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Japan for Sustainability Newsletter #187
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March 30, 2018

Japan for Sustainability (JFS) is a non-profit communication platform to
disseminate environmental information from Japan to the world, with the
aim of helping both move onto a sustainable path.

See what's new on our web site: http://www.japanfs.org/en/
E-mail: info@japanfs.org

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In the March 2018 issue of the JFS Newsletter:

- Nishiawakura's Initiative for 100% Energy Self-Sufficiency, and a
Municipal ICO Scheme

- The Growing Senior Population in Japan's Metropolitan Areas:
Challenges for Japan, Hints for the World

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Nishiawakura's Initiative for 100% Energy Self-Sufficiency, and a
Municipal ICO Scheme
https://www.japanfs.org/en/news/archives/news_id036040.html

The February 2018 issue of the JFS Newsletter reported on a Japanese
village's initiative under the title "Nishiawakura's Initiative for
Self-Dependence Attracting Motivated Young People to Migrate to the
Village and Start Business." In Nishiawakura, various activities have
been launched and expanded, building upon the "Initiative with a
100-year Vision of Forests" that was organized in 2008. As a result,
people who have moved into the village from other areas now account for
nine percent of its population, and many entrepreneurs are playing a
lively part in the village. In this month's article, we introduce the
village's efforts to expand its initiative further, from natural capital
to social and economic capital, while aiming for self-sufficiency in energy.

Efforts for Full Self-Sufficiency in Energy

Nishiawakura has three hot-springs resorts. Together, they once used a
total of 213,000 liters of kerosene a year in boilers to heat the spring
water. Now, wood boilers are used and about 80 percent of the kerosene
has been replaced with firewood -- low-quality wood with little commercial
value -- from 5,500 hectares of forest in the village. A little over 10
million yen (about U.S.$88,500) used to flow out of the village each
year as kerosene costs, but it now circulates within the village. The
use of firewood, which is cheaper than kerosene, is also favorable to
the three hot-springs facilities. They can save 2 million yen (about
U.S.$17,700) in fuel costs annually.

In an effort to create splendid 100-year-old forests, the village cuts
trees to thin the forests and improves roads for forest work. Two out of
10 felled logs are sold as good wood on the market, three are sold as
plywood material, and five are low-quality wood with no commercial value.
The low-quality logs are often left where they were cut in the forests
because of high transportation costs. In some cases, they are processed
into woodchips, but the price of woodchips has been suppressed by
competition with inexpensive imported wood. Thus, moving logs from
forests to make woodchips incurs a loss.

Faced with that, Nishiawakura has been promoting the use of low-quality
wood as fuel, thinking it is best to utilize such wood within the village.
The main driver of these efforts is Kohei Izutsu who moved in the
village in 2014. He established Sonraku Energy Inc., which promotes
practical use of wood biomass by managing a firewood factory and
coordinating the introduction of wood boilers. The company also conducts
surveys and shares information via social media. In 2015, he
reopened a hot-springs resort, Awakura Onsen Motoyu, which had been
closed. Sonraku Energy's website says, "We are selling 'heat.' We
promote the use of biomass as a means to achieve our four objectives:
fuel cost reduction, stopping the outflow of money from the village,
supporting forestry and combating climate change. "

Takahiro Ueyama of the village office says, "We are trying to utilize
woodchips generated in the lumber sawing process, too. We are going to
install woodchip boilers and underground pipelines to provide hot water
to various facilities in the village, such as a nursery school under
construction, the village office which will be built with wood two years
from now, the elementary and junior high schools, senior-care facilities
and clinics. This is a centralized district heat-supply system that will
manage and control the heating and hot-water supply of individual
facilities. The construction of this system got started this year and is
scheduled to be completed in 2020. Upon completion, about 1,000 tons of
wood waste will be additionally utilized. In this way, we are going to
establish a scheme that will expand wood use in a cascading manner to
utilize trees in all of the village's forests. It will be completed soon."
The district heat-supply system is estimated to cover almost 40 percent
of the heat demand in the village.

In addition, Nishiawakura generates electricity using water power.
"Well-managed forests serve for keeping the volume of river water stable,
which makes it feasible to generate electricity using water power," he
says. The village operates two hydraulic power plants of 290 and 5
kilowatts, respectively, and plans to establish one more, of 199
kilowatts, to begin operation from around 2020.

Thanks to the Feed-in Tariff Scheme, the 290-kilowatt plant earns an
income of about 70 million yen (about U.S.$ 619,000) a year selling
electricity. Newly planned 199-kilowatt plant is expected to earn 50
million yen (about U.S.$442,000). Ueyama says, "These two plants will
earn almost the same amount as the village's tax revenue which amounts
to about 130 million yen (about U.S.$1.15 million). Hydraulic power
generation costs little after stable operation is achieved.
Twenty-four-hour operation is not possible from solar or wind power
generation but it is from water power generation. The equipment
efficiency is thereby as high as 86 or 90 percent in hydraulic power
generation."

At present, nearly 40 percent of regional power demand is supplied from
local energy sources in Nishiawakura. When the new plant starts
operation, the rate will increase to 70 percent.

Izutsu of Sonraku Energy Inc. says, "There are two types of energy
suppliers: mega power suppliers operating large-scale solar, wind or
biomass power generation, and local power suppliers featuring local
unique energy sources. The latter are increasing in number. Our project
aims for the third type: local conglomerate or local infrastructure
which supplies renewable energy with an eye to local tourism and welfare
services needed by the community. Focusing on 'local' to the bone, we
will run various businesses within the local economy."

Forest Management Also Evolving

Under the Initiative with a 100-year Vision of Forests, the wood supply
will not be sufficient for growing wood demand due to successful product
development and marketing by the Morinogakko project. Ueyama says, "The
village office negotiates with forest owners to entrust forest
management to the forestry cooperative and provide Morinogakko with wood
from their forests. The village office, however, has difficulty
providing these services promptly. Thus, in October 2017, a private
business, 'Hyakumori,' was launched under a comprehensive consignment
contract to provide forest management services for the village office.
The business will be run by young people moving in from Tokyo, former
forestry cooperative workers, people who want to work in the forest to
maximize the value of forest resources and other like-minded people. We
expect the private venture to work in place of the government, which has
limited capacity and speed, and to launch various new schemes."

Another project involves collecting forest data. The village office
manages each owner's forests by lot number, using the Geographic
Information System (GIS). In addition to that, an airplane equipped
with a laser was used last year to investigate the forest, beaming with
a density of four points per square meter of forest to detect types and
dimensions of trees. This makes it possible to ascertain, for example,
that person A owns forest lot B with X-many trees of Japanese cedar and
Y-many trees of Japanese cypress, whose dimensions are also known.
Three-dimensional topographic maps and accident records are also
available. We can thereby find the best places to build logging roads.

Based on these collected data, the village promotes sustainable
forestation. The effort to develop a 100-year-old forest also needs to
be economically sustainable. "It is expected that thinning the forests
by itself will result in no trees to thin in about 2060. Therefore, to
function as a commercial forest, where trees grow fast, we should cut
only mature trees and plant new trees."

In the case of cedar trees, they cut mature trees in 8 hectares of
forest, thin trees in 40 hectares and cut trees selectively in 3
hectares of forest. If they continue with this system, the trees will be
of an equalized age by about 2060. In Nishiawakura, such a model is
already under development. They are working according to a twenty-year
plan that determines where to clear-cut, thin or cut selectively.
Equalizing the trees' ages can make forestry economically viable, but it
is also a national issue. Ueyama says, "If our model proves successful,
it can be applied in other regions, so that is what we are trying to
achieve in Nishiawakura."

From Natural Capital to Social and Economic Capital

In Nishiawakura, abundant forest resources are used to bring out the
value in the natural capital or add value to it. "Nine years have passed
since the establishment of the Initiative with a 100-year Vision of
Forests, and we are doing well," says Ueyama. In the village, there are
now 31 local ventures, six of which are independently profitable
businesses. These ventures create local employment and generate tax
revenues.

The village thinks that this undertaking should not be limited to the
region but extended to the whole nation through cooperation with other
like-minded regions. In September 2016, it established the "Local
Venture Initiative" along with a non-profit organization called ETIC. to
develop and nurture entrepreneurial leaders who can create a new local
economy. Now 10 municipalities are working together on the initiative.

In Nishiawakura, starting from initiatives focusing on natural capital
such as utilization of forest resources, other kinds of ventures have
begun to be launched. More and more people are getting involved in
social capital services such as guest houses, Japanese sake catering
bars, gourmet game cuisine, Montessori education, midwifery and elder
care. Ueyama says, "Over the next 10 years, it will be important to take
note of such movements. The Nishiawakura vision is about creating a
quality countryside by 2058, so we have focused on natural capital, and
it is leading to progress in social capital. Next, we would like to develop
initiatives to increase economic capital, and enrich our economic foundation."

The regional revitalization promotion grants offered by the Japanese
government will end in fiscal 2020. Nishiawakura which uses the grant
program for local ventures will have to prepare funds by itself from
fiscal 2021. The village considers the hometown tax payment program one
option, but wonders about other systems by which the village can collect
funds internationally beyond the bounds of region or nation. It is
beginning to investigate a new system called Initial Coin Offering (ICO)
in cooperation with private businesses that are familiar with Bitcoin or
Blockchain technology. It will examine the possibility of a municipal
ICO as a new financial resource.

In this way, Nishiawakura is promoting new initiatives one after another.
Ueyama says, "Schemes by NPOs and private businesses are very
informative." Reinforcing the foundations of its forest and energy, the
village is attracting highly motivated incomers and entrepreneurs while
striving to manage the village in an absolutely new way. This
fascinating village has us mesmerized.

Written by Junko Edahiro

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What can we learn from a village striving to manage itself in an
absolutely new way? Please share your ideas and leave comments!
https://www.japanfs.org/en/news/archives/news_id036040.html#comment

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The Growing Senior Population in Japan's Metropolitan Areas:
Challenges for Japan, Hints for the World

In depopulated mountain villages of Japan, it's mostly elderly people
who are left behind after the young have moved to urban areas for
schools and jobs. This is a scene most Japanese people can easily
picture, as they've heard a lot about the aging problem in rural areas.

Recently, however, the aging problem is becoming more and more serious,
not only in the countryside, but also in the urban areas to which young
people are supposedly migrating. Why is the population aging in the
urban areas? In this issue of the JFS Newsletter we report on the aging
problem, particularly in Tokyo and the larger metropolitan area.

Aging in Japan

Across Japan, the population is rapidly aging. Figure 1 shows that the
proportion of elderly people (65 years old or older) in Japan was only
about 5% between 1920 and 1950. After that, during the high economic
growth period (from the 1950s to the 1970s), the population began to age,
to the point that seniors accounted for 25% of the total population in
2015. That's one in every four people. This trend is likely to continue
in the future, so the elderly in Japan are expected to reach 30% of the
population in 2025 and nearly 40% in 2055.

Figure 1: Past population trends and future projections in Japan
https://www.japanfs.org/en/files/nl_180415_01_en.jpg

On the other hand, the working-age population (15-64 years old) percent
of the total is decreasing significantly. After around 2055, the
projection shows that the working-age population will fluctuate around
50% of the total population, the senior population (65 years old and
over) around 40%, and the child population (0-14 years old) around 10%.

If Japan was a village of one hundred people, 40 would be seniors and
ten would be children. Compare that with 1920 to 1945, when five would
have been seniors and 38 would have been children, and you can see the
extent of this dramatic change.

The rapid pace of aging in Japan stands out when compared with western
nations. In France, it took 115 years (from 1864 to 1979) for the
proportion of seniors 65 or over to go from 7% to 14%. For Sweden, it
took 85 years (1887 to 1972), and for Germany, 40 years (1932 to 1972).
In Japan, the ratio of seniors doubled from 7% to 14% in just 24 years
(1970 to 1994). (Figure 2.) Japanese society must respond promptly to
the rapid pace of aging.

Figure 2: Years for the proportion of seniors 65 or over to go from 7%
to 14%
https://www.japanfs.org/en/files/nl_180415_03_en.jpg

Aging in Japan's Metropolitan Areas

Looking more closely, the population is not aging uniformly across Japan.
Certain patterns are unique to the major urban centers compared to the
rest of the country.

Table 1 shows the actual and projected increases in the ratios and
numbers of seniors in the Greater Tokyo Area (above the double line),
compared with Okinawa Prefecture (southernmost prefecture in Japan) and
Akita Prefecture (northern Japan, said to be the fastest aging rate in
the country). Akita and Okinawa had the highest and lowest ratios of
seniors in Japan in 2015, respectively.

Table 1: Past trends and future projections of seniors' ratios and
populations in Tokyo metropolitan area
https://www.japanfs.org/en/files/nl_180415_02_en.jpg

Looking at the trends in seniors' ratios by prefecture for 2015, 2025
and 2035 (left-hand columns in Table 1), every prefecture will see an
increase in the seniors' ratio compared to today. The ratio of seniors
in Akita Prefecture is expected to be a surprising 42.1% in 2035, which
indicates how significant the aging of the population outside the major
metropolitan areas will be. In comparison, the projected seniors' ratio
for Tokyo in 2035 is 29.8%, which is still lower than Akita's 33.8% in
2015. From that, one might conclude that Tokyo's problem is manageable.
But let's look deeper.

Now let's direct our attention to the numbers of seniors, rather than
the ratios. In the right-hand columns of Table 1, see "Increase in
seniors 2015 to 2025 (projected)" and "Increased in seniors 2015 to 2035
(projected)." In Akita, the number of seniors is projected to increase
by about 10,000 from 2015 to 2025. However, the total population in
Akita in 2035 is expected to contract to about 75% of the 2015
population, and the actual number of seniors in 2035 is expected to be
about 20,000 lower than in 2015.

In contrast, the population of seniors in Tokyo is expected to increase
by about 300,000 from 2015 to 2025, or by more than a whopping 750,000
from 2015 to 2035. (The total population of Tokyo in 2035 is projected
to decline to about 95% of the 2015 population.)

To understand the differences in absolute numbers, consider that in
Akita the seniors' ratio of the population is expected to grow by about
6 percentage points from 2015 to 2025, which means an increase of just
over 9,000 seniors. Meanwhile, in Tokyo, even though the ratio will grow
by only 2.5 percentage points, this still means an increase of over
300,000 seniors. The large population of Tokyo means that for every
percentage point increase in the seniors' ratio, the actual increase in
the number of people is much larger than in Akita.

The following graph shows the dramatic increase in the number of seniors
in Tokyo and the nearby prefectures. Figure 3 shows the increases in the
numbers of seniors based on data in Table 1. The increase in seniors in
Tokyo from 2015 to 2035 is huge. Prefectures neighboring Tokyo (23 wards),
such as Kanagawa, Saitama, and Chiba Prefectures, also see significant
increases. The increase in the seniors' population (aged 65 and older)
in Kanagawa, just south of Tokyo, is projected to be 550,000 from 2015
to 2035.

Figure 3: Projected Increases in Senior Population (Persons)
https://www.japanfs.org/en/files/nl_180415_04_en.jpg

Among the big concerns about such large increases in the numbers of
elderly people is the likely shortage of hospitals and housing of the
elderly. At first glance some people might think that Tokyo is well
served, with many hospitals compared to communities away from the
metropolitan area. But look at the number of hospital beds per 100,000
people. Kochi Prefecture ranks at the top, with 2,522.4 beds per 100,000
people, compared to 948.3 in Tokyo, 943.3 in Chiba, 853.8 in Saitama,
and 810.5 in Kanagawa. The Tokyo region actually has some of the worst
hospital bed ratios in Japan. (Source: "Survey on Medical Facilities
(Dynamic), Summary of Hospital Report (2015)" by the Ministry of Health,
Labour and Welfare.)

In Tokyo, the population itself is not expected to decrease much from
2015 to 2035. However, if the number of seniors increases, the number of
people hospitalized will also likely increase. Thus, the lack of hospitals
in the Tokyo metropolitan area is expected to become an increasingly
serious concern.

Shortages of caregivers and home-care nurses can also be expected.
Consider cases when rehabilitation is needed to recover from a disease
or an accident. With professional support and proper rehabilitation,
people could more likely return to their lives. But if there is a shortage
of professionals, patients may not be able to get rehabilitation support
and end up being bedridden long term. If that happens, more and more
hospitals and home care nurses will be needed.

There are further problems that are unique to big cities. Tokyo has the
largest number of single-person households in Japan. According to 2015
census figures, 47.39% of typical households (excluding facilities) are
single-person households. Meanwhile, at 1.99 persons, the typical
household now has less than two people. When the elderly population
increases in the future, issues like dying alone and "elderly care by
the elderly" are likely to become prevalent.

As one would expect, the Tokyo Metropolitan Government (TMG) has already
embarked on measures to address the challenges. According to a
Comprehensive Strategy announced in 2015, it is going to promote
"measures for realizing local communities in which the residents can
lead their lives with peace of mind until their last moment." The
strategy mentions various measures, such as introducing nursing care
equipment with robot technology and other tools for care and prevention,
easing the work load of caregivers, and improving of the quality of
nursing care.

The Comprehensive Strategy also mentions that by the end of fiscal 2025,
the TMG plans to provide additional intensive-care seniors' housing for
60,000 people, health-care facilities with nursing care for 30,000
seniors, and group homes for 20,000 seniors with dementia, plus 28,000
units of housing with services for seniors. For the latter, the total
number of residents will vary depending on whether each unit is
inhabited by a single person or two or more, so the total new housing
provided in this plan ranges from 140,000 to 170,000 seniors. (Housing
with services refers to housing offered by private operators who are
required, in principle, to offer safety confirmation and wellbeing
consultation services, for persons aged 60 and over. Basically this
category is aimed at seniors who do not yet need nursing care, but the
services the residents can get may vary significantly among facilities.)

As mentioned, Tokyo's senior population is expected to reach some
300,000 people in 2025. Given the government's plan, this translates
into a shortage of seniors' housing for 140,000 to 170,000 people, and
after 2025, the shortage will likely be even larger. Nevertheless, if
the plan is realized, it is still expected to have a substantial impact.

In Japan's major urban areas, a rapid increase in the senior population
is expected to bring serious challenges in the future, including shortages
of facilities and caregivers for seniors. Despite these projections, the
issue of aging in urban areas has not really drawn the attention the
warrants. Japanese society needs to deal with a wide range of aging
issues, each with different characteristics, not the least of which is
the different challenges facing big cities versus rural areas.
JFS will continue to cover the topic of the aging of society and
implications for sustainability, and we hope that this material will
trigger awareness and ideas in countries around the world that may be at
various stages along a similar path.

Written by Naoko Niitsu

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[JFS Web Site Additions of the Month]

- This month's cartoon:
"Does this life-form lack diversity?" (2018/03/05)
https://www.japanfs.org/en/manga/manga_id036025.html

- JFS Newsletter No.186 (February 2018)

"Good Companies in Japan" (Article No. 2):
Seeking "Happiness" for All Stakeholders(2018/03/15)
https://www.japanfs.org/en/news/archives/news_id036022.html
Nishiawakura's Initiative for Self-Dependence
Attracting Motivated Young People to Migrate
to the Village and Start Businesses (Part 1)(2018/02/28)
https://www.japanfs.org/en/news/archives/news_id036016.html

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