In order to reduce greenhouse gas (GHG) emissions interest in green energy such as biomass, wind mills and solar electric generation is growing. In a regional economic context, numerous local municipalities in Japan are attempting to reduce CO₂ emissions by making use of regional environmental resources such as wood (forest) , wind and sunlight (solar) . Some municipalities export as well as intraregional usage as an alternative of oil resources. These municipalities usually estimate how much CO₂ can be reduced by their environmental activities. However, the economic impacts of such efforts are ambiguous.
Representative policies for correcting regional income disparities so far include income transfers, plant location as related to outside areas and public investment. These policies, however, depend on national policies. In this study, we focused on regional environmental resources, particularly wood biomass, and examined economic effects of the utilization of such regional environmental resources by applying an extended regional I-O analysis.
To do so, we first constructed two types of I-O tables at the prefecture level and city/town level by making use of survey methods to obtain import/export data. Next, we reconstructed regional I-O tables by focusing on wood biomass and CO₂ credit service sectors to evaluate the economic effects of wood biomass and exporting credit. We defined economic effects of introducing renewable energy as three kinds: intraregional circulation effects as energy alternatives, export effects and supply cost effects. Transduction to biomass energy from oil induces changes in the structure of the input-output linkage. After conducting several simulations including changes in I-O structure, we found that the use of wood biomass contributes to an increase in regional per capita income if trading carbon offset credit is institutionalized. This effect is more significant at the city/town level than prefecture level.

JEL Classification: C67, Q57, R11, R15

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Recently, the Special Municipality Mergers Law deadline has passed and incentives for mergers have become considerably reduced from the viewpoint of fiscal effects. Additionally, merger plans in Hokkaido Prefecture have not been mostly completed to avoid increases in the inhabitant burden risk connected with area increases of municipalities. A vision for a sustainable settlement zone that can be supported by life functions and amenity improvements for small-scale autonomies has started to attract attention. These small-scale autonomies must make arrangements with large-scale "core cities". However, blank areas exist in the core cities of Hokkaido Prefecture, which is characterized by distances between municipalities. In this study, we newly proposed an analysis model for optimized combinations of municipality mergers to create new core cities in the open areas. The analysis model consists of two analytic views, "differences in public finance efficiency" and "differences in public service efficiency".
A dataset of municipal employment costs and budget expenditures after municipality mergers were computed from a forecasting model with explanatory variables set on the population after a municipality merger. Additionally, a debasement of public services for inhabitants takes into account the aggravation of the access environment with an increase in municipality area. Additionally, this study used the index of Access-Total Service Score (A-TSS) that is an integration of the index of public services and access burden for inhabitants.
The quantitative effects of municipality mergers were analyzed based on the Data Envelopment Analysis (DEA) model with the above-mentioned datasets from the viewpoints of 'public finance' and 'public service'. The effect values were derived from variations in efficiency scores. The optimized combinations of municipality mergers were evaluated by the Financial and Administrative Improvement Factor (FAI) , which is computed based on deviation scores using public finance effects and public service effects in these merger plans.
Based on the analyses, we propose a policy for sustainable settlement zones in Hokkaido Prefecture.

JEL Classification: R49, R51, R53, R59

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In this study, we developed a computable general equilibrium model to analyze environmental tax systems at the regional level. In addition, we estimated the impacts of a carbon tax in Aichi Prefecture, Japan. By simultaneously analyzing the tax source and how to use tax revenue, we considered the appropriate environmental tax system for the region. We also made the necessary settings for an empirical study at the regional level. For example, building the model as a two-region interregional model (Aichi and the rest of Japan) and explicitly stating a difference in financial conditions of the local government and the central government in each region. Moreover, we considered changes in environmental loads other than carbon-dioxide emissions to see if there are any trade-offs.
The numerical results clarified that: (i) in terms of economic benefits based on household consumption, the best carbon tax system is to tax all industries in accordance with CO₂ emissions, then return the tax revenue to the households; (ii) in terms of a contribution of CO₂ reduction for the whole country, the best tax system is to impose an environmental tax on the petroleum and coal products sector, then use the tax revenue for the CO₂ reduction projects of the local government; and, (iii) in terms of a secure local revenue and overall reduction in environmental loads, the best tax system is to tax all industries in accordance with CO₂ emissions, then include the carbon tax in the general budgets.

JEL Classification: H23, R13, Q58

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Japanese economic growth has slowed since the1990s so regional inequality has increased and local economies have suffered recessions. Measuring Total Factor Productivity (TFP) is crucial for considering growth of the regional economies and industries. This paper examines the impacts of industrial agglomeration on regional economic growth of Japanese Prefectures, and compares their regional characteristics. We measured TFP for Japanese manufacturing, wholesale and retail trade, and service industries, such as information service industries, golf courses, movie theaters, and fitness clubs, by using the current survey of production and commerce, and the survey of selected services.
The results of our analysis are summarized as follows. First, the effects on TFP growth rate decomposition in manufacturing industries was large and reallocation was very small, so it is unclear whether industrial agglomeration affects regional economic growth. Second, within, between and covariance effects were positive and relatively higher for TFP growth rate decomposition in wholesale industries. In addition, wholesale productivity was improved in the urban economy. However, within effects were actually negative for the period 1999 to 2007 in the retail trade industries and retail trade productivity declined in the regional economy. Third, within effects were large and between effects were negative for TFP growth rate decomposition in the information service industries. With regard to golf courses, movie theaters and fitness clubs, regional disparities in productivity were reduced.

JEL Classification: D24, O47, R11

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Regional development is different within a country. One region starts the developmental process with advantages such as location, amount of natural resources, pool of human capital and R&D. However, another region remains undeveloped with disadvantages in the initial conditions of economic development. Therefore, economic development of regions does not geographically equal.
Even though regional development is geographically uneven, economic transactions occur between regions. With the development of transportation, transactions of goods and services enlarge the geographical sphere. Regions with different levels of development mutually influence other regions through economic transactions. Mutual interactions among regions are generally called 'Spatial Interaction'.
In this study, I investigated the spatial interactions among provinces in China based on the recognition that the regional economy in China is not geographically uniform, The Interregional Input-Output Model of China developed by me was used for the analysis.
Through the input-output model analysis, I found the spillover effect is larger than the polarization effect, The economic benefit prevails from the core region to the peripheral region even though production is concentrated in provinces of the coastal region. In other words, the development of coastal or core provinces effects the promotion of development in the interior or peripheral provinces. Therefore, the development gap between regions will become small in the long run.

JEL Classification: O53, R12, R15

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The development and utilization of solar power has become one of the main strategies to address the energy deficit in the 21st century. Japan has set the promotion of solar power as the nation's new growth target for the next 10 years. This study investigated the inter-correlations between a city's penetration level of residential solar power systems (RSPS) and wide-range indexes that, in this article, are divided into three categories:
(1) natural factors, (2) social factors and (3) economic factors. From over 200 Japanese cities, the study randomly selected 35 sample cities with population sizes of 50,000 to 150,000. First, through correlation testing, 22 factors closely related to the city's penetration level of RSPS were extracted. Second, through a principal component analysis, the 22 factors were grouped into 6 components to explain the penetration level of RSPS. The sample cities were further divided into groups by cluster analysis based on the six components for further assessment of the group with a high penetration level. The discussion and conclusions are expected to help companies and governments enhance RSPS development.

JEL Classification: C8, Q4, R5

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To reflect on recent trends in model building based on microeconomic theory, a new modeling method in the input-output model in which the behavior of all economic agents is described according to optimization is presented.　This approach is incorporated into the construction of an interregional economic model in the Japanese economy.　Thus, intermediate demand, consumption expenditure, labor demand and price determination are endogenized in an interregional system where: a) consumption expenditure is explained by the Almost Ideal Demand System in which expenditure minimization is a key factor; b) intermediate and labor demands are derived from the generalized Ozaki cost function; and, c) sector price is determined by an monopolistic market.　This interregional system is incorporated into an interregional input-output model of nine regions.　The performance of the model was estimated using eight data points collected in five-year increments from 1965 to 2000.　The final section of this paper demonstrates the model's performance.

JEL Classification: C67, D57, R15

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Under market-oriented factor mobility, capital and labor relocate to regions offering higher returns. In consequence, the more factor inputs go to subnational regions with higher productivities, the greater the increase in national output. Interregional factor mobility reflects the output growth of a region and, in turn, a nation. However, in Indonesia, the extent to which interregional factor mobility has been efficiently distributed has been only infrequently examined because of constraints on provincial capital data.
Using the provincial capital estimates from Kataoka [10], the present study examined efficiency in interregional resource allocation by observing actual and optimal levels of factor inputs and outputs for 1986-2007 in Indonesia. To achieve this objective, we employed two empirical results: panel data analysis in the province-level production functions and computation of welfare-maximizing interprovincial input allocation. Given these empirical results, several instances of uneven factor-input distribution such as capital overconcentration in the Java−Bali region, different dispositions in capital distribution among resource-rich provinces, labor surplus in the remote agriculture-dominated off-Java provinces, and labor surplus in Jakarta's commuting province of West Java were found. More interestingly, a structural shift from a pro-efficiency interprovincial allocation before the year 2002 to a pro-equity allocation afterwards was observed.

JEL Classification: O18, O47, R11, R12

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Uncertainty in societies is increasing. Therefore, good quality information by which people can understand trends in the property market is necessary. The price of real estate property in a region is chiefly determined by the distance from the closest station. However, the influences between estates cannot be disregarded when real estate properties are concentrated. Patterns that influence properties are likely reflected in the peculiar geographical and historical characteristics of the existing region. The spatial autocorrelation model is a statistic method that can test for the existence of mutual influences between plural objects. However, there is little research on the features of interrelated influences of real estate compared with the features of a region. Therefore, we analyzed newly built apartments in a specific region in a metropolitan area to determine the patterns of social interactions based on the sale price, and evaluate the characteristics of the region.
The following three points were indistinct in the previous researches.
(1) the existence of partial space which has autocorrelations,
(2) the existence of inherent characteristics possessed by the partial space,
(3) the possibility of distinguishing between the interrelated influence of the construction apartments the same period and the influence from the already constructed apartment.
In this study, we focused on Kawaguchi Station with 143 apartments and Kawasaki Station with 130 apartments (each total of 16 years) . The results showed that apartments near the Kawaguchi Station are more competitive and influenced by apartments built at the same time, while the circle region around Kawasaki Station has different features along with directions from the center. Hereafter, we will semi-automate the calculation routine to utilize a computer to analyze the data, reflect on interviews with the concerned persons, and try to establish a marketing area with high consent.

JEL Classification: R12, R14, C31, C18, D85

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We investigated the effects of fiscal decentralization on economic growth in three prefectures in the Tokai region of Japan. A six-period overlapping generations model with endogenous growth fueled by human capital accumulations was employed and differences in economic growth in the prefectures were examined. Higher GDP levels may be attributed to higher levels of human resources in these prefectures where educational expenditures are higher than the average. Actual prefectural data were applied into the model to describe the economy as realistically as possible. Models that enable the capture of regional differences are underdeveloped. Although our model depends on various assumptions, it is nevertheless useful for examining divergence for local policy implications among prefectures. Our main finding was that regardless of the amount of public education expenditure, Mie may achieve an 18.3% growth rate during the next ten years (cf. 15.8% for Aichi; 7.5% for Gifu). This is because the public debt was only 880,000 yen during the period under the decentralized system (cf. 1,457,000 yen for Aichi; 1,029,000 yen for Gifu). This suggests that decentralized governments require not only a positive educational policy reform but a balanced budget amendment for economic growth.

JEL Classification: C68, D91, E62, H62, H72

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Waste reduction is an important factor of environmental sustainability in local communities. This study investigated the impacts of social networks on participation in environmental activities such as waste reduction and recycling by employing logit models and using survey data. Despite considerable studies on the relationships between individual motives such as responsibility or interest in environmental problems and environmental activities, the relationships between face-to-face interactions and social networks in a local community has not been sufficiently identified.
This analysis examined the relationships between both traditional neighborhood associations and independent associations in a community and environmental activities such as participation in refusing plastic bags, green purchasing, ecological cooking, reusing, drop-off recycling, group collection, environmental learning and general environmental activities.
The empirical evidence indicates that neighborhood association variables are associated with positive outcomes of all variables of environmental activities. The estimation results also showed that the activeness of associations through sports and hobbies effects participation in refusing plastic bags and general environmental activities, and associations through political networks effects participation in ecological cooking and environmental learning as well as associations with neighbors.
This analysis shows that social networks have significant impacts on participation in refusing plastic bags, green purchasing, ecological cooking and reusing for reducing wastes. It is difficult to politically encourage people to participate, but these results suggest insights into the social networks are important to promote participation. In addition, each environmental activity is related to different types of social networks and the results indicate integration of traditional community-based and voluntary groups is effective to utilize networks for promoting participation in environmental activities.

JEL Classification: Q53, R53

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This paper discusses the structure of regional environmental consciousness (REC) for streetcar users with social capital (SC) . Nowadays, streetcars are known as a useful tool for climate change countermeasures in urban areas. On the other hand, SC improves citizen consciousness and changes travel behavior. This study focused on SC that reveals a unique public awareness for each region. The definition of SC used in this paper is from Putnam (1993) . "SC refers to features of social organization, such as trust, norms, and networks that can improve the efficiency of society by facilitating coordinated actions." Moreover, high car dependency depends on citizen behavior types. Therefore, the purpose of this study was to clarify the influence structure of REC for streetcar choice behavior as it relates to streetcar services and citizen behavior types.
Two cities with different streetcar service levels were chosen as case studies. Hakodate City, Japan has a conventional streetcar service. Toyama City, Japan has a new streetcar service. A questionnaire survey was administered to streetcar users, and 558 valid samples were obtained. Structural equation modeling and the logit model were used to analyze the data. The results show the following REC influence structure: SC influences environmental and urban development consciousness, and the determinants of streetcar use intentions differ according to the streetcar service. Moreover, non car owners, pro-environmental consciousness and SC influence streetcar use intentions. Finally, the paper discusses several recommendations for the promotion of streetcar choice behavior by using REC.

JEL Classification: R48, R58

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Local railway management is facing severe problems in Japan. Especially in rural areas, the number of rail users has decreased since the 1970s not only because of depopulation but also because of rapid motorization. Therefore, many local railway companies have decided to abolish lines that are unprofitable under such difficult conditions. However, although public investment by a municipality is considered indispensable for supporting local railways, research is lacking on the non-market value of local railways as an authority of public investment. It is therefore necessary to clarify certain social situations in relation to the conditions caused with-without and before-after political actions based on a basic policy evaluation. However, this analysis is difficult because local railways as common social capital are highly probable to possess both market and non-market values.
In this study, we examined the Hitachi Railway System, which was abolished six years ago, and considered the influence of this abolition on factors such as residents' means of transportation, lifestyles and outlooks. To understand these issues, we conducted a questionnaire survey by mail for a part of residents living near the railroads in rural areas in November 2010. The main items in the questionnaire were concerned with 1) individual attributes of respondents, 2) frequency of travel before the abolition of the railway, 3) possible and actual alternate means of transportation, 4) possible and actual increase or decrease in the frequency of outings, 5) possible and actual increase or decrease in compensation for travel, 6) possible and actual perception of the impact of abolition of the railway on the region, and 7) views for and against abolishing the railway before and after its occurrence. The collection rate was 39 percent.
The results of this study were as follows.　First, residents with a driver's license and who used the Hitachi Railway had relatively accurate views about the social situations that resulted from abolishing the railway.　For example, their views on the frequency of people's outings and compensation for travel were more accurate than persons who did not possess a driver's license or who did not use the railway.　Second, there were gaps in transportation convenience with the introduction of substitute or regular buses, and resident views of punctuality.　Approximately 10 percent of the respondents that assumed they would use buses as an alternate means of transportation now use a family car or taxi.　Third, the abolition of the railway had impacts on the lifestyles of residents regardless of their previous methods of transportation or use of the railway.　This suggests that local railways function as a local symbol.　On the basis of these results, a discussion that is not confused by fragmentary information or value judgments is needed to determine whether to continue or abolish a railway.

JEL Classification: R11

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Recently activities in nature-rich residential areas, including an agricultural experience in a rental garden and allotment gardens, and shopping at a fresh fruit and vegetable farmer's market are popular among urban residents in Japan. This indicates a rising demand of urban residents for a sustainable way of living in touch with nature. Thus, schemes that encourage sustainable behavior are necessary in urban and regional environmental planning. It is also important to not increase the net carbon dioxide (CO₂) emissions through sustainable behavior to establish a low carbon society.
In this paper, a questionnaire survey of LOHAS (Lifestyles of Health and Sustainability) and general consumers in Osaka Prefecture was conducted to identify sustainable lifestyles related to food production and consumption. We also evaluated the effect of a sustainable lifestyle on CO₂ emissions based on the results of the survey. From the analysis, we reached the following conclusions: 1) LOHAS consumers have a tendency to participate in local food production activities such as allotment gardens and home vegetable gardens. 2) In addition, LOHAS consumers tend to make their purchasing decisions based on their values regarding health and environmental consciousness. 3) The total CO₂ emissions related to daily life activities of a LOHAS consumer is 15% lower than that of a regular consumer. 4) In contrast, LOHAS consumers usually take roundtrips to local farm shops so the CO₂ emissions related to transportation is higher than for regular consumers.

JEL Classification: Q51, Q57, R11

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The coastal areas in Iwate, Miyagi and Fukushima Prefectures prospered as fishery regions from many years with the Sanriku-Oki (Northwest Pacific Ocean) , one of the three largest off-shore fishing grounds in the world and with abundant aquatic animals and plants. Fishing ports and communities prospered with the fisheries.
However, ‘ The 2011 Offshore Pacific Coast Tohoku Earthquake' and ‘ Tsunami' that occurred on March 11, 2011, annihilated the fishing ports, communities, fishing boats, fishing gear and aquacultures facilities destroying the fishing industry of the region along with people's jobs and places to live.
The coastal areas of the region not only depended primarily on the fishing industry, but their lifestyles have evolved by concurrently working and living in the same place. Therefore, the adverse effects of ‘ The 2011 Offshore Pacific Coast Tohoku Earthquake' exceeded any assumptions at an unprecedented level.
Accordingly, for reconstruction of the stricken fishery areas, we reviewed challenges of Earthquakes and Tsunamis in the past and considered the necessary viewpoints for resumption and restoration of the fishery communities in the future, as well as evaluated the devastated conditions of the region.
Based on these considerations, we classified the affected areas into zones to enable selections according to actual conditions in the region and to formulate a reconstruction project. After clarifying the conditions, we developed the fundamental concepts for planning reconstruction of the fishing port and fishing village facilities.
Furthermore, we showed that it is important to create a restoration plan based on the characteristics of fishery communities such as kinds of fishing, community scale and geographical features.

JEL Classification: R11, R14

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This article aims to measure the economic impacts of the San-En-Nanshin Expressway that will be constructed through a prefectural cross-border area across Aichi, Shizuoka and Nagano Prefectures in Japan.　First, we present a simplified spatial computable general equilibrium model of the San-En-Nanshin region.　Then we attempt to measure the economic impacts of the San-En-Nanshin Expressway by applying the so-called shortcut method. The economic benefit of the expressway was estimated to be 24.4 billion yen which passes the cost-benefit criterion. The interregional benefit incidence is also described in this article. Recommendations for increasing the benefits are mentioned in the concluding remarks.

JEL Classification: R11, R13, R41

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Rapid economic development in Inner Mongolia, China is increasing the consumption of livestock products as well as forcing changes in the structure of agricultural production in recent years. In particular, marketing structure and transaction patterns for fresh milk have been changing extensively since the 1990s. Establishment of milk stations provides an opportunity for dairy farmers who do not own a milking parlor to take their dairy cows to a milk station and sell their fresh milk. Recently, dairy production under contracts with corporations such as the Private-Enterprise-Linkage (PEL) are increasing primarily in sub-urban areas. We selected the Inner Mongolia Yili Industrial Group Co. Ltd (Yili) as the subject for our case study. At the same time, we examined cases of small-scale subsistence farmers who play a central role in dairy farming in Inner Mongolia and compared the latter with the former.
This study aimed (1) to identify the structural changes of milk production in Inner Mongolia by comparing data from the 1990s to the 2000s, (2) to clarify the interrelation between dairy farmers and milk product manufacturers contracting with farmers, (3) to discuss possible future issues based on food marketing structure and milk production system with farmers.
The results showed three future problems for dairy production in Inner Mongolia. First, there is a problem with ensuring a stable supply of quality feed. However, standards for the quality of raw milk set forth by milk product manufacturers improved after the melamine adulteration incident in 2008. Secondly, there is a problem with technical support for feed management. PEL type dairy production has managed to increase the number of cattle raised and milk yields by moving into a pastoral park. This was made possible through technical support from dairy enterprises. Thirdly, there are still problems obtaining sufficient financial support to make the necessary improvements. However, Yili has established a payment system to offset feed prices by proceeds from sales of raw milk.

JFL Classification: N55, O13, Q13, Q15

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The aim of this paper is to examine industrial linkage effects in depopulated areas by focusing on the relationships between food processing and agricultural industries. Employment and income for people in depopulated areas are important to activate depopulated areas. Even if the food processing industry becomes active, the agriculture industry does not always grow because many factors must be considered for agricultural management.
To quantify the industrial linkage effects, three case projects were selected in depopulated areas of the Chugoku-Shikoku Region. In the first case project, there was a lack of farmland in the mountainous area, and a low level of agriculture income (average annual earnings of 500,000 yen∼1,000,000 yen) . In the second case project, there was a shortage of farmland and agriculture corporations employed young farm workers. In the third case project, there was a shortage of farmland and a low agriculture income level (average annual earnings of 486,000 yen) .
Various kinds of data were collected and analyzed for each case project. The most important finding was that agriculture earnings and development of agricultural farmland are requisite growth factors for developing agricultural economies in depopulated areas.

JEL Classification: P40, H00

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