I. Programs of Research and Study

1.	Japan's Option for a Society with Aging Population and Decreasing Children

In the above report, the "first chapter: Aging population society and Japan's options" discussed various issues Japan should address in the future, including: the personnel and labor management systems that have hindered the best use of potential labor force and appropriate personnel's deployment to an appropriate position; the corporate culture that would not hold relevant personnel responsible for their actions; and "the yutori kyoiku (lighter curriculum)" that has consequently let children deprived of "power to live," and have less practical linguistic achievement in English. The "second chapter: Economics of educational reforms" analyzed "the yutori kyoiku" and "voucher system for school selec-tion," from economic viewpoint, and concluded that "the yutori kyoiku" would not be acceptable in every aspect of efficiency and equity, and the voucher system would lack fairness as it would be advantageous to the gifted while disadvantageous to the less-gifted.

The "third chapter: Educational reform's potential measures for decreasing children" and "fourth chapter: Mismatch between the supply and the needs of daycare services" addressed the issues of daycare systems. The third chapter introduced the daycare system reforms through integration into education systems undertaken by New Zealand and Sweden, while arguing about the needs of educational system reforms in Japan including pre-school age education. The fourth chapter identified the mismatch between the needs and supply of daycare services, based on the result of parent and guardian questionnaires about daycare services, and indicated the needs to set up a system sensitive to the mismatch between the needs and supply, so to dissolve such mis-match...

The "fifth chapter: Why less children" examined the current empirical studies about the contributing factors for the trend of less children; observed that the variables such as income and wages alone could hardly explicate the causes of decreasing number of children per household; and concluded that it would be nece-ssary to change the social concepts of families, business customs, and gender models.

The "sixth chapter: Public and private burden sharing in childbirth and child care" provided the economic analysis of decision-making in childbirth and child care, then indicated the need for consensus-building in the social values of responsibility-sharing in childbirth and child care, while introducing the policies to increase public sector subsidies and burdens in childbirth and child care, in addition to the need for fundamental review in consensus-building. The chapter further recommended policy-making authorities to exhibit their visions in order to enlighten people's awareness.

The "seventh chapter: Current situation of pediatric care under the existing national health insurance system" illustrated the current difficulties in pediatric care and hospitalization provided by hospitals and clinics, due to the regulation of the current medical fee system. The chapter also indicated the current situation of pediatric emergency care, which is over-burdened by the problems of un-profitability and undermanned personnel, then ventured to call for the review of the "Law of Pediatric Healthcare" and for the revision of pediatric care fee system.

The eighth chapter is titled "Changing of players under the social security system due to the changed concepts of "families" and "corporations." It analyzed the current trend and discussed the concept rules associated with the changing of players, as observed in a wide area ranging from local and national governments to private sector markets, and from families to NPOs and communities, resulting from the collapse of the past system of care and welfare provided by families and/or corporations."

The "ninth chapter: Financial forecast of pension systems and the direction of their reforms" claimed, based on the result of simulation in pension fund finances, that the pension finances would not be disrupted when the ongoing pension reform would be fully implemented. The chapter further discussed that it would be important to win the credibility of pensions by promptly demonstrating pension funds' stability and sustainability, while mitigating the burdens born by younger generations and early converting to a market-oriented method as a financial method comparable to a reserve method.

2.	Issues for Poverty Resolution and the Role of Global Governance

1.	Global governance and poverty assistance

With the ending of the Cold War, the world community started to question the meaning of interna-tional development. The main theme of the Lyon Summit was market globalization, and even the World Bank and IMF became aware of the importance of poverty issue.

Early 1990's found the rise of the "third way" policy in EU, while the poverty alleviation became the central subject in the UN Millennium Summit Declaration of September 2000.

However, the "third way" adminis-trations started to crumble because of their inability to fully respond to market globalization. As of year 2001, the international community was seeing gradual increase in the importance of conflict resolution and peace-making as its new issues.

"September 11" happened just in such a situation. It seems the matter of time (after such an event) that the issue of governance emerges as a common factor of issues such as poverty, peace-keeping and sustainable development.

In the ODA community, which has a tri-polar structure with Japan, US and Europe each as a pole, and where the governance theory dominates, the links between the multilateral organizations such as the World Bank and UNDP and each of three poles seems to determine the way of the future.

The Committee then studied the actual cases of poverty assistance by the World Bank and UN Development Plan as the examples done by global governance.

In case of the World Bank, its targets of international development are those adopted by the UN General Assembly in 2000, inclusive of 7 individual targets ranging from "poverty alleviation" to "environmentally sustainable development."

As the future issues of poverty alleviation, the list would include:
(1) Removal of trade barriers, (2) debt relief, and (3) simplification and coordination of aid procedures.

2.	Current situation and future issues of bilateral aids

Regarding the current situation and future issues of bilateral aids, the Committee analyzed the cases of the Japan Bank for International Cooperation (JBIC).


( i ) Poverty measures using Yen loans

At JBIC, those applicable to any of the followings are considered as poverty measure projects: i) the ratio of people in poverty among project beneficiaries exceeds the average ratio of the host country, or ii) the scheme to directly support those in poverty.


(ii) Poverty alleviation and infra-structure

The local surveys found that building infrastructures is an essential factor in poverty alleviation.

The Committee next studied the measures to resolve poverty, envi-ronment, and gender discrimination.


( i ) Current situation of gender discrimination and poverty

Women are considered as cheaper labor force due to gender discrimi-natory systems and structures including lower wages and occupational category discrimi-nation, thereby bearing the heavier burdens of poverty.


(ii) Future direction of measures

To achieve gender equality is one of key factors for poverty alleviation, and it is essential to incorporate gender discrimination issue in every aspect of poverty alleviation (measures).


(iii) Relationship between envi-ronment and poverty

Considering the relationship between poverty and environment, it is necessary to focus on their inter-relationships.


(iv) Future direction of measures

The common direction of measures in this field would include to build-up resource foundation for people in poverty, to mitigate vulnerability to natural disasters, and to reinforce a capacity to respond to envi-ronmental problems.

3.	Local governance and poverty alleviation

Lastly about local governance and poverty alleviation, the Committee analyzed "residential welfare of urban poor and local governance," "poverty in Africa and local governance," and "the actions of international NGOs."

For the residential welfare of urban poor and local governance, the first chapter of the "Action Plan" adopted at the "World Summit for Social Development" in March 1995 defined it as "enabling environment for social development." In the context of "residential welfare," enabling policies would be for the government and administrative branches to promote deregulation and to support the efforts of the poor to self-improve their residential and home environment. What needs to be changed by the development is a system itself, and a policy system that can increase people's access to resources will bring the supportive policy environment for such changes.


The Committee then analyzed the poverty in Africa and local governance.

After the 1990's, North-South issue has taken a major shift to focus on the contents of developmental aids from the "North" to the "South."

As long as the global governance advances with the "North" dominant financial capacity and technologies as its background, it may be necessary to attempt for the following two approaches simul-taneously. One is to strengthen local governance, and another is to increase African nations' voices within the existing global governance.

Lastly, the Committee summarized the actions taken by international NGOs in their search of their new role in globalization.

The policy proposal type NGOs, which presented the criticizm that the "economic globalization" has not only increased the gap between the riches and the poor, but also led to environmental destruction, human rights' violation, and the loss of cultural multiplicities, are gaining greater powers and developing stronger ties in between such organizations.

Since the "event of September 11th," the world's trend is to further clarify the different aspects of globalization, and to propose to many NGOs the old but new issues. These aspects are mainly the following two fields: (i) NGOs and the war and peace; and (ii) tolerance and the issue of multi-cultural co-existence.

While the world after the "9.11" focuses more on the violence by countries and the surge of nationalisms, NGOs that aim for the solidarity and symbiosis of citizens beyond the national borders are greatly expanding their roles.

In the future, NGOs that associate with both developing and developed countries would be required to clarify their "vision of a target society," in this globalizing world.

3.	The Accounting and Approval Issues concern-ing Emission Reduction

With economic activities rapidly globalizing today, corporate financial indexes are essential elements in making investment decisions. The emission allowance is considered as a kind of asset in the Kyoto Protocol, which incorporates in part the concept of using economic principles to attain emission reduction targets cost effectively.

Since April 2002, the United Kingdom introduced a domestic emissions trading system utilizing such concept. In Japan also, some corporations have already started the practice of trades in emission allowance and emission allowance derivatives. It was only at the COP7 held in November 2001, however, the Parties to the UNFCCC agreed upon the actual operational rules of the Kyoto Mechanisms, and there has not been any concrete guidelines, yet, about the accounting concept, or accounting treatment of emission allowance. Therefore, currently the handling of emission allowance in accounting varies from such as "securities," "deferred charges," or "research and survey expenses," depending on how a trading entity judges.

In the future, however, as the trading of emission allowance increases, their significance as a type of asset is likely to grow further, and how to apply emission allowance on a corporate balance sheet will become a major issue.

Based on such awareness, this Research Committee has examined the concept and treatment of emission allowance in corporate finances. The Committee made a review in fiscal 2000 with a focus on the actual goods of emission allowance, and obtained the idea that it would be most appropriate to consider the emission allowance as a kind of intangible asset or (intangible) inventory, since the emission allowance has property similar to a fishing license or raw materials, although it would undeniably possess a characteristic of financial commodity.
In the fiscal 2001, the Committee's study focused on the accounting concept and treatment of emission allowance derivatives, which trading already started. Stated below is the general idea obtained through the Committee's research.

Derivatives are those usually include forward trading, future trading, options, and swaps, and the same can be applied to emission allowance. In case of forward trading and options among derivative trading, accounting processes differ depending on whether the trade satisfies the requirements for net amount settlement or not. In case of net amount settlement, derivative trading can be treated as a financial commodity. The forward trading that does not satisfy the requirements for net amount settlement will be off the corporate balance sheet until the delivery of actual commodity. However, another way to handle such trades will be, for example, to apply agreed accounting standards in order to indicate the debt/credit relationship at the point of sales contract . In case of options without net amount settlement, it is possible to apply the accounting procedure for the purchase of real asset and sales, if the exercise of options is to result in the delivery of actual commodity. For future trading, accounting standard for financial commodity can be applicable.

On the other hand, emission allowance can be traded frequently for the purpose of hedging. In such case, hedge accounting procedure will be applicable for any of forward trading, future trading or options.

4.	Building International Con-sensus for the Issue of Eco-nomic Development and Global Warming

The purpose of this Committee is to find the significance of "Clean Development Mechanism (CDM), one of key Kyoto Mechanisms, and to explore the fundamental measures to promote its implementation.

The Committee continued the studies from diverse viewpoints through the participation of many experts, who share common interests on CDM but differ in their positions.

This report is to review the Committee's discussion on the subjects of (1) essence in global warming issue and CDM, (2) basic strategies for the participation of developing countries,
(3) required conditions for CDM's success, and (4) reduction of transaction costs:


(1) Essence in global warming issue and CDM

Global climate change is the issue of how to control global commons called "atmosphere." If each nation acts only for the interests of own, then the rational will be not to participate in the reduction of greenhouse gas emis-sions, or participate only to the extent beneficial to own country, while letting other countries make the efforts of greenhouse gas emission reduction. The past discussion of global scale measures for global warming focused on the resolution of a free-rider problem through international cooperation. During the CDM negotiation, however, the "conflicting" situation between the ideal (international cooperation) and reality (egoistic action) has arisen.

Without urging the developing countries of increasing greenhouse gas emissions to address emission reductions, it is not possible to prevent any long-term global warming. Therefore, it is extremely important to enhance the understanding of developing countries on the significance of global warming prevention implemented by the transfer of advanced energy saving technologies through CDMs, and thereby to urge their participation from the second commitment period that will start after 2013.

Only when developing countries introduce measures to reduce greenhouse gas emissions, then both developed and developing countries can benefit from "the investment on global commons" called global warming measures. Kyoto Protocol's international rules themselves embrace an aspect of "international commons," since they affect participating countries simultaneously. To provide the compliance with the Kyoto Protocol through CDM use is an important role expected of developed countries such as Japan.


(2) Basic strategies for the partic-ipation of developing countries

From the viewpoint of developed countries such as Japan, which are to take an initiative in mitigating global warming, it may not be beneficial to negotiate with every single developing country about CDM in order to heighten their interests on global warming issue. For the imple-mentation of CDM, it will be necessary to let the developing countries build institutional capacity for procedures and environmental monitoring. Since the costs of such capacity building strongly involve the fixed cost elements, the gaps in capacity building costs between a big country and a small country is not too large. In this sense, also, it will not be judicious to implement CDM at as many developing countries as possible.

The country with much lower greenhouse gas reduction costs and overwhelmingly large emission quantities is China. Second to China is India, which is another major emitter with projected emission reduction costs even lower than those of China. Therefore, Japan's CDM should focus on, first of all, China, and secondly on India.


(3) Required conditions for CDM's success

Partially because the United States, which was expected to provide the largest demands for emission quota, withdrew from the Protocol, CER's prices would likely be much lower than projected. Therefore, the rates of return for CDM project investment will not be significantly increased by the acquisition of CER. This means that CDM will hardly be implemented, except in an exceptional case, if left to the discretion of a private sector.

However, we must not confuse the global value of greenhouse gas reduction with the lower prices of CERs. In the situation where green-house gas emissions will be overly excessive due to the emissions from developing countries and non-participating United States, the shadow values (that are the values of emission reduction) will far exceed the prices of CERs. It is justifiable, therefore, to promote CDMs, and to use public funds for it. Some argument indicates the importance of official aids including ODA, and there is a good foundation for such an argument.

Consequently, there is the rising "strategic importance of public funds in the fields where private sector investment alone cannot be appro-priated," so we need to contemplate on the strategies, such as "to prioritize CEM implementation in a developing country, which has set a quantitative target," or for Japan "to proclaim to lower emission reduction level" if CDM is not implemented.

For the industries such as power generation and steel-making expected to take an initiative in CDM, it will be important to find CDMs being welcomed as a scheme to provide a new business opportunity. Establishing superior environmental technologies for environmental businesses may have a potential to give ripple effects to long-depressed Japanese economy.


(4) Reduction of transaction costs

To establish baselines and to validate the additionality are no easy task. Standardizing baseline establishment and additionality validation, and reducing relevant transaction costs would be the first and essential task in promoting CDM. Second task can be to raise awareness in the needs of building capacity for environmental management, including the simpli-fication of procedures and introduction of monitoring systems, so developing countries will accept and implement CDMs. Moreover, it will be necessary to build a system like a Carbon Fund, and to design an open and official system to trade emission quota at a stable price greater than that of CERs.

Without such supportive system, CDM is unlikely to extend to the scale sufficient in providing substantial contribution for global warming mitigation.

That is another reason why it is vital to utilize public funds for CDM-inhibitive fields.

With the poverty alleviation in minds, ODA has a characteristic to be invested in the fields essentially prone to "the market failures."

Global warming, because of its characteristics as global commons, is a typical case where market fails. Considering the very objective of ODA, therefore, to apply ODA funds for resolving a global environmental issue will be an extremely appropriate measure.

Global warming mitigation will be central to ODA policies of 21st Century. In this sense, it is significant to find that the Committee's discussion has led to the consensus "to promote CDM by the active use ODA funds in order to reduce CDM transaction costs."

5.	IT Revolution's Impacts upon Global Environ-mental Issues

The "IT revolution" ongoing globally today is also called the second industrial revolution, and likely to provide a greater number of effects in various fields, including industries and our own life style. On the other hand, how this IT revolution will affect what kinds of impacts on global environmental issues is not clearly defined, yet. It is very important, therefore, to fully analyze the possible effects of IT revolution before the effects will materialize, and moreover to introduce response measures to prevent the occurrences of new problems.

Based on the results obtained from its basic researches of the previous fiscal year, and in order to conduct further advanced research and review, therefore, this Research Committee selected the following five subjects as its study focus of fiscal 2001, and conducted analysis and discussion mainly on the research and review of these subjects.

	-	Future prospects and visions of IT revolution
	-	Trend of research and survey for IT revolution in the United States
	-	Analysis of effects on global warming issues by an accumulative method
	-	Analysis of IT revolution's impacts on global warming issues, using industrial relevance method and macro economic models
	-	Case studies and analysis of effects on global environmental aspects other than global warming

This year the Committee nominated the Honorable Professor Yoichi Kaya of the University of Tokyo as its Chair and conducted survey, review and analysis, by the Research Committee constituted of renowned experts and specialists in each field of five study focus subjects stated above. As a result of active and energetic research, survey and analysis by conducted by the Committee-related personnel led by its members and lecturers, and also as a result of heated discussion that followed, the Committee was able to obtain valuable knowledge and learning. Especially the analysis using industrial relevance method and macro economic models resulted in many findings including the fact that the greater progress of IT usage would lower energy (CO2) unit requirement, and presented a possible impacts of IT revolution on global warming issues, embracing quantitative assessment.

6.	Collaboration System with NPO/NGOs, Government, and Business Firms

It is a general trend of the world to find growing awareness and actions for the positive thinking of coordination between non-profit sector and government/business sectors. Non-profit sector in Japan, however, still strongly adheres to the keeping of a non-governmental and independent status, while its government/business sectors incline to have a motivation for greater coordination not for a merit of its actual effectiveness but as a way to facilitate the attainment of public understanding. In the future, therefore, Japan will need to address such coordination more positively.

With its mission to support the activities of emergency human-itarian aids, the Japan Platform (JP) is to implement coordination among three sectors (non-profit, govern-ment and business) and has already achieved considerable results, for example, in the area of supportive activities for Afghanistan refugees, which was comparable to those provided by overseas NGOs. Their future tasks will be likely to be capacity building in the case of frontier NGOs, and the improved governance in the case of JP's. Ultimately, it will be necessary to aim for more autonomous coordi-nation through a network of the Foreign Ministry, businesses and active NGOs, without the help of the JP.

Matsushita Electric Co. considers that to develop more solid founda-tion for civil society must precede the attempt to build cooperation with NPOs. Under this view, the company founded the "Supporters Matching Fund" to enhance the culture of citizens' donations, and plan to launch a cooperative program to promote NPO activities and to strengthen their foundation.

NEC, in their view that it will be important to have the appropriate selection of NPOs in order to build win-win relationship between NPOs and corporations, is asking NPOs to disclose information and to observe the liability of explanation.

Because of NPOs' vulnerability, it is more realistic the simultaneous implementation of resource provision and infrastructure building. Moreover it will be effective to apply a corporative management methods such as common goal confirmation or P-D-C-A management. An intermediary organization has a role to organi-cally connect three factors of regional needs, NPOs that capture regional needs as its own tasks, and corporations that provide resolution for NPOs' tasks. In the case of coordination between Japan Philanthropic Association and Animo Ltd., the Animo Ltd. that has IT and voice technologies, an NPO that has the knowledge of needs in welfare, and the Japan Philanthropic Association developed a coordi-native program to launch and implement the on-line shopping site and transliteration service for handicapped.

The government sector anticipates NPOs to take a role of a provider of "new public services." For this, it will be necessary to build a tax system to support NPO activities, and to promote human resource exchanges and partnership with the NPOs, which are more vulnerable and less dependable. In addition, the government sector need to further develop economic and industrial policies, as there is an increasing importance projected for the promotion of greater growth in community businesses and small to medium companies, and for the support of budding enterprises in coordination with NPOs.

In the aspect of international cooperation using ODA, govern-ments have a vital role in developing NGO capacities, and in actively promoting coordination with NGOs. Currently implemented measures include periodical dialogue between the government and NGOs, joint assessment works, and financial support for the Japan Platform's emergency humanitarian aids.

However, in the aspect of building an appropriate legislative system, it is assumed that prohibiting situation will linger further. We must encour-age system to system competition within the existing legislative framework, rather than to pursue system reforms, thereby building an enabling process for system selection and curtailment.

Human resource development is essential in non-profit sector, and in order for non-profit sector to become a provider of public services, colleges and NPOs need to join forces for the full development of NPO education. Especially the graduate school level education of practical management is essential for the development of strategists. Considering today's undermanned line-ups of non-education sector, we must review the potentials of a network type NPO education, including the mutual offering of courses among multiple numbers of colleges.

Civil society in the United States has shown various forms of relationships with administrative branches. Japan, also, needs to aim for developing more flexible and creative relationships free of existing concepts among its various sectors. In a highly matured demo-cratic society, both administrative branch and NPOs act only a tool of the society, and the term "coordi-nation" applies when civil society designs a "combination of tools.".

7.	Effects of Global Envi-ronmental Problems and their Response Measures

The third Conference of Parties to the United Nations Framework Convention on Climate Change held at Kyoto in 1997 adopted the Kyoto Protocol, which stipulated the limits on greenhouse gas emission permits for the developed country parties including Japan (Annex-I Parties) during the first commitment period (2008-2012), and the Kyoto Mechanisms as flexible measures to help these countries attain such targets, as well as carbon sink activities. The "Buenos Aires Plan of Actions" adopted at the COP4 made an agreement to proceed with discussions in order to determine the operational rules for the Protocol by COP6, but the ministerial level negotiation during the COP6 held in the Hague, Netherlands, in November 2000 failed to reach agreement and the future of the Protocol depended on the outcome of resumed meeting in July 2001. Later, there was a doubt on the very continuation of the Protocol itself due in part by the US Bush administration's announcement of its withdrawal from the Protocol in March 2001. However, following the successful adoption of the "Bonn Agreement," a political agreement, at the resumed meeting of COP6 held in Bonn, Germany, in July 2001, the Parties decided on the operational rules of the Protocol at the COP7 held in Marrakech, Morocco, in November 2001. With the preparation for the Protocol's entry into force being underway one year later than the schedule defined in the "Buenos Aires Plan of Actions," the parties including Japan have undertaken the review of domestic systems for their ratification of the Protocol.

This particular research consigned to GISPRI has been implemented continuously since the fiscal 1990 in harmonization with the progress of international negotiations. The objective of the survey is to benefit for the Japan's study of effective response measures to global warming, a global scale environmental problem.

This year's research included, first of all, the systematization of those COP decisions included in the "Bonn Agreement," which was a political agreement on the core elements of operational rules for the Protocol adopted at the resumed COP6 meeting, then the sorting out of the "Marrakech Accord," which was the summarization of COP7 decisions on the details of operational rules for the Protocol. In addition, the Institute implemented the summarization and reorganization of changes and modifications made on the negotiation texts used from the resumed COP6 meeting till COP7 concerning the "Kyoto Mechanisms" and "Land-use, Land-use change, and Forestry (LULUCF)."

Furthermore, the Institute implemented, as a continuation from the last fiscal year, the information gathering in regards to the national registry, which would be a core element in the utilization of the Kyoto Mechanisms. By the COP7 decisions, it is projected that the CER (Certified Emission Reduction), which is an emission reduction credit for the Clean Development Mechanism (CDM) will be issued prior to the commencement of the First Commitment Period in 2008. In order to utilize the Kyoto Mechanisms including CDM, Japan will need to institute the national registry before the start of the First Commitment Period. Actual contents of this year's research included the systematization of COP7 decisions and their points of argument, and, with the use of outside research institutes, information gathering and the reorganization of major points concerning the registry systems of precedents implemented in other countries, such as a registry of UK Emission Trading Scheme.

Especially in regards to the national registry of the UK Emission Trading Scheme, which was developed in concern of a registry under the Protocol, we implemented the research on the details of operational and application methods based on the guideline published by the government of United Kingdom, and the hearing of relevant personnel.

In addition, we included in the Institute's report the Japanese translation of the resumed COP6's "Bonn Agreement" and COP7's "Marrakech Accord" texts related to the Kyoto Mechanisms and registries, while publishing the Japanese translation of the "Framework for the UK Emission Trading Scheme" disclosed by the Government of the United Kingdom in August 2001, and of "Linking Domestic and Industry Greenhouse Gas Emission Trading System" published by the International Emission Trading Association in October 2001, as a reference for the study of emission trading systems under review today in various countries abroad.

8.	IPCC's Climate Change 2001: Synthesis Report:

IPCC's Climate Change 2001: Synthesis Report:

For IPCC's Third Assessment Report (TAR), the Synthesis Report to summarize entire TAR was prepared in addition to the report of each Working Group from WG1 to WG3.

GISPRI conducted the review of how global warming mitigation measures related to WG3 were addressed in TAR, while describing the composition and preparation processes of the Synthesis Report and the contents of discussion at lead author meetings.

For future IPCC activities:

The planned IPCC Fourth Assessment Report is basically to follow the same preparation processes adopted for the First to Third Assessment Report. We examined what kind of cooperation Japan could provide in the future for the preparation of this Fourth Assessment Report.

As we find the discussion in IPCC Plenary and lead author meetings inclines to emphasize the assess-ment from the viewpoint of social sciences as well as of natural sciences, it will be necessary to nurture and foster experts not only in natural sciences (science and engineering), but also in social sciences (economics, political science, laws, commerce, cultural anthropology, etc.)

Issues in technology transfer and their solution:

The importance of technology transfer is widely recognized not only from the view of addressing global warming issue, but also in terms of contributing to the economic development of develop-ing countries. In reality, however, it has not necessarily functioned effectively because of various reasons. By contemplating on the future utilization of Kyoto Mechanisms, we identified the factors currently obstructing tech-nology transfer and dissemination, and analyzed and studied their solutions.

As there are various paths available for conducting technology transfers, it would be important to pursue and design the paths for (facilitating) the global transfer of technology and funds, assess them in view of their costs and CO2 emissions, and examine/determine the optimal paths for transfers.

World trend of global warming measures:

As the world finally reaches a political consensus for long awaited operational rules of the Kyoto Protocol, and begins to move toward the next step of implementing the practical measures, we have attempted to explain the character-istics of global warming and the current scientific knowledge, to describe each nation's stance toward the Protocol negotiation and their national situation, and then to contemplate on the future perspec-tives as well as on the issues pertaining to US's withdrawal.

The global warming is an issue that covers a broad spatiotemporal scale, so that it will be essential to have inter-generational and trans-national (regional) cooperation to solve this issue. Furthermore, we must note that the first commitment period under the Kyoto Protocol is only the first step in its ultimate solution, and we need to develop a future scenario for each nation and for the Earth based on a solid long-term vision.

9.	Review of System Designs for International Emissions Trading Market

Summary

International emissions trading system in the Kyoto Protocol is to allow the trading of national GHG permits and thus to enable the country, whose emissions will far exceed the national emission target, to purchase emission permits (rights to emit greenhouse gases) from other countries that have accomplished greater-than-target emission reduction. Trading between entities with different emission reduction costs enables the attainment of emission reduction targets at less costs overall.

This report summarizes the result of a study continued from the fiscal 1999, which aims to review underlying issues of emissions trading and to provide suggestions and implications for the international emissions trading system in the future. To conduct the studies, GISPRI established a Research Committee led by Professor Tatsuyoshi Saijo of Institute of Social and Economic Research at Osaka University. The Committee organized major underlying issues, studied overseas situation, and explored what type of institutions could efficiently attain the Kyoto GHG targets by using experimental economics. Stated below introduces the outline of the study using emission trading experiments, which are the core element of this research.

In experimental economics, a simplified institution is artificially made in a laboratory and by observ-ing how each subject behaves in that condition, the characteristics of that institution could be obtained. The purpose of this study is to find a way to design an economically-efficient institution for an emissions trading by using an experimental approach. First, the Committee started designing specifications for an experimental system, developed software for the experiments, and conducted computer experiments with the participation of subjects, using the software. Through the experiments, the Committee observed how varying conditions could result in what effects on market performance. Using the results attained from these experiments, the Committee reviewed which type of institutions could attain emission targets at the minimum cost.

Experiments were done for 18 times with nine different settings concern-ing three conditions: liability system (seller and buyer), trading methods (auction and bilateral) and contract information (disclosure and closure). Each subject, representing a nation, was requested to earn the maximum benefits with the use of domestic emission reduction measures and emissions trading.

By analyzing the resulting data in terms of efficiencies and of discrepancy between theoretical prices and actual trading prices, the Committee observed four patterns of price fluctuation. Moreover, by comparing the conditions in which each price pattern would tend to occur, the Committee obtained the essential points in designing an institution that would point to a successful and more efficient pattern in the market: the importance of disclosing contract information, merit and demerit of each liability system, etc.

Also in this study, the sub-committee discussed desirable characteristics of emission credit in terms of market fluidity. In addition, the sub-committee imple-mented the study about domestic policy tools and support measures which should be currently taken for the future international emissions trading, proposed some promotional measures for domestic emissions trading.

II. Symposium

12th GISPRI Symposium "New Challenges of Enterprises and Civil Society towards Social Value Creation"

The symposium was held for the purposes of identifying the future direction of Japanese economy and society from the indication of changes occurring in a global socio-economic system and of exploring the way to overcome problems.

Sponsor : METI
Lecturers and Panelists:

	Frederick C. Dubee, Senior Officer, Global Compact, the United Nations Kanji Tanimoto , Professor, Hitotsubashi University Minoru Inaoka, Managing Director, Ito-Yokado Co., Ltd. Mark. Bateman, Managing Director, Investor Responsibility Research Center(USA) Masakazu Kubota, Managing Director, Council for Better Corporate Citizenship Kriss. Deiglmeier, Chief Strategist, Juma Ventures(USA)
	et.al.

Contents:

12th GISPRI Symposium

In his special lecture "Global Compact," Mr. Dubee called for enterprises to become aware of their own social influences, and to agree to the compliance of nine principles on human rights, environment, etc., proposed by the UN Secretary-General Annan. In the session 1 "Corporate Social Responsibility and Sustainable Society", panel discussions and active questions and answers session with audiences led to illustrate that enterprises should make efforts to earn the under-standing and support of every stakeholder through dialogue with them so to realize socially sustainable development. In the session 2 "Social Innovation by Social Entrepreneur", panel discussions led to illustrate that it would be necessary for social entrepreneurs including non-profit organizations and business ventures to have creative and spontaneous ideas as well as self-governance in order to resolve social issues.


International Symposium on CDM -For Promoting CDM-

For promoting CDM stated in the Kyoto Protocol, GISPRI hosted the following symposium with the invitees from various countries, including CDM board members, UNFCCC Secretariat personnel, and project participants. The purposes of the Symposium were: (1) to analyze the system design status as of date; (2) to identify potential issues; (3) to introduce the cases of precedents, and; (4) to capture the thoughts of developing countries.

( i ) Date of the Symposium :

May 17, 2002

(ii) Venue :

National Olympics Memorial Youth Center

(iii) Number of participants :

About 280 people

(iv) Lecturers :

Sozaburo Okamatsu, Vice Chair of the CDM Executive Board Christine Zumkeller, UNFCCC Secretariat Taishi Sugiyama, Central Research Institute of Electric Power 　 Industry, and a member of small-scale CDM Panel Hiroki Kudo, Institute of Energy Economics Ikuo Nishimura, Deputy Manager, International 　 Environmental Business Group, Environment Dept.,Tokyo Electric Power Co., also former PCF Senior Engineer at the World Bank Egbert Liese, Senter Internationaal, Netherlans Chow Kok Kee, CDM Executive Board member, Malaysia Lu Xuedu, CDM Executive Board member, China,

(v) Contents:

Since CDM can contribute to global environmental measures as a win-win game measure for both developed and developing countries, it will be necessary to promote CDM through the cooperation between both country groups. Prior to the COP8, the CDM Executive Board must complete: (i) the accreditation of oper-ational entities that will register and verify CDM projects, (ii) the preparation of simplified procedure rules for small-scale projects, and (iii) the recom-mendation of detailed guidelines for baseline/monitoring. Concerning the risks involved in CDM, such as the prospect of Kyoto Protocol's entry-into-force, US's withdrawal, and the risks of CER price fluctuation depending on the movement of hot air, to reduce risks by MOU contracts between investor and host countries can be effective, yet much more is expected of ideas and originalities offered by the private enterprises, as well. For the CDM-related capacity building at Annex-I and non-Annex I countries, we need to robustly promote activities like this symposium worldwide.

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