4 Democracy and Future Generations Let us think about the features of democracies. Although there are many forms of democracies, most modern democracies are indirect, representative democracies. The citizens choose representatives who decide policy in a legislative body. The constitution of a nation is a set of fundamental principles that bind the power of the nation. The coverage of it is not restricted to a particular place or a time, but it should be applied to “anytime and anywhere.” That is, people born in the future should be protected and covered by it. Therefore, from the viewpoint of the constitution, the distance from it should be the same between current and future generations, and hence no explicit references such as “future” and “generations”. On the other hand, the coverage of the constitution is for the people who are alive now when we understand the constitution from the viewpoint of a citizen of the nation. For this reason, the distance between a person who will be born in a future generation and “you” is far larger than the distance between a person in the current generation and “you”. Let us take a look at several current constrictions from a person who is alive now. First, let us examine the Japanese constitution. There are almost no mentions made of future generations in the Japanese constitution. However, there is one passage in the preamble that mentions the Japanese people’s “desire peace for all time” and another that mentions basic human rights in Articles 11 and 97.12 Article 11. The people shall not be prevented from enjoying any of the fundamental human rights. These fundamental human rights guaranteed to the people by this Constitution shall be conferred upon the people of this and future generations as eternal and inviolate rights.

12 The

citations in constitutions of various countries are due to Takahashi (2007).

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That is to say, basic human rights are not laid out in terms of negotiating, opposing or cooperating with future generations but as something given to individual citizens. Although the US constitution is supposed to be carrying over the spirit of the Iroquois confederacy, there is no mention of “generation” in the US constitution. However, in the articles about judicial power there is a mention of the word with regard to “future treaties”. For Canada’s, ROK’s, and PRC’s constitutions, there are no mentions of “future” or “generation” at all. These constitutions, like markets, reflect the myopic nature of human beings. That is to say, the application, limitation, and restraining of state power, as well as the stipulation of guaranteed rights and liberties applies only to currently living people. For this reason, citizens of many countries including Japan have no constitutional obligation to care about the nation after one’s death. Of course, nothing stops people from voting for more far-sighted policies out of one’s conscience, but people naturally gravitate towards policies that give out benefits within one’s lifetime. Therefore, indirect representative democracies do not implement institutions that take future generations into account. Furthermore, the representatives themselves only care about reelection, so they are unlikely to implement policies that benefit future generations at the cost of the current generation. Therefore, it is hard to prevent policies that make future generations pay for the benefit of the current generations including massive borrowing and exploitation of resources. However, there are a few constitutions that include passages about the “future” and “generations”. The preamble of the 1999 Swiss constitution contains a passage that says “conscious of… their responsibility towards future generations”. The preamble from the 1993 Russian Constitution also includes a passage that reads “striving to secure the wellbeing and prosperity of Russia and proceeding from a sense of responsibility for our homeland before the present and future generations”. However, these passages remain largely abstract. Even in the EU, which leads the world in terms of climate change and sustainability, the 1993 EU treaty does not have any passages about future generations.13 Some of the member states, however, include passages that mention “future” and “generations” in their constitutions, including the 1949 Basic Law for the Federal Republic of Germany, Article 20a. Article 20a [Protection of the natural foundations of life and animals]. Mindful also of its responsibility toward future generations, the state shall protect the natural foundations of life and animals by legislation and, in accordance with law and justice, by executive and judicial action, all within the framework of the constitutional order.

In this article, the natural foundations of life and animals are to be protected not through the constitution but through statutes.14 13 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:11992M/TXT:EN:HTML. 14 There are six locations mentioning future or generations in the basic environmental law in Japan. For example, Article 3 states that “Environmental conservation shall be conducted appropriately to ensure that the present and future generations of human beings can enjoy the blessings of a healthy

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France’s 1958 constitution also does not mention “future” or “generations”. However, the 2004 Charter of the Environment contains a passage that explicitly addresses this issue. That in order to ensure sustainable development, the choices designed to respond to the needs of the present must not compromise the capacity of future generations and other people to satisfy their own needs.

In this way, modern constitutions generally do not have articles about sacrifice by the present generation for the benefit of future generations in the same way the Iroquois do, with the exception of French and German environmental legislation. This is reflective of the fact that with varying degrees, democracies contribute to the exploitation of future resources without hesitation. However, as the French and German cases show, it is possible to incorporate the welfare of future generations into democracies.

5 Optimism Bias Dilemma Is your driving skill above average? Although this is a bit old, according to a survey conducted among American automobile drivers, more than 90% people surveyed thought that their driving skill was above average.15 Even in a survey conducted among people hospitalized for automobile accidents, drivers showed overconfidence.16 Similarly, in a survey of one million American high school students, almost all of them said that they “get along well with others”, and one in four answered that they were in the top one percent in terms of social skills.17 Camerer’s market entrance game experiment provides very interesting results on optimism bias.18 Fourteen subjects first take a trivia quiz, and the top six divide $50 amongst themselves while the others must pay $10. If eleven people join, then the top six gain $50 total while the rest pay $50 in total. The total benefit is zero amongst all the subjects, so the individual expected benefit ought to be zero as well. The subjects understand this well, but usually 12 or 13 people join, indicating that most people consider themselves above average and therefore unlikely to lose.

and productive environment and that the environment as the foundation of human survival can be preserved into the future, in consideration that preserving the healthy and productive environment is indispensable for healthy and cultured living for the people, and the environment is maintained by a delicate balance of the ecosystem and forms the foundation of human survival, which is finite in its carrying capacity and presently at risk of being damaged by the environmental load generated by human activities.” 15 See Svenson (1981). 16 See Preston and Harris (1965). 17 See Camerer (2003). 18 See Camerer and Lovallo (1999).

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Optimism is not just a human trait—it is also seen in other animals including birds.19 Train a bird to pull a blue lever when a sound is played for two seconds while pull the red bar when a sound is played for 10 s by giving it food every time it pulls the lever, but give food instantaneously for the blue lever but delay the food for the red lever. If one plays a sound for 6–8 s, birds tend to pull the blue lever. This means that they preferred instantaneous gratification to delayed satisfaction. Does this optimism apply to predictions about the future? Sharot (2011b) gave one hundred questions on events that may happen over the course of a month to Israeli students.20 The question asked about events like receiving presents, getting in a traffic jam, and being late for a meeting. It turns out that once Sharot classified the events into positive, neutral, and negative, answers for the positive events were about fifty percent more than the negative ones. Furthermore, the results showed that students thought that positive events happen sooner while negative ones happen later. When the students were polled after a month, the number of replies for positive, neutral, and negative events was roughly the same. Why does optimism bias occur?21 When someone thinks that the probability of getting a certain kind of cancer is 20%, and one tells him that the actual probability is about 10%, then he is rather likely to change his thinking on the matter. However, if one tells the same to a person that thinks that the possibility for the same cancer is 5%, then it is much less likely that the person will change his opinion. Humans react more readily to positive information than to negative information. Furthermore, positive information is processed in the left inferior frontal gyrus, while the processing of bad information is hindered by the left inferior frontal gyrus. The one-sidedness of information processing is not economically optimal. This is because one cannot maximize expected benefit through one-sided information processing. However, there is a non-monetary benefit to this. In fact, optimism bias is very good for your health. According to Sharot (2011a), a survey conducted on 97,000 people reported that optimistic people are 14% less likely to die between the ages of 0–65 and the probability of death by heart attack decreases by 30%.22 It is probably not an exaggeration to say that we evolved to have optimism bias. Optimism may increase individual survivability, but it can lead to negative consequences for society. Many factors contributed to the 2008 economic crisis, but one reason is that optimism bias caused a bubble, which crashed. This is an example of how optimism among individuals can lead to negative consequences for both individuals and society as a whole. Let us call this the optimism bias dilemma. Optimism bias is one reason why estimates for public works tend to exaggerate the benefits and understate costs. Another reason is strategic manipulation by politicians and contractors.23 According to a study of 14 countries, the cost of building railroads 19 See

Matheson et al. (2008). Sharot (2011b). 21 According to Sharot et al. (2011), depressives react to positive information as well as to negative information. That is, the information processing is both sided. 22 See Sharot (2011a). 23 See Flyvbjerg et al. (2005). 20 See

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are on average 45% more than the estimate and the ridership estimates are 106% more than the actual ridership. This trend was almost unchanged for 70 years. To remedy this, British Ministry of Finance published a new guideline on cost estimates and benefits of public projects in the 2003 “The Green Book”—a novel attempt at regulating optimism bias and strategic manipulation.24 Let us now think about climate change that affects the earth over the course of hundreds of years. Despite IPCC findings that, climate change can cause a rise in sea levels, extreme weather, and warming, most people will keep emitting greenhouse gases.25 This is because the cost of climate change is minimal for the current generation but increases with the passing of time—for which future generations must pay dearly. Although this might be extreme, unchecked optimism bias may endanger human survival itself.

6 Incorporating Future Generations into the Present—Future Design Markets and democracies are, as we have discussed before, systems that use up future resources without any remorse, and their effects are reinforced by optimism bias. Then, how do we regulate markets, change democracies and control optimism bias? That is to say, how can we design the future? The British finance ministry’s The Green Book is a sort of future design in that it tries to eliminate optimism bias and strategic manipulation, but it does not seek to fundamentally change markets and democracies for the benefit of future generations. Ehara et al. (2007) examined many conditions necessary for a low carbon society by 2050 and suggested two alternatives. In terms of designing future societies, this is a radical idea but they do not go into how exactly either choice would be chosen. One idea set out in this book is that it is possible to create representatives of future generations in today’s society. Of course it is impossible to transport a person form future to the present. Therefore, it is practical to use the human tendency to be able to think of how others think in their hearts and create a group of people who act as a person from the future world.26 This group will be a sort of imaginary future generation, and make institutions to make it possible for them to bargain with the present generation. We shall call this group the Ministry of the Future.

24 See

HM Treasury (2011). tend to dislike any changes called status quo bias that is related shortsightedness. Especially, they have tendency to dislike being bad to status quo. Fleming et al. (2010) found the processes of changing the status quo. 26 Regarding a theory of mind of the chimpanzee, see Premack and Woodruff (1978). As for mirror neurons and the theory of mind reading, see Gallese and Goldman (1998), Gallese and Sinigaglia (2011). 25 Humans

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Of course, here we encounter the problem that the very nature of future generations depends on present decisions. This problem is Parfet’s non-identity problem.27 This includes the fact that almost everything in the future, even future populations are dependent on current actions. In this book we will assume that the same kinds of people will always be born to deal with the population issue by increasing or decreasing the distribution. We will call these people the Ministry of the Future, but it is not always necessary for these people to represent future generations. The Ministry needs only to come up with possible problems that people will face in the future, and create several alternatives from which current generations can choose the course of action. Then, we randomly select a number of individuals from society and through dialogue and debate with the Ministry of the Future, make them represent future generations. Then, we must also choose a group of people to serve as representatives of the current situation. The process will have the two sides and the ministry discusses and argues to decide upon a single course of action to solve problems to be faced by future generations. We will look at examples in Chap. 5. Of course, this process is only an example and there can be other processes. A method to support the various options that the future ministry suggests is backcasting. For example for greenhouse gas emissions, we must eliminate outright choices that are physically impossible but agreeable to both sides. Instead of predicting the future, we must determine possible outcomes and “retrodict” what the current generation must do to. For example, let us assume that the future and current generations have agreed on a limit on the use of a natural resource. How each generation uses it will probably use techniques like grandfathering and auctions used in emissions trading, or a combination of both. Furthermore, by regulating the market from the perspective of future generations, myopic democracy will have to change as well. Perhaps constitutions will be amended and new legal systems will be built up on the basis of a “basic law of the future”.

7 Do Imaginary Future Generations Really Work? Even though we introduce imaginary future generations in current decision makings, the current generation does not have any monetary incentives to reduce the payoff and to increase future generations‘ payoff as far as participants in our societies are selfish as economists assume. In order to answer this suspicion, Kamijo et al. (2017) conducted an experiment using human subjects. Let me introduce the experiment performed by Kamijo et al. (2017). More than a hundred students got together in a large classroom. They were told that they should not talk each other. Experimenters picked up fifteen students randomly and made five groups of three subjects. Each group went to another small room so that groups 27 See

Parfit (1981).

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could not communicate each other and then they were told to make a group decision to choose A (for example, $36) or B ($27). At the same time, they must divide the money among the three. They could see previous decision(s) between A and B on the whiteboard and had ten minutes to talk. Of course, the first group did not have any information of the previous decisions. If you were a member of the three, which would you like to choose? Of course, A is better than B by an obvious reason. Experimenters then told them one more information: when the group chose A, the amount of money of the next group on A and B reduced by nine. If B, no change in the next group. Every subject of the experiment received Table 1 as the payoff information. For example, if group 1 chooses A, then groups 2’s payoffs are 27 for A and 18 for B. That is, each payoff is reduced by nine compared with payoff of group 1.28 On the other hand, if group 1 chooses B, then no change of payoffs between A and B for group 2. Let me consider extreme cases. If every group chooses A, then the payoff sequence is 36, 27, 18, 9, 0, −9… If every groups chooses B, then every group obtains 27. The experimenter paid the participation fee so that all subjects received positive amount of money based upon their decisions. In order to understand the role of imaginary future generations, they introduced subject α in addition to the above design. The experimenter chose subject α among the three randomly, and then give the following information to every subject including subject α. Subject α is supposed to negotiate with the other two subjects representing subjects who belong to later groups. However, the monetary payoff that subject α receives is determined by the negotiation of the three subjects.

That is, subject α is an imaginary future generation. If the other two subjects prefer A to B, subject α cannot belong to the majority. In other words, “subject α” is a minimum possible device for the current generation to think about the future generations and “subject α” does not have decisive power. The veil of ignorance à la Rawls (1971) is a device for distributive justice so that every participants supposed to consider it as if they were participants before they were born. The implementation of this idea in real situations is not easy since all have their histories and they cannot be erased from their brains. Similarly, subject α cannot be a member of the future generations and is no kin to the future generations. In the experiment, subject α does not know who will be the future generations. That is, subject α’s history cannot be erased in his or her brain and must wear a cap of the future generations. A large body of the literature of theory of mind reveals that “we” can understand other people’s minds and can pretend as if we were somebody else. The other important feature of the experiment is not appealing to conscience of subjects, but using negotiation among the three. Table 2 shows the experimental results. Table 2a is for no subject α and Table2b is for subject α. The row shows groups or generations and Gi is for group i. For example, the first row in Table 2a shows that every group chose A. The choice of 28 The

reduction of nine can be considered as investment for sustainability.

1 Future Design: An Introduction Table 1 Payoff table distributed to subjects

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Table 2 With subject α (a) and without subject α (b)

G1

G2

G3

G4

G5

G1

G2

G3

G4

G5

A

A

A

A

A

B

B

B

B

B

A

A

A

A

B

B

B

B

B

A

A

A

A

A

B

B

B

A

A

B

A

A

B

B

A

B

A

B

B

A

B

B

A

A

B

B

A

A

B

A

A

B

B

A

A

A

B

A

B

A

B in sessions without subject α is 28% and the choice of B in sessions with subject α is 60%. That is, the introduction of subject α, or an imaginary future generation participant is quite effective. Following social psychologists’ usage of pro-sociality, Kamijo et al. (2017) measures pro-sociality of each subject after each session. A subject was asked to choose among alternatives 1, 2 and 3 in Table 3. If the subject would like to maximize the difference, the choice should be 1, if the subject would like to maximize the payoff, it should be 2, and if the subject would like to aim at equal payoff or pro-sociality, it should be 3. Each subject faced nine similar questions. A subject is called pro-social if the subject chooses at least six pro-social choices among the nine. In sessions without subject α, a group chose B only if all subjects in the group were pro-social and the ratio of pro-social subjects was 76% if the group chose A. In other words, a group chose B only if all acted according to their conscience. In sessions with subject α, the ratios of pro-social subjects were 79% for A and 73% for B. That is, pro-sociality does not matter if there is no subject α. There are many other ways to understand how imaginary future generations work such as conducting surveys, designing new voting systems, and real practices at local cities using deliberation. Some of them will be shown in later chapters. Table 3 Pro sociality

1 Your payoff The other payoff

2

3

480

540

480

80

280

480

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8 Concluding Remarks In this chapter, we recognized that markets and democracies are institutions that consume future resources without any remorse, as well as the inherent nature of optimism bias. I suggested a system that incorporates the preferences of future generations in policymaking to overcome these challenges. Not only must we predict the future, we must also design the future through negotiating with an imaginary future generation as well. To achieve this, humanity will face novel issues that cannot be overcome by traditional fields that deal with institutional design. For example, as the example of climate change shows, various fields are incorporated into the IPCC but they do not have a clear future perspective, so their intention is not to design the future itself. Therefore a new research field is needed. We can call it future design. Perhaps in the future there will be future design research institutions and graduate programs. If these ideas are incorporated into constitutions, then institutions like ministries and departments of the future will be designed. Think of a society in which one person in ten thousand only thinks about the future. Many universities will have a future department, complete with graduate schools and young people will learn how to design the future. From them, some may become researchers and others may become public servants in the ministry or department of the future. I hope for a society in which these kinds of people will be honored and respected.

References Camerer C (2003) Behavioral game theory, behavioral game theory: experiments in strategic interaction. Princeton University Press, Princeton Camerer C, Lovallo D (1999) Overconfidence and excess entry: an experimental approach. Am Econ Rev 89(1):306–318 Grinde Jr. DA, Johansen BE (1991) Exemplar of liberty: Native America and the Evolution of Democracy, American Indian Studies Center, UCLA, January 1, 1991 Ehara T, Fujino J, H T, Matsuoka Y (2007) Construction of socio-economic visions achieving a low-carbon society. Glob Environ 12(2):145–151 in Japanese Fleming SM, Thomas CL, Dolan RJ (2010) Overcoming status quo bias in the human brain. PNAS 107(13): 6005–6009 Flyvbjerg B, Skamris Holm MK, Buhl SL (2005) How (in)accurate are demand forecasts in public works projects?: the case of transportation. J Am Plann Assoc 71(2):131–146 Gallese V, Goldman AI (1998) Mirror neurons and the simulation theory of mind-reading. Trends Cognit Sci 2(12):493–551 Gallese V, Sinigaglia C (2011) What is so special about embodied simulation? Trends Cognit Sci 15(11):512–519 HM Treasury (2011) The green book: appraisal and evaluation in Central Government. Treasury Guidance. TSO, London. https://www.gov.uk/government/uploads/system/uploads/attach ment_data/file/220541/green_book_complete.pdf Kamijo Y, Komiya A, Mifune N, Saijo T (2017) Negotiating with the Future: incorporating imaginary future generations into negotiations. Sustain Sci 12:409–420

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Matheson SM, Asher L, Bateson M (2008) Larger, enriched cages are associated with ‘Optimistic’ response biases in Captive European Starlings (Sturnus vulgaris). Appl Anim Behav Sci 109:374– 83 Parfit D (1981) Future generations, further problems. Philos Public Aff 11:113–172 Premack DG, Woodruff G (1978) Does the chimpanzee have a theory of mind? Behav Brain Sci 1(4):515–526 Preston CE, Harris S (1965) Psychology of drivers in traffic accidents. J Appl Psychol 49(4):284–288 Rawls J (1971) A theory of justice. Oxford University Press Saijo T, Kusakawa T (2013) Designing emissions trading systems: theory and experiment. Keio University Press (in Japanese) Sapolsky RM (2012) Super humanity. Sci Am 307(3):40–3 Sharot T (2011a) The optimism bias. Current Biol 21(23):R941–R945 Sharot T (2011b) The optimism bias. Pantheon Books, New York Sharot T, Korn CW, Dolan RJ (2011) How unrealistic optimism is maintained in the face of reality. Nat Neurosci 14:1475–1479 Svenson O (1981) Are we all less risky and more skillful than our fellow drivers? Acta Psychol 47(2):143–148 Takahashi K (2007) World constitutions: new edition. Iwanami (in Japanese)

Tatsuyoshi Saijo received a master’s degree in economics from Hitotsubashi University in 1978 and a Ph.D. from the University of Minnesota in 1985. He was an assistant professor in the Department of Economics, University of California at Santa Barbara (1986–1991), assistant professor, associate professor, and then professor at the Institute of Socio-Economic Planning, University of Tsukuba (1988–1996), a post-doctoral fellow at the Center in Political Economy, Washington University at St. Louis (1989), professor at the Institute of Social and Economic Research, Osaka University (1995–2013), visiting scholar at the Rational Choice Center, Department of Economics, Duke University (1999), faculty fellow at the Research Institute of Economy, Trade and Industry (2001–2004), research associate at the California Institute of Technology (2002–2003), professor at the Research Institute for Sustainability Science, Osaka University (2006–2010), research professor and then specially appointed professor at the Center for Environmental Innovation Design for Sustainability, Osaka University (2011–2015), and professor at the Institute of Economic Research, Hitotsubashi University (2015–2016) before assuming his present position at the Kochi University of Technology and the Research Institute for Humanity and Nature (RIHN). He has been a member of the Science Council of Japan since 2014, project leader for Experimental Social Science at the Ministry of Education, Japan (2007–2013), and vice–president of the Economic Science Association (2010–2014).

Chapter 2

Asymmetrical Reciprocity in Intergenerational Justice Matthias Fritsch

Abstract The notions of sustainability that are most widely accepted, domestically and internationally, are underwritten not only by duties to contemporaries, but also, and crucially, by responsibilities to non-overlapping generations. The point of this chapter is to argue that intergenerational dependence suggests that such responsibility is grounded in a form of reciprocity that is often called indirect: A gives to B but B gives ‘back’ to C. On this view, a current generation takes responsibility for the well-being of future generations because it is indebted to previous generations. In conversation with economic and philosophical literature, including so-called care ethics, I develop the basic idea further toward a concept I call asymmetrical intergenerational reciprocity. This concept connects reciprocity with altruistic concerns and with asymmetrical responsibility for the next generation. The basic point is that, as opposed to construing reciprocity as mutual advantage, asymmetrical reciprocity demands the return of benefits to a previously uninvolved third party, and thus invites the combination with an other-regarding concern for the well-being of this third party, future people in this case. Keywords Intergenerational justice · Indirect reciprocity · Asymmetrical responsibility · Altruism · Care ethics · Feminism · Contract theory

1 Introduction The notions of sustainability that are most widely accepted, domestically and internationally, are underwritten not only by duties to contemporaries, but also, and crucially, by duties to non-overlapping generations. But what, if anything, grounds this longterm responsibility? The point of this paper is to argue that intergenerational dependence suggests that such responsibility is grounded in a form of reciprocity that is Forthcoming in: Tatsuyoshi Saijo, editor, Future Design: Incorporating Preferences of Future Generations for Sustainability (Berlin: Springer). M. Fritsch (B) Concordia University, Montreal, Canada e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_2

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often called indirect, but that I call, for reasons that will emerge shortly, asymmetrical. The basic claim of intergenerational reciprocity is that we, the currently living, ought to take responsibility for the well-being of other generations because we are indebted to them. In particular, but not exclusively, we are indebted to previous (even historically distant) generations, and therefore we should ‘pay forward’ to future generations. We owe our predecessors material goods (socio-economic wealth and institutions) and symbolic goods (cultural, normative, and linguistic) as well as more personal debts (care, attention, recognition) without which we could not be who we are, and do what we do. Seeking to propose intergenerational reciprocity, I will begin with elaborating and refining some of the crucial features of the asymmetrical model I have in mind. Among the features I wish to stress, what stands out here (I hope) is the connection of indirect reciprocity with altruistic concerns and with asymmetrical responsibility for the next generation. The basic point is that, as opposed to construing reciprocity as mutual advantage, indirect reciprocity demands the return of benefits to a previously uninvolved third party, and thus invites, in fact demands, the combination with other-regarding concern for the well-being of this third party. If the third party is often, perhaps even paradigmatically, dependent on the second in the way that future generations are on the presently living, then indirect reciprocity calls for further characterization in terms of asymmetrical responsibility. I will continue by arguing that an asymmetrical concern for the overlapping next generation implies a concern for its responsibilities to its next generation as well, so that an indefinite (in the end, even incalculable) element is thereby admitted. Partly because of this openness of indirect reciprocity to altruistic concerns, the major objective here is not to construe reciprocity as a theory of intergenerational justice in competition with other such theories—at least not with the ‘winner takes all’ variety. Rather, the point is to suggest that the temporality of social relations renders asymmetrical reciprocity a part of the very fabric of social life, one in which concern for future people cannot be neglected. The core argument (one that philosophers would thus call ‘social-ontological’ as well as ‘normative’) is that social life cannot be adequately grasped without its pointing to a time before me and a time after me: each of us was born of the gifts of others and will leave life to yet other others. Time connects us across birth and death, but it also separates us, putting each on his or her own journey between birth and death. Precisely because time is not merely shared (not even among contemporaries) but discontinuously recommences in each person, social cooperation and democratic life consist in a taking turns (Fritsch 2015b, 2018) that may be elaborated as asymmetrical reciprocity.

2 Some Economists on Indirect Reciprocity To introduce asymmetrical reciprocity, this section will briefly discuss the work of intergenerational economists relevant to developing the concept. (The next section will refer to feminist critiques of philosophical accounts of justice as reciprocity.)

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The first feature of asymmetrical reciprocity that I want to highlight is its indirect nature, which both philosophers and economists have noticed and elaborated. Given that the production, distribution, and consumption of goods and services involve cooperation across generations, economists have long been occupied with intergenerational relations. They have also concerned themselves with reciprocity. As somewhat broader than economic exchange, perhaps even its ground, reciprocity has been extensively examined by economists as the, or one of the, main bases of socialization, the ‘glue’ that holds societies together (cf. Kolm 2006). Broadly speaking, reciprocity consists in benefiting others as a result of benefiting oneself, or in contributing to practices from which one has benefited, or will or may benefit in the future. Thus, reciprocity may range from direct exchange between two parties, all the way to more impersonal cooperative systems with three or more members, a system to which a participant contributes or from which she benefits, without directly interacting with another individual (e.g. a blood bank, or an insurance scheme). Reciprocity has been argued to be intimately connected with some basic and widely accepted principles of fair play (Klosko 1992; Rawls 1971) and to be central to social cooperation and social life (Levi-Strauss 1949; Ekeh 1974; Becker 1986; Gintis 2000). It is often claimed that there is no exchange or reciprocity between nonoverlapping generations, for these relations seem to presuppose that the parties live at the same time (Beckman and Page 2008; Page 2006; Rawls 1971; for critical discussion, see McCormick 2009). However, if we combine the focus on reciprocity with intergenerational relations, the idea of indirect reciprocity seems to suggest itself (Kolm 2006: 395–6). As economists Arrondel and Masson write, for instance, the concept [of reciprocity] must be adapted to the succession of generations, taking a particular form which has been introduced by the French anthropologist Mauss (1968): namely, indirect (serial) reciprocity, involving three successive generations at a time and leading to infinite endless chains of descending or ascending transfers between parents and children. (Arrondel and Masson 2006, 976)

As opposed to the two agents involved in direct reciprocity or in exchange, indirect (or serial, or transitive) reciprocity names a three-party relation in which A gives to B who ‘returns’ the gift to C. The parties may be individuals or groups, in this case generations and/or individuals in different generations. Tracing the notion back to the highly influential work of Marcel Mauss on gift giving practices in archaic societies (Mauss 2002 [1924]), Arrondel and Masson argue that intergenerational transfer motivations can be explained satisfactorily neither by direct reciprocities (such as self-interested exchange) nor by pure altruism: we shall try to convince the reader that indirect forms of reciprocity between generations may be viewed as appropriate dynamic syntheses of altruism and exchange allowing, with minimal deviations, the introduction of ‘intermediate’ motivations for transfers which better fit the data. (Arrondel and Masson 2006: 976)

Arrondel and Masson discuss a great range of empirically observable conduct among generations that cannot be explained by the standard alternatives, i.e., selfregarding tit-for-tat or pure altruism. As I will elaborate, one motivation for renaming

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indirect reciprocity ‘asymmetrical’ lies in this combination of elements of reciprocity and of altruism in a way that overcomes their usual, even defining contrast (the one is usually defined over and against the other). The altruistic aspect can be read, in a way Arrondel and Masson do not, to stress the asymmetry in power and in responsibility in the typical relations between generations.1 Economists and other social scientists have also stressed that indirect reciprocities play a significant role in people’s motivations for giving to the future. Studies show that participants who are asked to make an allocation decision for future generations are strongly influenced by information about how previous participants had behaved in similar research—generously or ungenerously—or by the source of the funds to be allocated (whether it was the result of generous gifting of previous participants or not). Summarizing this research, Wade-Benzoni writes “[t]he results support the hypothesis […] that the greater the amount of resources perceived as having been left by previous generations, the greater the amount that will be left to future generations” (2002: 1021; cf. Wade-Benzoni 2008). Reasons for this tendency toward indirect reciprocity combine a sense of reciprocal obligation (a realization of having received benefits in the past, and thus owing to the future) and following a norm or model provided by past generations (conformity to inferred norms). In general terms, this suggests that it matters to what extent a present generation understands itself as situated historically and generationally. As Edmund Burke put it most famously in his reflections on the French Revolution, “People will not look forward to posterity, who never look backward to their ancestors” (Burke 1955 [1790]: 38). Today, many social scientists argue that the social acceleration connected with a fast-paced modernity undermines this sense of historical connectedness.2

1 Arrondel

and Masson (2006: 977, 1026, see also the table at 1028) offer a typology of four reciprocity types by combining the result of two distinctions: first, the distinction regarding the orientation in time from which one’s model, content, or motivation for giving is drawn (backwardor forward-looking), and second, the direction of transfer (upward to the previous generation, downward to the subsequent one). While all four are relevant to generational sociality, and thus to asymmetrical reciprocity, in what follows I focus for the most part on the most commonly intuited type, the backward-downward (or descending) type. 2 Most of the recent work on social acceleration has been done by Rosa (2010, 2012) and Scheuerman (2004). In his famous The Culture of Narcissism (1979), Christopher Lasch complains of “the waning sense of historical time”: “To live for the moment is the prevailing passion—to live for yourself, not for your predecessors or posterity. We are fast losing the sense of historical continuity, the sense of belonging to a succession of generations originating in the past and stretching into the future” (Lasch 1979: 5). Under the heading of the “Critique of Modernity”, already in 1888 Nietzsche diagnosed a lack of “solidarity of generational chains forward and backward ad infinitum [Solidarität von Geschlechter-Ketten vorwärts und r¨uckwärts in infinitum]” (Nietzsche, Twilight of the Idols, aphorism 39).

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3 Feminist Criticisms of Justice as Reciprocity Economists focus on financial and quantifiable transfers among generations, especially in the family (bequests or gifts of money, property, estate, paying for education, etc.). The many studies that Arrondel and Masson draw on, for instance, only go so far as to include time spent with other generations as part of reciprocity (Arrondel and Masson 2006: 989). While they concede they must consider “non pecuniary services” (987) such as “time transfers and services” as part of intergenerational relations, such as “attention” and care during old age, they note the great difficulties of identifying them and their direction of giving, as well as their quantifiability. However, it may be argued that a very significant dimension and conduit of intergenerational cooperation lies in activities that may be best summed up by care, from infant care (including education, language acquisition, etc.) and sick care to care for the elderly and the dying. If we do not just focus on the question how much we might owe to future people, but are interested in finding out why we owe, and how we should understand ourselves such that we may first of all see intergenerational obligations as applicable to us, then quantifiability must not limit our considerations. In part for this reason, but also to bring into the conversation the philosophical literature on reciprocity, feminist care ethics and feminist criticisms of justice as reciprocity represent another useful starting point for an intergenerational theory that takes asymmetry seriously. Philosophical theories of justice as reciprocity have been recognized to come in two major forms: contractualist and contractarian. Roughly speaking, contractarianism stems from Hobbes’s social contract, which is based on mutual self-interest. Justice then is found in cooperative behaviour that is mutually advantageous for selfinterested agents. David Gauthier offers the most prominent modern exposition of this view (Gauthier 1986). By contrast, contractualism understands itself as grounded on the equal moral status of persons who are taken to be capable of rationality and autonomy. Justice consists in what would result if we were to make binding agreements from a point of view that respects our equal moral importance as rational autonomous agents. Contractualism’s most well-known modern defenders include Rawls (1971, 1993) and Scanlon (1998). Its roots are closer to Rousseau than to Hobbes: the general will is what we would jointly will if we adopted the perspective of free and equal citizens. As a contractarian, I try to maximise my own interests in bargaining with others. As a contractualist, I pursue my interests in a way that I can justify to others who I take to be pursuing their own interests.3 Some of the feminist literature on both types of philosophical mutual-advantage theories accuses them of mistakenly assuming “rough equality” as a starting point, as if justice was a matter of bargaining between autonomous, otherwise unrelated parties of equal power (Nussbaum 2001, 2006). Indeed, many theories of justice in this tradition begin by seeking to establish this equality in the face of actual inequalities in power, typically by arguing that the weaker parties are still a threat to the stronger one. (Hobbes famously argued that the weak can kill the strong in 3 For

more on this distinction, see Ashford and Mulgan (2012), and Cudd (2013).

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their sleep; see Becker 2005). This, the objection goes, neglects or even ignores the reality of interpersonal dependency and the need for care that characterizes human relations, for example in relation to childhood, parenting, old age, sickness, and disability (Held 1993; 1995; 2006; Kittay 1999)—care that is predominantly carried out by women. Indeed, much feminist care ethics emphasizes that traditional moral theories and principles, in particular social-contract theories, questionably ignore, trivialize, or demean values and virtues traditionally associated with women, with fostering social relations rather than abstract moral principles, and with caring for others (Gilligan 1982; Noddings 1984). The intergenerational dimension of the ethics of care, however, merits further exploration. Asymmetrical reciprocity’s closest approximation from within the feminist responses to philosophical theories of justice as reciprocity may be in Eva Kittay’s amendment to Rawls’s reciprocity-based model of social cooperation—a model that Rawls himself, however, did not ‘extend’ to the intergenerational setting. Kittay’s amendment seeks to correct the ‘rough equality’ Rawls assumes by having the parties in the original position (who are to devise the principles of justice that are to govern the basic structure of society, the terms of the social contract, if you wish) think of themselves as in need of dependent care and/or as having to or wanting to spend significant resources caring for others. On this basis, Kittay develops an indirect model of reciprocity that she calls ‘doulia’, named after doula, the birth companion and post-birth supporter who cares for a person before, during, and/or after childbirth, as well as her spouse and/or family. Accordingly, doulia stresses the need for societal care for the care-giver, and thus involves more than two parties engaged in bargaining or exchange. In this context, Kittay then points to, but does not elaborate—neither in general nor for purposes of developing an account of intergenerational justice—the intergenerational significance of including the mother-infant relation as paradigmatic for justice relations: Since society is an association that persists through generations, an extended notion of “reciprocity” (a transitive—if you will—responsiveness to our dependence on others) is needed for justice between generations. […] [J]ust as the savings and gains from a previous generation pass from us to the next generation, the care a mother bestows on her child calls for reciprocation from the adult child not only back to the parents, but also forward to a future generation. (Kittay 1999: 107)

In speaking of asymmetrical reciprocity, I seek to combine Kittay’s “transitive” or “extended” (and, according to her, Rawlsian) reciprocity with the (non-Rawlsian) asymmetry that she here stresses in the mother-infant relation. If we do not, as the social contract tradition is wont to do, take rough equality (of either strategic, utilitymaximizing or communicative actors with a sense of justice) as a starting point, then the paradigmatic case will be one of an asymmetrical relation between the one called to responsibility and the object of moral concern—a relation that need not be restricted to parents and their offspring, but may be seen as including all those cases in which one person takes asymmetrical responsibility for another. On this feminist and care-ethical view, then, social cooperation should be seen to emerge with human dependency rather than with contracting rational utilitymaximizers. Asymmetry, rather than equality, is the paradigm that calls for moral,

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political, economic and juridical considerations (cf. Brumlik 2004; Jonas 1986). Accordingly, the power asymmetry that characterizes the intergenerational relation between present and future (Barry 1991: 243-7) is no longer as anomalous as it seems when we assume that the core of justice involves contemporaries, a core to be ‘extended’ to justice between generations. Apart from indirectness, asymmetry then forms a second feature of the asymmetrical reciprocity I wish to introduce here. The third feature of asymmetrical reciprocity lies in the generalization of benefits. When commentators speak of ‘generalized reciprocity’ they mean that the interaction is not just a one-off exchange, but part of an established practice or societal system in which individuals do not stop to count particular instances of benefit and cost (Arneson 1997: 340; Page 2006: 103). In my usage, generalized reciprocity assumes the following two claims (separately or jointly): (a) all agents are (necessarily) the recipients of (some) gifts and benefits, in particular from preceding generations, and; (b) all human beings, living and future, are worthy recipients of the obligations thereby generated. If both are maintained, the obligation is generalized in two ways at once: with regard to (a) the obligated party and (b) the obligee. Here I just assume (b). As for (a), I do not wish to argue for it in detail here, but I take it to be a reasonable assumption that human subjectivity as we know it, with its various corporeal, cognitive, linguistic, and responsible capacities, cannot emerge without care, cultural transmission (language, know-how, habits, institutions, and so on), and material transfers regarding basic necessities. (Of course, generations do not only pass on benefits, but may also leave harms; though obviously important, I take it to be a separate question how generations should handle harms.) At this point, one may also wonder why agency-enabling benefits should obligate their recipients, for one may think that these kinds of benefit do not afford the freedom to accept or refuse them (cf. Barry 1991: 232, cf. Nozick 1974: 95). Following Mauss (2002)—who in fact makes this question the key to understanding gift practices and their central role in socialization—in particular Mauss as interpreted by Derrida (1992), I have argued elsewhere that the constitutive nature of certain benefits in fact demands some normative commitment to them, a commitment here developed as asymmetrical reciprocity (Fritsch 2015a; Fritsch 2018).4 We should also note that, especially in the literature around a guaranteed basic income, reciprocity obligations have been extended to ‘care’, and indeed in such a way that both care and the obligation to which it gives rise have been argued to be public in nature due to the fact that, as we also saw with Kittay, procreators and non-procreators share a vital interest in the continuation of society (Smith 2003: 245ff; Stuart White 2003a, b: 108ff.).5 4 For an argument that at least some (intergenerational) gifts are obligating because they suspend the

requirement that receipt must be voluntary, see also Fritsch (2017). The latter discusses the work of Page (2007), Gosseries (2009), and Klosko (1992), authors who similarly present circumstances that suspend the voluntary receipt requirement. 5 Regarding the necessity of care, consider also Rawls’s claim that justice as fairness assumes as an “important political value” the need for “the ordered reproduction of political society over time, including the family in some form” (Rawls 1993: 243). Elsewhere he agrees with Okin that the family is part of the basic structure of society (Rawls 1993: 258, 1999: 595), and so subject to justice as fair reciprocity. One might thus argue that on Rawls’s theory, caregivers are owed compensation for the

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Assuming that actual benefits must have been given and received, and indeed in an obligating manner, has the advantage of not making intergenerational reciprocity part of an ideal theory of justice that permits itself various counterfactual assumptions, and that reasons on the basis of what generations would have liked to be the case (see in this context Wade-Benzoni (2002) and her critique of Rawlsian reciprocity). Rather, the account given here addresses living contemporaries as historically situated and therefore intergenerationally obligated. Asymmetrical reciprocity is then not just a normative theory about what we should do, but presents a social-ontological account of how we are to understand our being. This account suggests that our subjectivity comes with intergenerational responsibilities that point to a time before birth and after death. Sociality in general, and responsible agency in particular, can hardly be understood without taking into account the generativity as well as mortality of life: that we are born of predecessors and will die to leave the world to future people. Arguably, indirect intergenerational reciprocity is well placed to recognize this intergenerational temporality, the connectedness of human life across birth and death in both continuous and discontinuous ways. For in arguing that we owe our descendants because we received from our predecessors, indirect reciprocity is perhaps the only approach to intergenerational justice that takes both the past and the future into account in the very grounding of the obligation. The reciprocity obligation responds to a past donation that claims the present to take responsibility for the future.

4 From Contributor to Recipient If we accept that intergenerational reciprocity is both a fact of social life and captures some of its normativity, the next point I want to stress here may be easier to situate. This point is that intergenerational reciprocity names a kind of basic normativity that intrinsically calls for further elaboration by other norms and values. We already encountered the idea that indirect reciprocity presents us with a ‘dynamic synthesis’ of self- and other-regarding motivations for intergenerational giving. Arguably, the dynamic and synthetic nature of reciprocity is related to the fact that reciprocity is here not just a normative notion regarding what ought to be the case, but also refers to a social-ontological and historical reality: while all human beings will leave the world to successors who are dependent on them, they also inherited gifts and benefits from their predecessors, and both mortality and inheritance contribute to what it is to be a human being. Thus, even purely altruistic giving, if it exists, could be connected public good they provide, namely, the reproduction of society. Consider also Casal and Williams (1995) and Arneson’s response: “In the case of procreators having children and thereby benefiting bystanders, Casal and Williams say several of these conditions [under which direct reciprocity incurs obligations] fail to hold, so no Hart-Rawls duties of fair play arise… I suggest the fair play principle ought to be interpreted more loosely and under it obligations are triggered in bystanders who benefit from activities of procreators” (Richard Arneson, “Procreative Rights and Duties”, manuscript of paper read in Louvain-la-neuve, March 2011; available here www.vrousalis.net/Arn eson-Procreation.doc; last access May 8, 2020).

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to having received past benefits that are co-constitutive of one’s very being. Let us now explore the temporal and historical dynamism as well as the synthetic and open-ended normativity of indirect reciprocity a bit further. We should pay close attention to what happens when we understand reciprocity to generate obligations indirectly. For indirect reciprocity differs significantly from the model of direct reciprocity as it is generally discussed in the philosophical literature on justice. It is usually assumed that the logic that underwrites reciprocity runs from contribution to entitlement. In the case of direct exchange, you owe me because I gave (or am about to give) something to you; in the case of a more impersonal system, people deserve a share of a good because they contributed to its production. As Page puts it, “the central premise of justice as reciprocity is that only individuals who contribute to the well-being of others are owed the full range of ethical duties” (Page 2006: 100). Since on this view it is the contribution that engenders the entitlement, it is often thought that this theory’s greatest difficulty lies in explaining why we should owe to those who cannot, throughout their lifetime and not only temporarily, be construed as contributors. This is why, even in the literature on intergenerational justice, the issue of disability is at times adduced as an argument against intergenerational reciprocity, even if indirect (Gosseries 2008a, b). And it is also the reason why, for instance, John Rawls’s influential contractual theory of justice considers future people to represent a “problem of extension” along with relations to other nations, to the disabled, and to animals and the rest of nature (Rawls 1993: 20ff.). Like the disabled, future people thus belong to a group of non-contributors (or not full contributors) who are not treated as part of the core problem of justice, a core obtained by “simplifications” for theory-construction (Rawls 1971: 45–6), even if Rawls allows that insights gained from extensions may alter the core. It may be argued, however, that this difficulty, when applied to indirect reciprocity, underestimates the shift that occurs once we understand reciprocity as indirect. For the basic logic is here no longer one from contribution to entitlement, but from reception (for instance, inheritance) to obligation. Indirect reciprocity does not address the agent as someone who is entitled to receive benefits as a result of her or his contribution, but rather asks about how this contribution itself was (or will be) possible, and what debts came about in its emergence. The theory addresses agents as historically situated and interdependent subjects who received benefits and so are (‘always already’) obligated to give to others. In determining entitlements, the first question to ask is not “Who contributed fully (and how much)?” but “Who received (and how much)?” The addition of the third party then brings on another question, namely, “To whom should the recipient of benefits give back?” In a certain sense, this question regarding potential recipients now displaces the question about the contributors, who are no longer primarily relevant in determining entitlements, shares, and so on. This is so because indirectness means that the contributors need not be the ones (and in most cases in fact are not the ones) to whom entitlement accrues first and foremost. Rather, indirectness opens up the question of who should be the recipient of benefits. Given that indirect reciprocity allows a (potentially non-contributing) third party to benefit

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from the cooperation, it displaces the centre of attention, away from the contributor and toward the third party (“who to give back to, and how much to give back?”). It is in view of this question that asymmetrical reciprocity calls for normative supplements, that is, moral, political, social, juridical and economic accounts of need and desert, of equality and freedom, and so on. If we now assume (as discussed under generalization, above) that all capable agents received benefits in virtue of what their agency required to come about, then the shift that comes with ‘indirecting’ reciprocity becomes even more pronounced. If all agents must have received, even if to different degrees, then at the most general level, the primary morally relevant features will lie with the recipients, and not with the contributors. Indirect reciprocity, if thus generalized, would of its own accord invite a normative component centred on the needs of the third party. The specifics of the contribution made by the contributor (for instance, previous generations) is then relevant at a lower level, when we want to determine a specific obligation and for that reason want to know what and how much a given generation may have been given. This displacement of emphasis from contributor to recipient, and from entitlement to need, underlies, I would argue, the ‘dynamic synthesis’ Arrondel and Masson discovered in intergenerational conduct. The basic point here is not primarily that a motivation to reciprocate may be mixed, located in a grey zone between self- and other-regarding concern, between strict exchange (‘tit-for-tat’) and altruism. Any actual motivation may of course be mixed in this sense. Rather, the three-party relation introduced by indirect reciprocity allows ‘dynamic syntheses’ for the more basic and underlying reason that an obligated agent engages in a relation to not just one other person, but simultaneously to two other parties. This makes it possible to be at the same time, in one and the same motivation, exchange-oriented in respect to one such relation, and ‘altruistic’ (or more generally normative and other-regarding) in the other. If these two parties occupy different positions in time (say, one in the past and the other in the future), then the dynamic synthesis will also undo strong contrasts between the modes of time, that is, the source of the obligation will not be assignable exclusively to the past or to the future (even if we can, of course, distinguish primary sources and primary orientations of transfers). Stressing this temporal aspect and ‘dynamism’ of the ‘dynamic synthesis’, asymmetrical reciprocity could be argued to be not as vulnerable as indirect reciprocity to the objection that it cannot account for direct (and arguably much stronger) obligations to future people. By contrast, in insisting that in every relation to future generations, there is an element of past debt, asymmetrical reciprocity necessitates further specifications of owing forward, as we saw, including what I called other-regarding future-oriented duties. But these specifications are to take our Janus-faced generational entanglements seriously. In taking my motivation for giving to the future from the future, for example, an element of indebtedness to the past is also at work; I could not ascribe my gift to the future just to myself, or just to the ‘present’ generation. I thus propose a kind of cooperation of asymmetrical reciprocity and normative theories of justice (such as egalitarianism, utilitarianism, sufficientarianism,

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etc.). Just as asymmetrical reciprocity points to (one of) the social-ontological and historical-temporal origin(s) of the normativity (i.e., the responsibility and imputability of agents) presupposed by normative theories of justice, so asymmetrical reciprocity, of its own accord, calls for such theories to further specify the content of moral duties. For the reasons given, this cooperation is of particular relevance when it comes to intergenerational justice.

5 Infinity I have argued that we should understand asymmetrical reciprocity as indirect, generalized, calling for normative supplementation, and characterized by human interdependency and power asymmetries. In this last section, I want to explore another feature of asymmetrical reciprocity, namely, what I call (following Levinas 1969) ‘infinity’ (see Fritsch 2018, Chap. 2). (Given the limited time span of the universe, and thus of all life, ‘indefiniteness’ may be better, but ‘infinity’ is meant to also capture the limit to quantifiability and calculability that Levinas in particular sees as a hallmark of responsibility.) The asymmetrical responsibility to care for those who are to survive us may be focused on, but is not limited to, minors in the most proximate, overlapping future generation. However, it also stretches to distant future people in their very indefiniteness (as concerns number and identity). I believe this point to be crucial though easily overlooked (for exceptions, see Passmore 1974: 90ff., Howarth 1992). If intergenerational responsibility is underwritten by asymmetrical reciprocity, then it also implies an ‘infinite’ element that relates to distant future people not so much directly, but via those who will survive through our care: responsibility for distant non-overlapping generations begins with the responsibility we take today for the next generation. Let us look at this more closely. Under certain conditions, we may argue, power asymmetries translate into asymmetries in responsibility. Such conditions, generally speaking, involve the kind of dependency we typically find in the relation between present and future people. Of this relation, the responsibility between parents and children is perhaps the bestknown and most general case. (It is a case that adds the more-or-less voluntary acceptance of the responsibility, but as we have seen, asymmetrical reciprocity adduces reasons for this responsibility that are independent of such voluntary acceptance.) If an appropriate paradigm case of responsibility is that of an adult for a minor (or as well a teacher for a student, a trainer for a trainee, and so on), then responsibility includes responsibility for the responsibilities that the minor will have in the future but is not yet, or not yet fully, capable of understanding and exercising. For instance, parents and teachers are to occupy themselves with a child’s success in school: so that the child be able in the future to take care of itself and its dependents. (To a significant extent, education consists in extending the future planning horizon of minors—inability to defer gratification, for example, or to anticipate the likely consequences of one’s actions on others in the medium and long term, is usually interpreted as a sign of immaturity.) When we take responsibility for another, we

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substitute ourselves for her in assuming, for now, her responsibilities for herself and for others. And if I seek to ensure in the here and now that my (metaphorical or biological) ‘child’ (my survivor) be able to take care of her ‘children’, then I must also seek to ensure that her ‘children’s children’ be able to do so with regard to their children, ad infinitum. The argument does not just entail a negative duty, insofar as it is wrong to prevent others from exercising their duties. Rather, asymmetrical dependency implies the stronger claim that it is wrong not to bring the next generation into a position of autonomy-as-responsibility, a position from which they can exercise their responsibilities. Thus, we owe them the capacities and instruments they need to do so. For caring responsibility is not just about satisfying the needs of a dependent, but of fostering the autonomous exercise of capacities, including the capacity to act on one’s future responsibilities (Jonas 1986: 98ff.).6 In contrast to other construals of the chain of obligation, we must stress that this is a responsibility that is related to the next overlapping generation but also at the same time (though less immediately) to generations in the further future. In this way, the chain of concern is not unable, as is claimed at times, to address cases in which the present needs to take responsibility for a distant generation (Page 2006: 118). For instance, Jamieson claims in this context that, according to the Stern Review, “perhaps 90% of climate change damages will occur after 2200” (Jamieson 2014: 165). These damages would thus skip intermediate generations, and standard chain-of-concern models that rely on direct reciprocity, so the objection goes, cannot account for them. In response, the infinite dimension of asymmetrical reciprocity overlaps with, but also differs from, the generationally infinite nature of direct reciprocity. Gauthier (1986) and McCormick (2009), for instance, also exploit the overlap between generations to arrive at a chain stretching indefinitely into the future. Limiting moral regard to direct reciprocity among overlapping generations still results in long-term connections due to the fact that there is a reciprocity relation between, say, generation twenty-nine G29 and G30, and then in turn between G30 and G31, and so on. Thus, we have interlocking pairs (G29–G30, G30–G31, G31–G32…) that stretch indefinitely into the future. But the infinite dimension I wish to attribute to asymmetrical reciprocity adds to this the regard G29 must have for G30’s regard for G31 and G31’s for G32, etc., and thereby undoes the limiting of reciprocity to overlapping pairs (or triples, if we admit grandparental relations to the collaborating overlap). The moral relation between G29 and, say, G50 (while still, and reasonably, indirect

6 That care is not just about satisfying needs but about fostering the development of the autonomous

exercise of capacities has been well recognized in the literature on care and dependency (though less well noted is the emphasis on the responsibilities that come with autonomy). Even in the very hard case of congenital disability and its prospect of life-long dependence, Kittay includes “independent living” (next to social recognition and normalcy) as one of the goals of care, though in this case it will be “a subsidiary goal to living as full and rich a life as one’s capacities permit”; in these cases, Kittay argues, we must “reconceive development not only toward independence, but toward whatever capacities are there to be developed” (Kittay 1999: 172–3).

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in that it passes through other generations7 ) is thus denser than on the standard chain model, due to both the indirectness of reciprocity and the asymmetry between the generations. Responsibility even for distant generations, then, begins—and begins again, in response to other such beginnings—in the relation between overlapping generations, but from these singular circumstances it has always already expanded to include responsibility for many others, including those in the distant future. When an adult takes responsibility for a minor’s future responsibility to yet other future people’s responsibilities, we may speak, with Levinas, of a kind of ‘substitution’ (Levinas 1998) for the other’s responsibility that involves a moment of what he calls ‘infinity’ (Levinas 1969): our responsibility for future people precedes their turn, but thereby also exceeds their responsibility, in the sense of reaching beyond them to yet others, in particular in the future. We must take responsibility not only for them before they can reciprocate but also for their responsibility to take responsibility for their (future) others, and so on to infinity. While responsibility is future-directed, the infinity stretches in both directions: neither in the future nor in the past can we trace all the capillary and substitutive connections of which we are the recipients as well as the addressees called on to take our turn. The gift from my parents and ancestors was enabled, though of course not caused or determined, by their parents and ancestors, and so on; at some point the line becomes untraceable, and the debt unquantifiable. Similarly, in taking over responsibility for my own children (or those of my sister or of my friends or of strangers), I asymmetrically assume responsibility for their future responsibilities and gifts, including their responsibilities for the responsibilities of their children and children’s children. But the indefiniteness in both directions in no way lessens the responsibility of the present, for it remains the heir to the past and will engender the world of the future, always already in the process of becoming the future’s ancestors. Taking responsibility for one’s actions’ long-term consequences entails enabling ‘our’ minors (those who are to be educated by and will survive us) not to remain minor but to become capable of discharging their responsibilities to the next (and subsequent) generation(s). This is a point at which concerns over, for example, the corporatization of public education, the replacement of the critical and democracy-fostering university with a 7 Due to the well-known power of the past over the future, each generation cannot but make decisions

for its next (and subsequent) generations, for example with regard to the legal and institutional structure, infrastructural investments and educational policies. This gives us an epistemic rather than a normative reason to include a chain model in an intergenerational theory: for the more proximate generations will be better situated to make the relevant decisions. Also, what speaks in favour of a chain are more general pragmatic (not just epistemic) reasons: we must rely on intervening generations to pass on what we intend for more distant ones, and in case of continuing goods like environmental ones, at least not to ruin our efforts, to the extent we make them, but to safeguard them. That is another reason why education of the next generation is crucial, as it must not only be autonomous, but also cognitively and motivationally equipped to carry on long-term projects (such as biosphere-conserving and democracy-enhancing goals) if they are based on good reasons.

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more market-oriented one, reveal their intergenerational aspect.8 These worries may even extend to an erosion of adult-minor responsibility itself in an ever-increasing corporate culture.9 Further, the infinity of intergenerational responsibility has implications for such burning issues as climate change: the latter demonstrates to us on a daily basis that the presently living have the possibility of severely hampering, perhaps irretrievably, the means and background conditions of future life to address its obligations to the next generation. There is yet another way in which asymmetrical reciprocity proposes an intergenerational chain of concern that goes beyond interlocking pairs. For the infinity and untraceability of intergenerational debts means we can always, and with some legitimacy, begin to abstract from the personal relations of care, of bequest and inheritance, and so on. If I owe my philosophy teacher a specific debt for what she taught me, I also recognize (and should recognize) that she could have done it only because of her teachers and the tradition that stands behind her like a giant. As a result, I may feel I owe a debt to teachers or philosophers in general, or even relevant previous generations in toto, a debt that is to be paid forward to students and future generations in general. As we can see, the infinity of asymmetrical reciprocity links up with its normative open-endedness and connectability. Specifically, the infinity of the responsibility contributes to asymmetrical reciprocity’s call for normative supplements in affecting the content of the reciprocity obligation. Generally, it is assumed that reciprocity is governed by some sense of equivalence: the recipient is to give ‘back’ at least as much as she received (Gosseries 2009), or, as Mauss put it in his classic ethnographical study regarding gift-giving, “something of equal or higher value” (Mauss 2002, 15; cf. Kolm 2006; Page 2006; Gosseries 2009 speaks of “strict equivalence”). Infinity and the supplementation do not dismiss equivalence, but they render reciprocity more open-ended (and the intergenerational obligation more overdetermined). Indirect reciprocity, we said, is intrinsically open as to the third party that is to benefit from a previous interaction. It thus invites other values and moral concerns to come to the fore to help determine the most deserving or needy recipient. Given that the recipient is a third party that need not (yet) have contributed, and in fact whose contribution is contingent and indeterminate, the ‘desert’ in question need not exclusively be defined in terms of the likelihood of future contributions (even if these are desirable and to be aimed at if possible, as we have

8 Regarding

recent changes in the university, in particular with reference to the US, see, Aronowitz (2008), Schrecker (2010), Carvalho and Downing (2010), Giroux (2011). 9 It may be worrying in this context, not only for the next generation but also for distant ones, that there appears to be sociological evidence for the claim—a claim that is at least as old as Adorno and Horkheimer’s critique of a culture industry that is said to replace adult family members as principal authority and role models for children (Adorno and Horkheimer 2002)—according to which consumerism tends to undermine the asymmetrical relation between adult and minor (cf. Barber 2007; Stiegler 2010). If the present generation is a spending one compared to the “saving” generation of the post-WW II era, ‘infantilized’ (Baudrillard) by its short-term relation to desire and its overdrawn credit cards, the debts—both monetary and in terms of failed responsibility to act on, for instance, environmental degradation—are passed on to the next generation.

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seen).10 The necessity of connecting the reciprocity motive with an asymmetrical focus on others goes along with the future contingency and unpredictability that the notion of infinity stresses: indirect reciprocity suggests paying forward to a future that is beyond the control of the agent, in particular in the intergenerational context in which the agent must anticipate her death. This may also explain, at least for the symbolic goods in question here, why they are to be, by and large, paid forward. When we ask ourselves to whom we should return the benefits we have assumed from previous generations, we find that many of these benefits are of such a kind that it makes little sense to give them back to the donors. We show our appreciation for the efforts of our teachers by and large not by teaching them in turn, but showing (albeit creative, context- and objectspecific) faithfulness to them in our teaching the next generation. The reason is that the donor has little or no need for the reciprocation, and is better appreciated by symbolically and indirectly surviving in our faithful but discontinuous continuation. This is a point overlooked if, in our modeling of the intergenerational problem, we both abstract from the passage of time and quantify the goods to be passed on. Temporal finitude—the passage of time from birth to maturity (to birth of others) to death—recommends descending reciprocity at least with regard to symbolic goods such as education, asymmetrical trust and recognition, and so forth. And to some extent this argument from temporal finitude or from alternating asymmetries carries over to material goods as well, at the very least to those, as we saw above, that are prerequisites for the symbolic ones. But even with regard to material goods alone, most often treated by way of extending standard distributivist theories of justice to the intergenerational case, a combination of indirect reciprocity with asymmetrical responsibility for the next generation recommends itself. To see this, let us recall the basic problem that afflicts distributivist approaches (in particular aggregative ones), however much we need them even here, in the intergenerational case where neither the amount of the good to be distributed nor the number of recipients may be knowable (cf. Lauwers and Vallentyne 2004).11 As a result, distributivist approaches can hardly avoid transferring some duties, both in terms of the production and the distribution of material goods, to the next generation (or the next few generations), asking it to do its turn. This is in part because this next generation is more favourably positioned epistemically, but also because it cannot be bypassed in terms of the production and continuing transfer of the goods in question, or just avoiding harms. In this sense, it seems, no account of future justice can do without a chain-of-concern model. 10 Some gifts are such that they require an indirect reciprocation that is altruistically bent towards being given to a third party whose neediness trumps demands of equivalence, whether between the first and the second, or the second and the third party. To return care, trust, recognition, or education is to focus on the other to be cared for, trusted, recognized, or educated. In this case, the goods to be ‘distributed’ mandate altruistic concern. 11 For this problem to occur, we need not assume an ‘infinity’ of generations, to which David Heyd has objected on ontological grounds (Heyd 1992) and Birnbacher (1988) on empirical grounds; ‘indefiniteness’ will suffice, comprising the probability of a very high number and the impossibility of knowing how many.

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Due to this open-ended concern for the future other, each generation, despite its debt and faithfulness to the past, may very well feel called upon to fulfill its forward-looking duties not only differently but better. This may help to address the ‘problem of iteration’ in the reciprocity chain of obligations, that is, the problem that if a generation fails to do its part, its successor will inherit both a compounded problem, and less of a prima facie justification and motivation to continue a project that requires the cooperation of several generations (Gardiner 2011). This may pose the greatest objection to theories of intergenerational justice that rely on such a ‘chain of obligation’, such as indirect reciprocity: as the saying goes, the weakest link breaks the entire chain. The intrinsic combination of reciprocity with an open-ended concern for future others may help us to avoid this conclusion. The combination between direct and indirect duties also addresses another problem that is said to afflict indirect reciprocity. It has been argued that a theory of intergenerational justice ought to be ‘demo-sensitive’, that is, it should take the (expected) number of future people into account. If one argues, for example as a luck egalitarian, that the current generation owes to future people equivalent opportunities for well-being as a direct result of these people’s morally relevant interests, then a generation must transfer more goods to a larger generation that it chooses to bring about. By contrast, Gosseries argues that in particular descending reciprocity (from past to present via future), precisely because of its indirectness, is incapable of taking population size into account: reciprocity merely requires that a generation passes on (at least) as much as it received, regardless of the number of people it puts into the world. As a result, it may allow gradual impoverishment per head over time (Gosseries 2009: 138f.). In response, I remind the reader that I do not wish to rule out in general an account based on direct intergenerational relations, for as I said above, the reciprocity account is compatible with, and in some respects invites and mandates, a ‘subject-centred’ moral theory that roots moral obligation in the vulnerability or the equality of others. Nonetheless, it seems that this alleged defect results in part from abstracting from the generational overlap in which we found an asymmetrical and infinite responsibility. For if I realize that I owe life chances to another (in part) because they were given to me, and I further understand that enacting this responsibility requires enabling the other to meet his future responsibilities, and I also see that the other’s future responsibilities will be crucially affected by the number of people to whom she is responsible, then I must be concerned to limit the number of future people in view of these responsibilities. In addressing the content of asymmetrical reciprocity, then, we should keep in mind that the openness to normative supplementation avoids the strict reciprocity we find in exchange, and renders the content context-specific: what the recipient needs is often a more important consideration than what the donor received. The various combinations and linkages—principally, the one between indirect reciprocity and asymmetrical responsibility, but also those between symbolic and material goods and between singular and collective ownership and pathways of transmission—render the exact content demanded by this kind of reciprocity overdetermined, context-specific,

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and open-ended. It is not my goal here to specify in greater detail which normative theory (egalitarianism, utilitarianism, sufficientarianism, etc.) may be best suited to supplement asymmetrical reciprocity. Last but not least, we may respond to the objection that intergenerational reciprocity is at best silent on, and at worst suggests reciprocation, in cases of the passing on of harms, rather than benefits, such as excessive environmental degradation. First, we should recall that the combination of reciprocity’s equivalence with future-regarding concerns militates against any justification for passing down harms. Second, asymmetrical reciprocity suggests that, to the extent a new generation has come about whose life is at least worth living (however we define this), possible harms will have been received in the context of some benefits. This prompts us to ask whether the harm a generation had to assume is (causally) connected to inheriting a benefit that may be used to compensate future generations for the harm. Indeed, in the context of climate change in particular, various liability principles have been proposed that suggest, grosso modo, that the benefits of industrialization obligate its heirs to in part direct these benefits to mitigation, adaptation, and compensation (Baer 2006; Caney 2010).

6 Conclusion I have presented asymmetrical reciprocity as a social-ontological and normative concept that captures why we, as historically situated and dependent beings, have obligations to future people. On this view, intergenerational reciprocity is indirect, generalized, characterized by asymmetries in power and responsibility, infinite, and calls for connections with other, more subject-oriented accounts of intergenerational obligations. Asymmetrical reciprocity understands individuals as members of interdependent generations, and each generation is taken to address its successor as carrying on the project of justice in a chain of concern.

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Wade-Benzoni KA (2008) Maple trees and weeping willows: the role of time, uncertainty, and affinity in intergenerational decisions. Negot Confl Manage Res 1(3):220–245

Matthias Fritsch studied philosophy in Cologne, New York, Berlin, and Philadelphia. He joined the faculty of Concordia University in Montréal in 2002. He has been a Humboldt fellow in Frankfurt, Germany (2010–2011), visiting research professor in Kyoto, Japan (2015–2016), and is Senior Research Fellow at Western Sydney University. He is a fellow of the Sustainability Research Centre at Concordia University and a Collaborator of the Sustainable Climate Risk Management Strategies Network (Penn State University, funded by the US National Science Foundation). His research in moral and political philosophy focuses on historical justice, intergenerational ethics and politics, theories of democracy, and the critical theory of society. To date he has published two monographs (The Promise of Memory, SUNY Press, 2005; and Taking Turns with the Earth: Phenomenology, Deconstruction, and Intergenerational Justice, Stanford University Press, 2018), co-edited two anthologies (Eco-Deconstruction: Derrida and Environmental Philosophy, Fordham University Press, 2018; and Reason and Emancipation. Essays in Honour of Kai Nielsen, Humanity Books, 2007), and co-guest-edited a journal volume (“Phenomenology and Future Generations” Metodo. International Studies in Phenomenology and Philosophy, 2017). Dr. Fritsch has published a range of articles in scholarly journals, and translated authors such as Heidegger, Gadamer, and Habermas into English. While continuing to write on environmental and intergenerational ethics, he is working on a monograph on phenomenology and the sources of normative critical theory.

Chapter 3

Future Generations Correcting Markets and Democracy—Research Needs in Future Design Michinori Uwasu

1 Introduction Since the Industrial Revolution began with the invention of the steam engine in the seventeenth century, the global economy has continued to grow rapidly. Our hasslefree lifestyles and the shape of our cities and communities have been formed by the “liquid energy revolution” of the early twentieth century, which saw petroleum used for energy and raw materials, as well as by the Internet and the revolution in information technology of the late twentieth century. Undoubtedly, leaps in medical technology, such as the discovery of pathogenic bacteria and the invention of antibiotics, have greatly contributed to improvements in human health. The “structure” of society is a further element that is inseparable from such technological innovations. With an adequate social “structure,” not only does scientific and technological progress become possible but also technology can be linked to social development and economic growth. Specifically, in the modern age the economic structure of the “market” and the political structure of “democracy” form the cornerstone of the social structure. The “market” is a mechanism by which resources such as labor, capital, and raw material may be effectively distributed. We have achieved economic growth by developing the “market” and simultaneously industrializing the economy. In turn, “democracy” is a “structure” by which society makes decisions via the principle of majority rule. Within a democratic system, elections are used to determine government representatives who make decisions about the redistribution of income, and so forth. These social structures, which form the foundations of our society, are becoming unstable. Efficient distribution of resources to the current population prevents the “market” from taking into consideration the needs of future generations. Global

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warming caused by the use of fossil fuels, the loss of biodiversity because of deforestation, and overfishing are all clearly caused by current generations’ overuse of resources that should be left to future generations. Although the “market” can and does accelerate these phenomena, it cannot provide solutions for them. On the other hand, democracy in its current state is also burdened with significant problems. The sophistication, complexity, and gigantic scale of technology has disrupted communication flows between experts, policymakers, industry leaders, and citizens and made correct decision making via majority rule (elections) impossible. Although deep, expert knowledge is required to understand problems such as global warming and the restarting of nuclear power plants, the scientific uncertainty and required ethical judgments mean that any lack of communication undermines the citizens’ trust in the decision-making processes. Moreover, demographic changes within advanced nations—decreasing birthrates and aging populations—may skew the election results that determine governmental representatives. As these societies emphasize policies that prioritize elderly people and reduce investment in future generations, fiscal deficits may increase which will in turn increase social welfare costs. This chapter explains future design a research framework to solve these types of problems—the creation of groups within current society to represent future generations and participate in decision-making processes. A future-generation group might be called the “Ministry for the Future” if it were an administrative body or the “Future Research Institute” if it were an agency for investigation and research. Regardless, there is a need for debate concerning the type of groups that might be able to produce information representing future generations (for use in decision making) and the type of mechanisms that would allow these groups to participate in contemporary decision-making processes. This chapter, using the keyword “deliberative democracy,” discusses methods to incorporate future generations.

2 Problems Within Market and Democratic Systems We already understand that in many instances, the “market” does not function adequately in contemporary society. For instance, when there are large informational discrepancies between sellers and buyers regarding products and services, social losses are incurred. When factories producing industrial goods also produce pollutants that affect the environment, the market alone is unable to ensure that the pollutants are cleaned up, and again a social loss is created. (Economics theory tells us that if the costs of cleaning up the environment were included in the price of the product whose production generated the pollutants, excessive pollution would be avoided.) In addition, no mechanism exists within the current market to allow the consumption of petroleum and other precious minerals while at the same time leaving some of these resources for future generations.

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These problems are called “market failures” within the field of economics, and public institutions such as governments exist to remedy these failures. Under conditions in which only the seller of used car parts, for example, is party to information concerning the defects of those parts, the government or public bodies provide laws and rules for accurately publicizing that information. With regard to the environment, excessive pollution can be prevented if manufacturers are forced to cover the cost of correcting environmental damages or if environmental taxes are levied on each product. Let us consider here the grounds on which public institutions such as governments and administrative bodies take action against these types of problems. Most modern societies utilize a “democratic system” as their political apparatus. Under this system, it is difficult for those in power to ignore the voices of aggrieved parties. On the other hand, contemporary societies are facing increasingly complex problems. First, one cannot easily distinguish those who cause a problem from those who suffer its consequences. Second, the injuring and injured parties may traverse borders and eras. Finally, the very methods that may be used to solve one problem may negatively affect people not connected with that problem. Thus, many of the most important problems faced by contemporary societies cannot be solved by science alone, but instead, must be addressed by ample discussion among a variety of stakeholders. Let us call this process of producing answers through stakeholder discussions “deliberative consensus building.” Nevertheless, large problems also stand in the way of such consensus building. The mainstream democratic system found in contemporary societies is the system of “representative democracy.” In representative democracies, politicians are chosen by citizens who voluntarily participate in elections, and then these politicians establish laws and make decisions about significant issues in the society. Of course, the positions and roles to which politicians are elected, as well as their terms of office, differ from country to country. However, the crucial point is that although many developed countries employ the representative democratic system, deliberative consensus building is difficult to achieve under this system. Let us examine this in more detail. Intergenerational problems, such as environmental or energy issues, faced by contemporary societies are typically highly complex. Distinguishing clearly between those who might cause a problem and those who would suffer its consequences is often difficult. Furthermore, depending on the methods used to resolve a problem, people with no apparent connection to it may be affected and the effects may occur across generations. For example, nuclear power plants illustrate a truly complex interaction of interests, and science alone cannot determine whether a nuclear power plant should be built in a particular society. Nuclear power is a cheap, stable source of electricity that produces much lower carbon dioxide emissions at the point of generation than thermal power. Nevertheless, radioactive waste materials must be managed for many generations, and accidents at nuclear power plants have severe consequences. To consider

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the pros and cons of nuclear power plants, answers must be produced through “deliberative consensus building” among stakeholders. However, the current democratic system of “representative democracy” includes a number of important overlapping factors that hinder deliberate consensus building. The first factor is the vulnerability of citizens to information. Many citizens rely not on schools and specialist publications for information regarding a particular issue but rather on mass media and the Internet. Much of the information flying around on television and the Internet is biased or inaccurate. Citizens are easily influenced by this information and may not have an accurate understanding of problems. In addition, societal opinions may be divided due to inconsistencies in how problems are perceived. (This is the phenomenon known as “group polarization.” “Apathetic” attitudes, showing a lack of interest in a given problem, or outright “political ignorance” resulting from having no interest in politics itself, spread amongst citizens and electors. While important factors such as informational literacy allow a person to correctly obtain, interpret, and understand information, the decisive issue is the fact that there are no opportunities for in-depth deliberation of social problems within a system of indirect democracy. Phenomena such as “group polarization,” “apathy,” and “political ignorance” are all products of current decision-making processes, and yet they damage the very foundations of democratic systems by dividing societies rather than building consensus.

3 Initiatives in Deliberative Democracy It is in this context that several attempts to overcome the failings of current democratic systems are being made. Two main trends have emerged. The first is the system of deliberative democracy derived from ethics and philosophy. With the increasing technological development and economic expansion of the twentieth and twentyfirst centuries, environmental pollution has become an acute problem. In particular, ecosystems and people of weaker socioeconomic standing go unheard and suffer the consequences. Hans Jonas, a philosopher who continually questioned the meaning of technology for society, sought to define the responsibility of human beings towards sustainability, that is, the responsibility we hold to future generations, and made great advances in the debate around environmental ethics and intergenerational ethics. Despite this, within the world of philosophy, inquiry into metaphysical questions has become the mainstream topic. For example, philosophy has focused on individualism versus totalitarianism, the rigorous definition of nature, and the ethics of the rights of future generations. As a contribution to resolving actual problems was sought, a pragmatic approach, which focuses heavily on problem resolution, has emerged. This approach proposes the adoption of a multi-dimensionality, which respects consensus-building processes in which various stakeholders participate, and respects localities and unique specificities. It is also characterized by a strong influence from no authoritarian and depoliticized voices, emphasizing opinions that rise

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up from the ordinary citizenry (i.e., a bottoms-up approach). Two initiatives, in which elected citizens deliberate about small social issues, have emerged—the citizen’s jury in the United States and the Planning Cell in Germany. Political studies in the 1990s debated the theoretical foundations of these deliberative democracy models of participatory decision making. Habermas argued that deliberation by groups of regular citizens was legitimate. Moreover, other studies demonstrated the superiority of deliberative democracy systems organized by regular citizens. Fiskin and others at Stanford University ranked various efforts at supplementing indirect democracy at the national level (such as direct–voting systems, regional government, government by parties, assemblies, deliberative councils, and citizen movements) to evaluate whether each of these can produce agreements based on careful deliberation. For example, they point out that indirect voting does not solve the problem of participation bias associated with a lack of political interest within electorates and that even election participation by a large number of voters does not remove group polarization. Accordingly, the problem remains that any agreement derived from a system of indirect voting may be undesirable from a societal viewpoint or may be unstable. How are systems of deliberative democracy superior? Political scientists Karpowitz and Mendelberg summarize the advantages of deliberative democracy as follows: First, each individual citizen benefits by simply participating in the deliberations. Through the process of acquiring information and debating an issue, the participants learn about the issue and acquire tolerance and sympathy toward other people. In the consensus-building process, participants develop a greater understanding of their own personal interests, an ability to defend their opinions, a heightened interest in the opinions of others, and an increased ethical awareness. Second, it has been argued that deliberative democracy also leads to reductions in extremist views, which can become barriers to consensus building in the public arena, as well as to improved citizen empowerment. It has also been noted that benefits accruing to individuals are also benefit society as a whole. For example, improved citizen empowerment can increase rates of participation in public events. Reaching consensus on the basis of careful deliberation increases trust in the democratic process, benefitting the democratic system itself. Deliberative democracy is a decision-making process that goes hand-in-hand with public spiritedness, rationality, and satisfaction. In large part, deliberative democracy compensates for the shortcomings of indirect democracy.

4 From Environmental Problems Toward Sustainable Development Now let us look at changes in social awareness of environmental issues. The twentieth century was an age of astounding global economic growth and large-scale population increases. However, the increased economic activity created environmental concerns that threaten the sustainability of society. Pollution emitted by factories

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caused severe damage, including negative effects on human health, during the period of rapid growth. While a large number of people in Japan became victims, many people worldwide worked tirelessly to solve pollution problems. The American biologist Rachel Carson’s publication (1960) and a report by the nongovernmental think tank, the Club of Rome (1972), raised alarm about the finiteness of planet Earth. In consequence, awareness emerged that the Earth’s environmental capacity as regards human utilization of resources and emissions of pollutants was limited (that is, its resource abundance and ability to absorb pollutants), and that humanity itself threatened (in terms of a wider definition of environment) ecosystems and its own continued existence. Such warnings concerning sustainability are linked to movements by international societies, and in particular, by the United Nations (UN) whose mission is the promotion of world peace and development. The UN held its first Conference on the Human Environment in Stockholm, Sweden in 1972, establishing the United Nations Environment Programme. A 1986 report by the UN World Commission on Environment and Development also argued the need to leave future generations with the ability (resources) to fulfill their needs, in other words, the need for sustainable development. At the Third UN Conference on the Human Environment, held in Rio de Janeiro, Brazil in 1992, significant conventions were adopted to tackle international environmental problems such as climate change, loss of biodiversity, and desertification. These developments were deeply influenced by the “precautionary principle” as a way of thinking about building a sustainable society. With regard to the problem of global warming, the Intergovernmental Panel on Climate Change (IPCC) works to scientifically define the mechanisms of climate change, while the United Nations Framework Convention on Climate Change (UNFCCC) is charged with creating international agreements to carry out concrete initiatives on climate change. IPCC reports compile information about the mechanisms, causes, and results of climate change. While there is much that remains unexplained scientifically, there is no doubt that the “precautionary principle” is an important keystone of the UNFCCC. For example, the Kyoto Protocol adopted at the Third UNFCCC Council of Parties in 1997 obligated developed countries to reduce their greenhouse gas emissions. This was a groundbreaking achievement for an international society comprised of sovereign states, and within the current energy system, which relies heavily on fossil fuels as a source of energy and in which any cuts will result in large economic burdens. Unfortunately, UNFCCC initiatives have not functioned well in practice. Any international agreements are undoubtedly difficult to achieve as long as advanced countries are responsible for reducing emissions but developing nations contribute more than half of the total greenhouse gas emissions. The energy-intensive United States, which should be taking the lead in applying countermeasures, has not ratified the Kyoto Protocol. China, the largest emitter of greenhouse gases, is not required to make reductions. Canada has left the Protocol, and Japan decided not to participate in mandatory greenhouse gas reductions from 2013 (the third Kyoto Protocol commitment period).

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5 Creating Future Generations International society has succeeded in embedding the standard of the “precautionary principle” within society by shifting views around environmental problems toward the challenges of sustainable development. This shift can be seen, for example, in Japan’s Annual Reports on the Environment. In 1980, the main concerns noted in these reports were the conditions of and countermeasures against public pollution such as air and water contamination; since 2000, social models such as a low-carbon society and recycling have emerged as keywords. However, current structures are still not sufficient to overcome the problems inherent in the market and in democratic systems. Some may argue that a world government is needed to tackle global challenges such as protecting the environment. Unfortunately, such a centralized organization would be incapable of developing policies for each nation and region, as can be seen clearly by observing the current state of Japan, which has a centralized government. Hence, we propose a bottoms-up approach of developing future generations in a range of areas within society and having them participate in deliberations in order to make important social decisions and build social consensus. The idea of creating future generations in the present in order to give them the right to speak may seem outlandish. However, is not human progress often made, sometimes unexpectedly, by applying outlandish ideas to society? While the progress of humankind can be seen in the creation of a rich society through innovations in systems and technology, such progress may be superficial. Is not real progress found in society’s overcoming of race-, gender-, or class-based discrimination and valuing diversity? Rights—from the right to life to cultural rights to the right to selfexpression—that should be enjoyed by all have been expanded from a small number of voters to nonvoters and in recent years even to nonhuman actors. We argue that a mechanism must be designed to bring forth future generations that do not yet exist so that their voices can be heard. The markets and democratic systems of modern societies have a tremendous number of advantages and limitations. While some of these limitations can be overcome via the public sector, the improved systems will still not be able to solve problems related to intergenerational resource distribution and sustainability. Can we consider making decisions about how best to utilize the market on the basis of careful deliberations that take into consideration future generations? A mechanism to embrace future generations in our deliberations may—from a sustainability perspective—allow us to correct the functioning of markets and democracy.

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6 Research Needs Our proposal is not an armchair theory. We intend to assemble teams of experienced practitioners from the fields of sociology, engineering, natural sciences, and the humanities, working together to create a new discipline of future design. We are considering the types of research steps that must be taken by implementing pilot studies. For example, experimental debates about energy issues were conducted in the artificial environment of a university classroom, with the aim of reaching consensus through deliberation and considering future generations. In addition, economic experiments have verified the possibility of and mechanisms by which current generations would pass on resources to future generations even if this incurred a cost. Questionnaire surveys have been conducted to assess opinions about systems that could contribute to the creation of a sustainable society. Through insights gained from these types of studies, questions are being asked about the characteristics future generations are likely to have as a group and the types of settings that will be most effective for allowing them to have an impact on present-day decision making. The need for interdisciplinary studies of the environment and sustainability is already clear. Within the field of sustainability studies, which aims to understand the interrelationship between ecosystems and human societies and to connect this understanding with a vision or problems to be solved, progress has been made in unifying and structuring knowledge gained from academic research. On the other hand, the establishment of research methodologies for resolving real-world problems is still underway. “Meso-domain studies” are in the process of bringing together a range of technical solutions and connecting them with problem-solving or visionactualization efforts. Future design, sharing the same underlying principles and goals of these efforts, differs in that it involves undertaking research into systems and mechanisms to support a sustainable society and the concrete steps required to build them. Here, I would like to introduce three important research issues within the field of future design. First, as a tool for providing information necessary for deliberations, future design must establish methodologies for constructing scenarios that postulate tangible contexts or themes. For example, back-casting is a method used for imagining a desirable future society (a vision) and deriving the possible ways of arriving at that vision (scenarios). Back-casting does not predict the future, but rather, it establishes a desired future and asks what current generations must do to ensure that future. Back-casting differs from the comparatively more established practices of statistical and econometric forecasting in that it has no predefined approach. By combining, for example, system dynamics and simulation from the computational sciences with the qualitative research methods used to explain society, back-casting can provide tangible information for future visions and strategies. Visualization can help us to understand intuitively the content and meaning of even physically unfeasible choices; although not all choices can be implemented, visualization can be an indispensable tool in policymaking and deliberations.

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Retrospect is also an effective tool in deriving insights from tracing previous experiences until the present. Verifying any “if/then” propositions about the future is difficult because the very structures of future society, such as its population and industry, are unknown. Yet, as regards the past, to some extent, it is possible to recreate society using comparatively well-established general equilibrium models from economics or system dynamics from engineering. For example, how would have policies promoting renewable energy sources rather than nuclear energy affected society? Testing these types of “if/then” hypotheses can provide data useful for contemporary deliberations and choices. Second, to correct the shortcomings of the current market and democratic systems, future design must construct methodologies for intergenerational deliberation to incorporate the views of different generations at the site of the deliberation in order to overcome human shortsightedness and tendency toward optimism. As market failures indicate, the peaceful distribution of resources across generations may not always be achieved by groups of randomly assembled citizens (mini-publics). Accordingly, various ways of incorporating future generations’ viewpoints into the debate must be tested. Within deliberations by mini-publics, the importance of randomly selecting participants and of the facilitator has been noted, but no methodologies for conducting the debate have been established. How can we assemble a group of people who can truly “identify” with future generations? How can we evaluate the substance and processes of consensus building from the perspective of intergenerational resource distribution? In order to answer these questions, we are testing the conditions and methods of evaluation required for sustainable consensus building by using experimental approaches from the social sciences around processes and agreements (results) of decision making. Third, how can we integrate the practice of deliberative democracy into society? There is a need to design social systems, such as to make adjustments to legislative systems and reorganize bureaucratic government bodies, and to reconsider the role of think tanks. Merely implementing consensus building through deliberations may have an effect, such as educating individual citizens or increasing citizens’ trust in democratic systems. However, we must determine which systems and arrangements will be required to ensure that public opinion resulting from deliberation will be both transparent and quickly reflected in political and management decision making. How best to reflect public opinion from deliberations in political decision making, and whether this should be done at all, will rely largely on cultural background and political environments. Accordingly, a variety of forms and methods will need to be designed into social systems and arrangements aimed at peaceful cross-generational resource distribution on the basis of analyses of the legislative systems, forms of government, and cultural and historical backgrounds of various societies. For example, the historical societal structure of the Native American Iroquois Nation is said to have possessed mechanisms aimed at considering negative impacts of current behavior on future generations. The Iroquois Nation is also said to have achieved ideal social conditions, with women’s rights guaranteed and no gaps between rich and poor. Although their systems cannot be incorporated as-is into the present massive industrialized society, it is worth considering what lessons can be gained from them.

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7 Case Study—Creating Future Generation’s Voice Through Deliberation This section introduces a case study as to how to create future generation in an experimental deliberation setting. A specific research question of this study is to understand what factors and conditions create bias in a decision-making process and its outcome. Though it may be impossible to immediately create people who epresent the future, we are able to explore how individual attributes as well as information given in deliberation may affect people’s attitudes and decisions themselves. The series of deliberation experiments revealed some important points for the establishment of deliberation methodology. To examine the effects of deliberation procedures as a bias, we set up two hypotheses to explore the factors that create decision-making biases. The first one is role-playing. Literature in psychology has argued that a human being has the ability to play different roles in real life and virtual environments. For example, a single person may play different roles as a wife and mother at home and a professional in the workforce. The question to be tested in future design is: whether people play the role of different generations and whether role playing affects decision-making processes and outcomes. The second one regards the order of topics composition in discussion. Particularly, when it comes to energy, though energy is an indispensable resource, securing energy is not the objective of a society. Rather, an energy system should be established as a means to achieve a better society. In this sense, it is plausible that changing discussion steps so that they discuss both societal vision and energy system can alter the outcome. Specifically, discussants discuss first a societal vision and then choose energy systems. Given these hypotheses, the deliberation experiment was conducted as follows. The first series of experiments deal with whether role-playing affects the decisionmaking process and discussion outcomes. In this session, some groups areasked to play a future generation—they decide electricity generation composition as if they were living in 2050. The second one deals with the decision-making step: the order of discussion topics. Specifically, controlled groups in this session are asked to select the electricity composition through discussion, while treatment groups first discuss what societies are desirable for the group members and then choose corresponding electricity source composition for the future. We carried out deliberation experiments in the undergraduate class “sustainability science”, a liberal arts course the authors teach at Osaka University, in 2013 and 2014, in which students discussed how to select a composition of different electricity sources—thermal power, nuclear power, and renewable energy—in 2050. In the sustainability science course, first-year undergraduate students participated from all departments of Osaka University. Usually, about 100 students register for the class, two-thirds of them from humanity and social science departments, and one-third from engineering and natural science departments. As this experiment is carried out during a class, students receive a series of lectures on the environment and energy, assuming they have a fundamental knowledge of the deliberation subject. Students

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were also given advance instruction for the deliberation experiment to further obtain necessary information and knowledge to discuss electricity composition in Japan, including thermal, renewable and nuclear energy. Specifically, Forty-eight students participated in the 2013 experiments, whom we randomly placed into eight groups. Among the eight groups, four were told to play a future generation—they were supposed to be residents of 2050—and another four groups just discussed who they are now. In this year’s session, there was also an intergenerational discussion after the internal discussion. Internal discussion is conducted to make a first choice, and future and present generations exchange opinions toward a final decision. In the 2014 and 2015 sessions, 62 and 86 students joined, respectively. In these sessions, students were asked to discuss first societal vision; what would a desirable society look like in 2050? Then they discussed the corresponding energy system (the composition of power generation) in 2050 in Japan. Furthermore, in the 2015 session, we checked out the order effect, finding that seven of the 15 groups first discussed the energy system and then discussed societal vision, and the other eight groups did so in the opposite order. In what follows we briefly show the results of the experiments. First, we found from the first series experiments that role-playing can influence the discussion process. In this series, 5 groups represent the future generation and other five are present generation. Though the results did not show the difference in the choice of power generation composition in 2050 between the current generation groups and future generation groups, we saw a clear distinction of reasoning in their choice. For example, even though groups propose identical energy system for the future, groups representing future generation are likely to address the importance of technology inheritance or diversity of energy sources whereas present generation groups tend to put weight on economic factors. Second, the session for the results in 2014 showed the deliberation structure can alter the consensus reached or decisions made. Though no statistical analyses were demonstrated, there was a clear association between the proposed societal vision and power generation composition chosen as an energy system that supports society. Specifically, many groups who chose zero nuclear power proposed a communitybased society, or a de-centralized society, focusing on an autonomous regional economy as a societal vision (some others value nature, implying the risk hedge of nuclear power accidents). Since the current nuclear power generation technology is characterized by a centralized and large-scale energy system, it is incompatible with those societal visions. These results showed that role playing and deliberation structure can affect the discussion process and its outcomes. However, it is of significance to examine how the choice of discussion topics affects our results. First, this study used power generation composition as an energy system for a discussion topic. Our results showed a strong association between societal vision and the corresponding energy system. Technologically speaking, renewable energy, for example, is very site-specific, and thus it was easy for the discussants to connect a regional (societal) vision and its supporting systems. When dealing with other topics such as artificial intelligence or diplomacy, it may be difficult to connect a specific social vision to corresponding outcomes. In

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this sense, deliberation must include a discussion about what the objective is and what the means are for society. Second, we must be careful about how to interpret the discussion results about which decision represents future generational voices. For example, we should avoid concluding thereby that choice of renewable energy is merely future-oriented or that economic-oriented decisions are myopic. To identify under what conditions and environment the decision-making process and the outcome can represent future generations, we need to establish a set of criteria. Finally, existing literature in fact points out the significance of mini-publics by having randomly selected discussants deliberate when and if we seek public opinion. However, the participants in our deliberation experiments were all undergraduate students, but how this composition affects our results is yet to be examined.

8 Conclusion This chapter has raised some of the significant issues of the two systems that form the foundation of modern society—the market and democracy—and has suggested some approaches for overcoming those issues.Our argument is not that the market and democratic systems should be rejected, but rather, that they are no longer able to respond to the scale of our economic and demographic changes. In Japan, where industrial development has long been linked with rapid economic growth, there may still be a tendency to think of technological development and economic growth as the very purpose of society and thus sufficient for solving problems. However, economic growth and technological development are the means to create a desirable society. What is required is the creation of values leading to sustainable societies by developing future generations within contemporary societies, and to build mechanisms to undertake long-term decision making that includes multifaceted points of view within a range of social settings.

Michinori Uwasu is an associate professor at the Center for the Study of CO* Design, Osaka University.

Chapter 4

Backcasting for Envisioning Sustainable Futures Across Multiple Generations Yusuke Kishita

1 What Is Backcasting? The world is full of difficult problems, which often have no clear answers. One of the typical examples is life planning. The average life expectancy in Japan as of 2012 is 79.94 and 86.41 years for males and females, respectively (The Ministry of Health, Labour and Welfare 2013). During their lifetime, people would experience a variety of milestones, such as marriage, birth, home purchase, and retirement. Since the occurrence of these events involves huge uncertainties, it is impossible to predict accurately when these events will take place. Nevertheless, many people are likely to set several goals in life. For example, some people in their teens may decide upon a career they are interested to pursue, while others in the same age group may pick a university they wish to attend. During this process, people often define what is necessary to achieve their goals. Such a way of thinking is called backcasting. It is a useful concept when a person considers what actions should be taken to attain longer-term goals. Backcasting is characterized by thinking backward in time from a particular future end-point to the present (Robinson 1982; Holmberg and Robert 2000). The term backcasting was coined by Professor John Robinson at the University of British Columbia (currently working at University of Toronto) as a counter-term for forecasting, which means predicting as often used in weather forecasting. Backcasting intentionally does not consider what is happening at present and how the situation might unfold in the future. Instead, the characteristic of backcasting is that it starts with a consideration of what a desirable (or undesirable) future may look like. In the field of sustainability science, the concept of backcasting has been popularized in an effort to address environmental issues (e.g., climate change, resource depletion, water scarcity, and biodiversity loss) or sustainability issues in a broad sense (Kishita et al. 2016). This is because transformative changes in social systems Y. Kishita (B) Department of Precision Engineering, The University of Tokyo, Tokyo, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_4

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are crucial to arrive at a sustainable future. A long-term perspective, perhaps over the span of 50–200 years from now, is required to bring about such changes in reality, particularly when we consider the inertia of natural and social systems (Swart et al. 2004). The power of backcasting increases when envisaging ideal futures without being influenced by current situations, which helps to conceive of futures that are significantly different from extrapolations based on the past and present. Even when applying backcasting to the design of desirable futures, there are several constraints to be considered. One example is demographic changes. For instance, Japan’s population is projected to decline by 65% to 45 million from 128 million between 2010 and 2100, as described in Fig. 1. In particular, the working-age population between the ages of 15 and 64 is estimated to decline by 70%. Under such conditions, Japan’s population is projected to be ranked 17th in the world in 2050 (was ranked 10th in the world as of 2011) (Kito 2012). As the global economic situation is changing dramatically, Japan is required to reform its industrial structure in order to maintain its economic growth and living standard (Kito 2012). Another example is climate change issues. As mentioned in the IPCC (Intergovernmental Panel on Climate Change) Fifth Assessment Report (IPCC 2013), the fundamental cause of climate change issues lies in human activities. Therefore, it is essential to achieve a drastic reduction of greenhouse gas emissions, such as CO2 emissions, on a global scale. Potential actions to be taken include mobilizing a variety of energy-saving technologies and transforming our lifestyles. Then, the questions in envisioning sustainable futures include:

Japan's population by age (thousand)

• What would our ideal future look like when considering a variety of constraints, such as population declines and CO2 reductions? 140,000

Age 65 or older Ages 15 to 64 Ages 0 to 14

128,057 (2010) 120,000 100,000

Working-age population (Ages 15-64) 81,735 (2010)→24,396 (2100)

80,000

45,200 (2100) 60,000 40,000 20,000 0 2010

2030

2050

2070

2090

2110

Year

Fig. 1 Projected Japanese Population by Age (Median Birth Rate, 2010–2110) (National Institute of Population and Social Security Research 2012)

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• What kind of society would we wish to leave for our offspring living 100 years or 200 years from now? • How then should we put backcasting into practice? and • How effective would backcasting be to envision a sustainable society? The aim of this chapter is to answer these questions. Section 2 addresses the history of backcasting research conducted in the past and its related studies. As an example of applying backcasting, Sect. 3 shows descriptive scenarios of a sustainable society in Japan by considering situations around 2050. Lastly, Sect. 4 discusses the efficacy of backcasting that aims to design a future society as well as its future challenges and development.

2 Backcasting Approach for Scenario Design 2.1 Brief History of Backcasting Research Backcasting research has originated from Amory Lovins’ Soft Energy Path (Lovins 1977) published in 1977.1 As a path toward achieving a desirable energy future, Lovins focused on improvement in energy efficiency and the introduction of renewable energy (e.g., solar, wind, biomass etc.) instead of pursuing a large-scale, centralized energy supply system (i.e.,hard energy path), which mainly uses fossil fuels or nuclear power to meet increasing overall energy demand. Then, he proposed a smallscale, decentralized energy supply system (i.e., soft energy path) in accordance with the scale and quality of the final energy demand (Lovins 1977). As mentioned in Chap. 2, the United Nations World Commission on Environment and Development (WCED 1987) presented the concept of sustainable development in 1987. Since then, backcasting research has been actively conducted to achieve sustainability (Holmberg and Robert 2000; Robinson 1982; Mander et al. 2008). Combining energy and climate change issues, for instance, the International Energy Agency (IEA) (2010) has depicted a scenario to reach the 2050 target, which reduces CO2 emissions by half of the 1990 level. The scenario assumes the widespread use of various low-carbon products and technologies, including photovoltaics, wind power, and electric vehicles, in order to reduce the amount of CO2 emissions significantly. In Japan, various efforts using a backcasting method have also been taking place to delineate the image of a future society through which solutions for global environmental issues are to be sought [e.g., Nishioka (2008), Global Environment Committee, Central Environment Council, the Ministry of the Environment (2012)]. For example, the Ministry of the Environment, Japan has developed two contrasting scenarios (i.e., Scenarios A and B) to reduce greenhouse gas in Japan by 70% below the 1990 levels in 2050 (Nishioka 2008). Scenario A assumes a growth-oriented 1 It

was called backward-looking analysis at that time. The concept was then named “backcasting” by Robinson (1982).

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approach to achieve a low-carbon society using various technologies (e.g., photovoltaics, fuel cells, etc.) while pursuing economic growth and convenience aspects in peoples’ lifestyle. In contrast, Scenario B assumes changes in people’s lifestyle to achieve a low-carbon society based on local production and consumption as well as appropriate amounts of production and consumption.

2.2 Characteristics of Backcasting Future predictions including weather forecast often use a large amount of past data and knowledge and experienced-based extrapolations from the past (Huss 1988). However, global situations can possibly be changed by unexpected events, such as the global financial crisis in 2008 (the so-called Lehman Shock) and the Great East Japan Earthquake, which occurred in 2011. In general, it is hard to predict possible futures only based on extrapolations from the past (Huss 1988). Therefore, we should recognize that the ability of prediction is limited when looking ahead at the next 10 years or longer. It should be noted that prediction is quite useful when the problem of concern has less uncertainty in the future. For example, as depicted in Fig. 1, prediction is widely used in population projection by taking a statistical approach. To counter future uncertainty, the concept of scenario thinking or scenario planning has been prevalent to depict possible futures as described in Fig. 2. The idea of scenarios is to assume several paths that connect the present and future (transition process). In particular, the term scenario planning became popular in business worlds after Royal Dutch Shell, one of the major oil companies, eventually overcame the oil crisis in the period between the latter half of the 1960 s and the 1970 s by using scenarios for its strategic decision making (Wack 1985; Schwartz 1991). The objective of designing and using scenarios is not to predict the future accurately. Instead, it aims to assume various possible future situations (scenarios) in order to help make Fig. 2 Concept of scenario thinking (adapted from Kishita et al. 2016)

Visions Backcasting

Transition path

Forecasting

Present

Futures that might happen Time Future

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decisions concerning the future. In the scenario design process, various tools and techniques, such as brainstorming, interviews, workshops, and questionnaires, are often used to gather information and data related to the future (Glenn 2003; Kishita et al. 2016). Scenarios can be classified into two types—forecasting and backcasting (see Fig. 2). A forecasting scenario depicts possible future situations based on the past and present conditions, whereas a backcasting scenario is a concept that aims to depict a path backwards in time from a certain future vision (e.g., desirable future or undesirable future) to the present. In other words, the difference between the two types lies in its beginning point to depict the future. Table 1 shows a summary of comparisons between forecasting and backcasting scenarios. A forecasting scenario is suitable when the scenario designers aim to forecast how socioeconomic situations may change in the relatively short-term future (Swart et al. 2004). On the other hand, a backcasting scenario is suitable when the scenario designers aim to assume a broader space for change by taking into account the renewal period of capital stocks and infrastructure already remaining in society. Who will benefit from using backcasting? Potential users include policymakers, corporate strategists, researchers/scientists, and citizens, who encounter the opportunity to address any problem with a longer time frame (e.g., 30–50 years) in mind. In particular, backcasting has actively been applied to tackle a wide array of sustainability issues, which include land use, climate change, energy supply, water management, and transportation (Kishita et al. 2016). Table 2 shows the conditions of the problems generally suitable for backcasting (Dreborg 1996; Masui et al. 2007). Energy is one of the typical issues that satisfy these conditions. For instance, suppose that we design a desirable energy system in Japan in the year 2050. The right side of Table 2 describes examples of conditions (1)–(5) when targeting this issue. Table 1 Comparisons between forecasting and backcasting (updated by the author after Robinson 1982; Dreborg 1996; Masui et al. 2007) Type

Advantages

Forecasting scenario • Able to depict possible futures based on extrapolations from the past and the present • Helpful to generate countermeasures to deal with possible futures

Disadvantages • Difficult to reflect unprecedented events because the depicted futures can be influenced by the past and present situations • Unable to guarantee that the depicted futures actually achieve the objectives set by the scenario designers

Backcasting scenario • Able to depict drastic or • Difficult to think backward in the discontinuous changes from the passage of time from the future to present by assuming future the present; that is, it is not as visions that should be attained or easy as forecasting to pursue a those that should be avoided causal relationship in the • Helpful to generate actions to be opposite direction taken to arrive at desirable future visions

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Table 2 Conditions of the problem that favors backcasting (adapted from Dreborg 1996) Condition

Example of energy issues

(1)

• When the problem is complex and affects many interested parties and various levels of society

• In general, various aspects including policies, technologies, and consumers’ lifestyle have impacts on one another in energy issues. In response to this relationship, various actors, such as policymakers, energy companies, citizens, and industry, are involved, which makes it difficult to compromise their interests

(2)

• When dramatic changes (non-sequential changes) are required instead of incremental changes from the present

• Since the current energy self-sufficiency rate in Japan is extremely low at 4% and many of the power production sources rely on fossil fuels, the amount of CO2 emissions and economic cost have been increasing. Considering these facts, dramatic changes in both energy supply and demand sides are essential in order to increase sustainability

(3)

• When dominant trends are included in the problem that needs to be solved since forecasting is often conducted based on such trends

• As described in the above-mentioned example in (2), Japan is faced with structural problems in its energy supply side. To solve this problem, it is necessary to implement various changes, including energy policies, technological development, and consumer lifestyle changes

(4)

• When the problem is heavily influenced • Procurement of energy sources, such as by externalities, which prevent the fossil fuels, is significantly affected by market from providing sufficient global politics, including the Middle East control and global economic situations

(5)

• When the time horizon of interest is long enough to consider a wide range of options available

• From a temporal perspective when targeting the year 2050, it is possible to choose various energy supply sources (e.g., renewable energy, nuclear power) and build infrastructure for these energy sources

As mentioned in Sect. 1, the characteristic of backcasting is to conduct a search backward from a certain future vision to the present. In other words, the starting point is not the present but a desirable (or undesirable) future vision in the distant future. The purpose of using backcasting is not simply to depict a future vision but to describe the path and strategy needed to achieve that vision (Robinson 1990; Quist 2007). For instance, it is used to examine policies necessary to achieve a future vision (Robinson 1982). Planning a future society based on backcasting can be broadly divided into two stages: (1) depicting a desirable (undesirable) future vision, and (2) depicting a transition process to reach the present from the future vision backward in time (refer to Fig. 2). One of the advantages of depicting a future vision is that it

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aims to share a long-term objective of the future among people with different backgrounds and knowledge and to elucidate the direction of actions toward achieving the objective (Quist 2007). Since various stakeholders (experts, policymakers, industry sectors, citizens, etc.) exist in society, a so-called “participatory” approach, which presumes the participation of these stakeholders, is often used in backcasting (Quist and Vergragt 2006). Here, various types of ideas and knowledge from stakeholders are obtained by using methods such as workshops and surveys (Glenn 2003). While the concept of sustainable development described by the WCED (1987) is not necessarily built upon backcasting ideas, it can be viewed as a future vision in a broad sense. It should be noted that a future vision does not necessarily need to depict a desirable vision. Instead, it can purposely assume an undesirable future vision that should be avoided. For instance, in her book “Silent Spring,” Rachel Carson, an American ecologist, depicted a future in which serious environmental pollution was caused by chemical substances (Carson 1962).

2.3 Backcasting Studies for Sustainability Many researchers have already proposed methods to undertake backcasting. As one of the typical examples, Robinson (1990) defined the general backcasting procedure in the following six steps to depict a path from a desirable (or undesirable) future to the present. 1. Defining the Objectives of Backcasting: Elucidate the objective of conducting backcasting and define the temporal and spatial ranges of the system targeted for analysis. 2. Specifying Future Goals, Constraints, and Targets: Set up specific future goals, constraints, and targets for the analysis (e.g., reducing CO2 emissions in 2050 by 70% compared to the 1990 level). Here, future goals, constraints, and targets cannot always be quantified (for instance, it is difficult to quantify aspects such as lifestyle). 3. Describing Current Situations: Describe the current situations of the system being considered. 4. Specifying Exogenous Variables: Specify variables that will not be targeted for backcasting (exogenous variables) in the system targeted for the analysis, and predict future trends of these variables based on outside literature sources. For instance, factors such as population changes would be considered exogenous variables when using backcasting technologies, or policies necessary to achieve a future with CO2 emissions reduced by 70% in 2050. 5. Undertaking Scenario Analyses: Based on the results from Steps 2–4, an analysis will be conducted on a final vision of the future, a future midpoint located in between the present and the future vision, and the transition path that connects the present and the future vision. For the analyses, various scenarios with

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different assumptions for the future vision and the midpoint will be described. Mathematical models are often used to conduct quantitative analyses as needed. 6. Undertaking Impact Analysis: Each scenario described in Step 5 will be analyzed based on social, economic, and environmental impacts. The analysis will be repeated until the goal set in Step 2 is met. Using the above-mentioned procedure, Mander et al. (2008) depicted an energy future in the UK with the objective of reducing CO2 emissions by 60% compared to the 1990 level by 2050. With the condition to meet energy demand as a constraint, they examined the optimal energy supply mix to achieve the CO2 emission target. Similarly, other researchers have also proposed backcasting procedures, which were often applied to future energy visions toward a low carbon society and corporate business strategies to achieve a sustainable society (Kuisma 2000; Lundqvist et al. 2006; Mander et al. 2008). Now, suppose that we depict a sustainable future in Japan across seven generations from now (approximately 200 years from now) based on backcasting procedures. When aiming to create a sustainable future for society, it is necessary to consider various aspects, such as economic (GDP, household income, etc.), environmental (CO2 emissions, etc.), social (public safety, etc.), and well-being (health, etc.) factors (AtKisson and Hatcher 2001; Matsuhashi et al. 2013). The Robinson’s 6-step procedure is potentially available for describing an ultra-long-term future that envisions sustainable conditions of these aspects. However, less research has been done on this topic. There are at least three challenges that need yet to be addressed as follows. The first challenge is that a “sustainable future vision for society” is influenced by each individual’s values. That is, the image varies significantly depending on each individual. One of the ways to deal with this challenge is to depict several scenarios based on the backcasting concept. For instance, the Energy and Environment Council (Energy and Environment Council 2012) established by the Japanese government in 2012 created three different scenarios for national power supply in the year 2030 in accordance with the levels of dependency on nuclear power plants, consisting of (A) a 0% dependency scenario, (B) a 15% dependency scenario, and (C) a 20–25% dependency scenario. While these scenarios differ from economic and environmental standpoints, there is no absolutely correct answer in selecting these scenarios. Therefore, choosing an option will ultimately be left to society or people. The second challenge is that current and future generations (e.g., seven generations ahead, a generation 200 years from now) do not necessarily have the same interest when targeting an issue that extends over many generations. This is related to intergenerational equity. A typical example of such situations is nuclear power generation. While the right to use electric power is given only to the current generation (although the economic base and infrastructure obtained from using the electric power may subsequently create benefits over the span of several generations), management of waste nuclear fuels produced by nuclear power generation will become a burden for many generations in the future.

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The third challenge is that it is difficult to depict a path backward in time from a future vision to the present. For instance, if CO2 emissions increase due to fossil fuel consumption from using aircrafts, global warming becomes exacerbated. This is a forward thought along the passage of time. In contrast, questions raised in a backward thought include: What would happen if the causes of global warming were considered? In this case, we first assume various possible causes of global warming (e.g., use of aircrafts, increasing solar activity, increasing trade among nations as a result of signing up a free trade agreement, etc.), after which it would become necessary to examine whether these factors have actual impacts on global warming. As this example shows, the reason why it is not easy to have a thought backward in time lies in the fact that there are many possible causes for a certain outcome in general, and that human thoughts mostly rely on a causal relationship along the passage of time. Nonetheless, it may be possible to improve this predicament to some extent using simulation techniques with computers. In fact, some studies are underway to assist human thoughts on backcasting with computers [e.g., Mizuno et al. (2012), The Ministry of Education, Culture, Sports, Science and Technology (MEXT) Grant-inAid for Scientific Research on Innovative Areas, “Innovative Materials Engineering Based on Biological Diversity” (2013)].

3 Backcasting Approach to Describing Scenarios for Sustainability Although various domestic and international studies on backcasting have been conducted, there is a need for more efforts to tackle with the three challenges mentioned in the previous section. With the particular focus on the first challenge (i.e., reflecting diverse values held by people), a research project to create scenarios of a sustainable future society in Japan in the year 2050 was jointly run by the research team consisting of the author and researchers from Osaka University and National Institute for Environmental Studies (NIES) (Kishita et al. 2013; Miyake et al. 2014). In this project, workshops involving experts in sustainability were used to reflect diverse values and ideas in the scenarios. Here, a set of the future vision and transition path described in Fig. 2 is considered “one scenario.” In what follows, this section presents a method to describe a future society scenario based on the backcasting method proposed by the research team. Then, a case study of envisioning sustainable futures of Japan in the year 2050 is presented. It should be noted that the case study focuses on the design of future visions of sustainable futures, which is the first part of the entire backcasting scenario design process.

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3.1 Method to Design Backcasting Scenarios for a Sustainable Society By extending the Robinson’s procedure in Sect. 2.3, the research team developed a method to design backcasting scenarios for sustainability. The method is characterized by extracting key factors chosen by the workshop participants when they envision a future society (e.g., health, finances, ecosystems, etc.). This helps depict various future visions that reflect the difference in values held by people. Here, a key factor is defined as a factor with different levels of importance placed by the participants. Then, different future visions are devised based on these key factors. The detailed backcasting steps in the method are described as follows (Kishita et al. 2013; Miyake et al. 2014). (i) Problem setting The objective of creating a backcasting scenario and the scope of the analysis are defined. Then, the goals, constraints, and targets that need to be satisfied are clarified. (ii) Describing a scenario storyline The workshop participants describe a storyline, which is an outline or overview of a future vision and its transition path. During the process of creating each storyline, a logic tree is used as depicted in Fig. 3 to assist backcasting thinking by pursuing a cause-effect chain backward. The descriptions in the logic tree help the workshop

Reduce CO2 emissions by 70% in 2050

Promote the widespread use of Life satisfaction new energy technologies without changing the lifestyle

Reduce energy consumption by energy-saving technologies

Introduce renewable energy (e.g., solar and wind)

A: New energy technology scenario Goal Measure

Promote to switch to a lifestyle that uses less energy

Walk or use a bicycle when going from one place to another

Reduce the amount of energy consumption per household

B: Lifestyle changing scenario

A desirable condition to achieve in the future Events, actions, conditions, etc. necessary to achieve the goal

Fig. 3 Example of describing a scenario structure using a logic tree

Direction of a cause-effect chain

Reduce fossil fuel consumption

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Average importance

Fig. 4 Extraction of key factors using a two-dimensional matrix

II. Important factors shared by all participants

I. Key factor candidates

III. Relatively unimportant factors

IV. Relatively unimportant factors

Standard deviation

participants devise various measures that are believed to be essential to attain the goal using a top-down approach. Based on the constructed logic tree, storylines for the future vision and the transition path are described in the following way. In describing a storyline for the future vision, the workshop participants first define various factors for attaining the goal in the future. For instance, energy, government finances, and life satisfaction levels are considered an example of such factors when depicting a future vision that aims to reduce CO2 emissions as described in Fig. 3. The workshop participants set the numerical weighting for each factor and arrange all factors in the two-dimensional matrix (Fig. 4) based on the weighted average (average importance) and standard deviation of the factors. The factors in the first quadrant on which each participant places significantly different levels of importance will be considered a candidate for key factors. In the example described in Fig. 3, life satisfaction levels are selected as a key factor, and two scenarios (A: energy conservation technology popularization scenario, and B: lifestyle change scenario) are depicted by changing the condition of the key factor in two different patterns. On the other hand, the second quadrant in Fig. 4 has factors with small standard deviations, which are considered important among all of the participants. The third and fourth quadrants are determined to be factors considered less important by the participants. The participants devise a future vision for a sustainable society based on changes in the conditions of the key factor, and they describe the future vision in detail while organizing it in the logic tree. Then, the workshop participants develop details of a transition path from the storyline of each future vision they described. In this process, the participants describe the steps to attain each future vision in the logic tree and revise the scenarios.

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(iii) Detailing scenario descriptions A scenario is described in detail by refining the future vision described by the workshop participants and the storyline for the transition path in Step (ii).

3.2 Case Study: Japan’s Sustainable Visions to 2050 This section presents the future vision for sustainable society in Japan in the year 2050. It is part of the backcasting scenario created, which corresponds to Steps (i) and (ii) described in Sect. 3.1. The research team held a workshop (a total of 18 participants) inviting faculty staff and graduate students from Osaka University, extracted key factors based on the survey filled out by the participants, and then created four future visions. Note that the problem setting of the scenario design was done in collaboration between researchers from Osaka University and NIES. (i) Problem setting The problem setting, including the objective of creating the scenario, was defined as shown in Table 3. In this scenario, Japanese industrial sectors were considered a main actor as the scenario aimed to focus on an ideal state of industries in a sustainable society. The goal for the scenario was assumed to reduce CO2 emissions by 80% while sustaining the national economy at an appropriate level. The constraints assumed in Table 3 Problem setting to envision a sustainable society in Japan Item

Description

Title

Scenarios for a sustainable society in Japan

Objective

To depict future visions for a sustainable society in Japan in the year 2050 and the transition path to attain the goal

Period

2010–2050

Areas

Japan and its surrounding areas

Main actors

Industry in Japan (Including primary, secondary, and tertiary industries)

Actors

Citizens, Japanese government, Non-governmental organizations (NGOs), Non-profit organizations (NPOs), Researchers, etc.

Goals, constraints, and targets • Reduce CO2 emissions by 80% by 2050 compared to the 2005 level • Resources will be depleted and energy issues will become more serious • The world population is expected to reach 9 billion in 2050, and the population in Japan is projected to be approximately 90 million. Moreover, the working age population in Japan is expected to be about 50 million in 2050

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Table 4 Factors that Comprise Sustainability (Matsuhashi et al. 2013) Areas

Factors

Descriptions

Individual

Health

To have a physically and emotionally healthy life

Opportunity for selection

To have an equal opportunity in selection

Life satisfaction

To have a high degree of life satisfaction and spend quality time

Disasters

To have resilience (i.e., the capacity to recover) and the ability to avert hazardous events and disasters

Diversity

To have society where diversity among people is accepted

Pride

To be able to have fondness and pride in history and culture

Workplace

To be able to work at a reasonable workplace

Fiscal condition

To ensure that Japan’s fiscal conditions are healthy

Productivity

To ensure high added value on inputs (human resources, materials) in the production activity in Japan

Resources

To be able to use resources and energy effectively

Society

Economy

Environment

Ecosystems

To conserve biodiversity and ecosystems

Environmental burdens

To reduce burden associated with social activities in Japan on global environment

the scenario are that Japan is expected to face the crisis of resource depletion and energy security as well as demographics changes including a population decrease. (ii) Describing a scenario storyline Upon depicting a sustainable future society in Japan, a total of 12 factors in four areas described in Table 4 were presented to the workshop participants, and they were asked to weigh the level of importance of each factor. The sustainability factors in Table 4 were organized based on various past domestic and international research investigations on sustainability goals or indexes (Matsuhashi et al. 2013). The weighing method consists of two steps. In the first step, the participants had 10 points and were asked to assign the points to the four areas—individual, society, economy, and environment. In the second step, they were asked to assign their points for each factor to have a total of 10 points in each area. Then, a mathematical product of the points for the area and the points within the area was defined as the level of importance for the area. Figure 5 shows the results of placing the factors in the matrix in accordance with the weighted average (the average importance level) among the participants and standard deviations. The quadrants in Fig. 5 were divided based on the average importance levels for the 12 factors and the weighted average of the standard deviations. As the result, four candidate key factors—health, life satisfaction, resources, and workplace—were included in the first quadrant. Out of the four candidates, the

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Average Importance Level

Candidates for Key Factors

14

Health

12

Life satisfaction

10

Ecosystem

8

Disaster Pride Diversity Financial Productivity Opportunity Environmental condition for selection load

6 4

Individual Society

2 0

Resources Workplace

0

1

Economy Environment

2 3 4 Standard Deviation

5

6

Fig. 5 Extracting key factors based on surveys completed by the workshop participants (Miyake et al. 2014)

workshop participants selected life satisfaction and resources as key factors based on discussions in the workshop. By changing the condition of the two key factors, the research team depicted four distinct future visions. As shown in a brief summary of the four visions in Fig. 6, the research team assumed two types of society for life satisfaction—society that respects individuality and society that respects cooperation. The research team also set up two types of the economy for resources—a dematerialized society and a circular society. The narrative storylines in Table 5 provided detailed descriptions of each future vision. It should be noted that the storylines of the transition paths to the future visions are yet to be completed. For instance, the Living in Ease and Comfort scenario depicts a future vision in which service-oriented industries have advanced in pursuit of dematerialization, while people’s lifestyle emphasizes a work-life balance in pursuit of individuality. The Happiness Pursuit scenario aims at circular society with robust economic activities, assuming that there are many entrepreneurs since a sense of independence among people is strong.

4 Outlook of Backcasting Research The main topic of this publication is to propose future design as a concept to design a desirable future society. As one of the future design methods, this chapter presented and discussed the concept of backcasting and its related studies. The concept of backcasting is useful to depict an ideal future vision. The steps described in Sect. 3

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Individual-oriented Society A. Living in Ease and Comfort People are living life freely with work-life balance People become more service-oriented, leading to enhancing service industries Dematerialized Society C. Hospitality People become thoughtful of others, leading to more active volunteering. Conserving the environment by sharing items within the community.

B. Happiness Pursuit People design and create what they wish to have for pursuing convenience in life People have a strong mindset of independence. There are many entrepreneurs. Circular Society D. Economic Affluence People pursue economic affluence as they become less concerned about their future due to generous social safety net programs. Rapid product circulation are taking place.

Cooperation-oriented Society Fig. 6 Four scenarios for Japanese Society (Miyake et al. 2014)

introduced the ways to devise backcasting scenarios in a way that responds to different views held by the workshop participants. The activity of designing backcasting scenarios and devising options to be taken for sustainability can be thought of as an experimental tool to discuss the direction of society and the desirable interaction between science and society. There is still much room for improvement in theory and methods for backcasting research. While the three challenges related to backcasting were discussed in Sect. 2, methods to create and analyze backcasting scenarios (consisting of future visions and transition paths) have not been sufficiently studied. In particular, how to accelerate backcasting in a participatory environment (i.e., involving both researchers and lay stakeholders) remains a critical research topic to strengthen the connection between science and society (Kishita et al. 2017). Upon assessing the impacts of various measures (technologies and policies, etc.) that may be selected to build an ideal vision for society, it is imperative to consider not only the effects the measure has on the immediate issue, but also new issues that may be triggered as adverse events. In this sense, it is important to have forecasting-based ideas even in backcasting research. For instance, Japan implemented the Feed-inTariff: FIT2 scheme for renewable energy in July 2012 to improve its energy efficiency rates and reduce CO2 emissions (Agency for Natural Resources and Energy 2014). 2 “The

Feed-in-Tariff scheme for renewable energy” is a program in which citizens are responsible for paying the cost required to buy electricity generated by renewable energy.

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Table 5 Future vision storylines for the four scenarios (Miyake et al. 2014) Scenarios

Future vision storylines

A. Living in ease and comfort

Each Japanese citizen is living a free, self-sufficient life. Specifically, many of them are mentally content since they are living a relaxing life while considering the environment The Japanese society does not embrace change very well. This is a peaceful culture that aims to avoid harming the environment while the government is pursuing the implementation of the minimum necessary policies in people’s lives The tertiary industry is active in the Japanese economy. Mechanization has advanced to complete simple tasks, and people are engaging in work that requires intellectual skills. Productivity levels of service industries are high Citizens do not use resources or energy too much and are living a life that causes less environmental burdens by considering natural ecosystems

B. Happiness Pursuit

Japanese citizens are leading a life in which convenience is pursued. Specifically, they are directing their energy toward an area that they wish to pursue and actively taking part in activities. This is a society in which citizens have a strong sense of independence. In particular, diverse cultures are integrated as citizens are taking part in various activities to achieve their dreams with assistance from the government Individuals are actively taking part in economic activities. There are many entrepreneurs, and many self-employed individuals are conducting activities. Government spending is kept low. Numerous nature conservation organizations are actively taking part in environmental activities, and they aim to reduce environmental burden through the conservation of ecosystems and the construction of circular society by accelerating domestic resource circulation

C. Hospitality

Many Japanese citizens care about other people. They value a connection with other people and respect local communities by helping each other while paying attention to their own health The Japanese society is built upon diverse regional characteristics. The local culture is rooted in each region, which also implements policies suitable for local communities Japan’s economy is based upon trust and mutual help. Work sharing has become more prevalent in each region. Each region has a different industry with competitive advantages. Finances are managed by each region The conservation of the local environment is ensured by cooperation within local communities. In particular, environmental burdens are mitigated by sharing local ecosystems and resources and generating power using renewable energy within local communities (continued)

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Table 5 (continued) Scenarios

Future vision storylines

D. Economic Affluence

Japanese citizens are cooperative toward achieving social progress. Specifically, they find joy in contributing to the society and vigorously take part in activities to pursue the objective without being too concerned about inconveniences they may encounter Since new cultures are created continuously and become widespread in the entire society, the pace of social changes is quick. The government is flexible in order to respond to such changes. With regard to Japan’s economy, the entire country aims to achieve economic development that is in harmony with the environment. With the government taking the initiative, corporations that handle advanced environmental technologies to improve the environment and economy are growing The conservation of the environment is ensured with advanced environmental technologies and cooperation from the citizens. In particular, environmental burdens are reduced by pursuing domestic and international resource circulation, generating power with renewable energy, and implementing the conservation of ecosystems as the government secures cooperation from the citizens

The policy certainly resulted in significant increase in the use of renewable energy, including photovoltaics. However, it has also caused increased utility expenses for households. Based on the above-mentioned facts, integrating the two concepts—backcasting to achieve an outlook for a desirable future vision and forecasting to foresee the future from the present—can be considered one of the research tasks of future design (Kishita et al. 2016; Milestad et al. 2014; Swart et al. 2004). This type of integration is effective in depicting the transition path that connects the present and the future vision in a feasible manner. Moreover, using quantitative simulations to create scenarios makes it possible to undertake more detailed analysis for both future visions and transition paths. Another important issue is whether the concept and method of backcasting can be used effectively in real worlds. For instance, to what extent would backcasting be useful for adjusting intergenerational interest and conducting intergenerational negotiations? In other words, while one’s longevity is up to around 100 years, can backcasting really render assistance to some type of decision-making to solve issues that have an impact for an extremely long period of time easily exceeding the 100-year time span (e.g., 200 years from now)? In this regard, we have great expectations for the role of future generations discussed in Chap. 2. In other words, if imaginary future generations are created, depicting the basis of the thoughts of future generations can also be expected using backcasting. As a result, it seems possible to organize the discussion points toward reconciling intergenerational interest by revealing the difference between the future vision depicted by the current generation and the future vision depicted by future generations based on the concept of backcasting.

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In addition to various challenges described above, another challenge is to develop the ability to demonstrate backcasting-oriented thinking. It will probably become an essential skill in the near future for those who lead a nation, corporation, or organization (however, it would probably be sufficient as long as 2–3% of all personnel are equipped with such abilities). In any case, efforts to conduct backcasting research toward future design have just started. To reach the point where its validity and efficacy can be demonstrated widely to the public, it is essential to continue making a steady effort by conducting studies and putting backcasting into practice through the accumulation of various examples. Acknowledgements I would like to extend my sincere gratitude to Prof. Yasushi Umeda (Osaka University, currently working at the University of Tokyo), Dr. Yuji Mizuno (Osaka University, currently working at the Institute of Applied Energy), Mr. Gaku Miyake (Osaka University, currently working at Panasonic Corporation), Dr. Keisuke Matsuhashi (National Institute for Environmental Studies (NIES)), and Dr. Mai Inoue (NIES, currently working at Leave a Nest Co., Ltd.) to carry out the case study in Sect. 3.2. Financial support from the Grant-in-Aid for Young Scientists (A) (No. 26701015) and Challenging Exploratory Research (No. 15K12290), both from the Japan Society for the Promotion of Science (JSPS), is acknowledged.

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Yusuke Kishita is a lecturer in the Department of Precision Engineering, The University of Tokyo. Prior to his current position, he worked at the National Institute of Advanced Industrial Science and Technology (AIST) and Osaka University. His research interests include scenario design, backcasting, and life cycle engineering. He holds M.Sc. and Ph.D. degrees in mechanical engineering from Osaka University.

Chapter 5

Designing the Ministry of the Future Masahiko Ozaki and Michinori Uwasu

1 Incorporating the Needs of Future Generations into the Present What are some of the methods we can adopt to incorporate the needs of future generations into this present society? One method would be to establish a norm for the sake of future generations, as the Iroquois tribes of North America once did. Another would be to create a commons system to regulate the use of natural resources shared by the users (eventually future generation) by punishing the violators. However, no matter what option is taken, it is not difficult to foresee that people’s myopic tendencies and optimistic biases will prevent individuals or corporations from continuously implementing autonomous and proactive measures. Thus, a strategy to design the future may require a unique, heteronomous mechanism to be imposed on society. Throughout history, humans have been seeking profits and satisfaction by producing, exchanging, and consuming goods and services. For this purpose, we have always negotiated, and occasionally fought, over limited resources. The mechanism created to reduce social problems arising from such human activities is the system of government.1 The government creates and implements a variety of measures to improve the lives of people. The government intervenes in the economic activities of individuals and corporations financially, legally, and administratively through such measures. The Cabinet, ministries, and agencies that are established by the will of the people draft these measures. Publicly elected lawmakers approve the measures, 1 This paper defines the term “government” as an organization that governs certain territory, although there are various definitions and interpretations available (Oosawa et al 2012).

M. Ozaki Yamato University, Suita, Japan M. Uwasu (B) Osaka University, Toyonaka, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_5

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which are then implemented by the Cabinet, ministries, and agencies. The government serves as a mechanism to solve social problems and coordinate the interests of various people. It is the contention of this paper that the government with which we are familiar may also serve as a powerful means of balancing the interests of the present generation with those of future generations.

2 The Ministry of the Future The government consists of lawmakers and bureaucrats. Lawmakers prioritize people’s requests whereas bureaucrats provide the lawmakers with information for their decision-making. Bureaucrats then effectively implement and administer measures adopted by the lawmakers. Lawmakers are elected by those who have the right to vote. Since the future generations do not yet exist, they cannot elect lawmakers in the present world. That means government ministries and agencies must incorporate the needs of future generations into this society. Government organizations are called ministries, such as the Ministry of Finance or the Ministry of Economy, Trade and Industry. Therefore, the organization that incorporates the needs of future generations into the present society should be called the Ministry of the Future. The government reorganized its ministries and agencies in 2001. There are now 11 organizations—the Ministry of Internal Affairs and Communications; the Ministry of Justice; the Ministry of Finance; the Ministry of Education, Culture, Sports, Science and Technology; the Ministry of Health, Labour and Welfare; the Ministry of Agriculture, Forestry and Fisheries; the Ministry of Economy, Trade and Industry; the Ministry of Land, Infrastructure, Transport and Tourism; the Ministry of the Environment; the Ministry of Defense; and the National Public Safety Commission—plus the Cabinet Office based on the Cabinet Office Establishment Act. The primary responsibilities of these organizations include information gathering, research and analysis, policy formation, policy implementation, public enlightenment, and coordination with one another. Of these, information gathering, research and analysis, policy formation, public enlightenment, and coordination are proactive functions that differ in quality and quantity from one organization to the other. On the other hand, policy implementation is a passive function shared by all organizations; what is expected is an efficient execution of what has been decided. These organizations specialize in certain fields, as their different names indicate. However, the Cabinet Office is an exception. This organization assists the Cabinet in policy formulation and takes on projects that cut across all other ministries and agencies. One of the main characteristics of Japan’s government ministries and agencies would be continuity. For example, volume 1 of Tsusho sangyo seisaku shi (history of economy, trade and industry) published by the Research Institute of Economy, Trade & Industry, says this: “Despite the war and the defeat in the war, the organizational structure and personnel of the Ministry of International Trade and Industry (MITI, which is now METI), had continuity from the pre-war era.” This continuity may have helped ease the volatility in policy as the Cabinet underwent drastic changes during

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the war and allowed the government to accumulate high-level data that became necessary in creating measures to facilitate post-war recovery. Another characteristic of the Japanese government would be its vertical administrative structure. Each ministry has bureaus and sections that handle various duties. In the past, these bureaus and sections were highly independent, guarding information that they had collected themselves. Such a practice allowed government ministries and agencies to maintain specialized knowledge and expertise. However, this vertical structure also hampered efforts to formulate policies that cut across various fields and provide services that are convenient for individuals and corporations. Let us now consider the organizational structure for a Ministry of the Future based on the characteristics of the existing ministries and agencies. First, strong organizational continuity is essential for the Ministry of the Future, as it is for the existing ministries and agencies, so that the interests of future generations are protected from outside pressures. The Ministry of the Future must also feature a vertical administrative structure similar to other government organizations so that it will be able to work effectively with them (11 ministries and two other organizations). Based on the characteristics of the Ministry of the Future described above, the ministry would not have any strong authority over other ministries or agencies. Therefore, each section of the Ministry of the Future should be prepared to discuss issues with other ministries and agencies on an equal footing as a representative of those who live in the future. This requires that officials of the Ministry of the Future possess the same level of expertise as those of the other ministries and agencies, making it difficult for any one section of the ministry to handle several other ministries or agencies. Still, such a corresponding structure has a disadvantage—the system could create a clubby relationship between officials of the Future Ministries and their outside counterparts. Measures should be taken to prevent officials of the Ministry of the Future from representing the interests of other ministries and agencies and waging internal battles within the ministry. In addition, efforts must be made to prevent the same type of problems that often arise at existing ministries and agencies as a result of their vertical administrative structure. This would probably require a matrix structure with a horizontal axis based on the guiding principle of the new ministry, instead of the wholesale adoption of the existing vertical structure.2 Let us now turn to the guiding principle, or horizontal axis, of the Ministry of the Future. The guiding principle of the ministry would be to establish a sustainable society that incorporates the needs of future generations into the present. The Ministry of the Future would request the present generation (primarily other ministries and agencies) to preserve certain resources for future generations. The horizontal axis would encompass the objectives that should be shared by other ministries and agencies based on the guiding principle of the Ministry of the Future. These objectives would include, for example, (1) environmental protection; (2) long-term economic 2 Such

a matrix structure is not unprecedented. For example, the former Ministry of Trade and Industry (now METI) had, in addition to bureaus that dealt with industry-specific policies (vertical axis), had a commerce bureau and company bureau that examined policies that cut across all industrial sectors (horizontal axis). In this respect, MITI was different from its predecessor in the pre-war period.

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Fig. 1 Matrix structure

stability; (3) protection of cultural assets; (4) long-term stability in the procurement of natural resources and energy sources; and (5) highly advanced, safe technologies and institutional structures.3 The Ministry of the Future should be structured in such a way as to maximize the likelihood of realizing its principle. Here is our proposal: a matrix structure that has 13 sections (vertical axis) that correspond to the 11 ministries and two other organizations, five groups through which officials of the 13 sections share their expertise across different subject matters, and a sixth group (horizontal axis) that would not belong to any other sections (Fig. 1). Based on the above discussion, let us consider how the Ministry of the Future could fit into the overall government structure. The ministry, for example, could be created as an organization outside the Cabinet or the jurisdiction of the National Government Organization Act. In this respect, the ministry could be modeled on the Board of Audit of Japan. This proposal may not have unanimous support. However, considering that the Board of Audit of Japan has the responsibility of examining the execution of the national budget from an objective standpoint, it may stand to reason that there also exist an independent organization that ensures the sustainability of resources in public administration and politics. In fact, there is a well-known system to assess public policies in the U.K. called New Public Management (NPM). The Green Book, which was mentioned in Chap. 1, is a set of guidelines for assessing whether particular policy proposals and their implementation have led to effective public services. The Ministry of the Future could be tasked with creating guidelines for a sustainable society and evaluating administrative policies as an independent body. 3 Specific

objectives may change from age to age. Thus, there is room for debate when it comes to the selection of the subject matter. As will be mentioned later, thorough discussions would be necessary concerning this issue. This debate may need to include imaginary representatives of future generations.

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While the Board of Audit of Japan is armed with the science of accounting, it cannot adequately evaluate programs and policies from the standpoint of sustainability. The Ministry of the Future, therefore, should be academically capable of evaluating government programs and policies. This, along with the issue of how to train human resources, is a challenge that must be addressed.

3 Human Resources for the Ministry of the Future What type of human resources are required for the Ministry of the Future? Normally, personnel rotations are unavoidable in running an organization. The Ministry of the Future should also regularly rotate its staff members who deal with officials of other ministries and agencies (vertical axis) to prevent them from becoming too cozy with their counterparts in other organizations. On the other hand, it would be more realistic to avoid rotations among groups that deal with specialized subject matters (issues related to the formulation of society) as much as possible. That is because it takes time to nurture experts with highly advanced knowledge in the areas of the environment, economics, culture, natural resources, energy, technologies, and institutional structures. The Ministry of the Future requires people who are capable of thinking flexibly from a long-term perspective to consider the needs of future generations by extrapolating the thinking of the present generation. In addition, these people should also possess a high level of expertise and argumentation skills so that they can persuasively make their case with officials of other ministries and agencies and, in some cases, people with vested interests. Such individuals are unlikely to show up spontaneously. Thus, a training program should be created at schools. One proposal would be to establish a doctoral course at graduate schools designed to equip students with the capability of designing the future. Students taking such a course, in addition to pursuing studies in their own fields, should be given scholarships since their workload would effectively double. This is not such an unrealistic idea. A similar program was implemented by the Ministry of Education, Culture, Sports, Science and Technology in fiscal 2011. This doctoral-level “leading program” is aimed at fostering global leaders with a broad viewpoint and originality through the establishment of graduate schools that provide instruction that is not bound by the traditional distinction between the liberal arts and natural sciences. Some graduate schools have already been approved for this program. There, liberal arts students study natural sciences on the side, while those specializing in natural sciences also take liberal arts classes. These students receive some 200,000 yen per month as a scholarship. This existing program could expand its mission and incorporate the above-mentioned goal of fostering students with a long-term perspective. The result would probably come close to the proposal presented earlier in this paper. If this system takes hold, it is possible that universities may create departments for future studies or future studies tracks, instead of offering secondary curriculums designed to complement existing programs.

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In the long run, it would also be necessary to create a society that elevates the status and prestige of the Ministry of the Future. The Ministry of the Future would create jobs from a practical viewpoint. However, there should also be strategies to create ripple effects upstream and downstream. In management studies, one of the characteristics required of managers of blue-chip companies—those that are called excellent companies or visionary companies—is a long-term perspective (future thinking). Therefore, the type of people required by the Ministry of the Future are also necessary for blue-chip companies. At the same time, intergenerational discussions touched on earlier in this paper, if they become common, would create opportunities for people to play the role of imaginary future residents. Intergenerational discussions may lead to a society in which people with a long-term perspective are highly respected, in a similar way that individuals who lead other people without fear are highly regarded in the U.S. If that happens, future studies departments at universities and the Ministry of the Future would probably attract many capable individuals.

4 Roles and Aauthority of the Ministry of the Future The Ministry of the Future would be an advocate for future generations. As such, the ministry would influence the behavior of existing government organizations. What roles and authority should the Ministry of the Future have? In December 2012, Hitoshi Aoki, a member of our research team, conducted a public opinion survey concerning a “future design” strategy, with a particular focus on the voting system and governance.4 The survey asked, among other questions, whether the Ministry of the Future should be established and what roles and authority should be given to the ministry in order of importance. According to the survey, 43% of the respondents said they would either support or somewhat support the establishment of the Ministry of the Future, while 33% said they would either oppose or somewhat oppose such a move. That means more people would support the creation of the ministry. As for the authority that should be given to the ministry, “information gathering” and “research and analysis” topped the list, followed by “policy creation,” “public enlightenment,” and “coordination with other ministries and agencies.” Respondents were cautious about giving the ministry authority that might directly affect the lives of the present generation. When it came to the level of authority, many respondents said that the ministry should not have the power to force its decisions on policies of other ministries and agencies, and that the ministry’s role should be limited to expressing opinions and curbing any excesses. They were also cautious about giving the ministry any authority to regulate the activities of individuals or corporations (Figs. 2 and 3).

4 The survey, conducted online immediately prior to the lower house election of parliament that gave

rise to the second Cabinet of Prime Minister Shinzo Abe, asked questions concerning the Ministry of the Future and a proposal made by Paul Demeny that parents be given rights to vote on behalf of

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Fig. 2 Survey results 1

Fig. 3 Survey results 2

Here is an outline of the Ministry of the Future based on the above consideration: It is an organization whose mission is to incorporate the needs of future generations into the present. The ministry will gather and analyze information to find out which their children. About 3000 people nationwide provided valid responses. The results of the survey were detailed in Aoki et al. (2013).

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aspects of society may affect the interests of future generations and what adverse impact these aspects may have on present and future generations. The ministry will then consider, with a view to making policy proposals, what action should be taken to alleviate such negative impact and how that will affect the present generation. The ministry will at the same time express opinions about the policies of other ministries and agencies and help curb any excesses. This is just one example based on the results of the survey. It would be necessary for experts and private citizens to continue to hold discussions in order to create an ideal picture of the Ministry of the Future.5 The primary significance for the Ministry of the Future would be its very existence. The establishment, or consideration of the establishment, of the ministry would serve as a powerful reminder to the present generation that there will be new generations to come. Take, for instance, the creation of the Ministry of the Environment and the Ministry of Defense. Major concerns and values of a nation at a particular period in history are sometimes reflected in the names of new government ministries or agencies. Individual citizens or corporations may not have detailed knowledge of the functions and authority of the Ministry of the Future. However, they will nevertheless understand that the country takes seriously the interests of its future generations. If the Ministry of the Future is given the authority to create a society that has imaginary members of future generations, the ministry will serve as a practical mechanism of incorporating the needs of such generations into the present. Moreover, since government is a social system used in other countries, Japan’s attempt to create the Ministry of the Future may spread to other parts of the world. Then, a social norm similar to the one held by the Iroquois would be adopted worldwide. This is the ultimate goal of the Ministry of the Future. The ideal direction for the Ministry of the Future would be to fulfill its mission of creating such a social norm so that every individual and corporation will start behaving autonomously in light of the needs of future generations. The ministry would thus contribute to the realization of a truly sustainable society. When this mission is accomplished, the ministry will be shut down.

5 Conclusion In order to establish a sustainable society, it is necessary that we incorporate the needs of future generations into the present. The Ministry of the Future could provide an important mechanism in the creation of a future design strategy required for this purpose. However, it would not be easy to establish such a ministry. The Ministry of the Future would, either directly or indirectly, regulate the behavior of those in the present generation. Those benefitting from the status quo—corporations, politicians, 5 This

principle should be applied to discussions concerning controversial social issues, such as a proposal to revise Japan’s constitution. Lawmakers and academics should not monopolize the debate when it comes to issues concerning the constitution, law, and administrative structures that determine the country’s future direction. Decisions on such issues should be made with the participation of individual citizens.

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or existing government ministries and agencies—may resist the establishment of the new ministry. However, an organization such as the Ministry of the Future has a tailwind. For example, there have been calls for the introduction of the so-called Demeny voting system.6 This method, which has the potential to transform the existing social system, may facilitate a greater interest among politicians in the needs of future generations. This change in the voting system may pave the way for the creation of the Ministry of the Future. At the same time, there have been vigorous efforts in Japan and elsewhere to encourage public participation in policy debates through discussion forums and written comments, even though there is no mechanism at this time to reflect such an endeavor in the political decision-making process. Still, public opinions may be formed in favor of the establishment of the Ministry of the Future. The realization of the Ministry of the Future may require an enormous amount of time and effort. However, we believe in the importance of feeling the presence of future generations in our midst. Our mission is to continuously transmit information and seek to maximize the number of people who are willing to spend the time and effort required to achieve this goal.

References Aoki R, Uwasu M, Saijo T (2013) Wakamoto to yukensha no seito seisaku sentaku – Demeny tohyo hoshiki, shoraisho, dai 46 kai sosenkyo zen zen jitsu no yukensha to wakamono no anketo kara Demeny P (1986) Pronatalist policies in low-fertility countries: patterns, performance and prospects. Popul Dev Rev 12(supplement):335–358 Hakushi katei kyoiku reading program (doctoral-level educational reading program) for fiscal 2013. The Ministry of Education, Culture, Sports, Science and Technology; Japan Society for the Promotion of Science, Tokyo Oosawa M et al (eds) (2012) Gendai shakaigaku jiten (Encyclopedia of Contemporary Sociology). Koubundou, Tokyo

Masahiko Ozaki is a professor of the Faculty of Political Science and Economics, Yamato University. Michinori Uwasu is an associate professor at the Center for the Study of CO* Design, Osaka University.

6 Demeny

voting is a voting method proposed by demographer Paul Demeny. Under this system, parents would be allowed to vote on behalf of their children (Demeny 1986).

Chapter 6

Science, Technology & Innovation and Future Design Reiko Aoki

1 Introduction Many countries, such as Japan, the United States (US), China, and European Union (EU) nations, have some kind of national policy regarding science, technology, and innovation (STI), which are called science and technology (ST) or STI policies. These policies are designed to guide national ST resource allocations. The always forwardlooking ST or STI polices invest in the future to varying degrees. STI policies could cover investments in a new solar battery that will take a few years to complete, in a new drug that will take a decade, or in supporting theoretical physics, with the timing of return on investment yet to be determined. STI policies share the two characteristics of planning for the future and involving all aspects of society and government. Each country has its way of determining how the future should be reflected in their STI plan. With the realization that there can be negative consequences from ST investments, the purpose of STI polices are to achieve a better future society. This raises the question: what is a “better future society?” Involvement in STI policies has expanded from scientists, engineers, and government officials to the general public of present and future. In short, STI policy is future design in practice (Yoshioka, forthcoming). Understanding how STI polices work in the real world is an important part of future design research. Working with all stakeholders, including future generations, to answer the question, “what is a better future society?” is one possible method to ensure that STI policies are progressive. In this chapter, we will first cover the basics of STI policies, the economic foundation of STI policies, and review STI policies in Japan, USA, EU, and China. Through a more-detailed examination of Japanese STI policies, we will understand how the future can be reflected in the current ST investments and coordination of stakeholders. Accordingly, we generalize STI policies as a future design topic. R. Aoki (B) Japan Fair Trade Commission, Tokyo, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_6

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2 Why Do We Need Policies? The purpose of this section is to understand what ST or STI policies are meant to do. STI policies refer to policies designed to advance ST, such as public funding, and legal and regulatory institutions. The term “innovation” is used so that these policies are designed to not only generate new knowledge but also implement it in society. Everyone agrees that ST advances benefit society; therefore, the ST is a worthy recipient of government lending and taxation funds. Nevertheless, not everything that is beneficial to society is included in government policies. However, it is actually necessary for the government to coordinate allocation of resources to ST or STI policies for several reasons. First, information, unlike goods such as cars or food, is a nonrival good, which is a product than can be used or consumed by any number of people simultaneously. Thus, one person using the information will not prevent another person from using the same information. This quality is different from that for a car or food. Someone else cannot use a car if another person is already driving it. The value of the car will deteriorate with use; therefore, the second person to use the car will be driving something that is inferior to what the first person drove. Similarly, deterioration is obvious in the case of food because it will be consumed. In contrast, many people can use an information good simultaneously, such as a method for making a new drug, and the method will use the same information, no matter how many times the drug has been manufactured. Some drugs become less valuable because better drugs or better production methods emerged; however, the original method or drug itself did not deteriorate with use. The nonrival nature of information makes it desirable to make the information available to anyone who demands it at a marginal cost of production, e.g., the costs of printing or duplicating an electronic file are both very low. However, the fixed cost of producing the original information is often very costly. This means that marginal cost pricing, which is close to zero, will make it impossible to recover the cost of research and development (R&D) to produce the original piece of information. There are two remedies for this problem. One is to give whoever discovers or develops the original idea the right to exclude others (i.e., it is no longer a nonrival good), to charge a high price, or to receive government investments in the production of new knowledge. Patents and other intellectual property are examples of the first solution. The second solution is direct public R&D funding. These solutions are what constitute a large part of STI policies. The second reason for the necessity of government policies to promote ST advancements is that these three things are closely related, but distinct, and require different human and physical capital. “Science” is also a term used in academic disciplines, such as mathematics and economics, which are based on the knowledge of methods with a potentially very wide range of applications. These fields usually require highly educated workers. A ministry or agency is often in charge of coordinating investments in scientific fields. Investments in technology should include more practical things, and are usually identified with a specific good or market, such as horticulture (agricultural technology) or health care (medical technology). People

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are also developing technologies and acting as producers and marketers of the final products associated with these technologies. Many of the new science and technology products are very innovative. Of course, there are also innovations that are not founded on new sciences or technologies. The national health-care and pension systems were groundbreaking social innovations with long-term effects to society; however, their sustainability has been called into question. Thirdly, STI investments, particularly in scientific fields, often require many years, sometimes decades, to see any sign of fruition. Thus, appropriating the return from investment is difficult. Exact returns are often difficult to identify, and how and who do you compensate for investments made decades ago? ST investment is a typical example of goods with externalities, in this case across time. There is a need for government intervention and thus a need for public policy. The number of STI stakeholders leads to the fourth reason for the necessity of public policy. Thus, coordination and providing right incentives is critical to the success of STI policies, which should benefit the whole society. Everyone is a stakeholder because their lives will be affected as ST consumers. Policy on research resources and institutions will directly affect scientists and indirectly affect the industries using the new knowledge. Doctors and the health-care system will be affected by life science research. The health-care system’s pricing system will influence how new life science technologies are implemented. In addition, “everyone” also includes future citizens. Future doctors, scientists, and engineers are products of the current education system; therefore, they are stakeholders in the current system. Coordination and incentives must cut across generations because of the long-term nature of STI.

3 What Do STI Policies Actually Look Like? STI policies take different forms in different countries. Each system is determined by the host country’s political system, governance structure, and history. The EU uses a seven-year plan, Horizon 2020, which began in 2014. The Horizon 2020 framework has three sections: industrial challenges, societal challenges, and excellent sciences. Industrial leadership identifies key industrial technologies: (1) space; (2) nanotechnology, advanced materials, advanced manufacturing and processing, and biotechnology; (3) information and communication technologies. Industrial leadership also includes “access to risk finance” and “innovation in small and medium businesses.” Societal challenges cover seven areas: (1) health, demographic change, and wellbeing; (2) food security, sustainable agriculture, marine, maritime and inland water research, and the bioeconomy; (3) secure, clean and efficient energy; (4) smart, green and integrated transport; (5) climate action, environment, resource efficiency and raw materials; (6) Europe in a changing world—inclusive, innovative and reflective societies, and (7) secure societies—protecting the security of Europe and the freedom of

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its citizens. Excellent science consists of funding and research platforms: e.g., European Research Council, future and emerging technologies, Marie Sklodowska-Curie actions, and research infrastructures. The STI policies in UK (Department for Business et al. 2014) and Germany (Federal Ministry of Education and Research and the Federal Government of Germany 2014) are more technology focused. The UK STI policy is comprised of six elements: (1) deciding priorities; (2) nurturing scientific talent; (3) investing in scientific infrastructure; (4) supporting research; (5) catalyzing innovation; (6) participating in global science and innovation, and eight focus technologies: (a) big data and energy-efficient computing; (b) satellites and commercial space applications; (c) robotics and autonomous systems; (d) synthetic biology; (e) regenerative medicine; (f) agrisciences; (g) advanced materials and nanotechnology; and (h) energy and its storage. The core elements of the German high-tech innovation strategy are: (1) prioritizing challenges concerning value creation and quality of life; (2) networking and data transfer; (3) the pace of industry innovations; (4) innovation-friendly framework; (5) transparency and participation (of stakeholders). The highest priority challenges are: (1) the digital economy and society; (2) sustainable economy and energy; (3) innovative workplaces; (4) healthy living; (5) intelligent mobility; and (6) civil security. Specific technologies have been identified in the context of these high-priority challenges. The US does not have any mid- or long-term STI plans similar to those of EU countries. Instead, the Office of Management and Budget and the Office of Science and Technology Policy issue a memorandum for the heads of executive departments and agencies called “Science and Technology Priorities for the FY Budget” each fiscal year (FY). The memorandum for FY 2016 identifies eight multiagency R&D priorities: (1) advanced manufacturing and industries of the future; (2) clean energy; (3) Earth observations; (4) global climate change; (5) information technology and highperformance computing; (6) innovation in life sciences, biology and neuroscience; (7) national and homeland security; and (8) R&D for informed policy-making and management. The priorities are motivated by socioeconomic needs, such as improvements in public health, facing climate changes and a sustainable society. Each priority is associated with several related departments and agencies working to address it. The memorandum also provided other R&D-related guidelines, such as the promotion of Grand Challenges, research infrastructure, and STEM education. In 2006, China announced its basic STI policy plan for 2006–2020. The ultimate goal is for China to become an economy based on innovation with world class ST. The plan consists of four frameworks: (1) priority areas (necessary for socioeconomic development and national security); (2) priority projects (resources concentrated on strategic products and basic technologies); (3) advanced technologies (next-generation technologies and technologies for new industries); and (4) a priority science research plan (research leading to innovation identified from trends and strategic needs). The 12th five-year plan (2011–2015) had seven goals: (1) stable and speedy economic development; (2) structural adjustment; (3) improvement of ST education; (4) saving resources and protecting the environment; (5) improvement of lifestyles; (6) building social infrastructure; and (7) improvement of urban and

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surrounding areas. Making industry more competitive is one of the ways to fulfill these goals. We focus on seven technologies considered critical for making industries competitive: (1) saving energy and protecting the environment; (2) new information technology; (3) biotechnology; (4) advanced manufacturing; (5) new energy; (6) new materials; and (7) new energy automobiles.

4 Implications of STI Policies for Future Design In this section, we derive lessons for future design from STI policies, particularly Japanese STI policy. We can learn about future design needs and challenges by understanding how STI polices are formed and executed. STI policies include many goals that are realized very far in the future. How do stakeholders identify and agree on the right goal? In addition, each goal requires the coordination of several diverse stakeholders, such as producers, universities, and consumers. Various ministries and other government agencies are also involved in spending public funds. Making decisions now to set long-term goals and coordinating stakeholders’ actions is precisely the question of future design. The EU’s Horizon 2020 program works to realize a specific society in the future. Horizon 2020 has already defined the type of society EU is trying to achieve in the future. In contrast, the STI policies of UK, Germany, and the US are more technology driven. The same goal of providing 30% of energy using solar energy technology can be part of a future energy scheme including solar energy or it can be a technological goal. Of course, possessing the ST to achieve 30% solar energy will be useful. However, a trade off with efforts related to energy is clear when the goal is not part of a comprehensive social goal; i.e., both approaches differ in compiling the STI policies. The danger of a STI policy without broad social goals is that the stakeholders associated with existing technologies will drive the policy-making process. People and institutions—researchers, firms, and government agencies—that either have invested or have acquired knowledge, or have other forms of claims to a particular technology would want their technology to be important in the future. People invest in technology because they thought it was relevant and in many cases, they would like to receive some returns from their investment. The preferences of people and institutions currently determine STI; thus, STI policies may not necessarily benefit a future society but instead benefit the current owners of the current or existing ST. Let us now examine how the Japanese STI policy works in greater detail. The Council for Science, Technology and Innovation Policy drafts a Basic Science and Technology Plan every five years to be approved by the Cabinet. The basic plan contains very broad descriptions of what the society should strive for, such as longer healthy lives, advanced information and communication technologies, safer habits, prevention and better management of natural disasters, advances in basic research. The STI policy also has specific ideas for how these goals would be met. Longer healthy lives will be achieved by finding a cure for cancer, better food and nutrition,

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and better lifestyles. Safer habitats would require better climate and weather prediction, advances in human behavioral science, better civil engineering, and investment in better infrastructure. Investment in education and research institutions is necessary for basic research. The current basic plan was approved by the Cabinet in January 2016 to cover the years 2016–2021 and is 53 pages long. The most recent Japanese basic ST plan (the Fifth Basic Science and Technology Plan covering 2016–2020) set four characteristics that the nation should strive for: (1) sustainable growth coupled with self-perpetuating growth of regional societies; (2) securing the safety and high quality of life for the nation and its citizens; (3) answering global challenges and contributing to global growth and development; and 4) sustained generation of knowledge. Note that these are long-term goals reflecting societal values, which do not promote any particular technology. This is critical for the STI policy to be truly forward looking and not captured by a single science or technology field. One can track how the basic plan is drafted by following the various committee records. In the first step, recent various aspects of Japanese society are reviewed, focusing on desirable and undesirable aspects. Then, the mid- and long-term goals of Japanese society are discussed and agreed upon by the Council. The Tohoku earthquake and tsunami, and its aftermath, looms very large in current Japanese society. The review of damage and recovery from the event would be used to propose goals regarding safety. Once these goals are determined, government ministries and agencies, reflecting the various stakeholders, would submit detailed plans for how to achieve these goals. Of course, the numerous committees that discuss the broad and detailed goals would include the stakeholders—producers, scientists, consumers, retailers—in their memberships. The relationship between the broad descriptions and more detailed goals are achieved by a kind of backcasting. The Council also coordinates the annual budgets of various government ministries and agencies; thus, STI-related expenditures follow the basic plan (Table 1). In addition to compulsory education (primary and intermediate), the Ministry of Education, Culture, Sports, Science and Technology (MEXT) supports all high schools and universities, both national and private, to differing degrees. MEXT is also responsible for national research institutes, such as RIKEN (the research organization known as Rikagaku Kenkyujo in Japanese) and Japan Aerospace Exploration Agency (JAXA). The Ministry of Health, Labor and Welfare (MHLW) regulates the health-care system and supports life science research. The MHLW regulates health claims made about food, but the Ministry of Agriculture, Forestry and Fisheries (MAFF) oversees the food industry. The Ministry of Internal Affairs and Communications regulates the communication system; however, the Ministry of Economics, Trade and Industry (METI) oversees firms producing information and technology devices. The Japan Patent Office operates under the auspice of METI, but the copyright system is overseen by the Cultural Agency, which operates under MEXT. Thus, at least three agencies need to coordinate closely to have any sensible policy on smartphones and the market for their contents.

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STI policies should have three components; i.e., they should: (1) decide what the nation should look like in the future; (2) determine the road map to realize the goal, starting with what needs to be done today; and (3) coordinate stakeholders. Backcasting (Quist and Vergragt 2006; Kishita 2015) is a long-range planning method where a desirable (sustainable) future vision or normative scenario is created, followed by examination of the current state to determine how this desirable future could be achieved, before defining and planning follow-up activities and developing strategies leading towards that desirable future. Thus, STI policy-making should be based on a type of backcasting on a very large scale. What we should be doing now is determined by the future societal states, which includes what institutions should be in place and where investments should be made. For example, what new scientific knowledge and technologies need to be developed to ensure a sustainable food supply system? What education systems and funding mechanisms should be in place to achieve this goal? The funding mechanism includes funding not just for research, but also for commercialization of new technologies.

5 Expanding STI to a Future Design STI policy-making requires future design thinking, which has sometimes necessarily been used unknowingly. In this section, we extract the basic principles of STI policymaking and argue how it can be improved. In the previous section, we saw that the Fifth Basic Plan expressed the nation’s values that would guide how the nation would proceed into the future. This expression of values departs from the previous plans. The first three plans identified scientific fields and technologies to promote, i.e., they provided focuses of investment. The fourth plan set fourth specific problems that needed to be resolved, most notably the aftermath of the Tohoku earthquake and tsunami. The Japanese STI policy has become similar to the EU’s Horizon 2020 in spirit. Tyler (2014) reports on an urban planning experience where five conditions, or “five cities,” that a city must satisfy were derived from a series of workshops with various city stakeholders from Columbia, Peru, China, and the UK, including politicians, business communities, academics, public officials, and the general public. The five cities were: courteous city, active and inclusive city, city as public space, healthy city, and evolving city. The technical feasibility of the cities was not an issue in the discussion. Institutions, including rules and regulations, and physical infrastructure to realize the five cities would be the next step, involving primarily expert discussions. In the case of the Japanese STI policy, technical experts, such as physicists, medical professionals, and engineers were involved in the policy-making, including the drafting of the fifth basic plan. Similarly to the Japanese STI policy-making process, a series of facilitated future urban planning workshops based on the five-city framework were conducted in London (Ortega and Tyler 2015). The participants were experts from education, heritage, architecture and urban design, building and utilities, physical sciences and

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environment, transport and utilities, retail and information technology fields. The word frequency analysis of the discussion shows that “people” was by far the most frequently used word and “city” was the second most frequent. These words were followed by “city,” “way,” “things,” “future,” “other,” “space,” “different,” “green,” “time,” and “being” in similar frequencies. The participants were asked to conceptualize a future city, so the words “future” and “city” are not surprising. The authors of the study note the difficulty in trying to disconnect the future from today. In addition, note that there are few technologyrelated terms and they are of lower frequency, which suggests that relating technology to future goals is something that should be done at the final level of backcasting. These experiences suggest that STI policy-making should be part of a more general future planning and that it should be done with all stakeholders, including the general public and imaginary future generations. We noted in Sect. 2 that STI policy stakeholders include future citizens, who should be represented in the policy-making process. An example of public participation is the Yahaba Town water supply future plan, which was drafted with citizen participation. Although the future plan was limited to water supply, citizens were able to overcome the tradeoffs between water prices and investment. Furthermore, experiments for future city planning at Suita City suggest that one effective way of disconnecting the future from the present is to include participants representing the future generations. The Suita City experiments show that contemporary citizens in the role of “future generations” are in fact able to disconnect themselves from the present situations, including the current state of technology. This shows that a plan that covers the whole city, not just water utilities, also can be drafted with stakeholders that include the general public.

6 Conclusion Future design strives to connect the present to the future by constructing credible and feasible paths to the future. On the one hand, ST advances have led us to leave long-lasting footprints on the Earth. Therefore, it has become necessary for us to plan and behave in a considerate way. On the other hand, social institutions, including the decision-making process for resource allocation has not kept up with ST changes, and the resulting social changes. How do we decide and implement investments in long-term goals? The current STI policies are examples of policies that coordinate various government and private sector investments with short- and long-term future implications. Improving on how the policy is drafted and implemented would be a topic for future design. There are already examples from urban planning and local experiments that suggest a methodology for future design. Perhaps we should seriously consider employing these methods to STI policies.

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Table 1 FY2020 science, technology and innovation budget (in 100 million yen) General

Accounts

Special Accounts

Total

Special coordination funds for promoting science and technology Diet Cabinet Secretariat

11

625

Reconstruction Agency

312

Cabinet Office

1203

833

Policy Agency

24

21

Consumer Affairs Agency

31

MIC Ministry of Law Ministry of Foreign Affairs Ministry of Treasury

12

625

1082

312 1203 24 31

489

1082

12

12

150

150

10

10

MEXT

20,783

8954

1093

21,876

MHLW

2171

639

182

2333

MAFF

2000

945

METI

1560

1131

5226

6788

Ministy of Land, Infrastructure, Transportation

2793

281

127

2920

395

282

1318

1712

Environmental Agency Defense Agency Total

10

2000

1290 34,139

1290 13,597

8237

42,377

Source Director-General for Policy Planning (STI), Cabinet Office

References Department for Business, Innovation & Skills, HM Treasury, Clark G (2014) Our plan for growth: science and innovation. Available from: https://www.gov.uk/government/uploads/sys tem/uploads/attachment_data/file/387780/PU1719_HMT_Science_.pdf. Accessed 23 May 2017 Director General for Policy Planning (Science, Technology and Innovation), The Cabinet Office (2016) Fiscal year 2016 science, technology and innovation budget Federal Ministry of Education and Research and the Federal Government of Germany (2014) The new high-tech strategy innovations for Germany. Available from: https://www.bmbf.de/pub/ HTS_Broschuere_eng.pdf. Accessed 23 May 2017 Kishita Y (2015) Back-casting for social vision very far into the future. In: Saijo T (ed) Fyucha Dezain (Future design). Keiso Shobo, Tokyo, pp 50–86 (in Japanese) Ortega A, Tyler N (2015) Constructing a vision for an ‘ideal’ future city: a conceptual model for transformative urban planning. European transport conference 2015, Frankfurt, 28–30 Sept 2015 Quist J, Vergragt P (2006) Past and future of backcasting: the shift to stakeholder participation and a proposal for a methodological framework. Futures 38(9):1027–1045 Tyler N (2014) A vision for cities: the five-city model. ARGnote vol 1, no 5. Accessibility Research Group, University College, London Yoshioka R (forthcoming) Sustainable water works and the future design of Yahaba. In: Saijo T (ed) Future design. Springer, Berlin

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Reiko Aoki is an academic economist and Commissioner of the Japan Fair Trade Commission. Her research interests include innovation and intellectual property. She was an executive member of the Council for Science and Technology Policy (Japanese Cabinet Office) 2009–2014.

Chapter 7

What Are Urban Development and Urban Design for a Sustainable Society? Hiroyuki Takeda

1 Introduction: Why Is the Concept of Future Design Necessary? Cities form the basis of many people’s activities and are essential to their existence. In Japan, more than 90% of people already live in cities,1 and this ratio is predicted to continue to increase in the future. The Industrial Revolution, post-war reconstruction, and period of high economic growth greatly changed cities, although as society has to a certain extent matured, cities are no longer transforming drastically. Urban spaces are formed by the abundant physical environment, and buildings can have a lifespan of approximately 50 years2 depending on the type of structure (this may be considered short in comparison with European countries, since this claim is based on Japanese data) while civil structures have an even longer lifespan. Hence, to change the form of buildings a great deal of effort and time are necessary but conversely, once built they endure over the long-term and continue to exert their influence. Many of the problems within contemporary cities manifest with change over time, and responding solely to 1 In 2011, the urban population accounted for 91.3% of the population, and is projected to reach 97.6% by 2050. “City” here refers to the “shi (city)” of shichoson (cities, towns, and villages) in Japan (United Nations 2011). 2 Although the lifespan of housing is often deemed to be around 30 years, this figure is known as the “cycle age,” and is the total number of years of construction stock divided by the annual number of new constructions (Construction, Demolition & Waste Countermeasure Council 1999). Since buildings endure in the site of their construction until demolition, here I have noted the average lifespan (the number of years of a residual ratio of 50%) for wooden residential buildings used in the method of estimating the interval residual ratio focused on the residual ratio of buildings. Calculated using this method, the average lifespan of buildings is 55 years for wooden residential buildings, 50 years for reinforced concrete structures, and 45 years for steel structures (Komatsu 2008).

H. Takeda (B) Osaka University, Suita, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_7

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the demands of a single point in time can cause unexpected future burdens. Although many of the world’s developed countries face similar trends, Japan is undergoing rapid aging and a falling birthrate, and the population is already shrinking as a result. For contemporary cities, many of which have assumed continued population growth, this trend constitutes a turning point. Urban design is being reconsidered and new approaches are being implemented in various areas, but in reality it is fair to say that we are still inadequately equipped to adapt to a depopulating society. As described in Chap. 1, since it is difficult for contemporary cities to accommodate major transformations, people are characterized by a desire to maintain the status quo and perceive things rather optimistically. In short, transforming current living environments will incur a financial as well as major psychological burden. However, in a situation where it is difficult to maintain the status quo there is a need for a change in direction at some point. At present, for better or worse discussions regarding the towns of the future are increasing in order for the implementing body of urban development and urban design to shift to public and private organizations. From an economic viewpoint, negotiations between the current and future generations tend to focus largely on “the distribution of profit,” but from the perspective of urban development and urban design, the “allocation of burdens” is the key concept. If the negotiations with future generations that I am proposing in this book could be implemented in urban development and urban design, then I think that in each generation the burdens and responsibilities could be debated from a long-term point of view. In this chapter, I would like to introduce one part of my research into the fundamental knowledge necessary to proceed with the implementation of what I call “future design,” an approach that seeks to understand how people today are thinking about the challenges facing current and future generations, given that urban development and urban design have yet to take negotiations with future generations into account. It would please me greatly if, as you read through this chapter, you think about the future of the region and/or city that you live in, work in, and will eventually inherit.

2 Cities and the Shrinking Population of Japan Having referred previously to Japanese cities, in this section I provide a simple outline of how their populations will change. Figure 1 shows population transitions and projections (2012 projections), and indicates the populations of three age categories in addition to the composition ratio of the population.3 According to this graph, the population peaks in the 2000s, and after 2011 falls continuously to nigh on 100 million people around 2050 before reaching less than 50 million people by 2100. 3 Japan statistics 2014 (Ministry of Internal Affairs and Communications (MIC) 2014a) and the popu-

lation transitions and future population (projections of the average births and deaths) of the Population Projections for Japan (March 2013 projection) (Institute of Population and Social Security research 2013).

91

14,00,00,000

80.0

12,00,00,000

70.0 60.0

10,00,00,000 Population

50.0 8,00,00,000 40.0 6,00,00,000 30.0 4,00,00,000

20.0

2,00,00,000

Population composition ratio

7 What Are Urban Development and Urban Design …

10.0 0.0

Population of young people Elderly population Ratio of working population

2090

2100

2080

2070

2050

2060

2030

2040

2020

2010

1990

2000

1980

1960

1970

1940

1950

1930

1920

0

Working population Ratio of population of young people Ratio of elderly population

Fig. 1 Population transitions and the population composition ratio (values from 2015 onwards are the estimated values from 2012 projections)

This prediction of rapid depopulation suggests that when children who have been born in recent years reach the age of their life expectancy, the total population will be half of what it is now. Likewise, viewed in terms of the population composition ratio, by around 2050 the youth population accounts for roughly 10%, the working population for roughly 50%, and the elderly population for roughly 40%, although this becomes uniform thereafter. However, caution is required regarding the declining birthrate and aging society, which may incline the reader to think that the youth population will decline while that of the elderly increases, but this increase only accounts for the next 35 years as around 2050 the population of elderly citizens also starts to decrease. In other concrete terms, if policies focused on the elderly continue to expand, sooner or later it will unambiguously result in oversupply, with measures that exceed their needs. Meanwhile, if we consider the low birth rate, one of the largest factors in depopulation, the total birth rate in 2013 was 1.43.4 While this number is a slight improvement over the all-time low of 1.26 in 2005, the total number of births was

4 The

“total birthrate by age for women aged 15–49” represents the number of children a woman will give birth to according to the birthrate by age. Incidentally, the birthrate was around 2.15 during the second baby boom between 1971 and 1974.

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the lowest on record at 1,029,816.5 Furthermore, according to data6 released by the Panel of Experts of the Council on Fiscal and Economic Policy “Choosing the Future” Committee, even if hypothetically by 2030 the total fertility rate increases rapidly to the replacement level7 of 2.07, depopulation will still continue for another 50 years until 2080, and it is predicted that the current population will decrease by approximately 20 million people to 100 million. In short, presuming that no largescale immigration policy is introduced, it is evident that the depopulation problem cannot be resolved in the short-term. Nevertheless, let us consider the ways cities will change in regard to the scale of their population. The Institute of Population and Social Security Research projected municipal populations until 2040, which are displayed as municipalities nationwide by population scale in Table 1.8 Looking at this table, the number of municipalities with populations of at least 50,000 people decreases across the board, and by 2040 the number of municipalities with no more than 1000 people is more than doubled from the 2010 figure. Furthermore, according to data released by the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) in March 2014,9 in approximately 60% of current residential areas the population is predicted to become halved by 2050, and residents will disappear entirely from one third of those regions. On the other hand, municipalities of over 300,000 people will only decrease slightly, and there is a trend for them to undergo depopulation at a lower rate than cities with large populations. Figure 2 is a graph of the ratios of people relocating between prefectures from 1970 to 2011, with figures higher than 1 indicating an excess of people relocating to that prefecture, or in other words, social increase.10 Although change has fluctuated to date, it is evident that in recent years there has been a large inflow to Tokyo and the Tokyo area. Likewise, even in the Tokyo wards and government-designated cities, since 1997 there has also been an excessive inflow, pointing toward the continued tendency for the population to concentrate into large cities. It is thought that this contributes significantly to depopulation, especially of smaller, regional towns and cities.

5 2013

Demographic Survey (Ministry of Health, Labor & Welfare (MHLW) 2014). the Future (Cabinet Office 2014). 7 The total fertility rate necessary for the population to remain constant in the future, (i.e., replace the parental generation with the same number). This figure depends on factors such as the female mortality rate, which was 2.07 in 2012. 8 Future projected population of Japan by region (March 2013 projection) (Institute of Population and Social Security Research 2013), which excludes municipalities in Fukushima Prefecture. Note that the applicable wards are the 23 wards of Tokyo. 9 “Domestic Ground Design 2050” Draws this Country’s Future (MLIT 2014a). 10 Basic Resident Register Population Report on Demographic Shift (2013 results) (MIC 2014b). The Tokyo Area: Tokyo, Kanagawa Pref., Saitama Pref., and Chiba Pref.; Nagoya area: Aichi Pref., Gifu Pref., and Mie Pref.; Osaka area: Osaka, Kyoto, Hyogo Pref., and Nara Pref.; large cities: government-designated cities (not including Kumamoto City) and Tokyo’s city-wards. *Kumamoto was designated in 2012. 6 Choosing

Over 1 million

11

11

10

(People)

2010

2025

2040

20

22

24

500 thousand–1 million

39

43

47

300–500 thousand

No. of cities by population scale

160

189

203

100–300 thousand

21 5

230

265

50–100 thousand

204

230

242

30–50 thousand

435

431

440

10–30 thousand

Table 1 Number of municipalities by population scale (excluding municipalities in Fukushima Prefecture)

230

230

225

5–10 thousand

31 0

257

201

1–5 thousand

60

37

25

Under 1 thousand

1683

1683

1683

Total

7 What Are Urban Development and Urban Design … 93

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1.30 1.20 1.10 1.00 0.90 0.80 0.70 1970

1975

1980

Tokyo Nagoya area Excluding the major cities

1985

1990

1995

2000

2005

2010

Tokyo area Osaka area Tokyo city-wards & government designated cities

Fig. 2 Ratio of population inflow and outflow (inflowing population/outflowing population)

3 Financial Difficulties of the State This section considers the financial costs of maintaining cities from the perspective of local government. As an example of financial expenditures on infrastructure, let us suppose that a city has a population of 100,000 people when calculating the familiar example of public facilities and roads. First, since the average revenue per capita is 376,000 yen,11 when estimating the value of revenue in a city of 100,000 people this figure would be 37.6 billion yen. Next, when taking into account that the construction unit price for public facilities calculated based on the area of structures and planned construction costs is 232,800 yen/m2 ,12 and the area of public facilities per capita is 3.42 m2 ,13 in a city of 100,000 people the area of public facilities would be 342,000 m2 and the construction costs would be approximately 79.6 billion yen. Of the entire cost (life-cycle cost) of structures from the

11 The

per capita revenue for mid-sized cities in 2012 (MIC 2014c). Cities with populations of at least 100,000 people are categorized as mid-sized cities. 12 According to the Construction Statistical Survey Report, in 2013 the floor area of structures owned by clients in municipalities was 6,561,000 m2 , and the value of planned construction was 1527.4 billion yen (MLIT 2014b). 13 Nemoto (2014).

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95

planning stage to demolition/decommissioning, the planning, design, and construction costs combined account for around 15%,14 so it can be calculated that approximately 523.8 billion yen is required for life-cycle costs, with 265.9 billion yen as running costs and 142.5 billion yen as maintenance and renewal costs. Considering the aforementioned average lifespan of a structure of approximately 50 years, this would require annual running costs of 5.9 billion yen and average annual maintenance and renewal costs of 2.8 billion yen. Next, when considering roads, the total expanse and area of Japan’s roads are 1.264 million km and 9874 km2 , respectively, of which 1.055 million km and 6663 km2 are under municipal management, respectively.15 In short, the average road expanse and area in a single municipality is 61.3 km and 3.8 km2 , respectively.16 In the national budget of 2011, the maintenance costs for national roads were 215.8 billion yen, and when including renewal costs, 1166.2 billion yen was earmarked for reconstruction costs;17 this figure can be broken down to maintenance costs of 160 million yen per km2 and reconstruction costs of 880 million yen. It should be noted that although the unit cost of maintaining and reconstructing national and municipal roads differs, here it was determined for data purposes that the unit cost of national roads would be used. Calculated on this basis, the annual road maintenance and reconstruction costs of a single municipality would be 630 million yen and 390 million yen, respectively. From the above calculations, the running costs (maintenance costs) of structures and roads alone accounts for 6 billion yen annually, and if including the maintenance and renewal cost of structures and reconstruction costs of roads, this becomes nearly 10 billion yen annually. Furthermore, since a city’s infrastructure includes water and sewerage systems in addition to structures and roads, watercourse maintenance would also be required, hence requiring even greater expenditure independent of whether or not a budget is secured. Today, in response to the decreasing birthrate and aging population the proportion of social security spending within regional finances continues to increase, and if public security is the priority, then by necessity the funds allocated to infrastructure will lessen. Some local governments are already unable to raise funds for infrastructure such as roads and water pipes, and there is increasing difficulty in aiming for uniform maintenance equal to that carried out to date, and it is conceivable that the public’s responsibility will increase.

14 The range of life-cycle costs includes the cost of planning and design, construction, running costs (e.g., utilities, maintenance, and general management costs), maintenance and renewal (upgrade and renewal costs), and demolition/decommissioning. The ratio of costs within these life-cycle costs are: 0.4% for planning/design, 14.8% for construction, 56.5% for running costs, 27.2% for maintenance and renewal costs, and 1.1% for demolition/decommissioning (Research Institute of Construction and Economy, General Research Institute of the Committee for Construction & Material Costs 2012). 15 From the 2013 Highway Statistics Report (MLIT 2013). 16 As of 2012, there were 1719 municipalities (MIC 2014b). 17 This value is from the initial 2011 budget (MLIT 2012).

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4 Questionnaire Survey of Road Maintenance and Management Policy Taking roads as representative of social infrastructure, Pat Choate’s “America in Ruins” famously sounded the alarm about 1980s America’s growing problem with aging social infrastructure, and can be pointed to as having started a wave of concern about the social infrastructure America had so rapidly established in the 1950s.18 In Japan, now approaching 50 years since the majority of the social infrastructure was established during the period of rapid economic growth in the 1960s, many accidents are occurring throughout the country as a result of aging social infrastructure. For example, when the ceiling boards of the Sasago Tunnel collapsed on the Chuo Expressway, the aging of the ceiling boards was determined to be one of the main causal factors. Social infrastructure is tightly integrated into peoples’ lives, and appropriate operation, maintenance, and renovation is an important challenge. Meanwhile, as a result of the depopulation described above, tax revenues are dropping and the costs for social services for the elderly are rising, which negatively impacts the financial affairs of local governments, leaving little money available for the operation and maintenance of social infrastructure. In 2009 the stock value of Japanese national infrastructure was about 786 trillion yen, yet considering the massive size of this stock, it is not hard to imagine the vast sums necessary to operate, maintain, and renovate it.19 If we are going to assume that extant social infrastructure will be maintained then much greater funds will become necessary, but a Japan that thinks “of course we have the money” will not be able to cope without raising awareness about operation and management costs among the citizens who will shoulder the burden. Against this background, we focused on roads as one form of social infrastructure and conducted a survey and analysis of current citizens’ attitudes toward social infrastructure, and their willingness to pay (WTP) for road operation and maintenance in the event of future economic difficulties. The survey was implemented as a web-based questionnaire on the residents of Suita City and Takatsuki City in Osaka prefecture, and posed questions assuming that “tax policy to strengthen road maintenance & management“ (hereafter, M&M policy) had been implemented (the contingent valuation method (CVM) was employed in the analysis).20 Two groups, were created for the survey, an information disclosure group and a non-disclosure group; the former was given information about roads, including road maintenance and management costs today and in 2040, urban road maintenance expenditures, and 18 Choate

et al. (1987). Office of the Director-General for Policy Planning (2012). 20 CVM is one kind of expressed preference method for assessing the monetary value of non-market goods. It is used in cost-benefit analyses of public works projects as well as in estimating the value of environmental conservation and so on, as it is especially suited to evaluating a wide variety of objects (Ministry of Land, Infrastructure, Transport and Tourism 2009). In this study we inquired into just how much local citizens value “a society that continues to appropriately maintain and manage its infrastructure” and how much of an increase in taxes they would be willing to pay for it. 19 Cabinet

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97

Takatsuki City Ibaraki City Settu City Toyonaka City Mino City Ikeda City Suita City

Fig. 3 Maintenance levels for city planned roads in Northern Osaka (2013)

Table 2 Annual cost of maintenance and management of city roads per household and estimate of costs in 2040

Target region

Road maintenance and management cost per household (yen/household-year) 2013

2040

Suita City

3049

4367

Takatsuki City

4862

6280

the role of highways, whereas the latter group was only given the questions.21 Note the subject areas, Suita City and Takatsuki City, were selected in order to observe regional differences. In Suita, which is located in the northern part of Osaka, the cost per household for road maintenance and management is low while the percentage spending on the establishment of previously planned roads is high, whereas in Takatsuki City the cost of maintenance and management is high while the percentage spent on establishing roads is low (see Fig. 3 and Table 2).

5 Citizens’ Consciousness of Road Management and Maintenance and Their Willingness to Pay Those for and against the road M&M policy are tallied in Table 3, however verification of the differences between the two groups (chi 2 squares test) across the information disclosure group and non-disclosure group found no significant differences in 21 A

for maintenance and management costs of urban roadways, in the public hearings at the Suita City Road and Parks Department and the Takatsuki City Urban Creation Department, the annual cost of maintenance and management in 2040 was calculated from the maintenance and management cost per unit of road extension and the 2040 road extension (calculated from the expected base annual extension rate), and the exclusion of this from the data estimate of the future of municipalities (National Institute of Population and Social Security Research 2013) was sought out.

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Table 3 Opinions for or against the road M&M policy

approval or disapproval of the policy in Suita City, though significant differences were found in Takatsuki City. In Takatsuki City information disclosure group, “Neither” was very high at 37.75%, those who mostly “Agree” totaled 21.20%, and those mostly “Against” totaled 44.37%; however in the non-disclosure group, “If I have to choose, then I’m against” was higher at 33.44%, “Agree” at 24.84%, and “Against” at 51.32%. This suggests that the information disclosure group had more clearly defined preferences, while the non-disclosure group tended to oppose the policy. In other words, it appears that disclosing information about roads in Takatsuki City has the effect of reducing the proportion of objections. Further, in the Chi 2 squares test comparing Suita City to Takatsuki City, a tendency to oppose the policy was observed only in the non-disclosure group, and significantly more so in Takatsuki City. This suggests that if relevant information is not disclosed, tax increases for road maintenance and management will be met by skepticism by the residents of Takatsuki City. Acceptance rate curves were calculated from the results of WTP for road M&M policies in Suita City and Takatsuki City (Figs. 4 and 5).22 In comparison to Suita City, where a large percentage of responses indicated “1000 yen or more,” in Takatsuki City low-value responses, from “0 yen” to “100 yen,” occurred with great frequency. The results of the Chi 2 squares test showed that in comparison to Suita City, there is a significantly lower WTP for road M&M policies in Takatsuki City. We calculated the average and median from the acceptance rate curves, but because this is a case where the average value was influenced by a small number of high-value responses, we took the median as the representative value because at that amount half of respondents agreed with the policy (acceptance rate of 50%). We did this because in 22 The WTP answer was taken on payment card system with the following options: “I wouldn’t pay,” “100 yen,” “200 yen,” “300 yen,” “400 yen,” “500 yen,” “600 yen,” “700 yen,” “800 yen,” “ 900 yen,” “1000 yen,” “1200 yen,” “1500 yen,” “2000 yen,” “3000 yen,” “5000 yen,” and “More than 5000 yen.” Also, in deriving acceptance rate curves, the payment card system was read as a multi-bound method and fitted to a log-linear logit model.

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Fig. 4 Acceptance rate curves for Suita City (Left: Information Disclosure Group, Right: Nondisclosure Group)

Fig. 5 Acceptance rate curves for Takatsuki City (Left: Information Disclosure Group, Right: Non-disclosure Group)

dealing with the qualitative aspects of policy, we decided that the popular will should be taken seriously. The median estimated from the acceptance rate curves was 385 yen/household/year for the information disclosure group and 437 yen/household/year for the non-disclosure group in Suita City, and 308 yen/household/year for the information disclosure group and 390 yen/household/year for the non-disclosure group in Takatsuki City. To compare each group, we conducted a verification of their differences (Mann-Whitney U test). Initially, when comparing Suita City and Takatsuki City we found no significant differences. On the other hand, although a comparison of the information disclosure and non-disclosure groups from each city showed no significant differences in Suita City, it also revealed a higher WTP in the nondisclosure group of Takatsuki City. In other words, it is clear that in Takatsuki City, information disclosure does not contribute to WTP or opinions for or against the M&M policy.

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(a) “Roads help support my

(b) “Road maintenance

(c) “Administration and

life”

and management is

citizens should cooperate”

important”

Fig. 6 Changes in awareness of maintenance and management before and after information disclosure

6 Effects of Information Disclosure and Means of Information Acquisition In this section we consider how to best influence the way people regularly acquire information in order to raise their awareness of road maintenance and management through information disclosure. Figure 6 depicts the changes in citizens’ consciousness of maintenance and management as well as their attitude toward obtaining information before and after information disclosure. In this survey, we found that while the awareness that “Roads help support my life” was higher, consciousness of things like “Road maintenance and management is important” and “Administration and citizens should cooperate” had decreased. On the other hand, awareness of attitudes toward obtaining information were observed to improve across all media after information disclosure (Fig. 7). However, when observing information retrieval processes sorted by personal attributes, gender appears to play a significant role, and differences based on occupation were also observed (Fig. 8). These results show that it is not always the case that information disclosure will produce positive results, however it does suggest that because disclosing information can improve stances on information retrieval, it may be possible to obtain a foothold by continuing to disclose information through gender- and occupation-appropriate media.

7 Varieties of Information Disclosure and Styles of Future Design With regard to the results of the survey and their implications for the development of future design, we have arrived at the following conclusions.

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(b) obtained from city

(c) obtained from city

SNS

newsletter

(d) obtained from consultation

(e) obtained from

(f) obtained from a

with city

neighborhood council

city-run event

(a) obtained from city HP

Fig. 7 Changes in stances on information retrieval before and after information disclosure

(a) Differences by gender

(b) Differences by occupation

Fig. 8 Differences in means of information retrieval based on personal attributes

(1) Transforming Intentions Toward the Future In recent years, the will of the people has come to be valued in urban development and urban design. It is thus typically thought that the disclosure of information is one of the most important activities that government administrations can engage into obtain the understanding and cooperation of the people. However, in this survey we found that information disclosure had little effect on rates of approval/disapproval

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Table 4 Representative value of population WTP as estimated from acceptance rate curves Representative value

Suita City

Takatsuki City

Disclosure group

Non-disclosure group

Disclosure group

Non-disclosure group

Average value (yen/household-year)

767

807

681

756

Median value (yen/household-year)

385

437

308

390

of road M&M policy or on WTP—on the contrary, in Takatsuki City information disclosure resulted in a decreased WTP. This suggests that it is not simply the case that information disclosure has no effect, but that changes in citizens’ opinions depends upon the contents of the information disclosed. Of course, in addition to pointing to the policy as a reality, it goes without saying that the administration should not intentionally manipulate information to produce certain effects, however, when the simple disclosure of information does not lead to the desired outcome, this indicates the importance of carefully scrutinizing the contents of the information. (2) On the Necessity of Dialogue with Future Generations In this study, we conducted a survey on roads, one form of social infrastructure that people do not normally pay much attention to in Japan. A comparison of expenditures on road M&M in 2040 as shown in Table 2 and the WTP for road M&M policies shown in Table 4 makes clear, in both of the target cities there is a large gap between the estimated future increase (approximately 2000 yen) and WTP (approximately 300–450 yen). It is therefore of essential that we begin a debate on the challenges facing the current and future generations, and furthermore, as part of future design these conversations and negotiations between present and future generations, with the intention of raising the awareness of people of the present generation, will grow increasingly important. (3) Effects of Disclosing Information: Raising People’s Awareness As described in (1), in this survey a direct effect of information disclosure was not observed. However, we found that positions on information retrieval improved as a result of information disclosure, and that one piece of information is connected with the desire to acquire further information. This means that in future design, in order to virtually produce the future generations, based on precise estimates of the future, the kind of contents, the methods of disclosure, and furthermore even the timing for information disclosure must be included as part of the design.

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8 Conclusion In Japan, it has been claimed for several years that “cities are at a turning point,” but I feel that the expiration date for this turning point has already passed. Amidst this situation, the government and local authorities will be faced with increasingly crucial choices regarding whether to concentrate cities compactly or attempt to maintain them in their current diffuse state, how to tackle areas at high risk of residents disappearing entirely, and where to direct public investments. However, rather than assuming the entire responsibility for such serious decisions, after considering various options and presenting them to the public, the government and public must make these decisions together. There will undoubtedly be situations in which the current public must tolerate some loss of interest. On the other hand, considering that for better or worse urban development is becoming increasingly driven by the private sector, whether such areas will be sustainable or not will to a significant extent be in the hands of the public and private sector entrepreneurs. Actual problems must be taken seriously, and rather than either the public or private sector being the evaluator, there must be a mutual recognition of each other as implementers and evaluators, and a system must be created in which roles are played out from each respective position. In such scenarios, it would be desirable that each individual will give some consideration to the future generation. Finally, terms such as sustainability are seeing frequent usage. I sense the nuance of the term that has grown in strength is “to maintain the status quo.” However, just as with the “Choices for the Future” introduced in the beginning of this chapter, even if the birthrate recovers to the population replacement rate, the Japanese population will nevertheless decrease for the next 50 years. Then even if the birthrate recovers to an even more favorable level and the population begins to somehow increase, we still have to think about how our cities will handle the increase over the next 50 years. In this sense, taking “How shall we create the future?” as a key phrase, we must produce the environment in which debates over not only how to avoid handicapping the present generation, but also how to reduce burdens and ensure benefits for future generations can take place. Although there is a lot of rather negative information with respect to the current situation and processes in cities to date, the reader may sense a desire to at least maintain the status quo. However, in addition to perceiving positive change and desiring to consider the design of future cities and lifestyles of the people living in them, I hope to persuade the reader of the importance of “future design” as holding the potential to embody this way of thinking.

References Cabinet Office of the Council on Economic & Fiscal Policy Expert Examination Committee “Choosing the Future” Committee (2014) Choices toward the Future—Constructing a Model of Growth and Development for Japan to Overcome a Rapidly Depopulating, Aging Society. http://www5.cao.go.jp/keizai-shimon/kaigi/special/future/houkoku/01.pdf. Accessed Dec 2014 Cabinet Office of the Director-General for Policy Planning (2012) Japan’s Social Capital 2012. http://www5.cao.go.jp/keizai2/jmcs/docs/pdf/jmcs2012.pdf. Accessed 5 Feb 2016

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Construction, Demolition & Waste Countermeasure Council (1999) Report of the Society for the Demolition & Recycling System: Aiming for the construction of a recycling society through independent and collaborative efforts and the creation of an environmental industry. Taisei Publishing Company Choate P, Walter S, Koga I (trans) (1987) America in Ruins. Council of American Planning Council Institute of Population and Social Security Research (2013) Projected Future Population of Japan by Region (March 2014 projection). http://www.ipss.go.jp/pp-shicyoson/j/shicyoson13/t-page.asp. Accessed Mar 2014 Komatsu Y (2008) Projected lifespans of residential buildings in 1997 and 2005. Architectural Institute of Japan, Journal of Architecture & Planning, No 632, pp 2197–2205 Ministry of Health, Labor & Welfare (2014) 2013 Demographic Survey. http://www.mhlw.go.jp/ toukei/list/81-1.html. Accessed Oct 2014 Ministry of Internal Affairs & Communications (2014a) Statistics of Japan 2014. http://www.stat. go.jp/data/nihon/index1.htm. Accessed Oct 2014 Ministry of Internal Affairs & Communications (2014b) Basic resident register demographic report (2013 results). http://www.stat.go.jp/data/idou/. Accessed Apr 2014 Ministry of Internal Affairs & Communications (2014c) 2014 edition of the regional finances white paper. http://www.soumu.go.jp/menu_seisaku/hakusyo/. Accessed Apr 2014 Ministry of Land, Infrastructure & Transport (2012) Investigative Committee on the maintenance and operation of national highways (nationally managed), as well as the current situation and issues regarding the maintenance operation of national highways (nationally managed), No. 1 (8/01/2012) documents distributed. http://www.mlit.go.jp/road/ir/ir-council/road_maintenance/ pdf/4.pdf. Accessed Dec 2013 Ministry of Land, Infrastructure & Transport (2013) Annual report of road statistics 2013. http:// www.mlit.go.jp/road/ir/ir-data/tokei-nen/2013/nenpo02.html. Accessed Apr 2014 Ministry of Land, Infrastructure, Transport & Tourism (2014a) Domestic Policy Research Group: “Domestic Ground Design 2050” draws this country’s future. Taisei Publishing Ministry of Land, Infrastructure & Transport (2014b) Construction statistical survey report, (summary for FY 2014). http://www.mlit.go.jp/common/001041519.pdf. Accessed July 2014 Ministry of Land, Infrastructure, Transport and Tourism (2009) Methods for virtual estimation of markets (CVM) guidelines for use. http://www.mlit.go.jp/tec/hyouka/public/090713/cvmshishin/ cvmshishin090713.pdf. Accessed Aug 2015 Nemoto Y (2014) Data analysis results report on the area of public facilities in local authorities nationwide. https://www.toyo.ac.jp/uploaded/attachment/688.pdf. Accessed Apr 2014 Research Institute of Construction and the Economy, Construction Research Institute (2012) Basic study of the effect of LCC on Construction Costs, Construction Research Institute, General Institute Research Report, No 7, pp 66–73 United Nations, Department of Economic and Social Affairs, Population Division (2011) World urbanization prospects: the 2011 revision, http://esa.un.org/unup/. Accessed June 2013

Hiroyuki Takeda Ph.D., is a lecturer in the Department of Management of Industry and Technology, Graduate School of Engineering, Osaka University.

Chapter 8

Future Design for Sustainable Water Resource Use from the Perspective of Ground Water Management Keishiro Hara

1 Introduction Human society relies on various types and forms of resources on earth. Many of the resources and materials that we use in our daily lives, such as drinking water, electricity and construction materials, can be traced back to a variety of natural resources. These natural resources are the foundation of society and lives of human beings. There are various kinds of natural resources, including energy-related resources such as petroleum and coal, water resources, minerals, biomasses, and so on. Petroleum and coal, for example, are among those belonging to the non-renewable category, which comprises resources physically dwindling in quantity as mankind continues to consume their limited supply. If our generation overconsumes such resources, people of future generations would not be able to benefit from them in the ways that the current generation has. Depletion of such natural resources would potentially result in significant disadvantages for future generations. It is therefore fundamentally important to share natural resources not only among those of the same generation but also between generations, so that resources continue to remain available for utilization by future generations. Among the various types of resources, we direct our attention to water with a special focus on ground water in this chapter. Water is a resource that circulates on earth through the cycle of rainfall and evaporation driven by solar energy. Water may be categorizes as a renewable resource in that respect. However, the potential quantity of water in a particular region, in other words, the amount of water resources available for use in the region, depends largely on physical conditions and regional characteristics. This becomes evident when considering the differences in the amount of rainfall in different parts of the world. In fact, in many regions on earth, the K. Hara (B) Osaka University, Suita, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_8

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amount of rainfall is extremely limited, and therefore the amount of water available for use is limited. Depending on the region, droughts are expected to occur quite readily due to future climactic changes, in addition to regional conditions including physical conditions. The population on earth has already exceeded seven billion and a further population increase is anticipated, primarily in the Asian and African regions (Population Division of the Department of Economic and Social Affairs, UN 2007). Securing water is expected to become an increasingly important issue in the future, because the demand for water resources—such as domestic water used as drinking water, agricultural water, and industrial water—will continue to accelerate, and the consumption of water resources is predicted to increase worldwide (IPCC 2014). Fresh water comprises only about 2.5% of all water resources that exist on earth. In other words, much of the existing water is seawater (saline water), which mankind cannot use directly for domestic consumption or for agriculture. Furthermore, only about 30% of the world’s fresh water is actually usable; the remaining 70% exists in forms such as water frozen in glaciers and snow, or trapped in permafrost layers, which prevent humans from using it directly. Unfortunately, many people probably have an image of abundant water on earth, but in reality, the amount of usable water is limited. Fresh water can be further classified into “surface water” that exists in rivers and lakes and “ground water“ that exists underground. In terms of physical quantities, estimations indicate that the majority of fresh water exists as ground water (Oki and Kanae 2006). By observing the situation from this perspective of a limited resource, one can understand how extremely precious ground water is as a source of water for the beneficial uses of mankind. Many countries and regions, particularly in Asia, tend to have a high degree of dependence on ground water for domestic use and economic activities, while economic development and urbanization have continued to accelerate. Consequently, an excessive amount of water is being extracted from the ground; this causes water table drawdown in these regions, and results in serious problems such as “land subsidence.” Furthermore, because of land subsidence, manmade infrastructures, such as buildings, have sustained significant damages, which in turn have seriously impacted residents. Such incidents have been reported all over the world (UNEP 2003), and they lead to the following question: How will future generations be impacted by the current generation’s overuse of ground water and resulting land subsidence, from which recovery is considered difficult once these problems occur? This chapter directs our attention to the excessive consumption of ground water, discusses how water resources can be managed and used fairly by people not only of present generation but also between generations, and considers the significance of Future Design of water resource management that take into consideration the needs of future generations. This chapter first looks into the Asian region and directs our attention to the cities of Bangkok (Thailand), Bandung (Indonesia), Ho Chi Minh (Vietnam), and Tianjin (China) to provide an overview of the increasing use of ground water resources in the middle of urbanization and economic growth, as well as the problem of resource depletion due to excessive ground water extraction. Next, serious incidents, such as land subsidence, that have occurred as a result of excessive ground water extraction

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are presented briefly, followed by examples of measures implemented by the City of Bangkok as well as the Government of Japan to deal with problems developing due to the overuse of ground water, and case studies in ground water management. Problems such as the lack of mechanisms for appropriately managing natural resources and incentives for sustained compliance are then addressed to indicate the necessity of an approach that enables sustainable use and management of water resources over time while taking into account the needs and benefits of future generations. Finally, a discussion of the basic concepts and some essential points of Future Design for managing water resources in a sustainable manner, while reflecting the interests of future generations, is provided.

2 Ground Water Use in Asian Cities 2.1 Increasing Demands and Dependence on Ground Water The Asian region is one of the regions in the world where the highest levels of urbanization and economic development are taking place. Concurrently, resource consumption and environmental burdens are also increasing rapidly. Ground water is an essential water resource that is widely used in major Asian cities. In the AsiaPacific region alone, one to two billion people are estimated to rely on ground water as a source of drinking water (Sampat 2000). The following reasons explain why the reliance on ground water is particularly high in regions in a phase of economic development. First, the available ground water has a stable quality and is easy to use. Ground water is stable because fluctuations in its water quality are relatively small. In contrast, surface water from rivers and lakes is readily affected by seasonal changes. Furthermore, ground water is easily utilized and costs can be kept low since large-scale infrastructures for water treatment or distribution are not needed, unlike cases where surface water is utilized as a water source. Bangkok set up a payment system to impose fees on users according to the amount of ground water extraction. In the past, however, Bangkok did not charge users for ground water use, and anyone could use it free of charge. The number of regions that do not impose fees for the extraction of ground water is still significant and controlling the demand for ground water remains a challenge. Due to factors such as stable water quality and low costs, particularly in areas that are currently undergoing economic development, ground water tends to be withdrawn in large quantities for domestic, industrial, and agricultural uses. Let us now examine the status of ground water utilized in the urban areas of Tianjin (China), Ho Chi Minh (Vietnam), Bandung (Indonesia), and Bangkok (Thailand). The consumption is especially high in Bangkok, Ho Chi Minh, and Bandung for industrial purposes, whereas about half of the consumption in Tianjin is for agricultural purposes (Hara 2006). Ground water also provides a certain proportion of the water used for domestic consumption, including drinking water. The principal

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reason for the high use of ground water for industrial purposes, as in Bangkok, is the fact that ground water is easy to use because it is less costly and has stable water quality. On the other hand, the amount used for agriculture tends to be greater in Tianjin because of its very large agricultural areas. Let us next look at the variations in the utilization of ground water in these regions over the years. The amount of daily ground water intake in the metropolitan area of Bangkok in the years 1980, 1990, and 2000 was 1.36 million m3 , 1.7 million m3 and 2 million m3 , respectively, and thus shows a trend of monotonic growth. Similarly, the use of ground water increased in Bandung, in association with its increases in economic activities and population. The dependence on ground water for the industrial sector was about 60% in Bandung as of 1993, but this was estimated to have risen to over 70% by 2004 (IGES 2006). Water demands increase rapidly in urban areas with significant growth, hand-in-hand with changes in the lifestyles of people due to economic growth, urbanization, and industrialization. In other words, urban areas tend to rely on ground water, which is less costly and easy to use. Meanwhile, water contamination is becoming an increasingly serious issue in cities where economic growth is rapidly occurring. Contamination can have an impact on the availability of usable water resources. Development of environmental infrastructures, such as sewer systems, in these regions has generally been unable to keep pace with economic development. As a result, hygiene problems related to such problems as water pollutions are becoming increasingly serious. If groundwater contamination occurs, the value of ground water for domestic drinking declines and the available amount of usable ground water decreases. Ground water management is now being thrust upon many cities in the Asian region. Ground water management needs to address problems relating to the quantity of water resources, such as the excessive extraction of water and associated depletion of water resources, and problems pertaining to water quality, such as water contamination. A matter of critical importance is how to appropriately share the physically limited supplies of available water among domestic, industrial, and agricultural sectors and how to use and manage the available water in such a way that societies and people can be supported. Furthermore, in addition to the issue of distributing water in the present society, when problems such as ground water depletion or land subsidence occur due to the excessive exploitation of ground water resources (which is addressed in detail later in this chapter), subsequent generations will be significantly impacted and the sharing of problems between generations may also become another concern. The questions for future use are how sustainable water resource management should be carried out to share limited water resources fairly between generations and how water resources can be used by the current generation in ways that will not put future generations at a disadvantage.

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2.2 Excessive Extraction of Ground Water and Problems of Land Subsidence The excessive extraction of ground water potentially results in the problem of ground water depletion when rainfall that replenishes ground water supplies does not keep up with the amount of ground water extracted. This can be seen as an indication that ground water, which should be categorized as a renewable resource, ceases to be renewable. In fact, the exploitation of ground water in great quantities has led to the lowering of ground water levels in many urban areas in Asia. The lowered water levels have resulted in land subsidence in practically all of the cities mentioned in this chapter. When land subsidence occurs, manmade infrastructures such as buildings and roads are damaged or even destroyed. This destruction could result in social consequences, such as lowering people’s incomes, and psychological consequences, such as anxiety, that negatively impact the residents in the affected areas. The occurrences of both direct damages to infrastructures and social life together with indirect psychological damages to people have been defined as “damages caused by land subsidence.” Land subsidence has manifested in Bangkok since the 1970s, due primarily to the excessive extraction of ground water, which impacted a variety of infrastructures. Secondary effects such as heightened influxes of sea water and flooding have also occurred in Bangkok, which is located along the seacoast. Land subsidence of at least one centimeter has been confirmed annually at many locations within the city even at the present time, and as much as 10 cm of subsidence has been reported in some places as of the year 2006 (IGES 2006). Once the ground subsides, it never returns to its original condition. This means that it is essential to implement precautionary countermeasures against excessive water depletion at an early stage. In many urban areas and regions, however, measures are implemented only after ground water levels have declined and the land subsidence phenomenon has already occurred. Such examples of land subsidence involving the depletion of ground water resources clearly show the need for sustainable use of ground water and sharing the resources over generations. Indeed, the behaviors of people in the present could cause significant losses to future generations through their actions relating to the use of resources.

3 How Ground Water Should Be Managed with Anticipation for Continued Use 3.1 Experiences from the City of Bangkok What kind of measures should be implemented for the problem many cities are facing, namely, excessive ground water extraction associated with an increasing demand

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for water? The example of Bangkok is used to consider how ground water could be managed. As described above, land subsidence became severe in Bangkok and developed into a social problem in the 1970s. In response, unrestricted drawing of ground water was no longer allowed and a variety of measures were implemented to achieve sustainable use by restricting ground water extraction. The Groundwater Act of 1977 systematically implemented sustainable ground water management based on the following three principal measures: (1) Identification of areas where the ground water level has dropped due to excessive extraction of ground water and specific measures to be taken in those areas; (2) Implementation of restrictions through economic measures that include the imposition of usage fees; and (3) Implementation of measures such as penalties and charges imposed on individuals who abstract water illegally. The Groundwater Act was amended in 1992 and currently plays a central role in Bangkok’s ground water management policies. The following examples from the Bangkok case are measures actually implemented under this legislation. Examples of Measures Implemented in Bangkok (1) Restrictions/regulation on ground water extraction (2) Charges for ground water extraction (e.g., 3.5 baht/m3 in 1994 ⇒ 8.5 baht/m3 in 2003) (3) Subsidies for activities intended to maintain ground water supplies (4) Provisions for alternative water sources that can be available for use by water works and similar facilities (5) Establishing monitoring systems for water intake trends (6) Institution of licensing and penal regulation systems (7) Implementation of “zoning” for areas with severe ground subsidence. In addition to the restrictions for ground water extraction (see the item1, above) in Bangkok, a system is in place for imposing charges corresponding to the amount of water extracted (see the item 2, above). No charges were imposed on drawing ground water during the first half of the 1980s, but phased implementation of a fee system was introduced during the latter half of the 1980s. The charge was 3.5 baht for the extraction of one cubic meter in 1994, and the charge rose to 8.5 baht for the same volume in 2003, with fees raised incrementally during this period. In addition to these charges, Bangkok implemented another type of payment in 2004. The payment was intended to support a variety of activities needed to maintain the ground water (see the item 3, above). These payment systems have gradually generated incentive effects to decrease the use of ground water by a variety of organizations and people in Bangkok (IGES 2006). In fact, a decreasing number of wells installed and a decreasing amount of ground water extraction since the latter half of the 1990s were confirmed. Meanwhile, restrictions on the extraction of ground water can potentially present hindrances to those people who significantly rely on well water for drinking and other uses in their daily lives. Making alternative sources of water available to people who had been using well water for domestic use over many years was therefore an important agenda for the city government, in order to ensure that these people would suffer no adverse effects resulting from restrictions on the use of ground

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water. The government added to the infrastructure by, for example, installing new water works facilities and expanding and improving existing networks of pipes, to provide alternative sources of water to mitigate the adverse effects associated with restrictions on ground water extraction (see the item 4, above). In addition, the establishment of monitoring systems for preventing illegal acquisition of well water or excessive extraction of water (see the item 5, above), as well as the institution of a licensing system for people who wish to use ground water (see the item 6, above), has also been carried out. Furthermore, areas with serious land subsidence due to particularly significant declines in the ground water level, as well as areas under threat of critical ground water depletion, were identified and a “zoning” method for special water intake restrictions was implemented (see the item 7, above) to promote effective and strategic ground water management. The implementation of such a variety of comprehensive measures and policy methodologies has steadily suppressed the increase in the number of wells drilled and the related problem of excessive ground water extraction. These measures turned out to be effective in controlling groundwater extraction. Similar symptoms indicating excessive ground water extraction and land subsidence have been confirmed in Bandung and Tianjin, and so these cities also planned to implement restrictions on the amount of ground water use. Such implementations, however, did not reached the level of systematic and comprehensive measures seen in the case of Bangkok as of 2006. Furthermore, although the excessive extraction of ground water is a concern in Ho Chi Minh City, no practical measures or restrictions on the extraction of ground water had been implemented then, in part because no official announcements had been made regarding land subsidence. However, monitoring of the ground water level in Ho Chi Minh City is expected in the future in order to take preventive measures against excessive ground water exploitation due to the current status and trends of ground water extraction, together with the experiences and lessons learned in other cities. In fact, the level of measures implemented and the awareness of the need for ground water management vary from one country or region to another, as described above.

3.2 Ground Water Management Policies in Japan The abovementioned issues relating to ground water utilization in Asian cities had already been experienced by Japan. Land subsidence due to the excessive extraction of ground water became a social problem in Japan during the country’s period of rapid industrial growth after the Second World War. Land subsidence was actually recognized as one of the seven major environmental pollution issues designated by the government of Japan, which included air pollution and water pollution. Dependence on ground water as the primary source of industrial water had already existed in industrialized zones in major cities such as Tokyo and Osaka, and Land subsidence had been observed since early in the Showa Era (Environment Agency 1972), but no controls on groundwater use had been implemented. The demand for municipal

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water increased significantly during the process of rapid growth, and so the excessive extraction of ground water progressed dramatically. Consequently, the land subsidence areas (that is, the low-lying areas) of major cities such as Tokyo and Osaka sustained significant damage from floods triggered by strong Typhoons, such as the one that hit Japan in September 1950, and other disasters. As the extensive damage from natural disasters became evident, the excessive ground water extraction came under scrutiny and led to subsequent implementation of various measures for ground water management. In 1956, for example, the “Industrial Water Law” was established to restrict the drawing of ground water, and the construction of industrial water service infrastructures for supplying industrial water at affordable prices was carried out to ensure that industry would not rely so heavily on ground water. Furthermore, the “Law Concerning the Regulation of Pumping Groundwater for Use in Buildings” was enacted in 1962 to regulate the intake of ground water for use in buildings. In addition to implementing such regulations and securing alternative sources of water, voluntary measures were taken by various industries. The manufacturing industry, for example, made active efforts to recycle and reuse water within manufacturing processes and plants. These efforts resulted in a successful reduction of dependence on ground water. Government-driven policies restraining ground water intake and voluntary efforts and measures implemented by industries, aided by technical developments, innovations, and a variety of supportive factors, all led to a certain degree of success in solving problems related to the excessive extraction of ground water and ground subsidence. In many areas where economic development and industrialization have been occurring rapidly, a series of common problems and responses have been demonstrated due to the increasing demand for water associated with such socio-economic changes and the associated manifestation of land subsidence described above. Indeed, similar phenomena have been observed over time in various countries and regions. Observing such occurrences indicates that summarizing, comparing and sharing past cases and then using the lessons of water resource management accumulated among countries and regions in an appropriate manner will be essential in the future. The first step towards Future Design of water resource management would be an attitude to learn from past lessons, share knowledge, and prepare for countermeasures in the future, as is described below.

4 Perspectives on Sustained Use of Resources In previous sections, an overview of the current status of excessive dependence on ground water against the background of socio-economic development and increasing demands for water, as well as the unsustainable intake of water, is presented by taking the examples of some Asian cities, including those in Japan. These cases demonstrate unsustainable condition with regard to water resource uses. Let us first discuss the underlying concept or approach for sustainable use or management of natural resources such as water resource.

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Herman Daly, an ecological economist, proposed the following model of the conditions required for sustainable development from the perspectives of material recycling and ecological systems. The model consists of three principles: (1) The usage rate of renewable resources (natural capital), such as forests and woods, must not exceed the renewal rate; (2) The sustainable usage rate of non-renewable resources, such as fossil fuels, must not exceed the rate at which they can be replaced by substituting renewable resources at sustainable rates; and (3) The sustainable discharge rate of pollutants must not exceed the rate at which the environment can circulate, absorb and detoxify such substances (Meadows et al. 1992). Water is a resource that circulates on earth through the cycle of rainfall and evaporation driven by solar energy, and, as such, it may be considered a type of renewable resource. The consideration of water as a renewable resource corresponds to the first of the three principles outlined above. In reality, though, the excessive intake of ground water in many cities is significantly surpassing the rate at which the ground water is replenished by rainfall, and thus does not satisfy the requirements of the first principle. Why, then, are similar problems being repeated in spite of the existing precedents and lessons learned from the depletion of water and land subsidence in many locations? Other than the fundamental reason that ground water is easily used by people, another issue is the difficulty in directly determining the extent of the depletion of ground water. It is not easy to understand how much ground water can be taken while remaining within the margin of safety of sustainable use (i.e., sustainable yield), because, unlike surface water, it is not easy to directly assess the situation underground. In addition, the complexity of physical conditions relating to the “aquifer,” where ground water exists, also makes it difficult to determine sustainable yield level. The lack of a formal mechanism for managing natural resources in a sustainable manner is also addressed as an important issue. The absence of a market for natural resources is discussed as an example. The aquifer, where ground water exists, is often spread across the boundaries of administrative districts and nations. This makes it difficult to institute regulatory systems for markets in separate administrative districts. Many countries and regions impose no fees for taking ground water from wells, and in such cases, people have little incentive to submit to restrictions on their intake and use of ground water. In the case example of Bangkok, the implementation of a payment system created an incentive for people to refrain from excessive intake of water from wells, but the actual situation is such that a so-called market does not always exist for natural resources such as water and ecological systems (Kinzig et al. 2011). A market is just one example of a mechanism that can be considered as a kind of institution for better management of natural resources, including ground water. If a fundamental mechanism for the sustainable use and management of water does not exist, not only will problems arise with regards to distribution between organizations and sectors of the same generation as the demand for water resources increase, but also future generations will be deprived of the opportunity to utilize ground water resources. It is evident that the distribution over generations is indeed an issue here.

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The problem of distribution within the current generation is determining what constitutes an appropriate distribution of limited water resources among the domestic, industrial, agricultural, and other individual sectors and user organizations. Some might conclude that the industrial sector, which has a higher potential for increasing economic values through manufacturing and other industries, should consume a larger proportion of the available water to achieve national economic goals, such as a high GDP. However, water is a resource that is also an essential and fundamental resource in people’s lives in the first place. The practices for distributing ground water that have been developed depend largely on the values of the region, the norms of its people, and the socio-economic context of the region. Thus, it is important to consider the full context of a region to comprehend how water resources should be used. That is, distributing limited resources must be carried out with a proper understanding of the regional context, rather than simply addressing economic values. Furthermore, sustainable use and management must ensure that future generations will not be disadvantaged by the depletion of water resources. Naturally, the needs of the present generation must not also be neglected by prioritizing the consideration of the needs and interests of future generation. Similar to the problem of resource distribution within the current generation, a social mechanism or methodology is required to consider the ways water should be used by the current generation, while taking into consideration the issues of fairness between generations and the interests of future generations. This is why Future Design has become necessary in resources management.

5 Future Design of Water Resource Management with Consideration of Fair Distribution Over Generations 5.1 Significance of Future Design in Water Management Let us now turn to the significance of Future Design in the field of water resource management. Future Design is realized by explicitly incorporating the “perspectives and interests of future generations“ in deliberations and negotiation through the participation of a diverse range of organizations and generations acting in a cooperative manner. Many people are involved in the use and management of water resources. These people comprise the wide range of sectors that use water: political administrations that formulate and implement policies regarding water resource management, as shown in the examples of Bangkok and Japan, and a diverse number of organizations and stakeholders, such as scientists and researchers, who can offer scientific knowledge regarding water resource problems. All of these people must participate in deliberations and form a consensus on the appropriate use and management of water resources. Their input would be fundamental to the Future Design of water

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resource management. In such cases, deliberations should not merely deal with the distribution of resources for use in respective sectors of the current generation, but discussion and consensus building must also take place regarding the amount of water resources that should be used by the current generation based on consideration of the interests of future generations, including how water resources should be managed for them. Most importantly, imaginary future generation group could be set up in these cases to speak on behalf of the interests and values of future generations in order to debate and reach a consensus with the group representing the current generation. Deliberation and negotiation between the imaginary future generations and present generation groups could lead to more sustainable water resource management because the benefits of future generations are taken into account in decision making related to water use and management. In order to avoid excessive ground water exploitation by the present generations and resultant land subsidence which is irreversible, it is fundamentally essential to facilitate Future Design in water resources management.

5.2 Essential Points with Regards to Future Design In Future Design, creating imaginary future generations who are tasked to speak for the benefits of future generations is essential. Hara et al. (2015, 2016, 2017) demonstrate that imaginary future generation who are clearly given the role to represent the voice of future generation are capable of considering the benefit of future generations in deliberation processes, overcoming the shortsighted decision making. In the meantime, some research questions remain with regard to operationalizing the concept of imaginary future generation as essential part of Future Design. The examples include, but are not limited to (1) How to effectively task stakeholders to become imaginary future generations, (2) What conditions would make it possible to create imaginary future generations in an appropriate and effective manner, (3) What kinds of information should be provided to present and imaginary future generations in Future Design processes, avoiding any information biases and (4) How to facilitate negotiation and consensus building processes between the present generations and imaginary future generations. It is of critical importance to continue to carry out relevant research to answer these questions (Hara and Saijo 2017). Speaking of Future Design in the context of water resources management, there are also some essential points to be considered. For example, the sustainable amount of ground water removal or usage can be discussed scientifically on the basis of the proportion and balance of the rates of replenishing and intake. On the other hand, in some regions, determinations of the appropriate amount of use or distribution within a generation or between generations must be made in a normative manner, with consideration of the interests of the respective sectors and generations, as well as of the local context. In this manner, information sharing and deliberations with the goal of forming a consensus from the participation of a diverse range of organizations are important processes and factors.

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Informed discussions based on scientific knowledge related to water resource use that include envisioning future societies are of vital importance. In this regard, “Scenario Analysis“ and “Scenario Approach,” have been proposed to examine the needs and conditions of future societies with such uncertainties (Kishita 2016). In the fields of inquiry related to water and ecological systems, attempts have been made to implement scenario analyses and evaluations. For example, World Water Vision illustrated future scenarios of water problems on a global scale (Cosgrove and Rijsberman 2000), and the Millennium Assessment Report analyzed changes in ecological system services in the future and the effects of such changes on the well-being of people (Carpenter et al. 2005). In Future Design of water resources management, scientists shall also play a vital role. The role of scientists would be as follows: (1) Carry out analyses through multiple possibilities and scenarios by taking into consideration socio-economic trends in the future and uncertainties related to the availability of water resources under different scenarios; (2) Perform appropriate evaluations of water use and water stress in the future, as well as identify potential impacts on people’s quality of life and welfare in future generations facing water stress; and (3) Present clear materials and information for evoking discussions about how water resources should be used and managed by people of the current generation in view of benefits and welfare of future generations. Many countries undergoing economic growth tend to have greater dependence on ground water during their initial stages of industrial development, and so lowered ground water levels and land subsidence are the initial result. Therefore, it is important to maximize the use of these experiences, lessons, and facts from the past by analyzing historical facts and case studies, and using them in future scenario designs. In Future Design, groups representing the interests of current generation and future generations (i.e., imaginary future generation group) would conduct deliberations and negotiations, as indicated above. The deliberations and negotiations would be based on their evaluation of the multiple scenarios presented in order to debate and decide actions regarding water use and policies for managing water resources in the future. These groups would conduct collaborative deliberations and decisionmaking activities regarding the selection and implementation of options for measures to be adopted for those ends. The use of management methods for water resources of the current generation may potentially change significantly from existing ones when the benefits for future generations from water resource use are fully taken into consideration. At the same time, it is important that the problems of water resource exploitation have significant impacts on a wide range of domains and therefore, Future Design should be conducted with an equally broad perspective. This can be readily understood by considering the example of building a dam to increase the water supply available for use. When discussing the pros and cons of constructing a dam in a region, the positive aspects, such as a stable supply of water, and the negative aspects, such as the destruction of a region’s ecological system or the loss of rural settlements, must be considered. This example clearly demonstrates the intersection of problems and domains. It is necessary to make decisions in future design by including not only

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the aspects of water use but also other aspects, such as the impacts on ecological system in the case above. It is essential to establish appropriate boundaries when defining the problem and to proceed with deliberations without overlooking multidimensional aspects related to decision-making when implementing Future Design for the management of a specific resource (in this case, water), as demonstrated by this example.

5.3 Learning from the Past and Collaborating Across National Borders Now let us consider Future Design for water resource management in an international context. For example, we consider a situation where a government organization (e.g., Ministry of Future) has been established in respective countries, with the primary purpose of formulating policies representing the interests of future generations. In such cases, it is conceivable that these ministries of future would cooperate with each other at the international level. Countries and regions that have already experienced a variety of pollution and environmental issues, such as land subsidence resulting from excessive extraction of ground water, could summarize and share their knowledge with other countries in discussions regarding measures that should be taken by the respective countries in the future. It is important for nations, such as Japan or Thailand, which have already encountered and overcome relevant problems, to summarize the lessons learned on the causal linkages of increased demand for ground water, water resource depletion and land subsidence. They can effectively share this information with other regions, along with their countermeasure technologies, policies, training, and other knowledge. Particularly in the case of Japan, the serious problem of land subsidence due to excessive abstraction of groundwater has been experienced and overcome. Therefore, significant contributions can be made by Japan in the fields of environmental and water resource management. International cooperation would also take place for the primary purpose of maximizing the interests and voices of future generations on issues related to the use and management of water resources. The possibilities of the ministries discussing and sharing the types and levels of implications that could occur in the future, and possible adaptation and mitigation measures are important. Such cooperation differs from the forms of international environmental cooperation conducted so far. A forum involving national governments offering advice on future scenario designs and evaluations relating to the use of water by other countries would be beneficial. A new kind of international cooperation, involving objective considerations of how water should be used by other countries, openly addressing how current generations should be using water resources and the options available to them, would be an effective approach.

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Reflecting on the past and sharing historical facts is the starting point for implementing Future Design for water resource management. Extrapolation and analysis of trends and experiences, in order to take appropriate mitigation and adaptation actions, is required.

6 Conclusion The sustainable use and management of water resources are essential for maintaining sustainability of a region. As evident in the case examples from the Asian region, however, excessive water intake due to the rapid growth of water demands and resulting land subsidence are real issues, potentially posing threats to future generation in terms of ground water usages. In fact, both the “quantity” problems relating to the physical depletion of ground water and the “quality” problems arising from contaminated water discharged from households and industries have manifested. Such deterioration of ground water resources through depletion and contamination is creating problems for future generations. Although we focused here on water resources, in particular ground water resources, future generations will be significantly disadvantaged in the availability of other natural resources due to their exploitation by current generations. Thus it would be of critical importance to address Future Design in the context of sustainable natural resources managemext of sustainable natural resources management. An important aspect in the development of adaptation and mitigation strategies for sustainable water resource management is the consideration of relevant case studies. Various stakeholders can then make appropriate decisions regarding how resources should be used or managed, with consideration for future generations. The problems of sharing among organizations within the current generation and discussing important issues relating to fair use for future generations affect all limited natural resources, as exemplified by the example of ground water in Asia. Securing resources for use by future generations needs to be accomplished from the perspective of fair use among generations. The role played by Future Design is significant in this aspect. On the other hand, the methodology of Future Design itself has a great deal of room for improvement through practical implementations, as discussed in Sect. 5.2. Deliberations for Future Design with a participation of local stakeholders have been carried out in local towns in Japan (Hara 2016; Hara and Saijo 2017). Such experiences could provide an essential insight into how to advance Future Design practices in vision setting and policy making in relevant fields. Finally, Future Design itself is a process that is carried forward through deliberation and consensus building among a diverse range of stakeholders. To enable this process, social mechanisms and programs which allow such practices in society will be extremely important in the future. Studies with such a perspective will certainly be required for pragmatic implementation of Future Design for forming sustainable societies not limited to water resource problems alone.

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References Carpenter S, Pingali P, Bennett E, Zurek M (2005) Ecosystems and human well-being: scenarios— findings of the scenarios working group. Millennium Ecosystem Assessment Series, vol 2. Island Press, Washington DC Cosgrove WJ, Rijsberman F (2000) World water vision: making water everybody’s business. Earthscan/Thanet Press, London Environment Agency (ed) (1972) Environmental white paper, 1972 edn. Printing Bureau of the Ministry of Finance Hara K (2006) Groundwater contamination and quality management policy in Asia. Int Rev Environ Strat 6(2):291–306 Hara K (2016) Participatory future design in pursuit of sustainability. Des Eng 32(51):297–302 (in Japanese) Hara K, Saijo T (2017) Future design—evidence and insights from participatory deliberations. J Jpn Soc Water Environ 40:112–116 (In Japanese) Hara K, Yoshioka T, Kuroda M, Kurimoto S, Saijo T (2015) Participatory deliberation for future design by creating imaginary future generations—evidence from an experimental workshop in Yahaba Town, Iwate, Japan. In: Proceedings of EcoDesign 2015 international symposium, pp 72–74, Tokyo, Dec 2–4 IGES Freshwater Resources Management Project (2006) Sustainable groundwater management in Asian cities: a summary report of research on sustainable water management in Asia. Institute for Global Environmental Strategies. http://www.iges.or.jp/en/fw/report01.html. Accessed 10 Dec 2009 Intergovernmental Panel on Climate Change (2014) Climate change 2014: impacts, adaptation, and vulnerability. http://www.ipcc.ch/report/ar5/wg2/ Kinzig AP, Perrings C, Chapin FS III, Polasky S, Smith VK, Tilman D, Turner BL II (2011) Paying for ecosystem services—promise and peril. Science 334(4):603–604 Kishita Y, Hara K, Uwasu M, Umeda Y (2016) Research needs and challenges faced in supporting scenario design in sustainability science: a literature review. Sustain Sci 11(2):331–347 Meadows DH, Meadows DL, Randers J (1992) Beyond the limits, translation supervision by Kaya Y, translation by Matsuhashi R, Murai M. Diamond, Inc Oki T, Kanae S (2006) Global hydrological cycles and world water resources. Science 313(5790):1068–1072 Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat (2007) World population prospects: the 2006 revision, highlights. United Nations, New York Sampat P (2000) Deep trouble: the hidden threat of groundwater pollution. Worldwatch paper no. 154. Worldwatch Institute, Washington, DC United Nations Environment Programme (2003) Groundwater and its susceptibility to degradation. A Global Assessment of the Problem and Options for Management

Keishiro Hara is a professor at the Graduate School of Engineering, Osaka University, and is also a consulting fellow at the Research Institute of Economy, Trade and Industry (RIETI). He was appointed as the senior officer for technology policy and strategy at the Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry (METI), The Government of Japan, between October 2016 and March 2018. He holds a Ph.D. in environmental studies from and a bachelor’s degree in urban engineering, both from The University of Tokyo.

Chapter 9

Sustainable Water Works and the Future Design of Yahaba Ritsuji Yoshioka

1 Introduction To ensure the sustainable operation of water service in a social environment that is growing smaller due to its declining population, it is important that sound governance be established with the participation of users. Specifically, it is essential for a water service operator to build a consensus and confidence among the residents of its serviced community with respect to waterworks policies and water rates. For the majority of the public, however, having reliable water service is something that they take for granted and is not usually a focus of particular attention in the normal course of life. Gaining public understanding and support for improvement works such as earthquake-proofing, whose benefits are not easily recognizable by users in terms of day-to-day water supply service, is therefore difficult. Additionally, because the demand for water supply, which is indispensable in the everyday life of the public, is typically inelastic to increases in water rates, water service operators face the difficulty of optimizing the balance between water rates and improvement of public welfare.

2 Resident Participation in Water Service Operation General forms of public participation originated from, among other factors, the negative side of Japan’s high economic growth period, which manifested itself in the increasing public distrust of politics and administration. For water service, on

R. Yoshioka (B) Yahaba, Iwate, Japan e-mail: [email protected]

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the other hand, the high economic growth period constituted a period of diffusion, in which the country’s water supply coverage ratio grew tremendously. The benefits brought by water service were a driving force that drastically changed the environment of society itself. Before water service became widely available, people were necessitated to take some actions to access water, and there was a demand for the use of serviced water supply. In response to such demand, the coverage of water supply has been expanded over the years to the level where water supply is considered by the public today as something always readily available to them. Because the needs of the public and the policies of water service operators were in common at the time in that they both sought the diffusion and expansion of water supply, public participation in water service operation did not originate from the manifestation of a negative factor as in other cases of public participation. Residents who use tap water in their daily life without devoting particular attention are “silent majority” users. The silent majority is defined as a large majority of people who have conservative and ideologically middle-of-the-road perspectives. For these people, water supply is merely an ordinary part of infrastructure and is not a focus of particular attention in their normal daily life. Therefore, opinions of the majority will not be reflected in decision-making for water service unless a system for encouraging their awareness and participation is developed. Public participation generally takes the form of people interested in or concerned about a particular issue taking part on their own initiative in accordance with application instructions prepared in advance. However, those who have high levels of interest in an issue do not always represent the opinions of many others. Rather, in many cases, they are the “noisy majority,” whose interest is high as a result of having specific opinions. It is natural that this tendency creates a pattern where the opinions of the silent majority are less often reflected in decision-making than the opinions of the noisy majority. When discussing water service, to which the public do not usually give much thought in normal times, a major challenge faced by water service operators is to determine how to incorporate the opinions of the silent majority and coordinate different opinions to form a consensus.

3 Importance of Two-Way Communication Concerning Water Service The circumstances explained above indicate that there seems to be a considerable difficulty in seeking public participation in water service operation, as the level of public consciousness on the issue is not generally high.

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Then, why is Yahaba Town striving to promote public participation in the face of such a predictable difficulty? To begin from the conclusion, it is because the town is committed to develop sustainable water service operation. Amid the accelerating population decline with a forecast predicting the population to be halved by the middle of this century, which will be the terminal point for the Waterworks Vision and the Community Waterworks Vision, it is necessary to establish water service that will be sustained with the support of the community as a whole in order to ensure the sustainable operation of a small water service operator. In other words, in order for a water service operator to remain as a going concern, a relationship must be developed with water users where the users accept the water rates and are willing to pay their water bills. Waterworks facilities constructed during the high economic growth era will reach their respective replacement periods in the coming years. If such facilities were to be simply replaced, it is easy to estimate the extent of burden that future generations would have to bear. Since such estimation can be made, the goals to be pursued for the future is to reconfirm the importance of waterworks that provide water, which is a fundamental need for humans as living organisms, as well as to establish water service that will be sustained with the support of the community as a whole and develop a relationship in which water users accept the water rates and are willing to pay their water bills. These are the manifestation of the necessity of public participation and two-way communication in water service operation. A water service operator must be prepared to meet considerable challenges in developing such a relationship. The responsibility of a water service operator in promoting public participation is to build a consensus by explaining to the residents of its service area the severe circumstances faced by the water service operation in a candid and easy-to-understand manner. This is a methodology that has not previously been used by a water service operator. Yahaba Town has been promoting resident participation based on the concept of multilayered resident participation,1 where several different “layers” of participation models are used in combination to cover various types of participants and various purposes. Through this method, the town develops effective communication with its residents and facilitates consensus building by coordinating diverse views collected from the participating residents.

1 The

system of multilayered resident participation consists of: (1) public comment procedure, (2) outreach method, (3) questionnaire survey and (4) direct user participation (Waterworks Supporter) method. The outreach method is used in the public welfare and other areas, and such cases where public institutions provide certain services at locations outside their own offices are also regarded as a form of outreach. In this study, the outreach method refers to carrying out surveys by physically visiting areas where a large number of potential respondents can be found and conducting interviews with such individuals.

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4 Findings from Outreach Efforts Contrary to resident participation that takes place in general community development processes, resident participation sought for water service operation may not attract many residents since water supply is largely considered as a standard infrastructure and not a focus of particular attention in normal times. The Water Supply and Sewerage Department of Yahaba Town has therefore adopted an outreach method in an effort to communicate with residents who do not actively participate on their own initiative, and has developed two-way communication with these “silent majority” residents. An outreach method is an approach used to develop communication by physically visiting areas where intended residents can be found. Through this method, Yahaba Town’s Water Supply and Sewerage Department carried out an interview survey and obtained responses from 954 interviews out of a total of 1000 conducted. In this survey, the interviews were conducted in an impromptu manner on the needs of the residents, instead of asking a set of questions prepared in advance as with a questionnaire. The reason why impromptu style interviews were chosen for surveying the needs of the residents instead of using a predetermined questionnaire was that working hypotheses for compiling a questionnaire could not even be developed, because employees engaged in the water service operation of Yahaba Town had come across a wide range of information in the course of their duties, which made it difficult for them to identify the actual needs of water service users in general. The process and result of this outreach project yielded two main findings. A finding came out of the process of conducting the interviews was that most of the residents surveyed in the project expressed their needs concerning water service without hesitation, which suggests that the residents do have certain levels of interest in water service although they are not particularly conscious in normal situations. This finding is important when seeking to establish communication with residents, because a water service operator will need to implement completely different policies depending on whether residents are neither interested in nor conscious of water service, or they have an interest but are not conscious of water service in normal times. As the second step, the results of the interviews conducted in the outreach project were divided into groups of similar answers using a convergence method. This classification step identified the pattern where the residents are calling for a reduction in water rates while also demanding safe and good-tasting water. A questionnaire compiled based on the result of the classification was also distributed to 500 respondents to determine the issues to be addressed by the Water Supply and Sewerage Department in the future. The majority of responses pointed out that a reduction in water rates and the safety of water supply are the needs of the residents.

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5 Social Dilemmas in Water Service Operation When examining the pattern where residents push for a reduction in water rates while also demanding safe and good-tasting water, the demand for a reduction in water rates seems to be the primary issue to be addressed since the safety of water supply is considered as standard and the quality of the taste of water is largely subjective. However, the demand for lower rates brings about a contradiction when a water service operator tries to make its policies effective. While it is natural from the perspective of economic benefit that individual residents prefer lower water rates, if all residents adhered to this same idea and acted accordingly, the local government would be placed under increased pressure for a rate reduction. Since local administration is run on the basis of democracy, this would naturally result in the council passing the motion to reduce water rates. However, such pursuit of individual economic benefit by many residents may lead to a fiscal shortage for the local government and eventually constitute risks for the safety of water supply in the long term, as the government would not be able to fund the replacement of facilities and other works necessary to ensure safety. The cost would also be compounded further due to rebuilding. Thus, the realization of lower water rates may have a paradoxical consequence in which public interest, in this case the safety of water supply, would be lost in the long term. This paradox can be explained with social dilemmas. Social dilemmas are defined as “social situations that require a choice to be made between an action that will contribute to the advancement of short-term private interests while reducing public interests in the long term (non-cooperative action) and an action that will contribute to the advancement of public interests in the long term while reducing short-term private interests (cooperative action)”.2 In case of water service, it can be said that residents are choosing a non-cooperative action without realizing that they are doing so.

6 Possibility of Eliminating Social Dilemmas This study now examines the ways to eliminate these social dilemmas. The Water Supply and Sewerage Department of Yahaba Town organized Waterworks Supporter workshops, inviting the direct participation of water users as part of the multilayered resident participation system introduced by the Department. Participating residents showed increased understanding of water service operation each time the workshop was held, and the social dilemmas were eventually eliminated among the Waterworks Supporters as they started to opt for cooperative actions. At the first workshop session, the Waterworks Supporters were interviewed in an impromptu manner without using predetermined questions, similarly to the survey conducted in the outreach project, in order to determine their views and awareness of 2 Fujii,

S (2003). A prescription for social dilemmas. Japan: Nakanishiya Shuppan. p. 12.

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water service. The result confirmed that the Waterworks Supporters are also favoring a reduction in water rates while also demanding safe and good-tasting water at the same time, similar to the needs of residents surveyed in the outreach project. While it was expected that these Waterworks Supporters might have certain opinions on water service in light of the fact that they participated in the workshop on their own initiative, many of their opinions were about tap water that comes out of a faucet, and were largely related to the view favoring a reduction in water rates while also demanding safe and good-tasting water. Thus, in this resident participation in water service operation, the systematization of the survey responses using a convergence method confirmed that the needs of residents who voluntarily participated in the process and those of residents who were surveyed through the outreach project were practically the same. Based on the above findings, we have examined why only the attitudes of the Waterworks Supporters changed while their needs and the needs of other residents had initially been the same. The two factors that were different between the Waterworks Supporters, who started taking cooperative actions, and the other residents were: (1) the Waterworks Supporters were provided with sufficient information to evaluate and make decisions on water service operation; and (2) two-way communication has been maintained between the Waterworks Supporters and the water service operator. It is natural that residents who do not have enough information to make informed decisions tend to opt for alternatives that better serve their private interests. As water supply is used by residents based on a general perception that it is always safe in the first place, residents do not feel the necessity for choosing to improve the safety at the increased expense of individual residents, let alone earthquake-proofing works whose benefits are not easily recognizable. On the other hand, Waterworks Supporters who have participated in programs set up by the Water Supply and Sewerage Department to develop two-way communication, including workshops to foster experience-based learning and free discussion sessions using video materials, all reported that their attitudes have become more cooperative with the Department. In a survey soliciting the Waterworks Supporters’ views on priorities to be addressed by the Department, most of the answers concentrated on “safety” and the “replacement of aged pipes,” which indicated that the social dilemmas have been eliminated as the respondents chose pubic interests over their private interests such as the “reduction of water rates.” As the factors that prompted such a change in their attitudes, the Waterworks Supporters cited: (1) they have been able to obtain specific information on water service operation; (2) they have developed trust in the Water Supply and Sewerage Department; and (3) their knowledge on water service has increased. Social psychologist Robyn Dawes pointed out in his study that important factors that prompt a cooperative action from a non-cooperative action are knowledge, trust, and moral consciousness.3 Of these three factors, two factors of knowledge and trust could be confirmed through the survey responded by the Waterworks Supporters. It 3 Fujii,

S (2003). A prescription for social dilemmas. Japan: Nakanishiya Shuppan. p. 28.

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can be assumed that the third factor, moral consciousness, was embodied in residents’ understanding of the current circumstances of water service developed through the participation in the formulation of the Waterworks Vision, as well as in the actions chosen by them based on their perception of “right” or “good” actions in view of the ideal shape of water service. This therefore suggests that the theory introduced by Dawes also applies to actual operation of water service. It has also been pointed out in general that those who have high levels of interest in an issue do not always represent the opinions of many others, and they are in many cases the “noisy majority,” whose interest is high as a result of having specific opinions. While the Water Supply and Sewerage Department of Yahaba Town has initially discussed the optimum systems of resident participation based on this assumption, it has later learned that the difference in opinions among residents who have not previously had access to much information was merely their motivation to participate, and the actual needs of these residents were practically the same.

7 Risk Communication Implemented at Workshops It can be argued that the reason why a significant change occurred in the attitudes of the Waterworks Supporters was that they were able to obtain sufficient information to evaluate and make decisions on water service, and also that they were able to maintain adequate two-way communication with the water service operator. These factors can be broken down into: (1) they have been able to obtain specific information on water service operation; (2) they have developed trust in the Water Supply and Sewerage Department; and (3) their knowledge on water service has increased. An important aspect to be especially noted here is the quality of such communication. The Water Supply and Sewerage Department did not use so-called persuasive communication, where a sender transmits one-way, sender-oriented information such as, “Earthquake-proofing work is necessary for building a waterworks system that can withstand earthquakes“ or “Supplied water is safe and good-tasting.” and then expects the recipients to change their attitudes or actions as envisaged. The Department carried out risk communication in the form of two-way communication by providing both positive and negative information openly to allow residents to make their own decisions based on the information. In risk communication, unfavorable facts from the standpoint of a water service operator and risks faced by the operator are also communicated to residents as possible scenarios by changing the preconditions. By having different alternatives presented as scenarios, residents are able to make decisions themselves and choose a scenario as a means to achieve the ideal shape of water service. Repeatedly carrying out this process is an important step to build the confidence of the public in the Water Supply and Sewerage Department. Risk communication is different from the conventional persuasive communication that provides recipients with only the information convenient to the sender and expects the recipients of the information to change their attitudes as envisaged.

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By adopting risk communication, a water service operator is essentially bound to concede scenarios unfavorable for itself or accept such a scenario if it were chosen by residents. Nevertheless, it must not be overlooked that after a consensus has been built through such a process, the policy can be truly effective.

8 Conclusion The population is projected to decrease at an accelerating rate in the future. In order to ensure the sustainable operation of water service in such an environment, building consensus with residents on waterworks policies and cost sharing will be increasingly important. The Water Supply and Sewerage Department of Yahaba Town has developed the method of multilayered resident participation and has adopted an outreach approach as a means to establish two-way communication with the silent majority. It has also recruited the Waterworks Supporters as a system of direct participation of water users, and has designated the system as the platform for developing the Community Waterworks Vision as well as building consensus on waterworks-related plans and other policies. Through these activities, it has been discovered that residents who do not have sufficient information on water service or do not maintain adequate two-way communication with their water service operators have certain needs that can be social dilemmas, and building consensus is difficult without eliminating these dilemmas. For eliminating social dilemmas, building the trust of residents in their water service operators, providing residents with sufficient knowledge about water service, and fostering moral consciousness that prompts residents to prioritize public interests by making their decisions in view of the ideal shape of water service, are necessary. The key difference between the Waterworks Supporters and other residents is whether or not this relationship has been established.

Ritsuji Yoshioka (Ph.D.) is director of the Planning and Public Finance Division of Yahaba in Iwate Prefecture. He works to promote resident participation in town policy formulation as well as FD implementation.

Chapter 10

Looking to the Future Based on the History of Water and Atmospheric Environmental Issues in Japan Masashi Kuroda and Hikari Shimadera

1 Introduction The word “environment” is widely recognized in contemporary Japan. Based on the dictionary definitions, “environment” refers to the general circumstances surrounding a certain type of matter. It is also used in various areas, including natural environments and social environments. Many universities have schools and departments that are focused on environmental studies, and the importance of environmental issues such as global warming has been widely acknowledged. Among various aspects concerning the environment, this chapter sheds light on water and atmospheric environments, which are the areas closest to nature. Environmental Conservation and preservation are ongoing challenges for mankind as the natural environment serve as the foundation for life. In the past, when humans did not have as much of an impact on the environment as they do at present, its natural purification process enabled it to be maintained relatively well. However, environmental pollution started to become apparent during the Industrial Revolution, which began in England in the seventeenth century. This period in history led to a rapid increase in human energy consumption and pollutant emissions. In Japan, environmental pollution began after the Meiji Restoration in 1868 when industrialization began to be pursued. From the post-World War II reconstruction period to the period of high economic growth by the 1960s, Japan faced serious environmental pollution called “K¯ogai (public nuisance)”. Subsequently, desirable environmental conditions have been achieved domestically due to painstaking efforts. However, the country is now pressed to respond to global-scale environmental issues, such as global warming, which call for international cooperation. M. Kuroda (B) Tokoha University, Shizuoka, Japan e-mail: [email protected] H. Shimadera Osaka University, Osaka, Japan © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_10

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In this chapter, we focus on the history of Japan’s environmental issues for the past 100 years water. Then, based on clues obtained by reviewing the history, we examine how the concept of “Future Design” can contribute to environmental protection for the next 100 years.

2 Earth’s Hydrosphere and Atmosphere First, this section briefly describes the Earth’s hydrosphere and atmosphere. With regard to the hydrosphere, approximately 97.5% of all water on Earth is salt water, while only about 2.5% is fresh water. Freshwater is mostly found in ice or glaciers in the Arctic, the Antarctic, and mountains. Only approximately 0.8% of fresh water exists in directly usable groundwater, rivers, or lakes, with groundwater accounting for the majority. About 0.001% of all water exists as water vapor in the atmosphere, which actively circulates, driven by solar energy, between inland water and the ocean through evapotranspiration from the land and sea surface to the atmosphere, and precipitation from the atmosphere to the surface. Moreover, ocean circulation occurs on a global scale, transporting thermal energy from the tropics to the polar regions. A combination of wind-driven circulation in the surface layer up to a depth of several hundred meters and thermohaline circulation in the intermediate-deep layer is called ocean general circulation. With regard to the water environment, this chapter focuses primarily on water quality issues. However, Chap. 7 also sheds light on groundwater management as an issue related to the amount of available water resources. In general, the atmosphere is divided vertically into several layers based on the altitudinal distribution of temperature. In the troposphere,1 which extends from the earth’s surface (atmospheric pressure: approximately 1000 hPa) to an altitude of approximately 8 km (in the polar regions) to 16 km (in the tropics) (an average altitude: approximately 11 km, atmospheric pressure: approximately 200 hPa), the temperature decreases at a rate of approximately 6.5 °C/km with increasing altitude and the vertical mixing of air takes place frequently. In the stratosphere, which is situated above the troposphere to an altitude of approximately 50 km above the surface (atmospheric pressure: approximately 1 hPa), the temperature rises as the altitude increases since the ozone layer absorbs biologically harmful ultraviolet radiation from the sun. The temperature declines again as the altitude increases in the mesosphere, which is located above the stratosphere to an altitude of approximately 80 km from the surface (atmospheric pressure: approximately 0.01 hPa). The thermosphere is located above the mesosphere. In terms of chemical compositions, nitrogen, oxygen, argon and carbon dioxide (CO2 ) account for approximately 78, 21, 1 and

1 In

the troposphere, the region from the surface to an altitude of approximately 1–2 km that is directly affected by surface friction is called the planetary boundary layer. The condition of the planetary boundary layer has a significant impact on dispersion air pollutants.

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0.04% of the entire volume of dry air,2 respectively. Driven by solar energy, globalscale circulation also occurs in the atmosphere, and thermal energy is transported to the polar regions from the tropics.

3 The Origin of Environmental Problems in Japan Over the course of human history, environmental pollution has occurred in conjunction with the advancement of industrialization and urbanization. The Ashio Copper Mine Poisoning Incident in Tochigi Prefecture is famous for being the first event in which such environmental pollution (K¯ogai) emerged in Japan. The production of copper increased dramatically at the Asio Copper Mine after the 1880s, and damage to human health and agriculture became more apparent in the downstream region of the Watarase River due to the wastewater from the mine. Along with deforestation activities to secure timber, smoke containing sulfur oxides (SOX ) generated during the copper refining process led to deterioration of the forests in the surrounding mountains. This resulted in frequent flooding, which led to an increase in farmland pollution in the downstream region. Mines and metal refining plants played a leading role as key industries in Japan at that time. As a result, mining pollution and smoke pollution in places such as the Besshi Copper Mine in Ehime Prefecture, the Kosaka Mine in Akita Prefecture, and the Hitachi Copper Mine in Ibaraki Prefecture became social problems around 1900, leading to anti-pollution movements in various areas. The Ashio Copper Mine was closed in 1973, and reforestation activities took place to recover depleted forests and woodlands. However, large amounts of degraded areas remain to this day due to the effects of soil acidification caused by smoke pollution and heavy metal contamination. During the period of about 1900–1930, local air pollution became a problem in major cities due to operations of industrial plants built in clusters and thermal power plants. For example, the city of Osaka was once called “Smoke City.” Air pollution increased rapidly in Osaka because coal was used as fuel and there was no flue-gas treatment at that time. Then in 1932, Osaka Prefecture enacted the “Ordinance on Control of Smoke and Soot”, which was the first of such ordinances in Japan. As this shows, awareness of anti-pollution measures increased primarily in areas where pollution had become a serious problem. However, such movements remained limited due to the social climate at that time, as the country was moving toward getting involved in World War II.

2 Moist

air contains approximately 0–3% of water vapor.

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4 Increasing Seriousness of Pollution Problems Japan required a large amount of iron for restoration after World War II, thus the production of iron increased, and coal was used as the main energy source. From the mid-1950s to the early 1960s, Japan underwent a transition with regard to its main energy source, i.e., coal was replaced by petroleum. In addition, the domestic production of industrial goods was promoted. While industrialization was a symbol of abundance and advancement from the post-war reconstruction period to the high economic growth period, serious pollution problems became apparent in various areas in the 1960s due to environmental pollution associated with industrialization. The most prominent pollution problems, which were referred to as the so-called four big pollution diseases of Japan, included Itai-itai disease, Minamata disease, Niigata Minamata disease, and Yokkaichi asthma. These diseases occurred in the area around the Jinz¯u River in Toyama Prefecture, in the surrounding area of the Minamata Bay in Kumamoto Prefecture, in the lower Agano River basin in Niigata Prefecture, and in Yokkaichi City and its adjacent areas, respectively. During its initial stage, Itai-itai disease causes pain in various parts of the body. Later, victims begin to suffer symptoms including bone fractures that result even from slight movements, such as coughing, due to embrittlement of the bones as the disease progresses. Although it is estimated that residents began to experience the onset of the disease in the 1910s, it did not become widely known in society until 1955. Subsequently, studies were conducted to find the cause of Itai-itai disease. In the 1960s, it was discovered that it was caused by cadmium found in byproducts generated from zinc extraction in the Kamioka Mines, Gifu Prefecture, located in the upper Jinz¯u River basin. The byproducts was released to the Jinz¯u River without proper treatment. A trial was conducted in 1971, and the court found the Mitsui Mining and Smelting Company liable to pay compensations to the victims. Minamata disease and Niigata Minamata disease are neurological disorders that are caused by organic mercury poisoning, and can be fatal in serious cases. The Chisso Minamata factory (a chemical company) began discharging untreated wastewater, which was generated during the acetaldehyde production process, into the Minamata Bay from the 1940s to the 1950s. It is believed that the residents living in the surrounding area of the bay began to experience the onset of the disease in the period. The first official medical report of the disease occurred in 1955. In 1959, the School of Medicine, Kumamoto University reported that organic mercury was the substance that caused the disease. However, Chisso Corporation refuted the finding since the type of mercury used in the acetaldehyde production process was actually inorganic. This led to a delay in implementing measures to deal with the problem, and the disease continued to spread in the meantime. Niigata Minamata disease occurred in the Agano River basin due to wastewater discharged by the Showa Electrical Company’s chemical plant in Kanose, which produced acetaldehyde with the same method used at the Chisso Minamata factory. The first confirmed cases of the disease occurred in 1965. The outbreak of Niigata Minamata disease is believed to have occurred because the lessons learned from Minamata disease were not applied,

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despite the fact that Minamata disease had already become apparent in Kumamoto Prefecture and the cause of the disease had been elucidated to some extent. With regard to Minamata disease, a court ruling found Chisso Corporation liable in 1973. However, lawsuits involving the certification of patients with Minamata disease still continue to this day. Yokkaichi asthma is an obstructive pulmonary disease that afflicted some of the residents living in the area around the Yokkaichi industrial complex, which was the first petrochemical complex built in Japan. The disease took the lives of many patients who suffered from conditions such as dyspnea. The primary cause of industrial air pollution, which can result in diseases such as Yokkaichi asthma, is SOX emitted from large-scale stationary sources, such as factories and power plants. During Japan’s high economic growth period, the amount of energy consumption increased due to the upsizing of steelworks and thermal power plants, in addition to the beginning of full-fledged petrochemical complex operation in the coastal region. Air pollution worsened due to smoke containing SOX because flue-gas treatment technologies and desulfurization of fossil fuels were not fully developed at that time. In a lawsuit regarding Yokkaichi asthma, the court ruled, based upon evidence presented by the Faculty of Medicine, Mie University, that there was an epidemiological correlation between SOX air pollution and the respiratory disease. Six defendants involved in the operation of the complex (Showa Yokkaichi Sekiyu Co., Ltd., Mitsubishi Yuka K.K., Mitsubishi Kasei Corporation, Mitsubishi Monsanto Chemical Co., Chubu Electric Power Co., Inc., and Ishihara Sangyo Kaisha, Ltd.) were found guilty of committing a wrongful act jointly. In 1972, the court issued a judgment in favor of the plaintiffs. These typical pollution events shared extremely similar characteristics. In each case, there was a lack of scientific evidence on the effects of discharging pollutants into the environment, and there was an inadequate awareness of pollutant emissions. In addition, these environmental problems were triggered because priority was given to economic concerns, and no legislations were established to regulate pollutant emissions. Furthermore, the pollution caused visible and significant damage to the local residents. From the standpoint of future design, these calamities occurred because there was a lack of consideration even for the people living at that time, and there was certainly no concern for the people in future generations.

5 Development of Anti-pollution Measures To deal with worsening pollution problems, the Basic Law for Environmental Pollution Control was enacted in 1967. In this legislation, pollution is defined as “conditions where human health and living environment are damaged by air pollution, water pollution, soil contamination, noise disturbance, vibration pollution, subsidence, and offensive odors caused by business activities or other human activities.” Additionally, environmental standards were established to achieve “the desirable levels that need to be maintained for protecting human health and preserving living environment.” Moreover, 14 pollution-related legislations, including an amendment of the Basic

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Law for Environmental Pollution Control, were passed and enacted by the National Diet in 1970 due to mounting public sentiment regarding pollution. The Diet is so called “the Pollution Diet of 1970.” In 1971, the Environmental Agency of Japan was established to centralize pollution-related administrative functions that were spread to various ministries and agencies. In addition, an institute of environmental pollution was established in each prefecture, and a division for pollution control was formed in each municipality across the country. These developments eventually paved the way for the establishment of the nationwide administrative system for pollution control. The “Water Quality Control Law,” enacted by the Pollution Diet, uniformly regulates pollutant concentrations in wastewater from factories, which contributed to significant improvements in the water environment. Figure 1 illustrates changes in the excess rate from the environmental standards (items concerning the protection

Fig. 1 Changes in the excess rate from environmental standards on water pollution (items concerning the protection of human health) (prepared from the annual report on the Environment in Japan3 , the annual report on the Environment and the Sound-Material Society4 , and the annual report on the Environment, the Sound-Material Society, and the Biodiversity5 )

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of human health).3,4,5 There were significant improvements in each category from the period between 1970, when the Water Quality Control Law was enacted, and 1980. The excess rates for arsenic and lead have increased since 1993, but this is because the environmental standards were revised as the Basic Environment Law was enacted, rather than the water quality deterioration. Overall, it can be argued that appropriate regulations enabled the control of heavy metal pollution in the water environment, which had caused profound damage by the 1960s. The “Smoke and Soot Regulation Law,” which was enacted in 1962, was the first legislation concerning air pollution control in Japan. This law failed to adequately respond to worsening air pollution caused by the increase in SOX emissions associated with the rapid rise in oil burning activities. This is because some of the problems with this law including strict district designation requirements, relaxed emission regulations, an insufficient number of targeted substances, and a failure to target vehicle emissions. The “Air Pollution Control Law” was enacted in 1968 to replace the Smoke and Soot Regulation Law, and it was dramatically amended by the Pollution Diet. The law made improvements by removing the economic harmony clause, abolishing the designated district system, specifying additional regulation target substances, and giving local governments the power to impose additional regulations. Environmental standards regarding sulfur dioxide (SO2 ), carbon monoxide (CO), nitrogen dioxide (NO2 ), suspended particulate matter (SPM), and photochemical oxidants (OX ) was publicly notified in 1973. Moreover, this amendment required continuous monitoring of air pollution, and it helped to increase the understanding of the atmospheric environment by using the national air pollution network to date. Figure 2 shows changes in the average concentrations of the above-mentioned air pollutants measured by air pollution continuous monitoring stations5 . The figure indicates a rapid decrease in SO2 concentration in the 1970s. SO2 is a main component of SOX , which became the primary cause of industrial air pollution problems such as Yokkaichi asthma. The K-value regulation6 was implemented to regulate each factory as a way to control SOX emissions from large-scale stationary sources. It was amended and strengthened up to 1976. In 1974, regulations were implemented to reduce the total amount of emissions in the entire region where factories and plants were concentrated because it was difficult to meet the environmental standards by only imposing emission regulations on each facility. Since SOX is generated when burning sulfur-containing fossil fuels, the production of fuels with no sulfur content began with the application of desulfurization during the oil refining process. In addition, emission reduction was pursued using flue-gas desulfurization equipment in 3 Annual Report on the Environment in Japan edited by the Environment Agency or the Ministry of

the Environment (1972–2006). Report on the Environment and the Sound-Material Society edited by the Ministry of the Environment (2007–2008). 5 Annual Report on the Environment, the Sound-Material Society, and the Biodiversity edited by the Ministry of the Environment (2009–2013). 6 The standard equation of (allowable SO emissions: Nm3 /h) = K × 10−3 × (effective stack height: X m2 ) is used. The K-value is determined depending on the district, and the amount of emissions can be increased as a smokestack becomes higher. This led to an increase in the stack height. 4 Annual

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order to remove sulfur oxides in the smoke emitted from fossil fuel combustion. These efforts led to significant improvement with regard to local industrial air pollution.

6 Urban and Lifestyle-Related Environmental Issues Steady progress was made in the implementation of measures against industrial pollution due to the Water Pollution Control Law and the Air Pollution Control Law in accordance with the Basic Law for Environmental Pollution Control. However, problems began to emerge that were primarily caused by environmental loads associated with urban activities and people’s daily activities. These problems were evidenced by water pollution that originated from organic pollutants, nitrogen, and phosphorus, as well as air pollution by nitrogen oxides (NOx ), SPM, and OX . Implementing measures against such urban and lifestyle-related pollution is more challenging because the source of the causative agents is more widely spread compared to industrial pollution. Figure 3 shows changes in achievement rates of the environmental standard on the conservation of the living environment3,4,5 , one of the environmental standards concerning water pollution. Biochemical oxygen demand (BOD) and chemical oxygen demand (COD) are index values used for organic pollution. While the BOD in rivers has gradually improved as more than 90% of the sites satisfied the environmental standards in recent years, the COD in lakes and sea areas has not improved as much since 1975. Restoring water quality in lakes, inland seas, and bays takes years since they are closed water bodies where polluted water remains for an extended period of time due to limited inflows and outflows of water from and to the surrounding area. One of the primary factors for this type of organic pollution is the overgrowth of phytoplankton, such as red tide and blue-green algae caused by eutrophication. Phytoplankton can lower the quality of drinking water that originated from river or lake water by producing malodorous substances. In addition, it can destroy aquatic ecosystems and cause damage to fisheries as the dissolved

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oxygen in the water are substantially consumed due to the decomposition of dead phytoplankton. Although the cause of algae overgrowth was not fully understood at first, it became gradually more apparent throughout the 1980s that nitrogen and phosphorus were the causative substances for the overgrowth. In general, among various substances necessary for the growth of phytoplankton, nitrogen and phosphorus are particularly lacking in a clean water environment compared to the amount required for growth. Under this condition, inflows of nitrogen and phosphorus to the water environment due to human activities change the nutritional balance to satisfy phytoplankton growth conditions and lead to a massive outbreak of phytoplankton. This is the mechanism of eutrophication. Nitrogen and phosphorus found in water bodies are derived from anthropogenic sources (such as sewage treatment plants, food manufacturing, livestock farming, and agriculture) or natural sources (such as outflows from soil). The “Interim Law for Conservation of the Environment of the Seto Inland Sea” was enacted in 1973 for the Seto Inland Sea where industrial areas and major cities were located in its surrounding area and eutrophication damage was particularly serious. The “Shiga Prefectural Ordinance Concerning the Prevention of the Eutrophication in Lake Biwa (Eutrophication Prevention Ordinance)” was implemented in 1979 for Lake Biwa, which is called the “water jar of the Kinki Region” and serves as an important source of drinking water. Moreover, Japan pursued the implementation of management and measures for other lakes by establishing environmental standards for water quality concerning total nitrogen and total phosphorus in 1982, and enacting the

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“Law Concerning Special Measures for the Conservation of Lake Water Quality” in 1984. The conventional activated sludge process was introduced in Japan around 1910 for domestic wastewater treatment, and it has since been implemented widely. While the process is highly effective in removing the BOD in organic wastewater, it has little capability to eliminate nitrogen and phosphorus that are also contained in large quantities. As in Japan, other countries were also facing similar challenges around the same time. This led to worldwide, active development of a biological treatment process that removes nitrogen and phosphorus contained in wastewater. Currently, sewage treatment plants have implemented nitrogen and phosphorus removal processes, such as the recycled nitrification/denitrification process, the step-feed multiple biological nitrogen removal process, and the anaerobic-anoxic-oxic process. These processes have been proven to be effective for nitrogen and phosphorus removal. Figure 4 shows changes in achievement rates of the air quality standard of NO2 and SPM3,4,5 . The standard achievement rates of these air pollutants have improved significantly in recent years compared to those in the 1980s. On the other hand, the achievement rate of Ox has remained close to 0% since the notification of the standards. With regard to SO2 , recent standard achievement rates have been almost 100% unless there is remarkable impacts of volcanos. As for CO, the standard achievement rates have been 100% since 1983. In the atmosphere, NOX is generated not only by combustion of fossil fuel containing nitrogen, but also by the oxidation of nitrogen in the air under hightemperature conditions. The main sources include non-stationary sources, such as vehicles and vessels, in addition to stationary sources, such as factories and power

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plants. Low-NOx combustion technologies and flue-gas denitrification equipment are available as emission reduction measures to deal with stationary sources. Catalytic technologies are available as a measure to curb vehicle emissions. During the 1980s, the effects of the measure were offset by a rapid increase in the number of vehicles, and therefore, concentrations stayed mostly the same. This led to the enactment of the “Law Concerning Special Measures for Total Emission Reduction of Nitrogen Oxides from Automobiles in Specified Areas” in 1992. The law was amended in 2001, further strengthening the regulations on vehicle emissions. The NOX emissions per gasoline-powered vehicle were one-tenth and one-hundredth of the 1973 emissions level under the 1978 regulations and the 2005 regulations, respectively. NOX emissions from vehicles in Japan are estimated to have reduced by about 40% from 2000 to 2010.7 The effects of the measures have been apparent as NOX concentration in recent years have been on the decline. SPM refers to solid or liquid particulate matters (PM) with a diameter less than 10 µm in the atmosphere, which can cause respiratory diseases. SPM consists of primary particles directly released into the atmosphere as particles, and secondary particles that are formed from complex reactions of precursors emitted as a gas in the atmosphere. SPM includes fine particulate matter that is approximately 2.5 µm or less in diameter (PM2.5 ).8 In Japan, PM2.5 has become widely known due to serious air pollution in China in January 2013. Anthropogenic primary and secondary particles are mainly contained in PM2.5 , and natural primary particles, such as sea-salt particles and soil dust, have a higher ratio of particles that are larger than PM2.5 . SPM emissions from stationary sources declined due to flue-gas treatment using a dust collector. This led to the reduction of SPM concentrations in the 1970s. Similar to NOX concentrations, the subsequent SPM concentrations remained almost unchanged due to the vehicle-led emission increases. However, SPM concentrations in recent years have been on the decline due to the effects of measures such as vehicle emissions control. OX is a general name for oxidized secondary air pollutants, such as ozone (O3 ), that are produced when NOX and volatile organic compounds (VOCs) undergo sunlightinduced photochemical reactions and become a cause of photochemical smog. VOCs contain various substances and are also a precursor of PM2.5 . The main anthropogenic sources of VOCs include the burning of fossil fuels and evaporation from paint, fuels, and printing inks. A large amount of VOCs is also naturally generated from vegetation, such as forests. In the stratosphere, O3 is an important component that blocks harmful ultraviolet radiation, while it causes adverse effects such as damage to human health in the troposphere. Photochemical smog occurred frequently in the 1970s, and numerous health hazard cases involving stimulation of the lacrimal glands and respiratory disorders were reported. However, the number of reported health hazard cases declined after that. Yet the average OX concentrations have been on the rise in recent years. Since the emissions of NOx and VOCs, both of which are 7 Japan

Petroleum Energy Center (2012). the current atmospheric environment in Japan, PM2.5 accounts for about 70% of SPM. The particle size of PM2.5 is even smaller and can easily reach further into the lungs. This raises concerns about its effects on health.

8 In

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precursors, have been on the decline in Japan, the increasing long-range transport of pollutants from the Asian continent can be one of the causes of the increased OX concentrations. With regard to OX , it will be necessary to implement measures in the future.

7 Difference Between Industrial Pollution Issues and Urban and Lifestyle-Related Environmental Issues Industrial pollution issues and urban and lifestyle-related environmental issues differ in several aspects. First, the polluter-victim relationship is different. In industrial pollution issues, specific corporations or industries were clearly polluters and violators while citizens were victims. One of the crucial concepts concerning environmental issues is that the polluter-pays principle, which contends that the party responsible for producing environmental pollution should pay for the cost to restore the original conditions. Since the polluter-victim relationship was clear in the industrial pollution issues, corporations and industries needed to make every effort in order to prevent pollution. In urban and lifestyle-related pollution issues, on the other hand, citizens are both victims and primary polluters. Therefore, the cost to implement urban and lifestylerelated pollution measures, such as additional costs related to vehicle emissions control and sewage treatment, are paid by citizens via taxes. Second, SOX , mercury, and cadmium, all of which caused the pollution in the industrial pollution issues, were clearly poisonous substances and the direct cause of the pollution. On the other hand, the causes of urban and lifestyle-related pollution are not necessarily limited to poisonous substances. The causes differ in that chemical elements that are not highly poisonous, such as nitrogen and phosphorus, actually trigger secondary pollution as they undergo complex chemical and biological reactions in the environment. To tackle such problems, it is essential to understand the complex mechanism of nature, and to conduct thorough examinations to determine how non-poisonous substances can generate secondary and tertiary effects when they are released into the environment. Third, a difference can be found in the sources of pollution and the extent to which pollution is spread. The sources of many industrial pollution problems were limited to specific corporations or industries, and the extent of pollution did not expand beyond their surrounding areas. In urban and lifestyle-related pollution problems, on the other hand, the extent of pollution expanded since the source of such pollution was derived from a wide range of human activities. This requires the implementation of measures to handle numerous emission sources and polluted areas, creating an issue of low cost-effectiveness.

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8 Shifting Toward Environmental Issues on a Global Scale While this chapter has only addressed water and atmospheric environmental issues in Japan thus far, it is important to note that global-scale environmental issues due to increased human activities started to draw attention in the latter half of the twentieth century. Sweden argued that it would be necessary to build international cooperation to respond to global environmental issues, as acid rain damage had become apparent in that country since the 1960s. This led to the “United Nations Conference on the Human Environment” held in 1972, as was mentioned in Chap. 2. In 1988, the “Intergovernmental Panel on Climate Change (IPCC)” was established by the World Meteorological Organization and the United Nations Environment Programme to conduct comprehensive assessments on anthropogenic climate change, its impacts and countermeasures. In 1992, the United Nations Conference on Environment and Development, known as the “Earth Summit” was held. At the Earth Summit, participating governments agreed on the “Rio Declaration on Environment and Development” to establish international principles on environment and development, including the “precautionary principle,” “Agenda 21,” an action plan to help implement the declaration, and the “forest principles.” Moreover, agreements on the “United Nations Framework Convention on Climate Change (UNFCCC)” and the “Convention on Biological Diversity” were opened for signature. Since then, countries around the world have pursued full-fledged cooperation to deal with environmental issues on a global scale. In response to the achievements of the Earth Summit, the “Basic Environment Law” was enacted in 1993 in Japan to replace the Basic Law for Environmental Pollution Control. The purpose of this law is to “establish basic principles on environmental conservation, elucidate the responsibility of the country, local governments, business entities, and citizens, implement policies on environmental conservation comprehensively and systematically by defining the matters that serve as a foundation for environmental conservation policies, and then make a contribution to human welfare while playing a role in ensuring that citizens have healthy and full lives at present and in the future.” In the Basic Environment Law, anti-pollution measures and nature conservation measures are integrally treated as “environmental conservation” to respond to complex, widespread environmental issues. As mentioned in Chap. 1, the law also takes future generations into consideration by clearly indicating “citizens in the future.” In 2001, the Environmental Agency was upgraded to the Ministry of the Environment, which became responsible for implementing policies to achieve global environmental conservation along with fulfilling traditional duties. With regard to water environment, Japan achieved the prevention of water pollution that causes direct damage to humans in the late 1990s, and it shifted its focus toward further reducing risks and protecting the global environment and ecosystems. One example of such efforts was the establishment of the Water Quality Standards for the Conservation of Aquatic Life in 2003. Based on the concept that ecosystems are one of the most crucial elements of the human living environment, the regulation defined water quality standards to protect aquatic life. It is also built upon a new

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perspective as the scope of “environment” surrounding humans was expanded to areas that can indirectly impact them from the areas that usually affect them directly. Additionally, for the sewage treatment system, which was already established as a pollutant removal technology, efforts to reduce the consumption of energy required for the system operation have gained momentum in recent years from the standpoint of responding to global warming issues. Since the sewage treatment system consumes a large amount of energy for its operation, it can be argued that CO2 is released into the environment in exchange for the removal of pollutants. Efforts are underway to update the device used for sewage treatment to energy-conserving equipment to reduce emissions, and to develop technologies that recover energy by turning sewage sludge generated during the treatment process into methane gas and fuels. Delving further into this matter, seemingly we are in an era when it is essential to achieve both water quality conservation and global warming control in consideration of a tradeoff relationship between improvements in treated water quality and the amount of greenhouse gases generated.9 The condition of atmospheric environment pollution has also improved markedly in Japan. To further reduce health risks, hazardous chemicals such as benzene have attracted attention since the 1990s due to concerns over the health effects of longterm exposure despite low concentration levels. Moreover, the country faced an issue involving air pollution caused by dioxins and dioxin-like compounds that are unintentionally generated unlike toxic chemicals produced and used in industries, and it implemented measures to improve the incineration of waste materials. The achievement rates of environmental standards for air quality are almost 100% at present for hazardous chemicals, such as benzenes, and dioxins and dioxin-like compounds. Although new environmental standards for PM2.5 were announced in 2009, they have not been met in metropolitan areas and widespread areas in the western part of Japan. The source of PM2.5 precursors is quite diverse, and related reactions in the atmosphere are extremely complex. Additionally, it is believed that the western part of Japan is strongly affected by the long-range transport of pollutants from the Asian Continent in particular. International efforts will be necessary to deal with pollutants such as Ox and PM2.5 , which are susceptible to long-range transport in the atmosphere. Other unsolved challenges concerning the atmospheric environment include urban heat islands and pollen scattered from Japanese cedar and cypress trees. A long-term effort will also be necessary to deal with these issues, and it is essential to consider these issues together with the concept of urban development mentioned in Chap. 6 and forest management issues discussed in Chap. 13. Global environmental issues with strong connections to the atmospheric environment include acid rain,10 ozone layer depletion, and global warming. While acid rain is caused by SOX and NOX released primarily by burning fossil fuels, as in the air pollution cases mentioned previously, the extent of pollution expanded internationally due to the expansion of industrial districts and an increase in the stack height, 9 Soda

et al. (2013).

10 In many cases, it is now comprehensively treated as a widespread air pollution issue together with

long-range transport pollution, such as Ox and PM2.5 .

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worsening the degree of damage as evidenced by forest decay. Ozone layer depletion occurs when chemically stable chlorofluorocarbons (CFCs) are exposed to strong ultraviolet light and release chlorine atoms with high O3 destruction efficiency when reaching the stratosphere over time without being decomposed after being released into the atmosphere. This led to significant declines in stratospheric O3 , particularly in the polar regions due to the atmospheric general circulation, from the 1980s to the first half of the 1990s. As is already well known among the public today, global warming is believed to be mainly caused by man-made greenhouse gases including CO2 , creating concerns over climate change on a global scale. While international regulatory frameworks contributed to curbing acid rain and ozone layer depletion, international efforts have not worked adequately to deal with global warming, as mentioned in Chap. 2. International cooperation among developed and developing countries will become essential to deal with global environmental issues. In developed countries, their interest has shifted toward global environmental issues along with improvements in serious local pollution caused by giving priority to their economic development. As mentioned in Chap. 7, it is important for developed countries to gather knowledge about the issues they have experienced and share it with other countries. However, serious pollution issues that developed countries experienced in the past have become apparent in developing countries, and many issues have yet to be prevented despite the fact that similar cases occurred in the past.

9 Regarding Global Warming Issues Global warming is believed to be caused by changes in heat balance on Earth, mainly due to an increase in man-made greenhouse gases. According to the IPCC Fifth Assessment Report11 prepared by the Working Group I, “Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia.” The report also mentioned, “it is extremely likely that more than half of the observed increase in global average surface temperature from 1951 to 2010 was caused by the anthropogenic increase in greenhouse gas concentrations and other anthropogenic forcings together. The best estimate of the human-induced contribution to warming is similar to the observed warming over this period.” The following paragraphs discuss global warming, which is considered to be a typical environmental issue today, from the standpoint of atmospheric environment. The main anthropogenic emission source of CO2 , a typical greenhouse gas, is the burning of fossil fuels, as is true for many air pollution cases. However, since CO2 is not harmful to the human body at atmospheric concentration levels, it was not considered to be a problem until its effects on climate were discovered. Other manmade greenhouse gases targeted for emission reductions include methane, nitrous 11 IPCC

(2013).

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oxide, halocarbons, and sulfur hexafluoride.12 Tropospheric O3 , an air pollutant, also causes the greenhouse effect, and PM has an impact on climate through its ability to scatter or absorb sunlight and to serve as cloud condensation nuclei (cloud seeds). Factors for climate change are not limited to changes in atmospheric concentrations of these man-made substances. For instance, other factors include changes in solar activity, volcanic activity, changes that occur naturally in the atmosphere and ocean, such as the El Niño phenomenon, and changes in the type of land use. Since climate is affected by various factors and responds to each of these factors in a complex manner, it is not an easy task to evaluate the effects of man-made greenhouse gases quantitatively. This creates significant uncertainties for the prediction of global warming. When considering an issue involving significant uncertainties, it is essential to make a determination by not only using certain limited information but also examining various pieces of information closely. Computer simulation models called climate models are used to conduct global warming predictions. While Chap. 3 explained backcasting, global warming predictions, along with weather forecasting, are a typical example of forecasting. Although climate models are based on physical laws, semi-empirical rules13 are used for areas that cannot be expressed only by physical laws. Therefore, the characteristics of each model appear to depend mainly on the difference in the rules.14,15 Many climate models have been developed today and are continuously being updated based on the latest knowledge applicable to each model. Moreover, multiple social scenarios are assumed, and then calculation conditions are set up according to these scenarios. Combining numerous models and scenarios makes it possible to obtain many global warming predictions. By comparing these predictions, it becomes feasible to quantify the range of uncertainty in global warming predictions, which helps to elucidate the causes of the uncertainty. While we mentioned that efforts to deal with global warming have not worked as effectively compared to acid rain and ozone layer depletion cases, there is a critical difference between global warming and the other two issues. The cause of acid rain is SOX and NOX emitted from burning fossil fuels, and sulfur and nitrogen content in fossil fuels are impurities that are not necessary to obtain energy. The emissions of these substances have been reduced effectively by using some 12 Although water vapor contributes to the greenhouse effect the most, the majority of it is derived from natural causes. However, water vapor has positive feedback effects on climate. (For global warming, Temperature rise → Increased amount of water vapor → Further temperature rise.) 13 In meteorology, it is called parameterization, which is typically used for representing turbulence in the planetary boundary layer, cumulus convection, cloud microphysics, and the radiative process. 14 While it is difficult to examine the validity of future predictions for each climate model, it has been confirmed that climate change from the past to the present can be reproduced. 15 A weather forecasting model has similar characteristics. However, its target is different from the target for a climate model. While weather forecasting intends to predict values at a specific site or time (e.g., the temperature in Osaka City at 9 a.m. tomorrow), climate forecasting aims to predict average values in a wide range of areas (e.g., annual average temperatures in the mid-latitude regions).

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of the obtained energy. On the other hand, since CO2 is always generated when obtaining energy from fossil fuels, CO2 generation is an unavoidable issue as long as fossil fuels are used. With regard to CFCs that cause ozone depletion, they have been replaced by hydrochlorofluorocarbons (HCFCs) with smaller ozone-depleting effect, and then, by hydrofluorocarbons (HFCs) with no ozone-depleting effect. On the other hand, although various developments in renewable energy technology have taken place to date, such developments have a long way to go before fossil fuels can be replaced. Therefore, global warming especially calls for a long-term commitment in the future among current environmental challenges, and it is an issue that requires a new framework for solution.

10 Importance of Future Design Based on the History of Environmental Issues in Japan Table 1 displays a summary of approximate characteristics regarding the abovementioned industrial pollution, both urban and lifestyle-related, and global environmental issues, although not all of the characteristics are applicable to these issues. In industrial pollution issues, which marked the beginning of environmental issues in Japan, the degree of pollution was extremely serious, resulting in a number of victims in a clearly visible way even though the spatial and temporal scales of the Table 1 Comparison of characteristics in industrial pollution, urban and lifestyle-related pollution, and global environmental issues Industrial pollution

Urban and lifestyle-related pollution

Global environmental pollution

Main polluters

Industry and mining

Urban activity and daily living activity

All human activities

Main victims

Citizens, agriculture, fisheries

Citizens, agriculture, fisheries

Every element

Pollution levela

Extremely high

Moderate

Low

Spatial scale

Small (local)

Moderate (domestic regions)

Large (multinational to global levels)

Temporal scaleb

Short-term

Mid-term

Long-term, extremely long-term

Understanding of mechanisms

Scientifically solved

Complex, but mostly solved

Extremely complex

a Indicating

the pollution intensity in a certain space the duration from the time when the causes of pollution were originated to the time when clear damage emerged

b Indicating

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pollution were not large. Damage started to emerge in a few years after the beginning of pollution, and the pollution was immediately reduced when countermeasures started to become effective, indicating that the temporal scale was relatively short. Compared to the industrial pollution issues, urban and lifestyle-related pollution issues were environmental issues with larger spatial scale for the pollution sources and polluted areas. Although there were adverse impacts on agriculture, fisheries, as well as human health, the degree of the pollution was not as high compared to the industrial pollution issues, which led to numerous deaths. Additionally, the characteristic of urban and lifestyle-related environmental issues lies in the fact that it took several decades to solve issues such as eutrophication in closed water bodies. On the other hand, the scale of global environmental issues that the world is facing today is significantly larger compared to the above-mentioned challenges. The spatial scale reaches the entire Earth, every human activity can be a source of pollution, and every organism can be affected. Moreover, these issues are different from conventional environmental issues, as their impacts do not become visible immediately. The temporal scale is also significantly more extended compared to the past environmental issues. In particular, concerning global warming, we have not been able to depart from our dependence on fossil fuels, and there are still no leads to solve the issue even a quarter century after UNFCCC came into effect. Measures need to be implemented continuously to deal with global warming issues as long as mankind exists. It is imperative to strive toward finding a solution by comprehending the issues in an extended temporal scale that straddles several generations. As Chap. 1 described, one of the ideas in future design is to create future generations in the current generation. Based on the history of environmental issues discussed, in this chapter, two ideas of future design can be proposed by creating future generations in the current generation. The first idea is to respond to and prevent environmental issues in developing countries. Countries that are currently undergoing high economic growth are facing serious industrial pollution and urban and lifestyle-related environmental issues that are similar to those occurred in the past in Japan. It has been mentioned that dire water pollution is occurring in several developing countries due to heavy metals and agricultural pesticides. Moreover, air pollution has become a daily occurrence, making it almost impossible to see clear skies in the metropolitan areas. While this condition in developing countries is extremely similar to the pollution issues Japan experienced during its period of high economic growth, Japan has already overcome these issues. In other words, the current generation of people living in Japan may be able to play a role as future generations for the current generation in developing countries (although this may sound presumptuous). It can be argued that the concept of creating future generations is applicable not only to the current generation and virtual future generations in a certain region, but also across various regions. While it is certainly not possible to intervene in another country’s issues

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politically, it is feasible to provide knowledge and technologies proactively. Therefore, it is essential to understand the history thoroughly, understand the experiences systematically again, and disseminate lessons learned from the experiences overseas. Although it is important to provide specific countermeasures we used to solve environmental issues to the regions facing such issues now, it is necessary to be careful when making use of our historical experiences. In Japan’s environmental history, the country responded to industrial pollution and urban and lifestyle-related pollution issues after these issues became apparent. In other words, a scenario presented based on the past experiences in Japan would give priority to economic growth and respond to serious pollution issues caused during the course of wealth building by using extra economic capacity. Therefore, a new scenario would be necessary to implement preventive measures toward environmental issues along with economic developments in developing countries where it is essential to emerge from poverty first. As a method to examine whether implementing preventive measures is actually feasible, an analysis can be performed to find out what the current conditions would have looked like if different measures were implemented in Japan in the past. For instance, if a comparative calculation between the social cost for damage caused by the manifestation of environmental issues in our history and the social cost that may have been incurred by the implementation of preventive measures shows that the latter is evidently lower than the former, it may prompt developing countries to pursue the implementation of preventive measures actively. Even if the result indicates that the social cost would be lower without implementing preventive measures, it would still give an opportunity to examine how to improve the issues. For example, once the structure that allows certain industries to enjoy benefits but forces the general public to pay the cost for damage is revealed, it would not be socially acceptable. We have valuable and beneficial information in the form of past experiences. As a virtual future generation for people living in developing countries, we believe that it is our responsibility to use such experiences and make a contribution to people living in the same era. The other idea is the contribution of future design to global warming issues. The concept of future design is indispensable since global warming issues cannot be solved overnight, and they are an extremely long-term challenge that requires implementing measures immediately by looking toward the future of the Earth more than several decades to several hundred years from now. Moreover, since greenhouse gases such as CO2 are generated from various human activities, and they cause damage that goes beyond national borders, international cooperation is essential to deal with the issue. Unfortunately, it has not worked effectively as described in Chap. 2. To reduce the amount of greenhouse gases, efforts to promote renewable energy and implement technological measures, such as energy conservation by introducing highly efficient equipment and achieving high device functionality, have been taking place. However, it is believed to be impossible to alleviate global warming by only introducing high technologies while maintaining a high-consumption-based current

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lifestyle. Therefore, it has been considered imperative to reduce the amount of fossil fuel use via lifestyle changes, as this is the main source of CO2 . However, this is a significant burden for the current society, which relies strongly on fossil fuels in every aspect of life. Since a nation is the largest unit of the current society, a decision will be made at the national level with domestic coordination to pursue the reduction of fossil fuel consumption. While global warming issues cannot be overcome without a cooperative effort among nations, some of the non-cooperating nations can equally receive the benefits of global warming mitigation as well. Therefore, for a nation that aims to maximize its own benefits, the optimal solution is to “pursue its active economic activities by consuming energy while leaving the task to reduce greenhouse gas to other nations.” This makes it extremely difficult to logically overcome the pressure of maximizing the benefits. In other words, a “nation” as a social unit is too small to deal with global warming issues. Expected damage caused by global warming includes frequent occurrences of natural disasters, such as flooding and drought, the spread of diseases including malaria due to increased temperatures, changes in ecosystems, and reductions in usable land areas due to rising sea levels. These issues are not expected to occur today or tomorrow but rather are considered likely events in the next 50–100 years. Considering the characteristics of human nature discussed in Chap. 1, humans are not capable of realizing minor climate changes in the short-term (relativity), and they are prone to give priority to gain short-term benefits over possible future issues that cannot be visualized (short-sightedness). Moreover, while predicting the effects of global warming with complex mechanisms involves a certain degree of uncertainty, humans have a tendency to think, “Things will work out one way or another” regarding such issues (optimism bias). Therefore, it is extremely difficult for everyone to take global warming seriously and implement measures in cooperation with one another. In terms of being caused by anthropogenic pollution, global warming issues appear to be the same type of challenges involving industrial pollution or urban and lifestyle-related pollution issues that occurred in Japan. However, the structure of global warming issues is completely different, and it is not possible to deal with the issues only using top-down-based regulations that have been implemented in the past. In particular, “environmental issues” are especially viewed as reminiscent of industrial pollution in Japan due to the painful memory of the four big pollution incidents. Yet it is essential to change perspectives and find new measures that complement the regulation system when dealing with global warming issues. The concept of future design we propose makes a particularly significant contribution to these issues. In other words, it aims to maximize benefits for mankind including future generations instead of maximizing benefits for countries by anticipating future generations concretely to overcome the wall of democratic states in modern society,

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and the aspects of human characteristics including relativity, short-sightedness, and optimism bias. For instance, imagine a situation in which our offspring as of the year 2100 (our great-grandchildren’s and great-great grandchildren’s generations) are living in the world with global warming that has advanced at the current pace. In Japan, it is estimated that the average temperature in August would rise approximately 4 °C compared to the current level, and that the number of days on which the temperature exceeds 30 °C would increase by about 70 days,16 increasing the risk of hyperthermia and tropical diseases. Beaches and mudflats along the current coastal areas would be underwater due to rising sea levels, and there will be a fewer regions where people can enjoy leisure time, such as skiing, as snowfalls will decline during the wintertime. Global warming would often cause flooding due to heavy rains while it would cause frequent occurrences of drought.17 Would it be considered ideal to leave such a world to our grandchildren and grand-grandchildren? Even if people may not feel global warming now and have to endure some losses in the short term, a majority of them would probably think that it is the current generation’s responsibility to prepare for future generations without becoming optimistic about the issues. If many people start to take action based on such a concept, it could affect the decision-making of democratic nations, and lead to voluntary reductions in greenhouse gases that would transcend the characteristics of human nature. Repeated gestures of having sympathy toward people in future generations displayed by people in the current generation will help to maximize the best interests of mankind.

11 Conclusion This chapter looked back on the history of water and atmospheric environment issues in Japan and considered how the concept of future design that we propose can make a contribution to current and future environmental issues. Future design is a bottom-up approach based on the idea that each individual proactively plans the future. It is also a concept that we should acquire as “global citizens” while enabling countries to take part in efforts beyond their national boundaries.

16 The

National Institute for Environmental Studies. The Impacts of Global Warming on Japan. http://www.env.go.jp/earth/nies_press/effect/. 17 Project Team for Comprehensive Projection of Climate Change Impacts. Global Warming “Impacts on Japan”—Latest Scientific Knowledge.

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References IPCC (2013) Summary for policymakers. In: Climate change 2013: the physical science basis. Contribution of working group I to the fifth assessment report of the intergovernmental panel on climate change. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA Japan Petroleum Energy Center (2012) JATOP technical paper: studies on air quality improvement. Estimation of Vehicle Emissions, JPEC-2011AQ-06 Project Team for Comprehensive Projection of Climate Change Impacts. Global Warming “Impact on Japan”-Latest Scientific Knowledge Soda S, Arai T, Inoue D, Ishigaki T, Ike M, Yamada M (2013) Statistical analysis of global warming potential, eutrophication potential, and sludge production of wastewater treatment in Japan. J Sustain Energy Environ 4(1):33–40 The Environment Agency or the Ministry of the Environment (ed) (1972–2006) Annual Report on the Environment in Japan The Environmental Agency or the Ministry of the Environment (ed) (2007–2008) Annual Report on the Environment and the Sound-Material Society The Ministry of the Environment (ed) (2009–2013) Annual Report on the Environment, the SoundMaterial Society and the Biodiversity The National Institute for Environmental Studies. The Impacts of Global Warming on Japan. http:// www.env.go.jp/earth/nies_press/effect/

Masashi Kuroda is a junior associate professor in the Faculty of Social and Environmental Studies, Tokoha University. Hikari Shimadera is an associate professor in the Graduate School of Engineering, Osaka University.

Chapter 11

Capitalism and Sustainability Dilemmas Raja Rajendra Timilsina, Shibly Shahrier, and Koji Kotani

1 Introduction A main theme in future design is a necessity of new social mechanisms that can successfully incorporate a voice of future generations into a collective decision the current generation makes. The future design is necessary especially when the current generation has a tendency to make decisions in favor of herself, damaging future generations and sustainability of societies, which we call sustainability dilemmas (SDs). This chapter addresses what kind of people in the current generation tend to fall into SDs. We argue that not only personal attributes but also environments or types of societies influence people’s social preference and behavior over sustainability. The current reality is that urbanization is sprawling and it is an inevitable process due to the rise of capitalism all over the world. According to the scientific journal “Science” 54% of the world’s population are living in urban areas and by 2050 it reaches to 70% and most of the urban growth is taking place in the developing world. We present a series of evidence supporting that people become less prosocial and tend to behave in a less sustainable manner in more competitive environments. These results demonstrate a necessity of “future design” in the rise of capitalistic societies.1 1 Ensuring

the efficient allocation of private goods through competition is one of the major ideas in capitalism and the economic development and modernization of current societies are based on capitalism. Considering this fact, we define “ongoing modernization of competitive societies” as capitalism and address highly modernized and competitive societies as capitalistic.

R. R. Timilsina Research Institute for Future Design, Kochi University of Technology, Kami, Japan S. Shahrier Research Institute for Humanity and Nature, Motoyama, Kyoto, Japan K. Kotani (B) School of Economics and Management, Kochi University of Technology, Kami, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_11

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Many important problems have occurred over several generations such as climate change and government debts. One unique feature of such intergenerational problems is that the current generation affects future generations, but not vice versa. This oneway nature of dependence over generations gives one strong incentive to the current generation. That is, the current generation chooses an action in favor of their benefit, leaving more burdens on future generations and damaging sustainability of societies in the long run, which we call “sustainability dilemma (SD).” Market economy and democracy have been widely spread all over the world as the most dominant social regimes. In theory, the market economy was expected to have achieved efficiency, while democracy has been believed to be the ideal social regime with freedom of speech and preference. Unfortunately, people are identified to be very optimistic in nature to overestimate future events in a better way than the reality (Sharot 2011, 2012; Sharot et al. 2011). In particular, the “optimistic bias” that interplays with the market economy and democracy is the main reason for the occurrence of various SDs. This chapter addresses how capitalism in market economy influence people’s social preference and behaviors. Whether nature or nurture shapes human behavior is an issue of debates for a long time (North 1990; Henrich et al. 2005, 2010b; Dawkins 2006; Richardson and Boyd 2008; Wilson et al. 2009; Leibbrandt et al. 2013). For instance, Dawkins (2006) introduces a concept of the “meme” as an agent of how culture plays a role in forming human nature like genes, and discusses that cultural evolution can nurture a change (or an evolution) in human behavior and preference. When economics change is considered a part of cultural evolution, economic development and growth are hypothesized to affect people’s behavior and preference based on this “nurture” theory. Given a rapid economic growth of societies together with growing concerns on environmental problems and future sustainability, this chapter addresses a change in human behavior and preference central to competition and cooperation in relation to the economic development of societies. In this study, we call ongoing modernization of competitive societies as capitalism. Several past studies have documented how culture affects the human behavior of competitiveness, fairness, equity, and trust. Henrich et al. (2005, 2010a) study 15 small-scale societies and conclude that people in small-scale societies integrated with markets are likely to exhibit higher prosociality and fairness. Leibbrandt et al. (2013) show that fishermen in an individualistic lake-based fishery are more competitive than those in collective sea-based fishery suggesting that the ways of interactions with other people in the workplace affect human behavior and preference. Van Lange et al. (2011) use a decomposed game of social value orientation (hereafter, SVO) to analyze the degree of competitiveness between economics and psychology students as well as the corresponding volunteering behavior. They reveal that economics students are more competitive than psychology students, and the “prosocial” individuals volunteer more in practice. Ockenfels and Weimann (1999) and Brosig-Koch et al. (2011) study people’s cooperative and solidarity behavior in the Eastern and Western Germany, considering the two different economic and social histories. They find that subjects from the Eastern part act more selfishly than that of the Western part in both public goods and solidarity games.

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The past literature demonstrates that not only nature but also nurture influence people’s social preference and behaviors. However, no previous works examine how a market economy or the degree of capitalism in societies affects people. Given this state of affairs, this chapter presents a series of evidence from our field experiments to show how the degree of capitalism changes people’s social preference and behaviors. Overall, our experimental results demonstrate that people tend to be less prosocial and tend to behave in a less sustainable manner in more capitalistic societies. We claim that the qualitative result is robust and well-established by presenting the results of two different experiments in the fields of Nepal and Bangladesh.

2 Experiments This section presents three different field experiments in Bangladesh and Nepal. These two countries are chosen as fields for experiments because they possess a huge gap between rural and urban that represents a variation in the degree of capitalism for societies within a country. All the experiments were conducted in several different fields between control and treatment groups, that is, the control group is a rural area (less capitalistic), while the treatment group is a capital city (urban area, or capitalistic). We conducted a series of experiments in each field to collect the data for people’s social preference and behaviors.

2.1 Social Value Orientation Experiments in the Fields of Bangladesh This subsection follows Shahrier et al. (2016) and presents the results of social value orientations conducted in the three fields of Bangladesh. The social value orientation experiments have been used in the field of psychology to categorize people’s social preference into several types. In this experiment, we have followed a decomposed SVO game developed by Van Lange et al. (1997, 2007). The concept of social value orientation comes from a game-theoretical approach of interdependence which represents the effective matrix of outcomes for self and for another person (Van Lange et al. 2007). In this game, numbers are given to represent the outcomes for oneself and the other with a pair of two persons where the other is unknown to the subject. Following Van Lange et al. (2007), the game is called a triple dominance decomposed game because each subject is asked to make a choice among the three options for one question. For example, Option 1: You get 500 and the other gets 100. Option 2: You get 500 and the other gets 500. Option 3: You get 560 and the other gets 300.

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Option 1 represents competitive orientation that maximizes the gap between oneself and the other (500 − 100 = 400) compared to any other option. Thus, subjects who choose option 1 can be considered competitive to maximize the relative outcome. Option 2 is a prosocial orientation that maximizes the joint outcome (500 + 500 = 1000). Finally, option 3 represents an individualistic orientation in that subjects who choose option 3 maximizes the own outcome of 560 and appears to be indifferent to the outcome of the other. The triple-dominant method of decomposed SVO games developed by Van Lange et al. (1997, 2007) consists of such nine questions each of which consists of three options as introduced above.2 Subjects are asked to choose one option among three options for each question and in total answer nine questions. The answers are first utilized to identify whether each subject’s orientation is competitive, individualistic or prosocial. More specifically, when at least 6 out of 9 choices of the person are consistent with one of the orientations (competitive, individualistic and prosocial), he/she is categorized as the orientation. Otherwise, the subject is categorized as “unidentified.” We have implemented our experiments with monetary payments, because we needed to attract people to come to the experimental sites and seriously participate in them, considering transportation and opportunity costs of time. To invite people in an equally random manner, the information about our experiments was distributed to all kinds of people through our human network of local NGOs, government offices, universities and so on. For each session, we have collected 20–40 subjects at a time in an experimental site, gave experimental instructions to subjects, and experimenter (the first author) orally made presentations to confirm subjects’ understanding. After eliciting subjects’ answers for SVO, we conducted questionnaire surveys collecting each subject’s socio-demographic information, randomly matched one questionnaire with another to make pairs and calculated the total payoff for each subject. One session took 40–50 minutes, and the average payment was BDT 300 (≈USD 3.30) with a show-up fee of BDT 150 (≈USD 2.00). The field surveys and experiments have been implemented with 1002 subjects in three regions of Bangladesh (each 334 subjects): 1. Dhaka, the capital city of Bangladesh (capitalistic), 2. Bogra, a northern subdistrict (transitional) and 3. Dacope, a southern subdistrict (rural). Dhaka is the most highly dense and capitalistic city, Bogra has been experiencing a transformation from the rural to the capitalistic societies due to the gradual economic growth in the last ten years. Dacope is a rural area with the least level of capitalism, i.e., agrarian societies based on fishing and agriculture. Bangladesh is ethnically and culturally a homogeneous country, and these three societies are integrated with markets and possess the same culture, language, religious variation and social norms. However, they differ from each other regarding the inhabitation in the degree of capitalism, and the locations are shown in Fig. 1. Table 1 summarizes the information and definitions of all the variables collected as data in the survey and field experiments. Tables 2 and 3 show the summary statistics 2A

major reason for using the triple-dominant method is due to its simplicity. Many subjects in the Bangladeshi fields are not educated and we needed a simple game for everyone to understand.

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Fig. 1 Three regions of Dhaka, Bogra and Dacope

of the variables and the proportion of social value orientations across three regions. These summary statistics reveal that Dhaka is the most capitalistic, Bogra is in the transitional and Dacope is in the rural, reflecting the summary statistics of socioeconomic variables in Table 2. Also, as the degree of capitalism increases in societies from Dacope to Dhaka, the proportion of the competitive becomes larger, while the proportion of the unidentified becomes the highest in Bogra. Overall, the results suggest that people are likely to be less prosocial as societies evolve from the rural to the capitalistic.

156 Table 1 Description of variables Variables SVO categories Household income Age

Education Children less than 12 years of age Gender Family structure Regional dummy

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Description Competitive, individualistic, prosocial and unidentified Household income per month in BDT 1000 Categorical variable of {0, 1, 2, 3, 4, 5} where ages between 20 and 29, 30 and 39, 40 and 49, 50 and 59, 60 and 69, 70 and more are coded as 0, 1, 2, 3, 4 and 5, respectively Years of schooling Number of children less than 12 years of age in the household Dummy variable that takes 1 when the subject is male, otherwise 0 Single-family structures are coded as 1, otherwise (joint family) 0 Dacope is a base group. Two dummy variables are defined for Dhaka and Bogra, respectively

Fig. 2 Urban (Pokhara, Kathmandu) and rural (Parbat, Chitwan) areas of Nepal

To confirm this qualitative result, multinomial logit regression is applied by taking the prosocial as the base group and compute the marginal probability of being in the specific type of social value orientations relative to being in the prosocial. Table 4 show the marginal probabilities when one independent variable increases by one unit, holding others fixed. The result in Table 4 illustrates that regional dummies are quite strong predictors for determining social value orientations, even controlling for other socio-economic variables.

11 Capitalism and Sustainability Dilemmas Table 2 Summary statistics of independent variables Regions Dhaka Bogra Monthly household income in BDT 1000 Average 110 16 Median 35 12 SD1 566 21 Min 3 3 Max 10,000 350 Age (ordered categories)2 Average 0.66 1.58 Median 0 1 SD 0.85 1.39 Min 0 0 Max 5 5 Education (years) Average 12.66 6.26 Median 16.00 5.00 SD 5.30 4.96 Min 0.00 0.00 Max 20.00 17.00 The number of children (< 12 year-old) Average 0.84 0.65 Median 1.00 1.00 SD 1.08 0.78 Min 0.00 0.00 Max 6.00 6.00 Gender (Female = 0) Average 0.82 0.95 Median 1.00 1.00 SD 0.39 0.22 Min 0 0 Max 1 1 Family structure (Joint family = 0) Average 0.62 0.75 Median 1.00 1.00 SD 0.49 0.43 Min 0 0 Max 1 1 1 SD

157

Overall Dacope 13 10 12 2 100

47 15 330 2 10,000

1.53 1 1.26 0 5

1.26 1 1.26 0 5

6.56 5.00 4.57 0.00 17.00

8.50 10.00 5.76 0.00 20.00

1.12 1.00 0.90 0.00 4.00

0.86 1.00 0.95 0.00 6.00

0.93 1.00 0.25 0 1

0.90 1.00 0.30 0 1

0.46 0.00 0.50 0 1

0.61 1.00 0.49 0 1

stands for standard deviation variable of age is defined as an ordered categorical variable (Table 1)

2 The

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Table 3 Social value orientations by study regions Competitive Prosocial Dhaka Bogra Dacope Overall

108 (32.34%) 79 (23.65%) 59 (17.66%) 246 (24.55%)

59 (17.66%) 74 (22.16%) 115 (34.43%) 248 (24.75%)

Individualistic

Unidentified

103 (30.84%) 75 (22.46%) 109 (32.63%) 287 (28.64%)

64 19.16% 106 (31.74%) 51 15.27% 221 (22.06%)

Table 4 Marginal effects in multinomial logit regression where the prosocial is a base group Competitive Individualistic Unidentified Monthly household 0.00 income (in BDT 1000) (0.00) Education (years of 0.011*** schooling) (0.0030) # of children (< −0.019 12 years old) (0.017) Male 0.029 (base group = female) (0.043) Age (categorical 0.022* variables) (0.012) Single family 0.012 (base group = (0.029) joint family) Regional dummy (base group = Dacope) Dhaka 0.096** (0.044) Bogra 0.053 (0.038)

0.00 (0.00) −0.0010 (0.0032) 0.027* (0.016) 0.069 (0.047) −0.0040 (0.014) −0.038 (0.032)

−0.00 (0.00) −0.009*** (0.0026) 0.025* (0.015) 0.071* (0.040) −0.0070 (0.011) 0.014 (0.029)

−0.022 (0.040) −0.10*** (0.035)

0.10*** (0.042) 0.16*** (0.038)

***significant at the 1% level, **significant at the 5% level and *significant at the 10% level The Wald χ 2 statistic is 102.67 for the multinomial logit with significance of 1% level

2.2 Dynamic Common Pool Resource Experiments in Nepal This subsection basically follows Timilsina et al. (2017) where we have implemented a set of new experiments together with SVO games and questionnaire surveys in Nepal. The focus of the Nepalese experiments is on the sustainability of common pool resources (CPRs) and whether people in the rural and urban areas can manage CPRs in a sustainable manner or not. As mentioned earlier, people in the rural areas can be considered those who live in non-capitalistic environments, while people in the urban areas are those who live in capitalistic environments. By looking at the

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difference between rural and urban people, we seek to understand how the degree of capitalism affects people’s social preference and behaviors in the context of CPR utilization. The field experiments of the CPR game incorporate resource dynamics in such a way that subjects with limited education understand. A group of 4 subjects is formed where each subject knows the group size, but not the identity of members in a group. Subjects are also informed that group members remain the same with anonymity until the game ends. Suppose that the resource stock at the beginning of every period is denoted by xt where the subscript indicates time periods of t = 1, 2, . . ., and an initial stock size, x1 , of 120 is given. At the beginning of each period t, subject i is asked to decide harvest yi,t . The escapement, st , is defined to be  his/her individual  st = xt − 4j=1 yj,t where 4j=1 yj,t is the group harvest at period t. If st ≥ 0, then the individual payoff is going to be πi,t = yi,t . If st < 0, the individual payoff, πi,t , is assumed to become yi,t = x4t for simplicity.3 The escapement, st , is considered to be a remaining stock at every period t and determines the evolution of resource dynamics. The resource stock dynamics is specified to be  xt+1 =

   1.5st = 1.5 xt − 4j=1 yj,t st > 0 0

st ≤ 0.

In this model, the next-period stock xt+1 grows up to 50% increase of the escapement, and the game continues to the next period if st > 0 (the remaining stock is strictly positive). Otherwise, it is considered to be resource depletion and the CPR game is terminated. To reflect a realistic situation, we incorporate time discounting in the CPR games. We use total 20 chips in a box where 19 chips are white and 1 chip is red. The game can move to the next period when a representative of members in each group picks one chip and the chip turns out to be white. If a red chip is picked, the game is terminated for that group. This situation resembles the discount factor of ρ = 0.95 in time preference. In summary, our CPR games are terminated when a group depletes the resource, i.e., st ≤ 0, or the red chip is picked by a group representative. With this setup, we are interested to identify how many periods each group can sustain the resource use in the games. The period at which each group terminates the game by the chip or resource depletion is called the “terminal period.” It is a measurement for the degree of sustainability. We report a series of the questionnaires and experimental results, focusing on the rural and urban settings with 65 and 67 groups of 260 and 268 subjects, respectively. Table 5 provides the summary statistics of subjects’ socio-demographic information and experimental results. In the rural, 38% of the participants are male with an average age of 34.5 years, while the urban consists of 58% male with an average age of 24.5 years. This reflects the fact that many young males in the rural areas migrate to the 3 There

may be other ways to split the resource when depletion takes place. However, this is the simplest way to let subjects understand the rule of games in the field based on pilot testing.

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urban areas or even to foreign countries for employment. With respect to education, more than 50% of subjects in the urban have an undergraduate degree in universities (16 years of schooling as the median in Table 5), while subjects in the rural possess 10 years of schooling as the median. Regarding occupation, 90% and 6% of subjects in the rural and the urban engage in agriculture, respectively, implying that more than 90% of urban subjects work in non-agricultural sectors such as such as business, service, government, and other sectors. Accordingly, household income is higher in the urban than in the rural. Overall, the summary statistics of socio-demographic information in Table 5 reflect the fact that urban areas are more capitalistic, providing non-agricultural employment and opportunities such as education. On the other hand, in the rural areas, people are less educated and engage in agriculture and forestry. Table 5 reveals subjects’ social value orientations (hereafter, SVOs) between the rural and the urban where the SVO game is conducted to categorize subjects into a prosocial or proself type. First, a significant difference of SVOs can be seen in the table, showing that 76% of subjects in the rural are prosocial, while only 39% of prosocials in the urban. This difference affects the group composition of members based on SVOs between the rural and the urban. In the rural, the average (median) number of prosocial members in a group is 3.03 (3) and is 1.57 (1) in the urban. Since one group consists of 4 subjects, it is expected to affect how rural and urban groups harvest the resources. This SVO result shows that people are less prosocial in capitalistic areas, putting more weights on their own gains. Table 5 provides the summary statistics of the terminal periods. The most striking features can be seen in the measures of central locations and variability between the rural and the urban. The median (average) terminal period is 6.00 (7.63) in the rural, while 1.00 (2.24) in the urban, implying that more than 50% of groups in the urban exhaust the resource or pick a red chip at an initial period and never proceed to the 2nd period. On the other-other hand, most groups in the rural successfully continue the CPR game more than 6 periods, and one group even reaches 20 periods of continuation. For the “longest” group, we asked the group members to stop the game due to time and budget limitations. The standard deviation in the rural (= 5.56) is much higher than that in the urban (= 2.19), and the total harvest per group in the rural tends to be much higher than that in the urban (Table 5). These statistical findings are in line with the fact that the rural groups continue the game much longer than the urban groups. Table 6 summarizes the frequency distributions of the terminal periods and game termination by picking “red chip.” Red-chip terminations in the rural are more often than those in the urban, and the overall percentage of a red chip in the rural is 33%, while it is 15% in the urban. This is consistent with the fact that the probability of red-chip termination increases with longer periods of the game for rural groups. In fact, there is only one red chip among all 43 terminations at “terminal period 1” for the urban in Table 6, implying that many urban groups (42 urban groups) terminate the game by exhausting the resources in the 1st period. On the other hand, the rural groups could have continued the game much longer if there is no red-chip termination rule. Therefore, we believe that the significant gap of terminal periods between the rural and the urban shall exist irrespective of the red-chip termination rule.

5.56

443.54

7.63

143.14

47.50

6.00 12.00

1.00

0.00 0.00 1.00 0.00 1.00 0.00 1.00

Min

3270.00

20.00

5.00 1.00 16.00 1.00 6.00 1.00 4.00

Max

36.23

2.24

1.62 0.58 13.07 0.05 4.80 0.39 1.57

16.62

2.19

1.25 0.49 3.57 0.22 2.02 0.49 1.08

30.00

1.00

1.00 1.00 16.00 0.00 6.00 0.00 1.00

Urban (67 groups, 268 subjects) Mean SD Median Min

13.00

1.00

0.00 0.00 1.00 0.00 1.00 0.00 1.00

Max

140.00

10.00

5.00 1.00 16.00 1.00 6.00 1.00 4.00

2 Age

“SD’’ stands for standard deviation is a categorical variable of {0, 1, 2, 3, 4, 5} where 0 is under 20, 1 between 20 and 30, 2 between 30 and 40, 3 between 40 and 50, 4 between 50 and 60. Finally, 5 is above 60 years old 3 A dummy variable that takes 1 when the subject is male, otherwise 0 4 Education represents years of schooling 5 Agriculture is a dummy variable that takes 1 when a subject is stably employed or engage in agriculture/forestry sector as a main occupation. Otherwise 0 6 It is a categorical variable of annual income measured by US dollar {1, 2, 3, 4, 5, 6}: 1. 0–300, 2. 300–600, 3. 600–900, 4. 900 ∼ 1200, 5. 1200 ∼ 1500 and 6. more than 1500 7 The “SVO” represents a dummy variable taking 1 (0) when a subject is prosocial (proself) based on SVO games

1 The

1.09 0.49 3.40 0.27 2.10 0.43 0.93

2.27 0.38 9.58 0.90 4.20 0.76 3.03

Age2 Gender3 Education4 Agriculture5 Income6 SVO7 Pro-social people in a group Terminal periods Total harvest per group

2.00 0.00 10 1.00 5.00 1.00 3.00

Rural (65 groups, 260 subjects) Mean SD1 Median

Variables

Table 5 Summary statistics for CPR experiments in Nepalese rural and urban fields

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Table 6 Terminal periods across the rural and urban areas Terminal periods Frequency Red chip Urban areas 1 2 3 4 5 6 7 8 9 10 Urban subtotal Rural areas 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Rural subtotal

% of red chip (%)

43 5 6 4 3 1 2 0 2 1 67

1 2 2 2 2 0 0 0 0 0 10

2 40 50 50 67 0 0 0 0 0 15

7 2 10 7 4 6 3 3 3 3 0 2 2 0 1 8 1 0 2 2 65

0 1 3 0 3 2 1 2 3 2 0 2 2 0 0 0 1 0 0 0 22

0 50 30 0 75 33 33 67 100 67 0 100 100 0 0 0 100 0 0 0 33

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20 0

10

Frequency

30

40

Urban

0

5

10

15

20

0

5

10

15

20

Terminal Periods Fig. 3 Terminal periods between rural and urban areas

Figure 3 shows the corresponding histograms where the vertical axis is the frequency and the horizontal axis is the terminal period. The distribution of the terminal periods in the rural areas is more widely spread than that in the urban areas. In particular, the highest spike of the frequency distribution in the urban is found in period 1, confirming that more than 50% of urban groups terminate the game at an initial period. At the post-questionnaires, we have included a question “how did you want to play?” A considerable portion of urban subjects answered to that question as follows: “I really wanted to continue the game longer, but I could not think that other members in the group are motivated in the same way.” In fact, this type of answers among urban subjects reaches 51%. It appears that many urban subjects recognize some potential benefits by continuing the game longer. However, they did not actually restrain their harvests for continuation even at an initial period in the game because of their concerns about other members. To confirm the difference of frequency distributions between the rural and the urban, we have run a Mann-Whitney test. The result shows that the frequency distributions differ from each other at 1% statistical significance. We characterize resource sustainability in the dynamic CPR games by running the regression of the terminal periods where the rural dummy, SVO, and sociodemographic information are taken as independent variables. Since the terminal periods take positive integers, Poisson regression is employed in our analysis. Table 7 reports the estimated coefficients and their respective standard errors with statistical

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Table 7 Poisson regression for the terminal periods in the dynamic CPR games Model 1 Model 2 # of prosocial members in a group Regional dummy

0.68***

0.65***

(0.041) 0.37***

(0.044) 0.49*** (0.108) −0.29 (0.042) 0.077** (0.039) −0.0045 (0.021) −0.077 (0.070) −0.37 (0.44) 530.86*** 0.46

Av. income in a group # of males in a group Av. education in a group Av. age in a group Constant Wald χ 2 Pseudo R 2

−0.55*** (0.13) 333.08*** 0.46

Numbers in parentheses are robust standard errors ***significant at the 1% level, **significant at the 5% level and *significant at the 10% level

significance in the regression. Model 1 contains the number of prosocial members in a group and the regional dummy as independent variables. The result reveals that both independent variables exhibit statistical significance of 1% and positively affect the terminal periods. More specifically, the expected terminal period increases by 68% with an increase of prosocial members in a group, holding other factors fixed. The expected terminal period in the rural is interpreted to be about 45% higher than in the urban, holding other factors fixed.4 These marginal effects are considered economically significant, illustrating the strong impacts of members’ prosociality and the regional dummy. Since the regional dummy in our analysis is considered to represent the degree of capitalism, the result can be interpreted that resource sustainability tends to be lost as societies become more capitalistic. For robustness check, we run Poisson regression by including other independent variables as shown in model 2, including average income, a number of males, average education and the average age in a group. The main results in model 2 do not change with model 1. Rather, the economic significance of the estimated coefficient for the regional dummy increases, while it almost remains the same for the number of prosocial members in a group. The estimated coefficients on the number of prosocial members in a group and the regional dummy are still statistically and economically 4 The marginal effect of the regional dummy comes from a simple formula Wooldridge (2008). The

marginal effect of the regional dummy variable can be approximated with the following formula: exp(.37) − 1 ≈ 0.448 ≈ 45%.

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significant. The expected terminal period is interpreted to increase by 65% with an increase of prosocial members in a group. Likewise, the expected terminal period in the rural areas is estimated to be about 63% higher than in the urban. We have tried some alternative specifications of the Poisson regression. However, the results with respect to the number of prosocial members in a group and the regional dummy have not changed significantly. We confirm that these two variables remain statistically and economically significant, irrespective of the specifications in the models. The SVO and the degree of capitalism (regional dummy) are key determinants for resource sustainability.

3 Conclusion Solving some inter-temporal problems such as the future generations’ sustainability, public goods provisions, pollution control, and natural resource management require people’s cooperation or prosocial attitude. Past studies show how culture can affect human preference of competitiveness, fairness, equality, and trust. The faster growth of modernized and competitive societies as part of cultural change might bring about a change in individual’s preference of competitiveness and decision about the sustainability of common pool resources. To examine this possibility, we conducted field experiments of social value orientation and dynamic common pool resource in rural, semi-urban and urban areas of Bangladesh and Nepal. The experiment of social value orientation reveals that as society becomes more capitalistic, people become less prosocial and more competitive. A significant portion of people with unidentified value orientation which is neither proself nor prosocial have been found in the transitional society. The different in ways of livelihood and daily economic activities between less-capitalistic and highly capitalistic societies might cause this difference in people’s social preference. For instance, People in the least capitalistic society in our study need to go to the nearby mangrove forest as a group to harvest natural resources and hunting for their livelihood. In such activities, individuals need to cooperate with each other to protect themselves from the wild animals and to ensure their livelihood. For the existence of such activities, the idea of cooperation for survival is dominant, therefore most of the people are prosocial in this region. However, since competition is a major idea in capitalism, the idea of competition for survival replaces the idea of cooperation for survival for livelihood and daily economic activities as societies become more capitalistic which in return changes peoples social preference from prosocial to competitive. Therefore, in the highly capitalistic society, competitors are dominant. The significant portion of people with unidentified social preference demonstrates a gradual change in individuals social preference in the transitional society. The direction of change could be from prosocial to proself and it is likely that people will be more competitive with the maturation of capitalism in this society. Similarly, the second experiment analyzes people’s decision about resource sustainability with respect to the degree of capitalism in societies and individual’s social

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preference by implementing a dynamic common pool resource experiment. Results reveal that the composition of proself and prosocial individuals in a group and the regional specific effect of rural versus urban are the key factors for resource sustainability. An additional prosocial member in a group increases resource sustainability by 65%. Likewise, resource sustainability in the rural is estimated to be about 63% higher than in the urban. Along with the experimental data we have conducted questionnaire survey and it finds that urban people cannot sustain the resource because of their weak perception about other’s behavior, as more than 60% of urban respondents answer that “I really wanted to continue the game for longer periods, but I was not sure whether the other group members were motivated to do the same.” In summary, resource sustainability tends to be threatened with ongoing modernization of competitive societies (i.e., the increase in the degree of capitalism in societies). As societies become more modernized, people tend to be more proself and lose their coordination abilities in managing social dilemmas of resource sustainability. We have shown a series of experimental evidence about how the degree of capitalism affects people’s social preference and behaviors. These researches are conducted on different occasions and countries, especially in Bangladesh and Nepal. Since these experiments consistently show the same qualitative result of the relation between capitalism and people, we are confident to claim that the degree of capitalism affects people in the way that their social preference and behaviors tend to be less prosocial as societies evolve from the rural to the capitalistic. This finding is quite consistent with the claim made in other chapters of this book. That is, capitalism and democracy are not sufficient to guarantee the sustainability of societies. Thus, a new mechanism such as “future design” is necessary to ensure sustainability of capitalistic societies.

References Brosig-Koch J, Helbach C, Ockenfels A, Weimann J (2011) Still different after all these years: Solidarity behavior in East and West Germany. J Public Econ 95:1373–1376 Dawkins R (2006) The selfish gene. Oxford University Press Henrich J, Boyd R, Bowles S, Camerer CF, Fehr E, Gintis H, McElreath R, Alvard M, Barr A, Ensminger J, Heinrich NS, Hill K, Gil-White F, Gurven M, Marlowe FW, Patton JQ, Tracer D (2005) “Economic man” in cross-cultural perspective: behavioral experiments in 15 small-scale soceities. Behav Brain Sci 28:795–855 Henrich J, Ensminger J, McElreath R, Barr A, Barrett C, Bolyanatz A, Cardenas JC, Gurven M, Gwako E, Henrich N, Lesorogol C, Marlowe F, Tracer D, Ziker J (2010a) Markets, religion, community size, and the evolution of fairness and punishment. Science 327:1480–1484 Henrich J, Heine SJ, Norenzayan A (2010b) The weirdest people in the world? Behav Brain Sci 33:61–135 Leibbrandt A, Gneezy U, List JA (2013) Rise and fall of competitiveness in individualistic and collectivistic societies. Proc Nat Acad Sci USA 110:9305–9308 North DC (1990) Institutions, institutional change and economic performance. Cambridge University Press Ockenfels A, Weimann J (1999) Types and patterns: an experimental East-West-German comparison of cooperation and solidarity. J Publ Econ 71:275–287

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Richardson PJ, Boyd R (2008) Not by genes alone: how culture transformed human evolution. University of Chicago press Shahrier S, Kotani K, Kakinaka M (2016) Social value orientation and capitalism in societies. PLOS ONE 11:e0165067 Sharot T (2011) The optimism bias. Current Biol 21:941–945 Sharot T (2012) The optimism bias. Pantheon books Sharot T, Korn CW, Dolan RJ (2011) How unrealistic optimism is maintained in the face of reality. Nat Neurosci 14:1475–1479 Timilsina RR, Kotani K, Kamijo Y (2017) Sustainability of common pool resources. PLOS ONE 12:e0170981 Van Lange PA, Bekkers R, Shuyt TN, Vugt MV (2007) From games to giving: social value orientation predicts donation to noble causes. Basic Appl Soc Psychol 29:375–384 Van Lange PA, De Bruin EMN, Otten W, Joireman JA (1997) Development of prosocial, individualistic, and competitive orientations: theory and preliminary evidence. J Pers Soc Psychol 73:733–746 Van Lange PA, Schippers M, Balliet D (2011) Who volunteer in psychology experiments? An empirical review of prosocial motivation in volunteering. Pers Ind Diff 51:279–284 Wilson DS, O’Brien DT, Sesma A (2009) Human prosociality from an evolutionary perspective: variation and correlations at a city-wide scale. Evol Human Beh 30:190–200 Wooldridge JM (2008) Introductory econometrics, 4th edn. South-Western college publishing

Chapter 12

Compassion for Future Generation Is Not Only for Others’ Benefit: Solving the Problems with Long-Term Fiscal Policies Tatsuhiro Shichijo and Toshiaki Hiromitsu

1 Present State of Japanese Finance Of the 2014 annual expenditure of the budget bill for the Japanese government (Fig. 1), debt-servicing costs totaled 23.3 trillion yen, which is the amount borrowed plus interest payments. Total expenditure was approximately 96 trillion yen, with debt-serving costs accounting for 24%. On the contrary, in the budget for 2015 (Fig. 2), ordinary income, which does not rely on debt such as tax revenues, amounted to only 54.6 trillion yen. This amount, which is half total expenditure, is larger than that in a usual year because of changes such as consumption tax increases and business upswings. Moreover, income generated by bond issues is surprisingly 41.3 trillion yen. In short, Japan is currently managing to pay its debt or interest by using additional debt. However, debt repayment is a precarious day-to-day management issue. Moreover, Japan’s debt is increasing by 30 trillion yen per year. Indeed, the country’s cumulative debt is huge with outstanding government bonds totaling more than 700 trillion yen. Since local governments also issue a large number of local bonds, the total debt amount based on national and local governments is about 1000 trillion yen compared with an income of 50 trillion yen. Thus, it is estimated that about 20 years of debt is charged to both national and local governments. Further, on a per capita debt basis, this rises to more than 7000 thousand yen. Since this is not the amount charged to working people, but rather the amount per capita including the elderly and children, one can see that it is huge. This situation, which additionally led consumption tax to be increased to 8% in April 2014, with further increases Tatsuhiro Shichijo prepared Sects. 1–7 of the paper and Toshiaki Hiromitsu added Sects. 8–10. T. Shichijo (B) Osaka Prefecture University, Sakai, Japan e-mail: [email protected] T. Hiromitsu Visiting Scholar, Policy Research Institute, Ministry of Finance, Tokyo, Japan © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_12

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Cost for primary balance, 72.6 Tax allocations to Social security expenditure, 30.5 local governments and others, 16.1 Public work-related expenditures, 6.0

Debt-servicing costs, 23.3

Others, 20.0

(Trillion Japanese yen)

Fig. 1 Budget for fiscal year 2014 (expenditure)

Fig. 2 Budget for fiscal year 2014 (income)

Bond issues, 41.3

Taxaon income and royales' income, 50.0

Others, 4.6 (Trillion Japanese yen) considered, demands that we strive for fiscal soundness for both the current and the future generation. At this point, however, as a preliminary step, let us think about the reasons why Japanese finance is somehow not failing.

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2 Why Japan Is Not Bankrupt An amount as vast as 1000 trillion yen seems impossible to pay back. Yet, this level of debt is only increasing. Indeed, considering the future increase in the cost of social security to support Japan’s aging population and the high possibility of a declining workforce because of a decrease in the household size, it is difficult to expect financial statements to go into the “black.” Ordinarily, it would be strange to lend money to Japan if it continues on such a deficit path. Because Japan is in such a precarious situation, if no one were to lend it money, then bankruptcy would occur instantly. Fortunately, there are people who will lend money to Japan. As a result, Japan will escape bankruptcy. In this section, we explain the two important reasons why Japan is not bankrupt.1 The first is because Japan does not have an explicitly limited lifespan. Consider the theoretical case in which Japan disappears after 1000 years. Is it possible that Japan will increase its debt every year? In 999 years from now, Japan would be unable to pay back its debt simply based on its next year’s income. After 999 years, no one will lend money to Japan any longer. If this were true, after 999 years of rising debt, Japan must be bankrupt. If that is the case, how about after 998 years? If one knows that Japan will be bankrupt the following year, will anyone lend money to Japan after 998 years? The answer is no. The same is true for 997 and 996 years. If Japan were to disappear after 1000 years, no one would lend money to a country continuing on such a deficit path; thus, it would go bankrupt. Hence, the major reason why Japan is not yet bankrupt is because there is no end to its natural life. Another reason why Japan is not yet bankrupt is economic growth. Owing to the economic downturn precipitated by the Lehman Brothers’ bankruptcy in 2008, economic growth has become negative; however, the Japanese economy has typically experienced positive economic growth. From 2000 to 2014, annual real GDP in Japan only showed negative growth in three years because of constant technological innovations and other developments. As a result of ongoing economic growth, even if financial red flags continue, it is possible to continue to borrow money. If debt increases every year and the rate of Japan’s economic growth equates to its increased debt, then the debt to GDP ratio will not increase. Further, when the economy is growing, tax income is also rising. Therefore, debt increases and tax income increases may occur at the same rate. Indeed, if Japan continues to experience economic growth, it may never go bankrupt, even if debt continues to rise.2 Additionally, Japan is not bankrupt because its household financial assets are worth almost 1500 trillion yen. However, if household financial debts are removed, this is nearly the same as the present balance of Japan’s total debt. Moreover, if total

1 Note

that to satisfy these two points, this is the only necessary condition for the sustainability of Japanese finance. 2 This situation also applies to other countries. The United States, the United Kingdom, and other advanced nations also continue with “red” flags in their financial statements.

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debt continues to increase, it will exceed household financial assets in the future. Thus, we should not consider household financial assets as an essential reason behind why Japan is not bankrupt.

3 Will Japan Go Bankrupt? While it is technically possible that Japan will continue to be able to borrow money, offers such as unrestricted debt accumulation might be considered to be too good to be true. There are two viewpoints on debt limitations. The first is the view of flow, that is, how much money Japan can continue to borrow each year. The second one is the view of stock, that is, how much money Japan can borrow in total. First, flow is an indicator of how much debt is possible, which is called the primary balance. In Japan, this is referred to as the primary surplus. Simply put, the primary balance is the difference between income and expenditure related to debt. Here, income that is not generated from debt includes that from taxes or interest and dividends on assets. Other debt-related expenditure such as interest and amortization charges on debt, however, are not included. If Japan’s primary balance is in the “black,” under certain conditions, the ratio of debt to GDP will not increase; thus, in theory, it is possible to continue under this condition. However, Japan’s primary balance is in the “red” despite previous attempts at moving it into the “black.”3 With this in mind, the present situation cannot sustain, even in the case where borrowing money can continue, as mentioned before. Second, from the viewpoint of stock, no theory predicts the limit of debt that can prevent bankruptcy. Because it relies on vague factors such as people’s expectations, it cannot be calculated like the primary balance. Hence, if we look at Japan’s accumulated debt from the viewpoint of stock, the condition is extremely bad compared with other countries, even Greece. Indeed, Greece’s debt to GDP was 193% in 2013, while Japan’s was 228%. Based on only these figures, Japan is worse off than Greece. Of course, the figure is presented before assets have been deducted; compared with Greece, which uses the Euro, a common currency across several countries, Japan uses a unique currency, meaning that default rarely occurs. Thus, a simple comparison is not straightforward. Nevertheless, Japan’s condition is worse than that in many other countries.

3 At the time of the Koizumi administration, the aim was to make the primary balance “black” in the

2011 fiscal year; unfortunately, this was not realized. Under the democratic party administration, the aim was to make the primary balance “black” by the 2020 fiscal year; the Abe administration also had a similar aim, but the Cabinet Office (2014) indicated that making the primary balance “black” by 2020, even in the case of economic reform, would be impossible.

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4 Can Debt Be Solved by Inflation? This important question arises because even if Japan’s debt (1000 trillion yen) does not decrease by inflation, but the value of money does drop, actual debt has seemingly declined. Hence, it is possible to think that the problem could be solved by inflation. However, one problem is how to create inflation, while a second is the possibility of the bad effects of inflation. Inflation occurs if a nation issues a lot of national debt and the Bank of Japan buys it. Obviously, this will not solve the problem. The issuance of too much national debt would not decrease the balance of government bonds. Although the default of national bonds cannot happen thanks to support of the Bank of Japan, inflation would not stop and the economy would fail. To prevent such a situation, national bonds cannot be directly taken by the Bank of Japan. Moreover, the Bank of Japan should keep a balance sheet. Concerning the bad effects of inflation, we must first think that inflation has the same effect as the taxation of financial assets. If a nation suddenly experiences inflation and the value of money decreases by 20%, it means that the value of bank savings decreases by the same amount. Thus, by making any decrease in financial assets similar to that in savings and credit, and the government trying to decrease its own debt, one can think of executing taxation by changing method. In addition, we need to be careful to decrease the value of the national bonds that banks and pension funds hold. In the case of a decrease in the value of national bonds resulting from sudden inflation, some banks and pension funds would be badly affected. This is akin to a default in which the nation does not pay all of the refund money of national bonds. However, following this, a nation’s integrity would be damaged and it would be charged a high interest rate even if it issues a national bond. In summary, making inflation happen is difficult, and even if it does occur, many problems can arise.

5 What Happens After Fiscal Collapse? What happens if a financial crisis occurs? Consider the post-World War II period when inflation mushroomed. From 1945 to 1949, the inflation rate was 6900%. With such a dramatic increase in prices, a slice of bread previously costing 100 yen now cost 7000 yen and the worth of savings 1 billion yen became of 14 thousand yen. In addition, in 1946, a deposit blockade was conducted and the amount of money deducted monthly was limited to 300 yen per householder or 100 yen per family member. Since the average starting pay of college graduates for a government official post was 540 yen at that time, 300 yen can be thought of as about 120,000 yen in the present time. At the same time, the yen changed to a new yen, making the old yen useless. Therefore, even if cash was saved, when it was changed to the new yen, the

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government could hold an amount of the asset. Additionally, a 25–90% asset tax was applied to movable and fixed properties as well as savings. Although the rich were mostly taxed, the middle class was also affected.

6 Relationship Between Future Finances and Now Let us return to the main theme. Like the example of Japan disappearing after 1000 years presented earlier, we need to understand that an event in the distant future can affect the present. For instance, while Japan has much debt, it also has assets, including personal assets. However, continually increasing debt despite a poor economy is dangerous. People expect Japan to be bankrupt in the future because they believe that it simply increases its level of debt whenever the economy deteriorates. If such uneasiness escalated, then the interest rate of long-term national bonds would increase. In short, the rate of trust would decline and the interest rate for borrowing money would rise. If the long-term interest rate becomes higher, more uneasiness results. Thus, if interest rates rise, then debt payment becomes difficult as consumers decrease their amount of purchases. As a consequence, interest rates increase further, and thus Japan has even less money. Due to uneasiness about the future, a thorough market expectation of long-term interest rate appears to be the present issue. As for Japan’s long-term national bonds, the expiration is at most after 40 years. If the economic conditions within the next 40 years is expected to be bad, few investors will buy 40-year national bonds. In this respect, the period 40 years into the future is directly connected to the present.4 Additionally, after 40 years, because the nation should pay its 40-year national bond debt, the problem is that it can borrow only money after 40 years. In short, the future more than 40 years later also affects the present. Indeed, as discussed earlier, theoretically, even the distant future can affect the present. When Japan falls into crisis, it cannot expect to receive the kind of support Greece received from the EU. Compared with Greece, Japan’s economy is larger, meaning that the amount of debt would be too huge; any support would thus be insufficient. Therefore, when a crisis appears in the shape of an increase in long-term interest rates, failure is a likely possibility; any support would arrive too late. In short, thinking about the next generation implies a need to think about the present generation, too. If we reduce expenditure in order to lower the burden for the next generation or accept an increase in consumption tax, the long-term interest rate of national bonds would decrease, which would reduce the possibility of sudden failure. Thus, the future affects the present through long-term interest rates. Such monetary tightening is a global problem. And the problem is not solved by only aiming for the financial “black.” Indeed, in the case of devastating conditions occurring such as reductions in exhaustible resources or global warming, according 4 In

fact, there is a 60-year-rule in which the nation should pay back within 60 years at the same time as refunding; thus, the present is directly connected to 60 years into the future, too.

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to the same theory, many countries whose finances are in the “red” may experience financial tightening. In short, from various aspects, the actions of the next generation influence reducing the likelihood of devastating circumstances happening suddenly, not only affecting the future generation but also the present one.

7 Solving These Problems Japan’s accumulated debt is a well-recognized problem. Why has it continued to increase like this? One reason is that financial reform demands unpopular measures; the problem is not solved only by disposing of useless things and making things effective. For example, problems are not solved by reducing public works or civil servants’ salaries. As shown in Fig. 1, public work-related expenditures totaled 6 trillion yen in the 2014 fiscal year, while the total salaries of public servants were about 5 trillion yen, making a total of 11 trillion yen. Even if this figure was made zero, it would still be impossible to achieve a primary balance in the “black.” Hence, although it is important to try to make the government effective, this cannot be achieved though financial reform, which necessarily requires unpopular measures such as tax increases or reductions to social security costs. 250

200

Japan Greece Italy Iceland Portugal

150

100

50

0 1984198619881990199219941996199820002002200420062008201020122014 Fig. 3 International comparison of the GDP ratio of government debt (OECD Economic Surveys: Japan)

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Although conducting financial reform for the next generation actually affects the present one, it is inevitable that people are swayed too much by the thought of the immediate gain. Additionally, as discussed in Chap. 1, people tend to be extremely optimistic despite the future burden of social security likely to be large because of decreasing birth rates and an aging population. As people tend to ignore these huge demographic problems, public opinion becomes one element preventing instruments from conducting financial reform. For example, a consumption tax increase has seen huge and continuous resistance. Prime Minister Ohira, who suggested the introduction of consumption tax, lost in the following election; Prime Minister Takeshita, who introduced consumption tax, also recorded the lowest approval rating and then rushed to retire; and Prime Minister Hashimoto, who increased consumption tax to 5%, suffered a severe defeat in the following election and retired. Although these successive prime ministers lost popularity because of elements other than consumption tax, its introduction can be considered to be the major reason. Solving this problem is a challenging issue. Although people recognize the benefits for the next generation, this is rarely able to be understood presently; in addition, it cannot be applied to all problems. Two approaches are thus suggested in this book. Primarily, we need to create a representative administration for the next generation, which has three advantages. First, such a role would make it possible to estimate the future more accurately. Presently, the government and municipal offices estimate the future. However, the new administration would feel a sense of responsibility in fulfilling its duties; further, it would be conscious about being rated by the following generation. In addition, its losses and gains are not in the present budget. Thus, it would not need to estimate a high economic growth rate to ensure that the present situation does not look bad, leading to more precise future estimations. Second, it would become easy to gain people’s trust about future estimations. If existing authorities conduct future estimations, this may penetrate the view that they may be distorted for the interest of the authorities. Future estimations by such a neutral administration would be more trustworthy compared, for example, with the decision of the Ministry of Finance to increase tax. Third, even though it is virtual, humans would create the administration, making it easy for the public to imagine and see its importance. Humans can feel sympathy and act for other people; by contrast, a vague concept such as the “next generation” is difficult to imagine and easier to ignore. Hence, the decision-making would have more consideration of the future. The second approach suggested in this book is conducting careful deliberation by groups comprising various generations. This would have two main advantages. First, people who rarely talk about politics may have opposing opinions to those before such careful deliberation. Even if older and younger people have a chance to talk, they may have opposing opinions. However, with careful deliberation by groups of various generations whose standpoints are different, a relatively neutral opinion may be created.

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Second, by making the discussion process public, the opinions of people not in the discussion may become relatively neutral. Although the number of people who can join careful deliberation is limited, by listening to the discussion and imagining the scene of careful deliberation, people could change their opinions.

8 Human Nature and Its Influence on Fiscal Policies People tend to think only about their immediate benefits as well as be extremely optimistic. Humans have only limited capacities and thus they concentrate on the challenges they are facing. They do not consume their abilities by worrying about the distant future. Such behavioral tendencies must have worked for their survival in the long run. Both myopia and optimism bias are thus a part of human nature. However, owing to technological advances, as human activities increase in scale, the need for the careful consideration of long-term interests becomes high. Focusing on fiscal policies, through the developments of capital markets such as issuing longterm bonds, which enables intertemporal resource allocation among generations, we are now urged not to leave myopia and optimism bias intact. As discussed, forecasts by markets of future failure lead to an instant rise in interest rates, and thus markets are expected to discipline fiscal policies. However, market participants do not necessarily formulate the correct expectations by taking account of an infinite future; further, even if markets would allow, there are no guarantees that the policies selected by us, the present generation, would be the same as those that should have been selected from a long-run viewpoint. The enlightenment of fiscal policies and fiscal simulation are two methods for coping with these issues. In terms of the former, public bonds were issued for the first time after the War in FY 1960, and the Fiscal Inflexibility Campaign was launched in 1962. Concerning the latter, in 1970, when the nation issued deficit-covering government bonds, a five-year Fiscal Balance Projection was made by the Ministry of Finance. Since then, in addition to the 10-year Economic and Fiscal Projections for Medium- to Long-term Analysis by the Cabinet Office, the Long-term Fiscal Sustainability Analysis in Japan, whose scope is to FY 2060, has been published by the Fiscal System Council. Myopia and optimism bias are expected to be mitigated by these measures as well as selfishness, which is another part of human nature, in the sense that people come to think about long-run fiscal policies beyond their longevity. However, the seriousness of Japan’s fiscal conditions continues to deepen, and it is now necessary to come up with more effective measures of correcting our nature. In this respect, methods such as creating a representative administration for the future generation and deliberation have been raised, as discussed in Sect. 7. Although there are various obstacles to implementing these measures in society, it is possible to experimentally make up platforms in which there is an imaginary future generation and an opportunity to deliberate fiscal policies with the representatives of future generations. We discuss these experimental challenges in the next section.

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9 Experimental Exchange of Groups’ Opinions About Fiscal Policies 9.1 Setting The organizer of the experiment, one of the authors, prepared an imaginary fiscal scenario featuring different fiscal policy options. Based on the assumption that participants were real-world policymakers, groups of three members tried to decide fiscal policies to be adopted. In deciding fiscal policies, each member should join the decision freely. However, for half of the groups, one member randomly selected from the three was asked to become a representative of an imaginary future generation. In short, they were instructed to pretend to be a future human in 2046, 30 years from now, and to join a discussion to decide the fiscal policies to be adopted. Two imaginary fiscal policy options were developed on the basis of the Long-term Fiscal Sustainability Analysis in Japan mentioned above. Participants were told that the policies were imaginary ones simplified for the purpose of group discussion and not actual fiscal scenarios.5 The two fiscal policies are outlined below. Fiscal policy 1 It is assumed that, for 30 years from 2016, fiscal policy (tax rate, social insurance premium, and others) that resembles the present one in Japan is kept, and the burden is discretely increased after 2046 (e.g., the value-added tax rate is 10%6 from 2016 and 25% from 2046, while disposable income is reduced by 40% after 2046) Fiscal policy 1

2016–2045

2046–

VAT

10%

25%

Income tax

20%

30%

Social security premium (monthly)

40,000 JPY

60,000 JPY

Individual payment of medical expense

30%

35%

Pension benefits (monthly)

100,000 JPY

50,000 JPY

Disposable income (monthly; nominal earnings 300,000 JPY)

180,000 JPY

110,000 JPY

5 Participants

were instructed “please imagine that you are in an imaginary country different from Japan though similar” and given information that “in the country, at present (2016), the nation’s debt is about 1000 trillion (eight million yen per person), the rate of aging is 26%, and the working-age population (15-year-old to 64-year-old) reduces by more than one million per year.” 6 At the time of the experiment (December 2015), a consumption tax hike to 10% was planned in Japan from April 2017. In June 2016, however, Prime Minister Abe postponed the hike to October 2019.

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Fiscal policy 2 After 2016, including after 2046, the same fiscal policy is kept. Although the burden in 2016 is higher than that under fiscal policy 1, the burden after 2046 will be lower than that under fiscal policy 1 (e.g., the value-added tax rate is kept at 20%, while disposable income is kept 20% lower than 2016 in fiscal policy 1) Fiscal policy 2

2016–

VAT

20%

Income tax

25%

Social security premium (monthly)

50,000 JPY

Individual payment of medical expense

35%

Pension benefits (monthly)

70,000 JPY

Disposable income (monthly; nominal earnings 300,000 JPY)

140,000 JPY

Participants answered based on their preferred measure, and a 10-min exchange of opinions occurred in the groups. It did not matter whether it was a majority decision or consensus; however, the group had to decide which measure to be adopted in the end. At the time of the discussion, the person assigned the role of being a representative of the imaginary future generation had to let the other two know. Questionnaires were given before and after the opinion exchange; age, sociability, optimism bias, and free comments on the experiment were gathered. For example, as a hypothesis before the experiment, it was predicted that aged people would tend to select fiscal policy 1.

9.2 Summary of the Results The experiment was conducted in December 2015 in Tokyo with 56 office workers (38 men), ranging in age from early 20s to early 60s. Participants were separated into 18 groups: nine groups had only present generation members and nine groups included one imaginary future generation member. In principle, each group had three workers; however, a group of four present generation members and a group of four that included one imaginary future generation member were made. Regarding the fiscal policies selected before the discussion, 71% (n = 40) selected fiscal policy 2; 66% of men and 83% of women selected fiscal policy 2. As for those participants (n = 31) whose sociability was considered to be high as a result of the sociability test, 81% (n = 25) selected fiscal policy 2. Of those optimistic as a result of the optimism bias test (n = 29), 66% (n = 19) selected fiscal policy 2. Table 1 shows the breakdown by age group. Next, let us look at the policies selected after the opinion exchange. Among the 18 groups, four groups selected fiscal policy 1; those groups belonged to the nine groups comprising present generation members only. With regard to the nine groups that included an imaginary future generation member, all selected fiscal policy 2.

2/2

(100)

Number of people/total

(Rate %)

20–24 years

(56)

5/9

25–29 years (75)

6/8

30–34 years (67)

2/3

35–39 years (67)

8/12

40–44 years

Table 1 Participants who selected fiscal policy 2 before the exchange of opinions (by age group)

(78)

14/18

45–49 years

(100)

2/2

50–54 years

(0)

0/1

55–59 years

(100)

1/1

60–64 years

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However, in the individual selection, there were no groups that contained an imaginary future generation member in which participants who selected fiscal policy 1 before the discussion outnumbered participants who selected fiscal policy 2. In the questionnaire after the opinion exchange, participants were asked to identify the viewpoints raised during the discussion. Of the participants that were present generation members (n = 46) (multiple answers allowed), 61% (n = 28) answered “both our (present generation) interests and the interests of the future generation should be fairly considered,” 26% (n = 12) answered “because the future (2046) is uncertain, present interests should be given priority,” and 15% (n = 7) answered “we don’t know what future generations will value, or what they will want.” Among participants who selected fiscal policy 1 before the exchange of opinions (n = 16), 19% (n = 3) changed their opinion to select fiscal policy 2 after. As for these three, the other two in their groups both selected fiscal policy 2. On the contrary, among those who selected fiscal policy 2 before the opinion exchange (n = 40), after the exchange, only three participants changed their opinion to fiscal policy 1. As for two of these three, the other two members in their groups both selected fiscal policy 1. Finally, when participants that served as imaginary future generation members (n = 10) were asked (multiple answers allowed), 50% (n = 5) answered “I can now understand the thoughts of the future generation and my idea also has become closer to those of the future generation.” Table 2 presents the main results. Table 2 Main results Policies selected by groups

In groups of only present generation members

In groups having an imaginary future generation member

Fiscal policy 1

4

Fiscal policy 1

4

Fiscal policy 1

0

Fiscal policy 2

14

Fiscal policy 2

5

Fiscal policy 2

9

Viewpoints of participants (present generation members, 46 respondents)

Number of answers

(1) Interests of us (present generation) should come before those of the future generation

5

(2) Both our (present generation) interests and the interests of the future generation should be fairly considered

28

(3) Interests of future generation should come before ours (present generation) (4) Because the future (2046) is uncertain, present interests should be given priority (5) We don’t know what future generations will value, or what they will want (6) Consensus is more important than listening to only one

6 12 5 10

(7) Political measures should be decided by majority opinion because that is consistent with democracy

6

(8) Other

4

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9.3 Interpretation of the Results 9.3.1

Packaging of Policies

Fiscal policy 1 is beneficial to the present generation; however, fiscal policy 2 imposes the same burden on both the present and the future generations. An unexpectedly high 71% of participants selected fiscal policy 2. Considering the political difficulties surrounding the consumption tax hike in Japan, 71% seems surprisingly high. As a background of the strong support for fiscal policy 2, it should be noted that the format of the question in the experiment makes the selection of fiscal policy 2 easy. Participants were asked to select from policies packaging both present and future burdens. In the free answers from participants who supported fiscal policy 2, there were answers such as “After total debt and population projections were shown, if I would like to solve the problems, I thought that I needed to select fiscal policy 2” (male, aged 30–35) and “because I can’t know the example of the ‘scenario of 30 years after’ in everyday life, the scenario was very useful to make a choice” (male, aged 25–29).

9.3.2

Personal Interests or Public Judgment?

Besides the packaging of the policies, another factor in the strong support for fiscal policy 2 would be that participants make a choice not only based on personal interests but also based on public judgments. Participants were asked to decide “based on the assumption that they were real-world policymakers.” Hence, 61% of participants who joined the discussion as present generation members answered “both our (present generation) interests and the interests of the future generation should be fairly considered.” From the freely written answers from those who selected fiscal policy 2, there was “I had a viewpoint in which I want to select the policy by which the whole can obtain the most, while keeping the minimum safeguard of personal life” (male, aged 25–29). It seems that many participants departed from their own interests and made judgments considering the interests of society as a whole. Before the experiment, we expected support for fiscal policy 2 to decrease as participants became older. However, as far as Table 1 shows, although the hypothesis is not rejected, it is not necessarily supported either (it is, however, difficult to conclude because of the limited sample size). As noted above, participants’ judgements were not only based on personal interests but also based on public interests. Sen (1977), using Edgeworth’s words, pointed out that when we depart from “unsympathetic isolation which is abstractly assumed in Economics,” we adopt sympathy and commitment. Through sympathy, humans leave their own limited interests and join other people’s happiness/unhappiness and joy/sorrow. In commitment, “if it does not make you feel personally worse off, but you think it is wrong and you are ready to do something to stop it” (Sen 1977, p. 326). Hence, humans begin to act from commitment to the public, which is clearly distinguished from personal interests. Therefore,

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participants may have joined the policy decision not from limited personal interests but from sympathy and commitment, which may be a factor of the strong support for fiscal policy 2 among older participants. On the contrary, evidence of participants making a choice based on personal interests can also be found. Among the 46 participants who joined as present generation members (multiple answers allowed), 11% (n = 5) answered “the interests of us (present generation) should come before those of the future generation.” All these five selected fiscal policy 1. Among the participants who selected fiscal policy 2, some considered long-term personal interests. For example, the following answers were found: “because the fiscal policy has not changed for more than 30 years, the present burden is understood to be mine after 30 years, so I can consent; hence, I selected fiscal policy 2” (male, aged 30–34) and “it made me think about the burden when I become old. I’d like to pay more when I’m younger” (female, aged 40–44). Even if we attach to the assumption that participants select from personal interests, we can submit a hypothesis that young people’s support for fiscal policy 2 is the same as that of older people. The support ratio of fiscal policy 2 by participants in their 20s is only 64% (7/11; see Table 1), below the overall average (71%). Although they are in their 20s, they have started to earn, and they may select a lighter burden of 30 years from now, which occupy most of the years of their services. Furthermore, time preference that discounts future events would promote the selection of a lighter burden by those in their 20s. Younger people (10s) may show even stronger support for fiscal policy 2; however, this is a future research subject. In the sociability test, the sample size remains a problem; therefore, we are unable to say that people of high sociability tend to select fiscal policy 2. In addition, it is problematic that it cannot be known if a participant selects fiscal policy 2 because of his or her high sociability or because he or she is affected by the assumption that he or she is a real-world policymaker. Future studies may eliminate this assumption and let participants select perspectives from personal interests or public judgement. In the real voting behavior, people may keep seesawing between the two perspectives.

9.3.3

Optimism Bias

Regarding the optimism bias test, because of the problem with sample size, it is again too early to say that optimistic people tend to select fiscal policy 1. However, although uncertainty contains the possibility of being both better than expected and worse than expected, a quarter (26%) of participants answered “because the future (2046) is uncertain, present interests should be given priority.” It thus deserves attention that participants’ views of the economy would be contained in this valuation of uncertainty. Among the participants who selected fiscal policy 1, were classified as optimistic, and answered that because the future was uncertain, the present interests must be given priority, the free answers included “because the scenario of 2046 may be drastically changed by parameters such as future economic growth and population, policies that suppress consumption (including consumers’ sentiments) may be not very realistic” (male, aged 40–44) and “in 30 years, the working-age population may

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rise to 70 years old (or 75). Because of rapid progress of automation, the necessary number of workers for certain production may reduce” (male, aged 45–49). Further, in the format of the experiment, we asked respondents to select either fiscal policy 1 or fiscal policy 2; however, if someone doubts the validity of the packages with reference to his or her own economic theory, he or she will make a choice considering their immediate interests, which are more certain.

9.3.4

Imaginary Future Generation and Deliberation

How did the imaginary future generation function in the experiment? With regard to groups containing a representative of the imaginary future generation, all selected fiscal policy 2; however in terms of individual selections, the group in which participants who selected fiscal policy 1 outnumbered those who selected fiscal policy 2 was not found in the groups that contained an imaginary future generation member. However, three participants moved from fiscal policy 1 to fiscal policy 2 after the discussion, and these belonged to groups in which the other two participants originally preferred fiscal policy 2. Three participants moved from fiscal policy 2 to fiscal policy 1. For two of these, the other two members in their groups were already supporters of fiscal policy 1. Although the opinion exchange only lasted 10 min, this result suggests the important possibility of changing of opinions through deliberation.The participation of imaginary future generation means to obtain participants who are not expected to have in natural circumstances; therefore it would influence public opinions in the direction in which future generation has an advantage. Finally, of the 10 participants whose role was an imaginary future generation member, three selected fiscal policy 1 and seven selected fiscal policy 2 before the discussion. Half (n = 5) answered, “From the role of the imaginary future generation, I can now understand the thought of the future generation, and my idea also has become closer to one of the future generation.” Two of the five originally selected fiscal policy 1. Humans naturally understand the feelings of the part they play. In playing the role of a member of the future generation, the present generation is led to act according to the Golden Rule that “one should not treat the future generation in ways that one would not like to be treated.”

10 Future Prospects Despite these tentative conclusions, it is necessary to conduct more studies to validate the interpretations described herein. While long-term fiscal policies may be unpopular to the present generation, they are preferable overall, namely for both the present and the future generation. How should we design society to select these types of policies? Under despotism, it is easy to answer this question. However, the problem is how to answer the question under the constraints of democracy. Here, we have shown that by using the medium of a market’s function, a policy that is good

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for future generations may obtain a good result for the present generation. Moreover, the roles of enlightenment and simulation in fiscal policies have been discussed. Based on the interpretation of the experiment, we would like to provisionally point out the following four points as key factors for solving problems in long-term fiscal policies. First, the setting of the discussion is crucial. In the experiment, both benefits and burdens after 30 years and more were presented as a package. Participants were asked to select within the framework of a trade-off between benefits and burdens. In actual societies, it is often difficult to establish platforms of selection in which this trade-off is built. Fiscal rules, such as the pay-as-you-go principle and no loan policy, can be interpreted as attempts to build in this trade-off. Second, it is necessary to develop measures founded on the understanding that personal interests and public judgment compete in individuals’ decision making. It would be useful to design social systems in which those involved in policy selections are led to judge not on personal interests but on public interests. This problem is old and new aporia since the conception of the general will (volonté générale) of Rousseau, which is distinct from special will, and from its aggregation total will. This states that “When a law is proposed to the assembled people, what they are being asked is not (1) Do you approve or reject this proposal? but rather (2) Is this proposal in conformity with the general will?—the general will being their will. Each man’s vote gives his opinion on that point, ·i.e. his answer to question (2)” (Rousseau 1762; trans. Bennett 2017: p.56 ). However, we can not necessarily say that the general will is found by counting votes.7 Allowing an imaginary future generation member to join the discussion would promote better outcome not only through a Madisonian style balance of power among factions.8 But also, even if it is imaginary, through deliberation with the future generation, we may be able to make our generation closer to public judgments (i.e., make ourselves consider the future costs of current policies). This will heighten sympathy for the future generation and give us opportunities to ask ourselves if the policies we, the present generation, are going to select are truly reasonable. The third point is that even young people may not sufficiently represent the views of the future generation. To mitigate this problem, ideas such as lowering the voting age and Demeny voting have been proposed; however, they have inevitable difficulties in representing the interests of unborn generations. To conquer the obstacles, at last, it is necessary both to devise the setting of discussion (1st point), and to design social frameworks in which public judgments play greater role in policy making (2nd point). The fourth point is the importance of sharing appropriate economic views among interested parties. Even if the setting of the discussion includes a trade-off between 7 Following the quotation from Rousseau (1762), Rousseau wrote as follows: “and the general will be

found by counting votes.” Rousseau considered votes not as a process in which personal preferences are gathered, but as a process in which truth is found. 8 James Madison wrote “Ambition must be made to counteract ambition” (1788). In contrast to advocates of consensus-making through deliberation, some alert that deliberation faces the risk of worsening confrontation among parties and look to Madisonian power struggles and their management. See Shapiro (2003).

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the benefits and burdens, those who have unique views or theories of economy, such as the ways in which the economy works, and prospects of economic growth, population, and technological innovations may try to challenge the setting itself. To solve this problem, it may be necessary to design multilayered frameworks such as setting up opportunities for deliberation about the setting of the discussion itself.9 The purpose of this paper will be achieved if, by catalyzing critical comments from readers, it becomes a milestone to comprehensive the consideration of measures for tackling the issues of long-term fiscal policies.

References Cabinet Office (2014) Economic and fiscal projections for medium to long term analysis. Available at: https://www5.cao.go.jp/keizai3/econome/h26chuuchouki.pdf Rousseau J (1762) The social contract. (trans. Bennett, Jonathan. 2017). https://www.earlymodernt exts.com/assets/pdfs/rousseau1762book1.pdf. Accessed 29 Nov 2018 Sen A (1977) Rational fools: a critique of the behavioral foundation of economic theory. Philos Public Aff 6(4):317–344 Shapiro I (2003) The state of democratic theory. Princeton University Press, Princeton

Tatsuhiro Shichijo is a professor of economics at Osaka Prefecture University. Toshiaki Hiromitsu is Visiting Scholar at the Policy Research Institute of the Ministry of Finance (MOF). He has professional experience in the World Bank and Office of the Prime Minister. At the MOF he was director of Fiscal Analysis and director of Budget for Social Security in recent years and now he is director of Policy Finance.

9 When

imaginary future generations decide the setting of the discussion, it is thought that they do not attempt to make optimistic future expectations and claim to look at it safely.

Chapter 13

Why Is Future Design Needed in Japan? Public Finance Perspective Takashi Oshio

1 Introduction Japan is facing serious fiscal challenges because of an aging population. The proportion of people aged 65 and over has been rising rapidly and was 26.1% as of 2014, making Japan the “oldest” country in the world. This aging population affects the fiscal space for government policies on both the expenditure and revenue sides. On the expenditure side, a rising proportion of the elderly naturally consumes more social security benefits. The elderly receive public pension benefits, consume more healthcare services than the younger population, and often receive long-term care benefits. On the revenue side, it is becoming more difficult to collect tax and social insurance premiums due to a shrinking working population. As a result, the government deficit is becoming too large to be offset by private savings, which have also stopped rising due to the aging population. This chapter overviews the long-term trend of the fiscal situation in Japan with special reference to social security programs and discusses how to tackle demographic pressures, which are expected to keep mounting in the future. To enhance the sustainability of the fiscal system and the economic welfare of future generations, we have to reform current economic and social systems from a viewpoint of Future Design. The remainder of the chapter is organized as follows: Sect. 2 provides an overview of recent trends in the fiscal situation of the general government; Sect. 3 discusses how social security programs, which are key determinants of the fiscal balance, have been financed; Sect. 4 focuses on the declining trend of net national savings, which highlights the conflict of interests between current and future generations; and Sect. 5 concludes the chapter.

T. Oshio (B) Institute of Economic Research, Hitotsubashi University, Kunitachi, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_13

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2 Recent Trends in the Government’s Fiscal Position To examine the implications of the fiscal position of the government on people’s wellbeing, we must capture a broader picture of the fiscal position than usually discussed in the context of fiscal consolidation at the central government level. The general account of the central government, which is the core of the government budget system and usually attracts the most attention in budget debates, does not cover several special accounts of the central government or local government budgets. As such, the expenditure of the general account of the central government is less than half that of the overall government expenditure in national accounts. Most notably, the general account of the central government covers less than 30% of all social security spending, the rest of which is covered by the special accounts. In this chapter, we focus on the general government, which consists of three components: the central government, local governments, and the social security funds. Among of these three components, social security funds are in charge of funding and spending related to social security programs such as public pension, health care, and long-term care programs. As the most broadly defined government sector, the general government can capture the fiscal position most comprehensively. It can also summarize intra-government transfer in a consistent and unified framework. The general government data, which is available from the website of the Cabinet Office, is part of national accounts and is completely comparable with those in other countries. The size of the government relative to the overall economy has doubled in recent decades; the total expenditure of the general government rose from 19.5% of GDP in 1970 to 40.9% in 2014 (Fig. 1). More than 80% of this expansion has been accounted for by an increase in social security benefits. Government consumption and investment as well as other public spending have all stayed within relatively narrow ranges. Meanwhile, an increase in social security benefits has reflected the aging population. The proportion of social security benefits to the elderly has been steadily rising, from 25% of total government spending in 1973 to 68.4% in 2013 (National Institute of Population and Social Security Research 2015). The core programs of the social security system, which are characterized by the universal coverage of public health and pension insurance, had been established during the rapid growth period of 1955–1973. They laid the groundwork for a continued expansion in social security expenditures in subsequent decades, reflecting the rapid pace of population aging as well as the increasing generosity of the programs. Consequently, the long-term trend of the fiscal position has been largely determined by social security programs. Figure 2 compares the fiscal balances between the general government and social security programs. For the social security programs, we consider the difference between their contributions and benefits. Social security benefits consist of public pension and health and long-term care benefits, which are provided in cash or kind by the government. Social security contributions are levied on both employees and their employers as premiums to finance social security benefits. When calculating social security contributions and benefits, we exclude

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Fig. 1 Expenditures of the general government. Source Cabinet Office, Annual Reports on National Accounts of 2016

Fig. 2 Fiscal balances of the general government and social security programs. Source Cabinet Office, Annual Reports on National Accounts of 2016

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government subsidies financed by taxes from the contributions, and tax-financed public assistance from the benefits. Looking through fluctuations, the downward trend of the fiscal balance of the general government has been largely determined by the fiscal balance of the social security programs. Combined with an increase in social security benefits observed in Fig. 1, this confirms that the shortfall in social security contributions has been a key determinant of the long-term trend of fiscal balance deterioration in recent years. As seen in this figure, the fiscal balance of the general government has been clearly on a downtrend with cyclical fluctuations. It turned to surplus during the late 1980s due to the asset “bubble” economy, but since then the deficit has been widening (with temporary fluctuations during the 1990 and the early 2000s as well as in the late 2000s due to the technical adjustments of the government accounts). As noted, the fiscal balance of the social security programs has been on a more gradual downtrend, albeit without any clear cyclical fluctuation, reflecting demographic pressures. Meanwhile, the government has not compensated for the decrease in social security contributions by raising taxes, resulting in an increasing fiscal deficit. As a result of this sustained fiscal deficit, the net financial liabilities of the general government reached 126% of nominal GDP in 2014.

3 Financing Social Security The long-term fiscal position has been largely determined by a widening imbalance between social security benefits and contributions. By comparing the long-term trends among social security benefits, contributions, and taxes relative to nominal GDP, we observe noteworthy facts (Fig. 3). First, the growth of social security contributions remained lower than that of social security benefits, leading to a continued widening of their discrepancy. However, there is an important difference before and after 1990, when the asset “bubble” economy peaked. Before that year, the total of taxes and social security contributions grew at a somewhat faster pace than social security benefits, resulting in a surplus in the fiscal position of the general government as seen in Fig. 2. Since 1990, in contrast, the total of taxes and social security contributions has stayed within a relatively narrow range, with cyclical fluctuations, while social security benefits have accelerated modestly. This suggests that people have been reluctant to approve an increase in taxes or social security contributions in the face of sluggish income growth resulting from subpar economic growth. A widening gap between social security benefits and the total of taxes plus social security contributions has resulted in a mounting deficit for the general government. In other words, the channels through which public spending is financed have changed. Until 1990, an increase in public spending had been financed directly by additional taxes or social security contributions. Since 1990, it has been financed indirectly from private savings in the form of increased purchases of government bonds.

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Fig. 3 Social security benefits, contributions, and taxes. Source Cabinet Office, Annual Reports on National Accounts of 2016

Who have been the winners and losers during this period of worsening fiscal imbalance and the shift to indirect financing of government spending? One may be inclined to suspect that the elderly have gained and the young have lost, as is often suggested by discussions about intergenerational inequity (Suzuki et al. 2012). To address this issue, we compare pictures of net income transfer—that is, social security benefits minus income taxes and social security contributions—by age group of household in 1983 and 2010, based on data from the Survey of Income Redistribution (Fig. 4). The total amounts of net income transfer for each age group are calculated as a percentage of the total income before tax and transfer of all age groups within their respective survey years. In both 1983 and 2010, the younger groups (aged below 60 years) faced a negative net income transfer and the older groups received a positive one, confirming the notion that income transfers from the young to the old. This income redistribution between generations is reasonable and unavoidable, considering the pay-as-you-go scheme of the current public pension programs and higher health and nursing care needs among the older generation. More notably, net payments from the young decreased modestly between 1983 and 2010, while net receipts to the old increased rapidly. The latter fact reflects an expanding old-age population in addition to an increase in per-capita benefits. The former fact means that the younger generations as a whole did not pay the additional costs needed to finance increasing benefits to the elderly.

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Fig. 4 Net income transfer by age group. Note Net income transfer = social security benefits − (income tax + social security contributions). Source Ministry of Health, Labour and Welfare, Survey on Income Redistribution

A combination of these two facts suggests that increased benefits to the elderly have not been paid for by any age group in the current generation, leaving their burden to be rolled over to future generations. This view is supported by the rightmost bars in Fig. 4, which show net income transfer for the society as a whole. The bar for 2010 indicates that net income transfer for the society as a whole was 16.3% of total income before tax and transfer, in contrast to −1.7% in 1983. This means that net benefits equivalent to 16.3% of total income before tax and transfer in 2010 were not paid by the current generation but left to future generations, in contrast to the case in 1983, where benefits were largely financed by income tax and social security contributions. No age group lost net income; thus, there was no serious conflict between the young and old. To be sure, information about lifetime income is needed to precisely assess intergenerational equity (Suzuki et al. 2012). However, Figs. 3 and 4 strongly suggest that the current tax and social security system is in favor of all age groups—both young and old—belonging to the current generation, at the expense of a loss in net income for future generations.

4 Declining Net National Savings A possible criticism against the view that current public policy is lowering the economic well-being of future generations is that the current generation may be saving more in order to offset the transferred income loss to future generations. If this

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criticism is correct, we do not need to be worried about a deteriorating fiscal balance itself, because future generations can afford to finance it with income transferred from the current generation without lowering their living standards. To precisely capture a picture of the conflict of interests between the current and future generations, we have to consider net national savings. In general, savings mean the amount of produced goods at a certain time that have remained unconsumed and transferred to the future; hence, a higher level of saving means a larger amount of goods left available for future generations. The concept of net national savings qualifies this meaning of savings in two aspects. First, it captures savings at the national level by adding private and public sector savings. Even if the private sector consumes less than produce, savings at the national level will decline if the government sector spends much more than its revenues (taxes and social security contributions). Second, national savings are measured on the net basis; that is, they are net out of nationwide consumption of fixed capital, which is needed to sustain the existing level of capital such as equipment and structure for production, sales, and other economic activities. Hence, net national savings indicate the amount of goods which become newly available in the future. Private sector savings, which consist of household and corporate savings, have been relatively stable in recent decades. Household savings have been steadily declining due to an increase in elderly households, who save less than the younger ones or even dissave. Corporate savings, which are retained earnings in the corporate sector, have been increasing and are largely offsetting a reduction in household savings. Public sector savings are defined as the gap between government revenues from tax and social security contributions and current government expenditure, such as social security benefits. Public sector savings are usually in deficit and are financed by issuing government bonds. Capital spending in the public sector, such as spending on social infrastructure and other fixed capital, is not included in public sector savings; it is considered an investment to be financed by savings. Consumption of fixed capital indicates the decline in the current value of the stock of fixed assets because of physical deterioration, normal obsolescence, or normal accidental damage. Owing to the steady accumulation of fixed assets, consumption of fixed capital to GDP has been gradually rising and now exceeds 20%. Consumption of fixed capital is financed by national saving. Thus, net national savings indicate net income transfer to future generations, which is accrued on net each year, after consumption of fixed capital to sustain the existing level of fixed assets. Figure 5 depicts the long-term trend of net national savings. They peaked around 1990, when the asset “bubble” economy ended, and since then have been steadily declining to near zero. In recent decades, mounting government deficit has been absorbing an increasing portion of private savings, which have been relatively stable. This change, which has reflected demographic pressures, cannot be fully accounted for by economic conditions such as sustained subpar growth and deteriorating fiscal balances. Population aging has been adding to the imbalance between production and

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Fig. 5 Net national savings. Source Cabinet Office, Annual Reports on National Accounts of 2016

consumption, a natural outcome of a rising proportion of dependent generations to working generations. Even if the government could prevent its deficit from increasing by raising taxes, a reduction in net national savings would not have been avoided. Net national savings will surely turn negative in the near future due to increasing demographic pressures, making the conflict of interests between current and future generations more serious. Negative savings and resulting losses in welfare for future generations are difficult to tackle, because they are largely attributable to demographic, rather than economic, factors. Fiscal consolidation via increasing tax and social security contributions is likely to result in a shift of savings from the private sector to the government, leaving net national savings virtually intact. Policy reforms to make the social security and other public assistance programs more targeted to people most in need are welcome, but these reforms will in turn increase the number of people who must rely on private support.

5 Conclusion: The Need for Future Design A widening imbalance between production and consumption, which is highlighted by a steady reduction in net national savings, raises the risk that sustaining the economic well-being of the current generation will result in a loss in welfare for future generations. A possible and reasonable solution to enhance the economic well-being for both current and future generations is to increase the proportion of the working generations—in other words, to reduce that of dependent generations—in

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addition to increasing fertility and further advancement in labor productivity. The imbalance between production and consumption can be reduced only by increasing production, especially if the current generation wants to sustain their living standards. Fortunately, there is substantial work capacity among the elderly that is yet to be utilized. Figure 6 depicts an evolution of the relationship between life expectancy and employment at each age for males aged 50 years and above between 1975 and 2010, using life expectancy as a rough proxy for health conditions at each age. Those aged 65 years in 2010 had almost the same life expectancy at that age as 58 yearolds in 1975, while the former’s employment rate was about 40% points lower than the latter’s. In the same way, those aged 70 years in 2010 had almost the same life expectancy as those aged 63 years in 1975, while the gap in employment rates was about 42.6% points. The key constraint on elderly labor force participation is not deteriorating health status but institutional factors, particularly social security programs. Maturing public pension programs have allowed the elderly to retire once they reach the pensionable age, even though the pensionable age has been gradually raised (Yashiro et al. 1999; Oishi and Oshio 2004). Policy measures to reduce disincentives to work and enhance incentives to work should be an effective solution to utilizing substantial work capacity among the elderly, which is per se a favorable outcome for social security programs (Usui et al. 2016). As illustrated by discussions in this chapter, the idea of Future Design reminds us of the conflict of interests between current and future generations. If the population keeps growing steadily and net national savings remain sufficiently positive, we do

Fig. 6 Life expectancy and employment rate: 1975 versus 2010. Source Ministry of Health, Labour and Welfare, Life Table; Ministry of Internal Affairs and Communications, Labor Force Survey

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not need to consider the economic well-being of future generations. This is because any economic cost per capita will decline to a negligible level in the infinite future, even if it keeps being rolled over to subsequent generations. If that is the case, the current generation can enhance its well-being without a substantial loss in that of future generations. However, once the population starts an outright decline and reduces growth potential, we will be under serious constrains which makes it difficult enhance welfare for both current and future generations. The Future Design urges us to explicitly address the conflict of interests between current and future generations, especially under the aging population. This chapter highlights the risk of net national savings turning from positive to negative in the near future, reflecting the widening imbalance between production and consumption due to the aging population. There should be serious trade-off in the economic wellbeing between current and future generations, as long as we take the current social, economic, and institutional backgrounds as exogenously given. The Future Design suggests that we should and can redesign the socioeconomic systems as well as our behaviors to minimize potential burdens rolled over to future generations.

References National Institute of Population and Social Security Research (2015) Financial statistics of social security in Japan. http://www.ipss.go.jp/site-ad/index_english/security-e.html. Accessed 29 Apr 2016 Oishi AS, Oshio T (2004) Social security and retirement in Japan: an evaluation using micro-data. In: Gruber J, Wise D (eds) Social security and programs and retirement around the world. The University of Chicago Press, pp 399–460 Suzuki W, Masujima M, Shiraishi K, Morishige A (2012) Intergenerational inequality caused by the social security system. ESRI Discussion Paper, 281 (Japanese) Usui E, Shimizutani S, Oshio T (2016) Health capacity to work at older age: evidence from Japan. NBER Working Paper, w21971 Yashiro N, Oshio T (1999) Social security and retirement in Japan. In: Gruber J, Wise D (eds) Social security and retirement around the world. The University of Chicago Press, pp 239–267

Takashi Oshio is a professor in the Institute of Economic Research, Hitotsubashi University.

Chapter 14

The Need for a “Future Design” View of Forest Management: A Focus on the Current Situation of Forestry and Wood Utilization in Japan Yukari Fuchigami

1 Knowledge About Forests 1.1 Relationship Between Forests and People in Japan The word “Forest” refers to a place where trees (mainly tall trees) and their associated plant communities cluster across a large area. Since ancient times, forests have coexisted with people, and they have had a variety of meanings for those people. They have been used as sources of food and as shelter from the wind and rain, and they have been the subject of awe. Use of the phrase “Japanese countryside and nature” to convey the idea of a natural state inevitably conjures up an image of a forest landscape. Thus, besides their direct use, forests (forested mountains) have various functions (multi-functionality), including their inherent value as a landscape, as a means of transmission of culture, and as a spiritual anchor. In other words, forests have value for human beings that should be preserved. Therefore, what is the role of this report’s eponymous concept of “Future Design?” I see it as establishing how forests should exist, in the future, from an extremely longterm perspective. Then, working backward from that distant point in the future to today, we can discuss what choices we should take now and implement them. As an institution that can implement these measures, a “Ministry for the Future” or a “Department for the Future” could fulfill a coordinating function to formulate and implement policy, by using a technique called backcasting. Thus, what kind of image should we have of the forests of the future? In this regard, I would like to introduce the academic discipline of “forest esthetics.” This deals with forests from the viewpoint of beauty and is based on the late 19th-century German idea Y. Fuchigami (B) Osaka University, Osaka, Japan e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 T. Saijo (ed.), Future Design, Economics, Law, and Institutions in Asia Pacific, https://doi.org/10.1007/978-981-15-5407-0_14

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of “harmonizing the creation of beautiful forestland and the pursuit of economic profit in planted forest operations.” Although influenced by these German “forest esthetics,” unique “forest esthetics” focusing on Japanese forests were discussed later in Japan. In 1918, in “Shinrin Bigaku” (Forest Aesthetics), written by Yoshinao Niijima and Johzoh Murayama of Hokkaido University, the context was broadened from planted forest operations to encompass natural forestland, and the existence of unique beauty in all woodland was discussed. This beauty includes not only the landscape but also ecological depth. Let us take the example of Akasawa Shizen Kyuhyou Rin, a forest in Nagano Prefecture. This was originally a forest region with sacred trees and buildings, notably the Grand Shrine of Ise, and has been recognized as the Japanese birthplace of the concept of forest access for natural recreation. Today, it remains a rich primeval forest-like ecosystem. In short, its beauty results from the harmony between economic profit (mainly from planted forests) and conservation of the landscape and ecosystem (environmental conservation). In this report, I would like to position this type of forest as the image of future forests in Japan. (1) The multi-functionality of forests Around two-thirds of the land in Japan is covered by forest, and we human beings benefit from these forests in various aspects of our lives. Table 1 lists the functions of forests as defined by the Forestry Agency. The various functions are divided into eight broad categories, which are further subdivided. We call this “the multi-functionality of forests,” and all the functions underpin the infrastructure of our lives and are deeply important. In other words, the loss of our forests would cause a variety of problems. The existence of the human race depends on global systems that have been interconnected over billions of years. Among these, let us consider as an example the carbon dioxide absorption function of forests that has been a notable countermeasure to global warming in recent years. Forests absorb carbon dioxide (CO2 ) from the atmosphere and emit oxygen (O2 ) into the atmosphere via photosynthesis. According to a 2010 announcement by the Forestry and Forest Products Research Institute, although there are variations attributable to the type of tree and environmental factors, it has been calculated that one hectare of properly managed 40-year-old cedar trees (Cryptomeria japonica) absorbs around 8.4 t of carbon dioxide in a year. Science does not currently have a complete substitute for the forest’s function of sequestering such large volumes of carbon. We, therefore, have no choice but to rely on forests, rendering their preservation essential (Fig. 1). (2) Destruction of forests—current situation The natural resources that we obtain from the environment can be divided into renewable resources (such as timber, water, and fish) and non-renewable resources (exhaustible resources such as minerals and fossil fuels, whose regeneration cannot keep pace with human use). Renewable resources are precisely those that can be renewed, and if their exploitation is within their regeneration rate, we will be able to continue enjoying them cyclically as a natural resource.

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Table 1 The functions of a forest Conservaon of biodiversity Gene conservaon Species conservaon Plant species conservaon Animal species conservaon Microbe conservaon Ecosystem conservaon Conservaon of river ecosystems Conservaon of coastal ecosystems Global environment conservaon Alleviaon of global warming Carbon dioxide absorpon Alternave energy for fossil fuel Stabilizaon of the global climate system Landslide prevenon/Soil retenon Surface erosion prevenon Shallow landslide prevenon Other landslide prevenon Rock fall prevenon Mudslide prevenon/minimizaon Blown soil prevenon Soil runoff prevenon Soil retenon (maintenance of forest producvity) Prevenon of other natural disasters Avalanche prevenon Wind break Snow break Flood prevenon Watershed protecon Flood alleviaon Water source collecon Water volume adjustment Water purificaon Enhancing environmental comfort Climate alleviaon Lowering the temperature in summer /raising the temperature in winter Shade Air purificaon Dust absorpon Pollutant absorpon Enhancing living environment comfort Noise prevenon Amenies

(continued)

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Table 1 (continued) Health and recreaon Treatment Rehabilitaon Health maintenance Recreaon Walking Forest access for health benefits Recreaon Oungs Sports Fishing Culture Landscape, scenery Educaon, training Sites for industry & work experience Art Religion, ritual Tradional culture Maintenance of regional diversity (milieu formaon) Producon Timber Fuel Construcon materials Material for wooden products Pulp materials Animal food Compost Feed Greening material Raw materials for drugs and other industrial products Ornamental plants Art materials

Source: Taken from the Forestry Agency’s website

It is important to use resources in a planned manner by considering how to maximize the benefit to human society from the use of a given amount of a renewable resource. Exceeding the renewable level and using too much will deplete the resource (for forests, this would be forest destruction). Based on this constraint, we will consider the current situation regarding the destruction of forests. According to evaluations of the world’s forest resources carried out by the Food and Agricultural Organization of the United Nations (FAO) at five-year intervals, the rate of forest disappearance between 2000 and 2010 was around 5.21 million hectares per year (FAO 2010). This is equivalent to the area of about 1.11 million

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Fig. 1 Sustainable forest use

Tokyo Domes. Thus, every day forest areas equivalent to more than 3000 Tokyo Domes disappear. Although this decline is mainly due to cutting wood for fuel, it can also be attributed to logging, agriculture (expansion of farming land, burning to clear land, etc.), and changes in land use because of urbanization. Looking at unintentional destruction, we could also mention forest fires and war (including the spraying of Agent Orange during the Vietnam War). These factors cannot be renounced completely as the scale of the human economy expands, the population increases, and science progresses. However, it is certainly true that excessive use and pressure on the environment by humans has contributed to forests’ reduction. (3) Is it wrong to cut down trees? Is it wrong to cut down trees? The answer to this question is “no.” As mentioned above, forests, through photosynthesis, absorb CO2 from the atmosphere and emit O2 into the atmosphere. Meanwhile, carbon (C) sequestered in the wood remains captured even when the tree is cut down and processed into construction material, furniture, or paper products. It is only when the wood is burnt that the carbon is finally re-emitted into the atmosphere. As a result, trees are carbon sinks and careful long-term use of wooden products contributes to the prevention of global warming. Let us consider forestry from the viewpoint of its efficiency in carbon sequestration. As shown in Fig. 2, young forests absorb a large volume of carbon (in the form of carbon dioxide) annually as trunks gradually get thicker and branches and leaves grow due to photosynthesis. However, as a forest matures, the volume of absorbed carbon declines each year until, in old age, the forest absorbs almost no carbon (as growth of the trunks and branches ceases). In elderly forests, with almost no growth from photosynthesis, absorption and emission of carbon dioxide via respiration are balanced. Forests continue to be carbon stores even when they are elderly, but they can function as net absorbers of carbon dioxide from the atmosphere only up to a

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Young period

Volume of carbon sequestered per annum (per hectare)

Mature period

Old period

Carbon storage volume

Volume of stored carbon (per hectare)

Carbon sequestraon volume per annum Time (years)

Fig. 2 Carbon storage and carbon absorption volume at various stages of tree growth. Source Compiled by the author from Fujimori (2000)

certain age. As a result, the most effective way to maximize the use of forests as tools for carbon dioxide absorption is to fell trees at the time they enter their mature phase, plant new trees where the felled trees stood, and use products made from the cut wood for as long as possible. However, some mature forests such those in Yakushima and Shirakami-Sanchi are irreplaceable natural world heritage sites. Forests are expected to fulfill other functions, and we cannot focus only on their role in carbon absorption in their establishment. It is important to take a balanced view that considers all the various functions objectively and comprehensively.

2 Using Forests 2.1 Japanese Forestry’s Current State Next, we consider the structure of forestry in Japan. Forestry refers to the primary industry of producing timber products using forests. Around two-thirds of Japan is covered by forest, of which about 50% is natural forest, about 40% is planted forest, and the remaining 10% is bamboo groves or treeless (cleared forest, etc.). Planted forests are established by humans on land that was not naturally covered with trees or on the sites of previously logged forests. The most frequently planted tree is cedar, followed by hinoki cypress (Chamaecyparis obtusa), and the Japanese forestry sector manages such planted forests. In addition, forestry does not consist of only cutting down trees that are growing on the mountains and sending them off as timber. The

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planting of saplings and “silviculture” (tending trees until they reach a size at which they can be used as timber) are also important forestry tasks. The length of time it takes for planted timber to be ready for felling and harvesting differs depending on the type of tree, the region, and the intended use of the cut timber, but it is at least 40–50 years. In other words, as shown in Fig. 3, planted trees currently approaching harvest are the saplings planted by our grandparents’ generation and tended by our parents’ generation. Unlike in the fields of services, commerce, industry, and other primary sectors such as agriculture and fishery, in forestry, money and resources circulate in a long-term cycle, spanning a number of generations. If we care only about harvesting and obtaining a profit, our children and grandchildren will surely pay the price. Let us consider the current state of forestry in concrete terms based on the example of forestry management of planted cedar and hinoki cypress forests. Looking at the current ownership of forests in Japan, 31% are owned by the central government, 11% by public bodies such as prefectural and city governments or municipalities, and 58% are in private hands, owned by individuals or private enterprises (Forestry Agency 2013). Forest owners market their timber through three broadly defined routes (Fig. 4). Some forest owners handle growing, felling, and transportation of timber themselves acting as “foresters.” Other forest owners belong to cooperatives that thin, fell, and transport the timber on the owner’s behalf. The cooperatives’ staffs are too small to handle large forests, so they employ the services of logging companies. The third route to market is where logging companies team up with forest owners directly and buy the timber of trees that are still standing, undertaking their felling and transportation. Currently, as forest owners are aging, the latter two routes are more common. Felled timber is sorted according to, for example, thickness, compactness of growth rings, and straightness, and used as raw material for various products. Straight, thick (unbent and untapered) timber sells for a relatively high

Fig. 3 Model of forestry industry across generations

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Fig. 4 Forestry flow chart

price as raw material for construction. Timber not sold for use in construction is chipped and traded as raw material for the paper and fuel industries. The processing and distribution of timber differs widely depending on its application, and it reaches us via many processes. Next, we consider forestry related to broad-leaved trees. Broad-leaved trees, most of which are naturally occurring, cannot be processed uniformly as conifers can. According to the Forestry Agency (2013), demand for hardwood falls into two categories—for processed materials such as lumber, plywood, and wood chips and that used for shiitake mushroom growth—of which 95% of the demand is for pulp production from wood chips. Products that can be used as building materials are transported to the timber market, while material to be used for growing shiitake mushrooms is transported to individual companies, and material for pulp chips is transported directly to the factory. According to Narita (1980), broad-leaved trees were initially used as the source wood for pulp in the second half of the 1950s, which was boosted by declining production of charcoal due of the “fuel revolution” that began in the 1960s. However, since the 1990s, paper and pulp companies have relied on imported wood chips, mainly from broad-leaved trees, giving rise to the current weakness of the domestic resource base (Itoh and Konari 2004). (1) Problems currently facing the forestry business

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Fig. 5 Impact of the current generation on future generations in the forestry industry

What quantity of wood resources do we use each year? Wood resources include, for example, paper and timber, but also wood that is used in overlooked places, such as fuel for thermal power generation, firewood, and charcoal. Thus, our lives are sustained by various wood resources. However, are we aware that the forestry industry, which supplies these wood resources, has financial difficulties for a variety of reasons and that the number of people involved in forestry has declined? Let us take a look at Fig. 5. Left unchecked, the lack of forest management by the current generation will leave future generations unable to use wood resources at the present level. In other words, it is because our parents’ and grandparents’ generations looked after the forests properly that we are able to use wood resources today. Next, we will consider four factors contributing to the slump in the forestry industry. ➀ Dealing with nature The forestry industry is greatly affected by meteorological conditions, soil quality, individual genetic differences in trees, natural disasters, and insect damage, as well as other factors. In addition, unlike agricultural produce, trees’ long cultivation time increases the risk of loss in timber value. Let us take an example from planted conifer forests. Part of the process in timber production is an operation known as “pruning.” Pruning is trimming away branches from the tree trunk. The places on the tree trunk where branches used to be appear as knots when the tree is sawn into timber. Knots can arise as a result of pruning of branches (loose knots), making the wood not suitable for processing. Knots are also undesirable in many ways from an esthetic point of view, and the market prefers timber with as few knots as possible. Careful

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pruning during the period of cultivation allows the production of beautiful timber with few knots on the surface of the product. However, no matter how carefully you prune, you will damage the living tree. You can skillfully layer the tree’s growth rings over the site of a lopped branch, but that technique entails disturbing the tree bark, and trapped water might cause rotting. In that case, regardless of how thick the tree trunk grows, the value of the product will be greatly undermined. Further, insects can introduce mold and cause blemishes, and the funds spent over 50 years of cultivation can end up wasted. ➁ Competition from overseas products Japan, with around two-thirds of its land being occupied by forests, is a giant among forest nations (Fig. 6). However, in practice, Japan supplies only 27.9% of the timber it uses (2012). Why does Japan not use domestic products, despite having such extensive forests? The first answers are the often-heard excuses “Japan has lost to competition with cheap overseas products” and “the adoption of high performance forestry equipment is not widespread because of the steep terrain in Japan’s forested mountains.” I would like to point out the slight misconceptions underlying these justifications. First, let us consider “competition with overseas products.” Overseas products were first imported into Japan in the 1960s because of a severe shortage of domestic timber, although the prices of overseas products at that time were higher than those Fig. 6 Proportion of forest area to total land area. Source Compiled by the author from 2010 FAO data

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of domestic products. Later, partly because of increase in the value of the yen in the 1980s, there was a period during which overseas products became cheaper. However, the prices of domestic products also fell, and currently, the price of Japanese cedar timber is lower than that of western hemlock (an average price for overseas products). Then, why does most of the timber used in Japan come from overseas? This happens because the overseas products are superior given the effective processing and distribution systems implemented overseas, as well as because of their ease of procurement and consistency of their product quality. However, in recent years, there has been an increase in the number of large-scale timber mills in Japan too, and the quality management and distribution have improved, indicating that procurement is likely to become easier than in the past. Another factor to consider is that there are no duties in Japan for timber imported from overseas. In recent years, there has been a lengthy discussion in the media about problems surrounding the adoption of the agricultural Trans-Pacific Partnership. However, the import and export of timber was actually deregulated in 1964, with duties already abolished. The situation is slightly different in the paper and pulp industry. Why this industry, which uses mainly broad-leaved trees, depends on overseas timber is not fully explained by the fact that conifers are mainly used for building materials. An additional explanation is that Japanese paper companies grow trees overseas and import them for use. This is not only because of the relative ease of securing flat blocks of land overseas, which allow for efficient operations, but also because of the merits of planting fast-growing trees (eucalyptus and acacia) and of keeping personnel costs low (Kamikawa 2010). The demand for wood chip materials for pulp in 2011 (calculated in terms of logs) accounted for 44% of the total volume of demand for timber in Japan, of which 70% was imported chips (Forestry Agency 2013). This factor greatly reduces Japan’s rate of self-reliance in timber. Next, we will consider “the steep terrain of Japan’s forested mountains and highperformance forestry equipment.” Forested mountains are considered steep if the slope gradient is 30° or more. Japan’s forested mountains are certainly steep in many places. It is true that “harvesters” and other high-performance forestry equipment currently imported into Japan were intended for use on flat ground, and therefore they are not able to utilize all their functions in Japan’s steep-sloped forest regions. However, many of the wood products that have been imported into Japan include countries in the south of Europe, such as Austria, Switzerland, and southern Germany, all of which have terrains as steep as Japan’s (Forestry Agency 2013). In overseas forest regions, these countries have created an effective production system that allows efficient exploitation even on steep gradients. Therefore, it could be possible to raise production efficiency. In addition, some companies are now producing highperformance forestry equipment in Japan, and the situation is gradually changing. ➂ The problem of subsidies Japan’s forestry industry is not currently thought to be viable without subsidies. The forest planning system was substantially reviewed in the reform of Japanese forest law in the 2011 term, and a new system called the “Collective Forest Management Plan” was introduced in the 2012 term. This system aims to promote the installation

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of rational networks, mechanization, and improved operational efficiency through concentration of forestry operations. However, this system also has some negative points. First, only a limited number of people qualify for the subsidies. Under the system, subsidies are only payable for operational areas of at least five hectares and removal of an average of ten cubic meters of wood per hectare. These conditions promote larger operations by forestry cooperatives and logging companies, but smallscale owners who carry out their own felling will find it hard obtain the subsidies. In addition, the system further limits felling locations. The minimum volume of wood that must be removed renders the likelihood of exploiting less productive sites such as those with steep gradients or in remote areas very low. In addition, subsidies have various inherent problems. At the forest operation stage, subsidies are an important source of revenue to help cover personnel and operational costs. However, in the market, the existence of subsidies can become a “moral hazard for buyers.” That is, buyers may tend to take the attitude of “Well, since the production of raw wood by forestry cooperatives has been subsidized, we need not set a high price.” This kind of attitude on the part of buyers is likely to have a significant impact on their purchase decisions. As a result, there is currently a tendency in the timber market to buy only at the lowest price. It is also noteworthy that the current subsidy regime favors operations that produce timber and gives less weight to forest management (thinning, pruning, tree planting, etc.). Forestry is not only timber production: it also includes forest management, which is primarily in the trust of forest owners (Fig. 4). Nevertheless, it is currently hard to use subsidies funded by taxpayers to manage forests that are individuals’ private assets, hindering the management of privately owned forests. ➃ Labor shortage Because of the three aforementioned points, income from forestry is low and unstable and the number of people involved in forestry is rapidly declining. Forestry has fallen into a severe succession crisis, with more forests being unattended and abandoned in Japan’s mountains. The people who have taken responsibility for forestry work until now are aging, but their children and grandchildren are not willing to take on lowincome forestry work, and the older generation is losing the will to continue working. Management of government-owned forests is underfunded and cannot cover the labor costs for operatives on the ground. Leaving aside the first contributing factor, when did the other three problems materialize? A direct trigger was probably the decision to deregulate timber imports in 1964. It is important to note whether anyone accurately predicted that the current situation would arise when imports of timber were deregulated. Prices of domestic timber fell in line with the decline in prices of foreign products and failed to recover of their own accord. This reduced the income from forestry, causing a decline in the number of people engaged in the industry. The forestry sector currently operates only in line with government policy (import strategy and subsidies), and the situation is such that, even where there is demand, those involved in forestry are unable to profit from it without subsidy support. In contrast, overseas players, aided by high productivity and well-established processing and distribution systems, are able to

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successfully keep product prices low even if the price of the raw wood is high. The fundamental problem is that if a strategy is not formulated from a wide and a very long-term viewpoint, significant effects will appear in unexpected places. This point has been the “fifth factor behind the forestry slump,” which has caused problems ➁– ➃. Forest strategy during the post-war period of high economic growth lacked Future Design elements. That probably explains the current status of forestry in Japan. Who predicted this devastation of Japan’s forests? Who envisaged that the pollen released by cedars past their felling age would cause so many allergy problems? From now on, it will be important to continuously monitor the adverse effects of any policy on future generations from various viewpoints, not only before it has been formulated but also after it has been implemented. Further, it might even become necessary, depending on the circumstances, to improve the situation by revising legislation. (2) Effective use of timber ➀ The value of using timber Why do we persist in using wood, despite being surrounded by materials that are easy to process, such as metal, concrete, or plastic? We should first discuss wood’s functional advantages. Products made from wood are light and strong and, because they are absorbent, they possess the ability to stabilize humidity. These advantages are most apparent in housing. If the humidity in a room rises, the wood absorbs the moisture and, if it falls, it releases it. Therefore, a suitable level of humidity is maintained even in winter. This humidity control action guards against condensation, which causes mold and atopy. Research has also shown that the influenza infection rate is lower in buildings with wooden surfaces (Kitsuta 2004), and the Ministry of Education, Culture, Sports, Science and Technology (2007) is promoting the use of wood in the construction of school facilities. We will now discuss environmental concerns, tradition, and culture. The possibility of an environmental contribution has already been discussed, and below are examples of forests’ tradition and culture advantages. • Warm emotions are aroused by seeing and experiencing the forest. • Forests are used in the construction of historical buildings, and it is essential to maintain these cultural assets. • It is desirable to maintain the culture of coexistence between people and forests. Japan has a more widespread culture of wooden architecture than many parts of Europe and America, where stone construction has been more common. For example, Horyu-ji in Nara Prefecture, a temple complex constructed at the beginning of the seventh century, is considered the world’s oldest surviving group of wooden buildings. Wooden architecture, along with being part of traditional Japanese culture, is also considered to be functional for a long time. As already discussed, carbon absorbed by trees during photosynthesis (carbon sequestration) is fixed in the wood, and prolonged use of timber conserves the environment by not releasing carbon into the atmosphere.

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From this viewpoint, traditional Japanese architecture sustains the environment. Thus, if the volume of timber used in building constructions declines, it will not completely disappear. ➁ Environmentally friendly methods of use If asked to name common methods of timber use, posts and floors in houses and broad planks for shop counters would probably spring to mind. These are typical simple uses of timber, but the delivery of timber for use in these forms produces a large amount of wood trimmings. First, in the forest, when the tree is felled and made into logs, the branches and each end of the tree are left as trimmings. These, known as unused material, are often just discarded in the forest. Thinned branches are another type of unused material. Next, the logs are transported to the sawmill and processed using bandsaws into lumber. This process generates wood shavings and sawdust. Thus, in the process of turning the trees standing in the forest into the posts and planks in our daily environment, the volume of trimmings generated is a number of times bigger than the volume of the end product. Below, we consider two methods for using thinned branches, trimmings that cannot be used as wooden products, and scrap wood from wooden products after their useful life is over. These are the “use as materials” method, where these wood materials are processed into new products, and the “energy use” method, where they are used as fuel. [Use as materials] Engineered wood has attracted attention in recent years as an effective method of using wood trimmings. Thanks to skillful processing of wooden materials that are too small or too low in quality to be used for lumber in their existing form, thinned branches and trimmings can be transformed into splendid wooden products. Furthermore, given that most of the demand for timber continues to be for use in construction, the technical development and promotion of this field is an important issue. Engineered woods include laminated veneer lumber and plywood, in which thin layers of single sheets (wood peeled off following the growth rings of the timber into a rolled sheet that can be smoothed out) are fixed together with an adhesive. Often used as surface materials in houses and furniture, these can be manufactured easily and are comparatively cheap. Other engineered woods are laminated products formed by re-adhering laminae or scantlings (wooden material with small dimensions). The strength of the wood product can be adjusted by selecting the right raw material, and products with various shapes products or larger surfaces can be made. Cross-laminated timber (large panels constructed from layers of composite materials stuck together at right angles), a thick product with stable dimensions that provides more heat insulation, sound insulation, and fire resistance, is particularly popular and widely used as a construction material overseas. A set of Japanese Agricultural Standards was created in January 2014, and a system for their implementation has been put in place. Other engineered woods include particle board (mainly fragments of timber molded under heat and pressure using synthetic resin adhesive) and fiberboard (pulped wood fibers mixed with an adhesive and formed under heat and pressure).

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[Energy use] Until the energy revolution in the 1960s, the main use for wood biomass was as firewood. Even now, in developing countries, wood is mainly used as fuel, such as firewood and charcoal. However, since the fuel revolution, the main fuel types in developed countries across the globe are fossil fuels such as coal, natural gas, and oil. Fossil fuel, as is well known, gives off a large amount of CO2 when burnt. In addition, fossil fuel is an exhaustible resource estimated to run out in the near future. The use of wood biomass as a fuel is noteworthy in this regard. Wood biomass fuel is carbon neutral, and so its use as a substitute for fossil fuel can contribute to CO2 reduction. Wood biomass is gathering attention as an environmentally friendly fuel because it allows wood shavings, branches, leaves, and debris from thinning to be used as fuel. Wooden pellets are a well-known way of effectively using construction waste, byproducts arising from the use of wood as a material, and forest residue and unused elements such as branches and leaves lopped off during forestry operations. Unused materials are ground up and formed into small fuel tablets or pellets under pressure and used as fuel in pellet stoves, pellet boilers, and absorption refrigerators. Bio-coke has also made an appearance as a fuel made from wood. This is a next-generation fuel developed by the Faculty of Science and Engineering at Kinki University, the Osaka Prefecture Forest Owners Association, and Naniwa Roki Co., Ltd. It uses all wood biomass, including thinned branches, as raw material and is produced using a process of dehydration, pressurization, heating, and cooling. Hard and dense, it burns at a steady high heat, conferring it great potential as a substitute for coke from coal and for other fossil fuels. Bioethanol, methane fermentation of timber, and gasification for power generation are also noteworthy applications involving the decomposition of wooden materials. Such effective use of wood trimmings, combined with the use of wood biomass fuel, reduces the emission of carbon dioxide from the use of fossil fuel. However, at present, production of wood biomass fuel is not as economically attractive as fossil fuel (the price is high and the calorific value low). To encourage further adoption of wood biomass as a fuel, investigation is needed not only into its environmental impact, but also into various other aspects such as economics and efficiency. Having said that, it should not be forgotten that the use of energy from wood is a byproduct of the forestry industry. Wood biomass is a carbon sink, and seeking a method of maintaining it in that state for a long time without burning it would be the best approach for conserving the environment. The timber cascade effect refers to the use and reuse of timber as a material as many times as possible, before final consumption for energy (Fig. 7). In other words, trees are not felled to be used as wood biomass for energy production; rather, the use of wood biomass as energy source is an effective use of construction waste, thinned branches, and unused materials and trimmings (branches and leaves) arising during forestry industry processes. Nevertheless, it is also true that the forestry industry slump has hindered the use of wood biomass for energy. The development of methods for using wood biomass as a new energy source has attracted the attention of only the scientific community. There should be

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Fig. 7 Model of the cascade effect in the use of forest resources

a broad consideration of the practical aspects of this new energy source in forestry, economics, and sociology as well. (3) Forestry promotion and forest conservation activities I have mentioned the link between sustainable use and forest conservation more than once, and I will now outline current efforts in this regard in Japan. The government has enacted legislation to promote using timber (especially from Japanese forests), along with training personnel to look after the forests. The government embarked on a “Green Employment Program” starting with the FY2002 supplementary budget and, by engaging in on-the-ground research related to forestry, it has promoted regional identity and recruitment and training of new people who will take responsibility for forestry work. Employment policies in response to the recession were linked to forest management, where there was a severe manpower shortage. As a result, the number of new entrants into forest management increased from 2314 in 2000 to 4013 in 2010 (Forestry Agency 2013). The government enacted legislation to promote the use of timber in public buildings in 2010, formulating guidelines for

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official encouragement and highlighting its intention to promote “the use of wooden construction and wooden materials wherever possible.” The idea behind the policy was that widespread visible use of timber in public buildings would increase awareness among ordinary people of the possibilities of timber and have ramifications in private buildings. To support these government policies, initiatives such as a timber certification system and points for use of timber were promoted. The timber certification system involves evaluating the timber’s environmental burden using indicators such as its level of traceability and its “wood mileage CO2 ,” showing the environmental burden of transporting it, along with the distance the timber has travelled. These measures have the twin objectives of environmental protection and regional regeneration, aiming to reduce the amount of energy used transporting timber by promoting the use of Japanese wood and the use of regional timber within its home region. “Points for the use of timber” is a measure that awards points when a wooden house is built or extended, when an existing house is refurbished with wooden materials, when timber products are bought, and when wood pellet or firewood stoves are bought. These points can be exchanged for local agricultural, forestry, and fishery products and the like. The measure is expected to stimulate regional agriculture, forestry, and fishing, as well as to increase the use of regionally produced timber. However, the scope of government operations and subsidies is not large enough to allow improvement of all of Japan’s forests. Thus, as the perception of environmental problems has risen, amateur volunteers have carried out forest improvement activities in recent years, and forests have become places for environmental education. These “forest volunteers” operate at various levels, including student, local resident, and general groups. Their operations also range widely from forest improvement to planting and nature observation, and they use various equipment and techniques, from chainsaws to hatchets and handsaws. To raise the value and price of Japanese timber and raise forestry income, it will be necessary to increase demand. In particular, the development of various technologies related to the use of wood biomass that cannot be used for lumber has been promoted. Effective use of biomass would lead directly to an increase in forestry income and would have the added benefit of environmental conservation. “Cross laminated timber,” mentioned earlier with regard to the use of timber as a material, is a high-performance construction material, and since it uses sustainable wood raw materials, it also contributes to environmental conservation. These attributes have led to ongoing research by various institutions aimed at enhancing its performance and rationalizing its manufacture and application. Another new technology, whose use is gradually growing, is recycled wood plastic composite, which is made from industrial plastic waste and waste wood materials, mixed and fused together. Recycled wood plastic composite combines the appearance of wood with the functions of plastic. It does not require maintenance, such as corrosion-proofing or termite-proofing, and is suitable as a material for outdoor structures. Another positive aspect is that the product can be recycled after use and repeatedly used as a raw material. Additionally, progress has been made with pioneering new uses for timber by processing it chemically and biologically (using such processes as liquefaction and gasification) to utilize

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its component cellulose and lignin. Other developing technologies including genetic, ecological, and operational methods aim to prevent disease and insect damage. At the same time, the effective use of high-function forestry equipment has been investigated, and there has been field research on various new technologies such as methods of surveying forests using satellite imagery and ground-based lasers. Thus, a wide range of activities is taking place, from ordinary citizens volunteering to researchers developing new technologies. However, it will take time for any activity to become commonly practiced and for its impact to emerge, and the forests will not recover immediately. Dealing with nature requires sustained effort over a long time.

3 The Role of Future Design 3.1 Need for a Long-Term View in Forest Resource Management In forestry, there is a saying that “trees are planted for our grandchildren’s generation,” which comes from the fact that our grandparents’ and great-grandparents’ generation planted the trees that we are currently using and describes how we act from a longterm perspective. In return for felling and using the trees planted for us by past generations, we also plant trees for future generations. However, this action applies only to people who actually use the forest resources for their subsistence and are affected by its economic impact. Can we now willingly use our assets and labor to plant trees, not for ourselves, but for future generations? We are not talking about a few trees planted by volunteers, but about enough trees to replace the wood biomass resources used by our generation. It is doubtful that you can imagine the scale of the task in financial and physical terms. However, unless someone undertakes this work, forests and wood resources cannot be passed down to future generations. This is an important duty for the current generation, not just from the viewpoint of the conservation of the environment and resources, but also for passing down Japan’s ancient tree culture. Forests’ environmental problems are not currently widely perceived as a serious issue that must be solved quickly, because the impact on the stability and balance of our own lives is not immediately apparent. Awareness has grown greatly in recent years, but the issue is still seen as “a problem for the future” rather than an urgent problem, and countermeasures tend to be put off. In this situation, how can people (the current generation) who have no special interest in the natural environment be prompted to create a source of carbon absorption and wood biomass resources for future generations and take action now of their own accord? It is unlikely this will happen spontaneously. This is because, as already mentioned in this report, there is insufficient data as to what kind of impact such actions will have on the future in practice and on what scale. Going further, the problem is that the future

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image of Japan’s forests in itself is unclear and not everybody has the same level of understanding. I would like you to recall the philosophy known as “forest esthetics” outlined at the beginning of this chapter. The value concept proposed by Niijima and Murayama with regard to Japanese forests, which spoke of “beauty resulting from harmony between economic profit (mainly from planted forests) and conservation of the landscape and ecosystem (environmental conservation),” could alternatively have been “a vision for the future incorporating the wishes of future generations.” What has become necessary in this regard is “future design.” By this I mean simulating the impact on the future and presenting, using concrete numbers easily understood by non-experts, the significance and impact for future generations if they plant one tree or save one sheet of paper, and the impact on natural resources, such as paper, that they waste. Setting long-term numerical targets and showing people in concrete terms the impact on the future of each individual action is likely to strengthen the current generation’s incentive to engage in environmental policies. For example, setting long-term forest management targets is likely to lead to a reexamination of the management system and to a resolution of the shortage of operational staff. Demonstrating the impact of tree planting, the use of environmentally friendly products, etc., could also promote tree planting, distribution of environmentally friendly products, and consumption of local products. Entities such as a “Ministry for the Future” or “Department for the Future” could thus function at an institutional level to collect data for discussion, present the results of simulations, which could be seen as representing the views of future generations, incorporate these views into policies, and create long-term scenarios to implement them. (1) Expectations of public institutions in “Future Design” the necessity of their participation The Kyoto Protocol was adopted at the third session of the Conference of Parties to the UN Framework Convention on Climate Change (COP3) in 1997. The Protocol called for Japan to reduce its greenhouse gas emissions to 6% below their 1990 levels between 2008 and 2013 (the first period of obligation). Within this reduction target, 3.9% was expected to come from carbon dioxide absorption by forests. The target was met, but problems remain as to the sustainability of the reduction, among other issues. A 50% global reduction in greenhouse gases by 2050 was discussed at the G8 summit in 2007, and it is now necessary to create plans based on long-term targets. Then in 2015, at COP21, Japan set itself the target of reducing annual greenhouse gas emissions to 26% below their 2013 level. Just as the expectation for forests to act as a source of carbon dioxide absorption is thus increasing, a delay in forest improvement represents a problem. Some 40% of Japan’s forests are planted forests, consisting of many conifers that were planted in deforested areas to meet post-war reconstruction demand. However, competition with overseas products and the decline in demand for timber has prompted a decline in the prices of domestic timber, such that today Japan’s forestry sector is not viable without subsidies from the central and local governments. In addition, subsidy payments are inadequate because of financial difficulties at the central and local government

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levels, and budgets do not even cover basic management practices such as thinning and pruning in each region. Forests fulfill the function of absorbing and sequestering carbon dioxide, which is a source of global warming. Trees absorb the most carbon dioxide when they are young (Fig. 2). Now, as forest improvement is delayed, most trees are slenderer than they should be, having shot up like beansprouts because of the lack of sunlight in the forest. Thinning-out is necessary, but for the reasons already mentioned, it has not been done. Furthermore, the forest management/forestry business arose from the planned economy, but housing construction, which is a main consumer of timber, is heavily influenced by the market economy. For example, even if a 50-year plan is formulated to plant, tend, and fell trees in a given area of forest, it is possible that prices will be higher than targeted if demand for timber increases over those 50 years. It is equally possible that a loss will result from felling the targeted amount of timber. Changes to the flow of demand for construction materials in Japan are, it must be pointed out, most effective if made under government direction. However, the government departments that currently execute forest conservation and forest use policies each have limited separate jurisdiction. The Ministry of the Environment is responsible for the environmental aspects of forest policy, the Forestry Agency for the forest management aspects, and the Ministry of Land, Infrastructure, Transport and Tourism for the aspects that touch upon housing construction. A similar, even more complicated, problem exists in the paper and pulp industry. The Ministry of Economy, Trade and Industry deals with business, including imports and exports, but environmental policy and forest management are governed by the environmental ministries in the countries from which the imports come. The Foreign Ministry may act as a bridge between the two. Thus, the problems in every process that need to be rapidly tackled differ, and there is no system in place to consider the future in a unified way. What is needed is a “Ministry for the Future” or a “Department for the Future,” structured to forecast all the various issues in a comprehensive way, enabling it to formulate a strategy that takes into account future generations’ prospects. (2) The existence of cross-border problems If we think about forest management-related problems from a global viewpoint, the value of incorporating Future Design into public institutions becomes even easier to understand. For example, despite the fact that the volume of demand for pulp chips for papermaking is 44% of the total timber demand in Japan, 70% of this pulp demand is met by imported chips (Ministry of Agriculture, Forestry and Fisheries 2013). What would happen, though, if we were to regard the slump in Japan’s forestry industry as the only problem, and eliminate imports in order to promote the use of domestic timber? In areas where logging and afforestation of bare land are occurring in the exporting country, the implications on employment creation and social infrastructure provision would be very substantial, and the impact on the lives of local people would be great. Thus, measures to solve a problem that considers a country in isolation can sometimes cause even greater damage in other countries or regions. The issue of who owns forests cannot be ignored either. In this chapter, we described the decline of Japan’s domestic forestry industry, and found that as things

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currently stand, the productivity of forests is so low that even paying inheritance tax on land has become a burden. In light of this slump in forestry, many landowners are choosing to let go of their forest properties. In this case, it is Chinese companies that are leading the charge to buy up available land (Ministry of Agriculture, Forestry and Fisheries 2014). In many cases, the purpose of the Chinese purchases is unclear, but TV and newspaper reports speculate that they are not just for timber production but also for acquiring rights to water resources. One memorable comment in relation to this was made by Kusao Endo (then a professor at Kagoshima University’s Faculty of Agriculture) on an NHK (Japan Broadcasting Corporation) TV debate program (NHK 2010). After talking about the state of forest purchases by foreign investors, the circumstances surrounding forest ownership in Japan, and the timber, water resources, and emission rights trading for CO2 sequestration, he said, “Unfortunately, Japan has not seized these business opportunities (timber, water resources, and CO2 sequestration). This example illustrates the low value placed on forestry, forest products, and forest land in Japan, and also suggests that the country’s national interest may be harmed in the future. Another global issue that urgently needs to be addressed is the atmospheric haze that frequently blankets Singapore. In June 2013, the haze was so bad that it drove the air pollution index to a level that put the lives of the sick and elderly at risk. This is a major problem confronting Indonesia, Singapore, and Malaysia (NEA 2015). The haze is principally attributable to the slash-and-burn farming of the inhabitants of the Indonesian island of Sumatra and the large fires that accompany this farming practice, as well as to the rapidly expanding area of palm oil plantations driven by demand from developed economies. This is generally considered an environmental problem of air pollution, but from a local perspective it can also be seen as a social problem of poverty and underemployment. To formulate policies that consider future impacts on a global scale, it is essential to undertake a comprehensive study that takes into account disparities in the social circumstances of developed and developing countries. It might become necessary to introduce the concept of the future design also such as the United Nations, in the coming years, for dealing with these kinds of global problems by means of an international framework. (3) Designing the future of the planet from a forest management viewpoint What kind of forests do we currently want? For ordinary people, it is probably “a forest that is comfortable to visit, ordinarily safe (with little risk of natural disasters such as landslides) and with a diverse ecosystem.” In contrast, for those involved in the forestry industry and their associates, it is likely to be “an ordinarily safe forest with high economic efficiency.” Let us outline the methods required to realize these two visions, since to talk about them is relatively simple. If stimulation of the forestry industry prompts the establishment of a cycle that is able to maintain the forests in a healthy state, it will be possible to realize the vision set out at the beginning of this chapter of “both economic profit and conservation of the landscape and ecosystem (environmental conservation).” Forestry, as well as being a source of income for the people engaged in it, also has an important role in realizing the vision that ordinary

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people have of the forest. Bearing this in mind, I think we must deal with the situation with an “economic revitalization of the forestry industry (forestry renaissance)” as a short-term aim and “environmental conservation by the forestry industry” as a medium-to-long-term aim. I would thus like to present a proposal for dealing with “forest management in Japan using Future Design.” The main reason that forest management is not viable without subsidies is that forestry does not have power (income) as an industry. The reasoning behind this includes a reduction in the value and price of timber, the harsh conditions of the forestry business, and a decline in people’s affinity for forested mountains due to changes in their living environment because of modernization. However, forest management is a problem that relates to all people, wherever they live. Mountains store water that flows into rivers, and trees sequester carbon and emit oxygen. Forests not only preserve biodiversity, they have cultural significance, and forest products physically support human society (see Table 1). All of us undoubtedly benefit from forests in some way. Forest management is an issue shared by all Japanese people, spanning regional and generational differences. This being the case, how should we protect Japan’s forests? Are you aware of the United Nations Conference on Environment and Development (UNCED) held in 1992 in Rio Janeiro, Brazil? It was at that conference that the principle of “common but differentiated responsibility” was proposed. This concept strikes a balance between the assertion by developed countries that all countries must take responsibility for solving the planet’s environmental problems and the assertion by developing countries that most of the problems stem from developed countries and that countries do not all have the same ability to take action. If we apply that same concept to Japan’s forest management problems, should not a balance be reached between the city and the countryside and between the generations? In this regard, we should propose to make forest management a “duty” based on “common but differentiated responsibility.” Here, let us focus on the differences between generations and consider assigning them roles (responsibilities) for managing Japan’s forests. The top of Fig. 8 is the model of forestry tasks by generation shown earlier, in Fig. 3. It represents the current forestry management situation. The bottom shows a model of forestry tasks by generation that the author of this chapter proposes. The greatest difference is a change in the meaning of “generation.” The classification upon which roles are assigned is not children, parents, and grandparents, but rather children, the young generation, and the mature generation. There are two purposes behind this. The first is to allocate roles that match the characteristics of each generation with the aim of maximizing the efficiency of each operation. In childhood, up to the teenage years, the assigned role is “planting.” Of course, because of the difference in physical strength, it will be necessary to allocate specific roles, with, for example, kindergarten and elementary schools growing saplings and middle and high schools carrying out site preparation and tree planting in the mountains. This represents an opportunity for environmental and emotional education. The assigned role for young people in their twenties and thirties is “tending.” Clearing undergrowth and thinning requires time and physical strength, implying that it is logical and efficient to allocate that role to those who are physically strong. Additionally, young people

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Fig. 8 Forest management responsibility by generation

who are about to or who have just entered adult society will experience a task that epitomizes the fact that, for environmental problems, “results will not be immediate but will definitely take shape in decades to come.” This, of course, is likely to prove very significant in their education as members of society. As a result, the “tending” would mainly be incorporated into activities such as university cultural studies or extracurricular activities and induction of new company recruits. The assigned role for the mature generation in their forties and fifties is “using.” Of course, it would be hard both physically and technically for all people in the mature generation to participate in operational tasks. However, “using” includes a variety of operations over a long period. Various responsibilities can doubtless be allocated such as, for example, felling and transporting, especially using heavy machinery, running businesses that produce and distribute timber products, leading and training children and the young generation, and developing science and technology. Of course, some people are likely to be models of good behavior to those around them, with an environmentally friendly lifestyle, using energy from scrap wood and unused materials. Thus, under the umbrella of conserving the environment and serving as a place of environmental and emotional education, forestry tasks will be allocated along the lines of planting (children), tending (young people), and cutting and processing (adults). The second purpose behind changing the generational definitions to children, the young generation, and the mature generation is that it enables each person to participate in the whole of the forest management process. Currently, planted forests are felled when they are about 50 years old. In other words, saplings planted when a child is in kindergarten will be ready for felling when that child is in his or her fifties. By

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that same time, the saplings, now trees, will not only serve the function of substance production, they will also have grown into a splendid forest serving a whole range of other functions, such as providing a pleasing landscape, preserving biodiversity, and protecting watersheds. Conversely, it is not ideal if each generation is only able to use the trees that it has tended itself. Forestry is work that spans a long time and, as already mentioned, in return for felling and using the trees planted for us by past generations, we also plant trees ourselves for future generations. Thus, forestry is work that reverses the ordinary relationship between profit and effort. In addition, it is no small thing for ordinary people who do not work in the forestry industry to, of their own accord, engage in this reversed structure and put in effort (such as planting and forest management) after they have reaped the rewards (resources such as timber). However, if each generation uses the trees that it has grown, this kind of conflict is unlikely to arise. Of course, this is only one idea. I cannot, however, help but think that forest management can be woven into each person’s life as an essential component. (4) If you design the future… Finally, I ask you to consider a conundrum. Imagine that you work for the “Ministry for the Future” designing policies for the future. Your job is to establish official future guidelines for an island in Southeast Asia where several Japanese companies are active. Problem: Island B is in Indonesia, close to Singapore. It is an industrial island, developed under the direction of the Singapore government with the agreement of the Indonesian government. Singapore expects the island to fulfill the role of an outsourcing city, providing land and manpower that Singapore lacks. Meanwhile, Indonesia has a vision of creating a second Singapore in Indonesia. On that island, development is the top priority and “environmental conservation legislation” as established in other regions exists only in name. The northern part of the island is already industrialized, but in some places in the south, traditional industries such as fishing and forestry are still being pursued, albeit on a small scale. Mr. F, who carried out research on the industry of the regional people in the southern part of the island for around five years, was asked by many people how to best preserve the nature on Island B and how to best combine development with nature conservation. His reply was that we should perhaps think of the island solely as an industrial island and not consider conserving its nature. His view is that the industrial zone, which is gradually spreading to neighboring islands, should be consolidated by developing the southern region of the island. He says that in this case the natural environment on Island B would disappear but that on other islands it would be protected, and we can probably claim that, regionally, the natural environment has been successfully conserved. Thinking of the future of this island, do you share the opinions of Mr. F. or do you reject them? If you do not agree with him, what needs to be clarified, and from what point of view? You may be surprised that our discussion has jumped from forestry and forests in Japan to faraway Indonesia. However, I would like you to understand that in this era of globalization, the environmental situation on Island B could have a great impact

14 The Need for a “Future Design” View of Forest …

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on things that are dear to you. In addition, we should not forget that if something occurs once, irrespective of it being good or bad, a precedent is set for the future. Therefore, taking the interests of future generations into account, what kind of future will you design?

References Forestry Agency (2013) Forest and forestry white paper 2013. In: Association of agricultural and forestry statistics FAO (2010) Global Forest Resources Assessment 2010: Main report, Rome Forestry and Forest Products Research Institute, How can we promote the volume of carbon absorbed by forests—calculating the volume of forest carbon absorption required by the Kyoto Protocol and developing a reporting system. Available from http://www.ffpri.affrc.go.jp/research/dept/22c limate/kyuushuuryou/. Published 2 Feb 2010 (in Japanese) Fujimori T (2000) Symbiosis with the forest: for a sustainable society. Maruzen Publishing Co., Ltd., Tokyo (in Japanese) Itoh S, Konari H (2004) The changes of the structure of wooden chip production in the 1990s: a case of hardwood-chip production in Iwate. J Forest Econ 50(3):27–37 Kamikawa K (2010) Regarding the possibility of expansion of the use of domestic materials in paper manufacturing. Shinrin Gijutsu (Forest Technology), vol 814, pp 8–21, Tokyo (in Japanese) Kitsuta K (2004) Educational environment in wooden school buildings: impact of school building materials on children, educators and educational activity. Japan Housing and Wood Technology Center, Tokyo (in Japanese) Ministry of Agriculture, Forestry and Fisheries (2014) Available from (http://www.rinya.maff.go. jp/j/press/keikaku/140425.html) Published 25 Apr 2014 (in Japanese) Narita M (1980) Overseas expansion by paper and pulp companies, and reorganization of the domestic pulp materials market. Hokkaido University Agricultural Department, Report into Forests Run for Education and Research vol 37, no 1, pp 1–50 (in Japanese) National Environment Agency of Singapore (NEA) (2015) [FAQs on PSI]. Available from http://www.nea.gov.sg/anti-pollution-radiation-protection/air-pollution-control/psi/ faqs-on-psi. Accessed on 4 Mar 2016 NHK (2010) Japan’s forest is gradually bought. Available from http://www.nhk.or.jp/gendai/kir oku/detail_2932.html. Published 7 Sept 2010 (in Japanese) Niijima Y, Murayama J (1918) Forest aesthetics. Hokkaido Daigaku Tosho Kankoukai (in Japanese) Research Institute of Educational Facilities (2007) Tree schools with warmth and interest—Tree schools in a nutshell. Ministry of Education, Culture, Sports, Science and Technology (in Japanese)

Yukari Fuchigami is a specially appointed assistant professor at Osaka University

Index

A Acid rain, 141–144 Advanced material, 81, 82 Agriscience, 82 Air pollution, 111, 131, 133, 135, 136, 139, 142, 143, 146, 217 Allocation of burdens, 90 Alternative water sources, 110 Altruism, 19, 20, 26 Anti-pollution measures, 131, 133, 141 Ashio Copper Mine Poisoning Incident, 131 Asian cities, 107, 111, 112 Asymmetrical responsibility, 17, 18, 22, 27, 31, 32 Atmosphere, 130, 131, 138, 139, 142–144, 198, 201, 209 Awareness of road maintenance and management, 100

B Backcasting, 11, 49–58, 60, 62, 63, 65, 66, 84–86, 144, 197 Basic science and technology plan, 83, 84 Biochemical oxygen demand, 136, 138 Bio-coke, 211 Biotechnology, 81, 83 Boundaries, 113, 117, 130, 144, 149 Bureaucrats, 70

C Cabinet, 69, 70, 72, 74, 83, 84, 92, 96, 172, 177, 188, 189, 191, 194 Camerer, Colin, 8 Capital, 5, 37, 53, 113, 177, 193 Capitalism, 151–155, 159, 164–166

Car, 39, 80 Carbon dioxide, 39, 130, 198, 201, 202, 211, 215, 216 Carbon monoxide, 135 Carbon neutral, 211 Care ethics, 17, 21, 22 Chemical oxygen demand, 136 China, 4, 42, 79, 82, 85, 106, 107, 139 Clean, 81, 82, 137 Climate changes, 7, 10, 15, 42, 49–51, 53, 82, 143, 144, 148, 149, 215 Collective Forest Management Plan, 207 Columbia, 49, 85 Common but differentiated responsibility, 218 Common pool resource, 158–161, 163–166 Competitiveness, 152, 165 Compulsory education, 84 Consensus building, 39–41, 45, 115, 118, 123 Constitution, 1, 2, 6–8, 11, 15, 76 Contamination, 43, 108, 118, 131, 133 Contract theory, 22 Conventional activated sludge process, 138 Coordinate, 70, 80, 84–86, 122 CO2 sequestration, 217 Council for science, technology and innovation policy, 83 Credible, 86 Cross laminated timber, 213 Cultural assets, 72, 209 Current generation, 1, 5–7, 10–12, 17, 32, 38, 44, 47, 56, 65, 105, 106, 108, 114– 118, 146, 149, 192–196, 205, 214, 215

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224 D Deforestation, 38, 131 Deliberations, 1, 14, 40, 41, 43–48, 114–118, 176, 177, 184–186 Deliberative democracy, 38, 40, 41, 45 Democracy, 6–8, 10, 11, 15, 29, 37–41, 43, 48, 125, 181, 184 Demographic change, 38, 48, 50, 81 Department for Business, Innovation & Skills, 82 Deregulate timber imports, 208 Developing countries, 143, 146, 147, 211, 217, 218 Digital economy, 82 Doctor, 81 E Earthquake, 52, 84, 85, 121, 126, 127 Earth Summit, 141 Economic stability, 72 Education, 21, 27, 29, 31, 57, 70, 73, 81, 82, 84, 85, 209, 213, 218, 219 Efficient energy, 81 Emission rights trading, 217 Energy-efficient, 82 Energy system, 42, 46, 47, 53 Engineered wood, 210 Engineers, 79, 81, 85 Environment, 3, 8, 38, 39, 42–46, 48, 51, 56, 61, 63–65, 70, 73, 76, 81–83, 86, 89, 90, 103, 111, 113, 121, 122, 128–130, 133–143, 149, 198, 201, 209–211, 214, 216, 218–220 Environmental conservation, 7, 96, 129, 141, 198, 213, 215, 217, 218, 220 Environmental infrastructures, 108 Environmental issues in global scale, 41, 51, 129, 141, 145, 146 Environmental pollution, 40, 55, 111, 129, 131–134, 136, 140, 141, 145 Environmental protection, 71, 130, 213 Environmental standards, 133–138, 142 Equity, 152 European Research Council, 82 European Union (EU), 7, 79, 81–83, 85, 174 Eutrophication, 136, 137, 146 Excessive exploitation, 108 Externalities, 6, 54, 81 F Fair distribution, 114 Fairness, 152, 165

Index Falling birthrate, 90 Feasible, 65, 86, 144, 147 Federal Government of Germany, 82 Federal Ministry of Education and Research, 82 Feminism, 18, 21, 22 Financial costs of maintaining cities, 94 Financial expenditures on infrastructure, 94 Fiscal collapse, 173 Five cities, 85 Five-year plan, 82 Food, 9, 80, 81, 83–85, 137, 197, 200 Food security, 81 Forecasting, 44, 49, 53, 54, 63, 65, 144 Forest esthetics, 197, 198, 215 Forest management, 142, 197, 205, 207, 208, 212, 215–220 Forestry cooperatives, 208 Forest volunteers, 213 Fossil fuel, 4, 6, 38, 42, 51, 54, 57, 113, 133, 135, 136, 138, 139, 142–146, 148, 198, 211 Fundamental theorem of welfare economics, 4 Future design, 1, 2, 10, 17, 37, 38, 44–46, 62, 65, 66, 74, 76, 79, 83, 85, 86, 89, 90, 100, 102, 103, 105–107, 112, 114– 118, 121, 130, 133, 145–149, 151, 166, 187, 194–197, 209, 214–218 Future generations, 1, 2, 5–8, 10–12, 15, 17, 18, 20, 22, 26, 27, 30, 33, 37, 38, 40, 42–48, 56, 65, 69–77, 79, 86, 90, 102, 103, 105–109, 113–118, 123, 133, 141, 146–149, 169, 170, 175, 177, 181–185, 187, 192–196, 205, 209, 214–216, 220 Future planning, 27, 86 Future society, 10, 44, 45, 51, 54, 57, 58, 62, 79, 83, 116 Future uncertainty, 5, 52 Future vision, 44, 53–60, 62–65, 85

G General public, 79, 85, 86, 147 General will, 21, 185 Global warming, 38, 42, 57, 129, 142–149, 174, 198, 201, 216 Governance structure, 81 Government, 2, 5, 37, 39, 41, 43, 45, 56, 59, 60, 64, 65, 69–74, 76, 77, 79–84, 86, 92, 94–96, 101, 103, 107, 110–112, 117, 125, 135, 141, 169, 173–177,

Index 187–191, 193, 194, 203, 208, 212, 213, 215, 216, 220 Government intervention, 81 Government lending, 80 Government policies, 80, 187, 213 Green Book, 10, 72 Green Employment Program, 212 Ground water, 105–118 Ground water management, 105, 107, 108, 110–112 H Health care, 80, 81, 84, 188 Herman Daly, 113 High economic growth, 89, 121–123, 129, 132, 133, 146, 176, 209 High-performance computing, 82 History, 2, 12, 51, 61, 69, 70, 76, 81, 129– 131, 145–147, 149 Horizon 2020, 81, 83, 85 Horticulture, 80 Human, 2, 3, 6–11, 22–24, 27, 37, 40, 42–46, 50, 57, 61, 69, 73, 80, 84, 105, 106, 123, 129, 131, 133–135, 137, 139– 143, 145–149, 176–178, 182, 184, 197, 198, 200–202, 218 Human nature, 2, 148, 149, 177 Human resources, 61, 73 Hydrosphere, 130 I Idea, 1–3, 10, 12, 15, 17, 19, 24, 43, 52, 55, 57, 63, 73, 80, 83, 125, 146, 147, 149, 181, 184, 185, 195, 197, 213, 220 Imaginary future generation, 10–12, 14, 15, 65, 86, 115, 116, 177–179, 181, 184– 186 Implement, 7, 54, 64, 69, 70, 80, 86, 109, 111, 114, 116, 124, 140, 141, 147, 148, 197, 215 Inadequate awareness of pollutant emissions, 133 Incentives, 11, 81, 107, 110, 113, 195, 215 Indirect reciprocity, 18–20, 24–26, 30–32 Industrialization, 33, 108, 112, 129, 131, 132 Industrial Revolution, 37, 89, 129 Industrial technologies, 81 Inflation, 173 Information and communication technologies, 81, 83 Information disclosure group, 96–99 Information technology, 37, 82, 83, 86

225 Innovation, 37, 43, 80–83, 112, 171, 186 Intellectual property, 80 Intelligent mobility, 82 Interests of future generations, 71, 76, 107, 114, 115, 117, 221 Intergenerational economics, 18 Intergenerational equity, 56, 192 Intergenerational problems, 39 Intergovernmental Panel on Climate Change, 42, 50, 141 Intertemporal, 165 Investment, 4, 5, 12, 38, 79–81, 83–86, 103, 188, 193 Iroquois, 1, 2, 7, 8, 45, 69, 76 Irreversibility, 5 Irreversible, 4, 115 Itai-itai disease, 132 J Japan

Aerospace Exploration Agency (JAXA), 84 Japanese finance, 169–171 Japan Patent Office, 84 Japan’s environmental history, 147 K Knowledge, 38, 44, 46, 47, 52, 55, 71, 73, 76, 80, 81, 83–85, 90, 112, 114, 116, 117, 126–128, 143, 144, 147, 149, 197 Kyoto Protocol, 42, 215 L Lack of scientific evidence, 133 Lake Biwa, 137 Landscape, 197, 198, 215, 217, 220 Land subsidence, 106, 108–113, 115–118 Long-term goals, 83, 84, 86 M Manufacturing, 3, 81–83, 112, 114, 137 Marie Sklodowska-Curie actions, 82 Markets, 2–8, 10, 11, 15, 30, 37–39, 43, 45, 48, 54, 80, 84, 96, 113, 174, 177, 184, 203–205, 208, 216 Matrix structure, 71, 72 Medical, 37, 80, 85, 132, 178, 179 Minamata disease, 132, 133 Ministry of Agriculture, Forestry and Fisheries (MAFF), 70, 84, 216, 217 Ministry of Economics, Trade and Industry (METI), 70, 71, 84

226 Ministry of Education, Culture, Sports, Science and Technology (MEXT), 57, 70, 73, 84, 209 Ministry of Health, Labor and Welfare (MHLW), 84, 92 Ministry of Internal Affairs and Communications, 70, 84, 90, 195 Ministry of the Future, 1, 10, 11, 69–77 Moral hazard for buyers, 208 Multi-functionality, 197 Multi-functionality of forests, 198

N Nanotechnology, 81, 82 Natural purification, 129 Negotiation, 12, 65, 90, 102, 114–116 Neuroscience, 82 Niigata Minamata disease, 132 Nitrogen, 130, 135–140, 144 Nitrogen and phosphorus removal process, 136–138, 140 Nitrogen dioxide, 135 Nitrogen oxides, 6, 136, 138, 139, 142, 144 Non-disclosure group, 96–99 Non-renewable resources, 113, 198 Nonrival good, 80 Normative scenario, 85

O Office of Management and Budget, 82 Office of science and technology policy, 82 Optimism, 2, 8–10, 15, 45, 148, 149, 177, 179, 183 Optimism bias, 2, 8–10, 15, 148, 149, 177, 179, 183 Optimism bias dilemma, 2, 8, 9 Organic pollutants, 136 Ozone layer, 130, 142–144 Ozone layer depletion, 142–144

P Participation, 12, 41, 55, 76, 82, 86, 114, 115, 118, 121–128, 184, 195, 215 Participatory approach, 55 Patents, 80 Paths, 51–55, 57, 86, 171 Pension, 81, 173, 178, 179, 187, 188, 191, 195 Peru, 85 Phosphorus, 136–138, 140 Photochemical oxidants, 135

Index Photosynthesis, 198, 201, 209 Physical capital, 80 Political system, 81 Precautionary principle, 42, 43, 141 Primary balance, 172, 175 Processing, 9, 81, 204, 205, 207, 208, 210, 213, 219 Prosocial, 151–156, 158, 160, 161, 164–166 Pruning, 205, 206, 208, 216 Public, 5, 9, 10, 15, 23, 29, 39, 41, 43, 45, 48, 56, 66, 70, 72, 74, 77, 80–83, 85, 86, 90, 94–97, 103, 121–123, 125, 127–129, 134, 143, 175–177, 182– 185, 187, 188, 190–195, 203, 212, 213, 215, 216 Public goods, 152, 165 Public judgment, 182, 185 Public participation, 77, 86, 121–123

Q Quality of life, 82, 84, 116

R Rapid aging, 90 R&D funding, 80 R&D priorities, 82 Relativity, 3, 4, 148, 149 Renewable resources, 105, 109, 113, 198, 200 Research, 1, 15, 20, 37, 38, 44, 46, 50, 51, 56–58, 60–63, 65, 66, 70, 74, 79–85, 90, 92, 95, 97, 115, 183, 187, 188, 198, 209, 212–214, 220 Research and Development (R&D), 80, 82 Research team, 57, 58, 60, 62, 74 Resource depletion, 49, 61, 106, 117 RIKEN, 84

S Sapolsky, Robert, 2 Satellites, 82, 214 Scenario Analysis, 116 Scenario design, 51, 53, 57, 60, 116, 117 Scenario planning, 52 Scenario thinking, 52 Science and technology, 79, 81–84, 219 Science and technology priorities, 82 Science, Technology, and Innovation (STI), 79–86 Scientific, 37, 38, 57, 80–82, 85, 114, 116, 133, 149, 211

Index Scientific infrastructure, 82 Scientists, 20, 41, 53, 66, 79, 81, 84, 114, 116 Security, 50, 61, 81, 82, 90, 92, 95, 97, 171, 175, 176, 178, 179, 187–195 Seto Inland Sea, 137 Sharot, Tali, 9 Shortsighted decision making, 115 Short-sightedness, 3, 148, 149 Shrinking population, 90 Silviculture, 203 Small and medium businesses, 81 Smart, green and integrated transportation, 81 Smartphones, 84 Smith, Adam, 4 Smoke city, 131 Social dilemmas, 1, 125, 126, 128 Social infrastructure, 82, 96, 102, 193, 216 Sociality, 3, 4, 14, 24 Social value orientation, 152, 153, 155, 156, 158, 160, 165 Society, 2, 9–11, 15, 19, 22, 23, 37–48, 51– 66, 69–74, 76, 79–84, 89–91, 96, 105, 108, 118, 122, 132, 134–138, 148, 177, 182, 184, 185, 192, 200, 218, 219 Space, 53, 81, 82, 85, 86, 89, 145, 187 Stakeholders, 39, 40, 55, 63, 79, 81–86, 114, 115, 118 STEM education, 82 ST investments, 79, 81 STI policies, 79–83, 85, 86 Structural adjustment, 82 Subsidies, 110, 190, 207, 208, 213, 215, 218 Succession crisis, 208 Suita City, 86 Sulfur dioxide, 6, 135, 138 Sulfur oxide, 131, 133, 135, 136, 140, 142, 144 Suspended particulate matter, 135 Sustainability Dilemma (SD), 151, 152, 161 Sustainability science, 46, 49 Sustainable agriculture, 81 Sustainable development, 8, 41–43, 51, 55, 113 Sustainable future, 49, 50, 56, 57, 61 Sustainable growth, 84 Sustainable use, 107, 109, 110, 112–114, 118, 212 Sustainable yield, 113 System, 10, 11, 14, 15, 19, 23, 25, 37–45, 47– 51, 55, 58, 61, 64, 65, 69, 71–74, 76, 77, 81, 82, 84, 85, 95, 98, 103, 107,

227 108, 123, 143, 196, 216

110, 125, 148, 198,

111, 127, 177, 207,

113, 128, 185, 208,

116, 117, 122, 134–136, 141– 187, 188, 192, 210, 213, 215,

T Taxation, 80, 173 Tax policy to strengthen road maintenance & management, 96 Timber cascade effect, 211 Time lag, 4, 5 Transitional society, 165 Transition path, 55, 57–60, 62, 63, 65 Trust, 152, 165 Tsunami, 84, 85 Two-way communication, 122–124, 126– 128

U Uncertainties, 38, 49, 52, 116, 144, 148, 183 United Nations Framework Convention on Climate Change, 42, 141 United States, 2, 41, 42, 79, 171 Urban and lifestyle-related environmental issues, 136, 140, 146 Urban design, 85, 89, 90, 101 Urbanization, 106–108, 131, 201

V Value creation, 82 Vision, 44, 46, 47, 54–56, 62, 63, 116, 118, 123, 127, 128, 215, 217, 220

W Water resource, 105–108, 112–118, 130, 217 Water table drawdown, 106 Wellbeing, 7, 81 Willingness To Pay (WTP), 96–99, 102 Wood biomass fuel, 211 Wooden pellets, 211 Wood mileage CO2 , 213 Wood plastic composite, 213 Workshop, 53, 55, 57–63, 85, 125–127 World War II, 129, 131, 132, 173

Y Yokkaichi asthma, 132, 133, 135