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Table 29. Main indicators: air pollution

Table 29. Main indicators: air pollution

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OECD Economic Surveys: Japan



174



Policy

Much of the poor performance on particulate pollution has been linked to

a reluctance to reduce the sulphur content of diesel sufficiently to make possible

the use of particulate filters. As recently as 1997, the limit on the sulphur content

of diesel fuel was 500 ppm and it was possible to sell diesel fuel mixed with heavy

fuel oil – a particularly polluting fuel. The recent emphasis of government policy

has been to obtain further reductions in emissions from vehicular sources. In part,

this may have stemmed from the growing success of citizen groups using classaction suits to win significant compensation in the courts from central and local

governments for failing to ensure adequate protection to public health from traffic

pollution, notably from particles. The limit on sulphur content is now being reduced

and will drop to 50 ppm in 2005, with the Central Environmental Council recommending that there should be a further decline to 10 ppm by 2007. If implemented,

by that date, diesel fuel would be cleaner than in the United States and Europe.

The government also speeded up the introduction of new emissions

standards. For gasoline-fuelled vehicles, these will be the same as prospective

US limits but stricter than in Europe. However, for heavy-duty diesel vehicles, the

new standards for particulates are less severe than those that will be introduced in

the United States in 2007. Further progress in Japan will require the introduction of

ultra-clean diesel fuel. Before 2001, emission standards for existing vehicles

concerned only NOX, and so the government introduced legislation, in 2001, to

limit the particulate emissions of existing vehicles in major urban areas. As from

October 2003, vehicles that exceed the legislated limit will not be allowed to

register in major urban areas. In addition, oil companies started to supply lowsulphur fuel nation-wide, on a voluntary basis, in April 2003. In a further move,

from October 2003, the Tokyo Metropolitan government has banned diesel

vehicles that do not conform to local emission limits from driving in the greater

Tokyo area. This regulatory approach in major urban areas was coupled with a

nation-wide change in vehicle taxation. As from 2001, the vehicle tax for older

vehicles (11 years old for diesels and 13 years old for gasoline vehicles) was raised

by 10 per cent. The tax for vehicles that were certified to have both low emissions

and low fuel consumption was reduced by 50 per cent. In addition, vehicles

fuelled by alternative power sources (electricity, natural gas, methanol and hybrid

vehicles) were eligible for a 50 per cent reduction in the vehicle tax.

There is less of a problem concerning fixed point sources of air pollutants.

Controls have been rigorous, especially for larger plants. The Air Pollution Control

Act mandates the use of best available technology. In the electricity sector, this

has resulted in nearly all coal-fired power stations being equipped with recent

technology, in contrast to Europe and the United States where a large fraction of

plants are not equipped with advanced pollution control (Smith, 2001). The

systematic use of best technology and retrofitting of existing plants is estimated to



© OECD 2004



Further structural reforms to enhance growth



175



have raised the cost of electricity generated from coal by 19 per cent (Wu, 2001).

While no estimates of the benefits from avoiding air pollution from coal power

plants are available, European estimates suggest that such costs are likely to be

less than the benefits. Large manufacturing plants are also subject to these limits

and regular inspections are made to ensure that the standards are being met.

Some limited attempts have been made to use economic instruments by favouring

a number of pollution control technologies.

Conclusions

For stationary sources of pollution, further reductions in emissions should

be achieved by using cost-efficient economic instruments. Further use of economic

instruments to reduce pollution from transport was envisaged in a government

report in 1999 and a number of steps have been taken in this direction, notably

the linking of the vehicle tax to pollution characteristics. A further move in the

direction of using economic instruments would give marked incentives to lower

pollution, and might be particularly useful in reducing emissions of fixed point

sources at a lower cost. The use of road pricing is being considered by the Central

Environmental Council and could have environmental benefits as reduced

congestion could result in less pollution. With vehicle monitoring possibilities

becoming more sophisticated, it should be possible in the future to charge for all

roads and not just toll roads, so avoiding traffic diversion. In addition, road pricing

could take into account the pollution characteristics of vehicles using data from

vehicle inspections. Road pricing should thus be explored actively. More immediate improvements are likely to stem from increased regulatory action, where

further reductions in truck emissions limits might be considered and the move to

ultra clean diesel fuel should be implemented quickly.

Helping developing countries to achieve sustainable growth

Main issues

A reduction in poverty in the non-OECD area will contribute to the

achievement of globally sustainable development. Although developing countries

themselves have the major responsibility to improve their living standards, trade

and aid policies of OECD countries can help to reduce poverty in developing

countries. For Japan, the challenge is to orient its trade and assistance polices

towards enabling the rural areas in developing countries to benefit from integration

into the world economy, in the same way that its policies have benefited large

parts of the urban population in Asian developing countries.

Performance

The Japanese economy has become markedly more open to trade with

developing countries over the past decade. Imports from these countries were



© OECD 2004



OECD Economic Surveys: Japan



176



Table 30.



Imports of non-energy goods from developing countries

All developing countries



US$ millions



Australia

Canada

Czech Republic

Hungary

Iceland



Leastdeveloped

countries



Per cent

of GDP



Other

low-income

countries



Lower-middle Upper-middle

income

income

countries

countries



Per cent of GDP



11 935

17 174

2 569

3 329

204



3.24

2.47

4.49

6.42

2.69



0.03

0.04

0.06

0.07

0.03



1.92

1.45

2.39

3.15

1.14



0.69

0.52

0.77

1.34

0.66



0.60

0.47

1.28

1.87

0.87



106 624

25 848

6 526

2 066

2 803



2.55

6.12

1.06

4.09

1.67



0.02

0.03

0.00

0.03

0.07



1.64

3.62

0.16

2.41

0.82



0.52

1.14

0.22

0.93

0.36



0.38

1.33

0.68

0.72

0.42



Poland

Slovak Republic

Switzerland

Turkey

United States



4 179

667

4 266

4 469

234 573



2.37

3.26

1.74

3.07

2.33



0.09

0.02

0.04

0.04

0.05



1.25

1.63

0.82

1.38

1.28



0.40

0.58

0.47

1.08

0.53



0.63

1.03

0.42

0.57

0.47



European Union



226 504



2.86



0.14



1.28



0.72



0.71



OECD



653 736



2.59



0.07



1.37



0.60



0.56



Japan

Korea

Mexico

New Zealand

Norway



Source:



OECD International Trade Database.



equivalent to more than 2.5 per cent of GDP in 2001, with the market penetration

doubling in the previous decade (Table 30). Such an increase is the reflection of

Japan’s growing integration with countries in South-east Asia and China. The

growth of manufacturing imports from these countries has been particularly rapid,

noticeably for textiles and clothing, where imports from low-income developing

countries now represent three-quarters of total imports in this category (Table 31).

Food imports from developing countries are also significant, especially from the

least developed countries, and are equivalent to one-fifth of the value added in

the agricultural and fishing sectors in Japan, with fish representing the largest commodity grouping. Overall, imports from developing countries, relative to GDP, are

slightly above those in the United States but below those in the European Union.

In contrast to its mid-ranking position in trade, Japan was the largest official development assistance (ODA) donor in the 1990s in terms of the absolute

level of aid. However, net disbursement started to decline in 2001, and government budgets for 2002 and 2003 brought further cuts, bringing aid spending to its

lowest level for a decade. By 2002, development assistance represented 0.23 per

cent of Gross National Income compared to 0.22 per cent for all members of the

Development Assistance Committee of the OECD. Almost 17 per cent of bilateral



© OECD 2004



Further structural reforms to enhance growth



177



Table 31. Japanese non-energy imports from developing countries

Per cent of total imports in 2001

Low-income

countries

Least

developed



Middle-income

countries



Other



Lower



Upper



All

Rest of

developing

world

countries



By commodity

Food and beverages

Raw materials1

Textiles and clothing

Other manufacturing

Total



0.7

0.4

0.5

0.1

0.2



19.2

16.6

76.9

19.2

24.6



10.0

9.2

2.5

8.0

7.9



4.7

14.7

1.0

5.4

5.7



34.6

40.9

80.9

32.7

38.3



By area

Food and beverages

Raw materials1

Textiles and clothing

Other manufacturing

Total



47.7

14.4

20.0

18.0

100.0



12.1

5.6

30.3

52.0

100.0



19.7

9.7

3.0

67.6

100.0



13.0

21.5

1.8

63.8

100.0



23.1

12.8

13.8

50.3

100.0



65.4

59.1

19.1

67.3

61.7



World



Annual

nominal

growth,

1991-2001



100

100

100

100

100



–4.3

–1.1

13.3

14.2

9.6



1. Except energy products.

Source: OECD International Trade Database.



aid was tied in 2002.135 Japan’s bilateral ODA spending has been concentrated on

Asian developing countries (55 per cent), especially members of the ASEAN group

and China (32 per cent). Such an emphasis has led to a relatively low proportion of

aid being directed to the Least Developed Countries (16 per cent) relative to the

flow from members of DAC (26 per cent). The structure of outlays is oriented

towards loan finance of major infrastructure projects (including a number of smallscale rural projects), with more than half of all loans being in this category

(Table 32), against less than 10 per cent in other countries.136 The annual gross

inflow of Japanese ODA loans into six Asian countries (China, Indonesia, Malaysia,

Philippines, Thailand and Vietnam) amounted to around 0.6 per cent of the capital

stock of these countries in the 1990s (Kawasaki, 2002).

Policy

In the manufacturing sector, trade policy has maintained an open stance

(Table 33). The principal exception to this general pattern is concentrated in the

textile and footwear sector where tariffs and tariff equivalents of quotas remain

high and well above those in Europe and the United States. Moreover, tariff peaks

for these products are much more pronounced than in other major countries. For

other manufactured goods, the stance of policy is reversed, with the average tariff

being lower than for the European Union and the United States and the impact of

tariff peaks being less than in other major trading countries. Anti-dumping measures

are used less than in other major trading countries and the duties applied are



© OECD 2004



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