Environmental Policy

I. Basic Concept Regarding Economic Instruments - D. :Utilization of Economic Instruments in Environmental Policies - Taxes and Charges

I. Basic Concept Regarding Economic Instruments

D. Public Approval of Economic Instruments

In order to increase public approval of economic measures and to stimulate debate among the general public about the actual use of economic measures, information must be constantly provided on the effectiveness of economic measures to a wide range of audience and aggressively provide opportunities for various interest groups to exchange opinions.

One valuable means to heighten public awareness is to numerically evaluate the social cost (exterior cost) on the environment caused by socioeconomic activity. In general, it is difficult to evaluate the cost of environmental preservation. However, as an example, the total payment made between 1974 and 1995 against compensation for health hazards caused by pollution and pollution-related welfare enterprises totaled 1.8280 trillion yen.
Furthermore, the total cost for construction of waste processing plants (construction cost for interim processing plant, final processing plant, etc.) and their maintenance in the fiscal year 1992 alone was 1.8460 trillion yen. There have been attempts abroad to calculate the social cost. For instance in the United States, economic damage caused by changes in weather was reported to be US$60-117 billion (or 1?2 percent of GDP) (R. Repetto et al, GREEN FEES, WRI, 1992).

Furthermore, the following results were revealed from a survey on public acknowledgment of economic measures (Table 4). The results of the table show that it will be important to let the public know the linkage between the purpose of environmental protection and measures such as environmental taxes.


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