Types of information Japan should obtain and
use
- To develop site-adopted technology, important to study locally available
technologies and to make the best use of them. Especially, need to
gather information on environ-mental technologies in use today in
China, a key recipient.
- Information on technology transfer know-hows accumulated in local
governments and firms.
- Information on practical technology know-hows of private firms.
Types of information needed in recipient countries
- Productivity improvement, inventory management technologies, domestic
part production technologies, etc.
- Low-cost measuring equipment technology
Fig.-1
Basic procedures to promote and build environmental technology information
data base.
Step 1 Current
accesses
1 . It is important
to provide accesses for information and windows of information gathering
for the private firms of developing countries, where infrastructures
are not fully deloped.
2. Need to surrvey of Iocal situalion. and to improve accessibility.
Step 2 Training
of necessary local personnel in developing countries
1. Need local
personnel to present, gather, advise on the informat ion.
2. Need local personnel to monitor the content and result of information
inquired to the information source.
3. Need local personnel able to act as a consultant to private firms.
Step 3 Distribute
brochures and CD-ROMs
1 . To grasp the
needs of information in, and the information input from, recipient
countries, need to distribute pamph]ets, brochures, and CDs, suiting
the situation of recipient countries.
2. Need to survey technologies needed locally, and improve the rate
of information.
Step 4 Set
up data base
1 . Important
to select efficient methodology to build data base, depending on
the projected course and the current situation of infrastructures.
2. Need joint works with recipient countries to build and support
data base Need to standardize the format for information provision.
3. Need to establish efficient query function that makes fast access
to required information.
2) How to utilize
environmental technology information
For the efficient
use of international information network on environmental technology
transfers, we must find out the needs of expected participants on
environmental technology information, and determine the key points
for encouraging their utilization. Also, it is necessary to establish
a network system to accumulate and exchange the information of higher
needs.
The attached Figure-1
describes the basic procedures to pro-mote environmental cooperation
with recipient countries in terms of information use, based on the
needs to use these information and the viewpoints discussed at the
Research Committee. (Ref: Fig.-1)
(2) Analyzing
the current situation of environmental information data base
1) Major data
base available in Japan
APEC Vlrtual Center:
Opened the Home Page of "APEC Virtual Center for Environmental
Technology Exchange" on internet. Transmlts the information
on environmental technologies, knowledge, and experiences accumulated
in local administrations, private firms, and environment-related
institutions of the Kansai area. Llnks with environment-related
home pages in the APEC region, aiming to promote information exchanges
on environ-mental technologies. Started the operation since April
1997.
2) Major overseas
data base
UNEP (United Nations Environment Plan) data base: UNEP/IETC (International
Environmental Technology Cen-ter) is a subsidiary organization of
the United Nations in Osaka, Japan. Links with the environmental
technology data bases of the world. Opened the Home Page in February
1996.
(3) Issues of
information and information exchanges
1 ) Contents:
Lack of information needed for private firms to promote projects,
such as a method to procure a project fund, successful cases of
projects, and know-hows on promoting projects.
2) Function : Insufficient query function to access to information
needed by data base users. Lack of consulting function to follow
up the flow from information provision to project execution. No
consulting by experts for matching needs I seeds, or support for
project execution. Lack measures to investigate the information
needs in developing countries and promote a utilization rate.
3. Mechanism
to procure funds for environ-mental investment
(1)Current fund
supply
1) Fund supply
by international institutions
(i) TheWorld Bank : Expanded loans availability for energy related
projects. (The environment related loans share about 7% of total
loans offered by the World Bank from 1990 to 1995.) The largest
render for the building of power generation infrastructure in China.
Offered loans for the monitoring and survey of environmental pollution,
the establishment of Action Plans, technology transfers, and pollution
prevention.
(ii) Asia Development Bank (ADB) : Approved loans totaled
about 5.5 billion US$ In 1996 (+0.7% increase over the year before).
ADB's basic developmental loans for the least developed increased
by + 14.5% over the year before. Shiited the focus of loans to poverty
evasion, environmental conservation, and education. Also offered
loans to finance capital Investment for the technology transfer
of high-tech industry and to cover the payment of consultant fees.
Avail-able for the private firms of developed countries to enter
the environmental conservation market in developing countries.
(iii) United Nations Development Plan (UNDP) : Introduced
the "Capacity 2 1 Programme" as a financial assistance
program to implement Agenda 21 in developing countries.
(iv) New relations with private sector funds : The general
trend of the world is to expand private funds. The total private
fund spent in developing countries was I 70 billion dollars in 1995,
about 8 times as much as the World Bank loans. Financial assistance
institutions such as the World Bank have been trying to expand the
"insurance functions" of MIGA (Multilateral Investment
Guarantee Agency) to reduce the risks of private investments.
2) Fund supply
by Japanese public institutes
(i) Environmental ODA : The actual funds offered In 1995
were 276 billion Yens, about 20% of ODA total. Among them, about
60% was spent on refundable financial assistance of Yen loans. The
sectoral classification of bilateral ODA showed less than 20% spent
on industrial pollution measures.
(ii) Public funds and private funds : Private funds play
a significant role for technology transfers, in case of Japanese
funds, too. The total amount of private investment and loans was
about 23 billion US$ (in 1995), about 1.6 times total of governmental
assistance fund.
(iii) Green Aid Plan : An international cooperation program
instituted by the Ministry of International Trade and Industry for
the support and assistance in addressing industrial pollution, recycling,
energy saving and other energy problems in developing countries.
The budget total for 1996 was 16.5 billion Yens. At present, over
20 companies have been either undertaking, following-up, or reviewing
the projects, mainly the model projects of technology transfers,
under this plan.
(2) Current situation
of fund procurement
1 ) Fund procurement
by private firms of developing countries
When the firms in developing countries make investments on environmental
conservation, they usually procure funds by two methods: stock issuance
and bond issuance. In developing countries, firms who want to receive
loans from local financial institutes to finance projects such as
environmental investment which offers less economic benefit yet
difficulty in collateral set-ting, generally receive higher interest
rates on loans than the money market rate. Many of the developing
country governments, therefore, implement various programs of preferential
treatment for environmental conservation projects in order to promote
investments in this field.
2) Governmental
policies and measures to promote fund procurement
-
Direct financial
assistance: Special financing mechanisms such as tax preferential
treatment, subsidies, Ieases, etc. for introducing environmental
conservation technology.
-
Clearing information:
Providing information on the bene-fits of environmental conservation
technology, and Its market.
-
Fortifying
regulations
-
Trade packages:
Financial support until the start-up of a project (v) Risk sharing:
Direct or indirect risk sharing (vi) EST (Environmentally Sound
Technologies) Right Banks: Governments (mainly those of developed
countries) to acquire intellectual rights.
3) Case studies
(Two-step loan to Philippines) Two-step loan: A system to enable
small to medium companies of developing countries to procure necessary
funds for environ-mental conservation Investment. This particular
program In Philippines aims to support the introduction of environmental
conservation technologies to private companies in Manila, Philippines,
offering two-step loans through the Development Bank of Philippines
(DBP). This is the first official funding system for the prevention
of industrial pollution in Philippines. The Ministry of Finance
of the Japanese Government is to lend a 30- years' Yen loan with
2.5% per annum rate to the DBP through the Ministry of Finance of
the Philippine Government, and DBP then lends to local businesses
3- 15 years loans at I I % per annum rate In local currency. Similar
systems have been either introduced or planned by OECF for Thailand,
India, Indonesia, and so forth.
For two-step loan
system to succeed, the key points are the accu-rate forecasting
of flnancial needs, the coordinatlon between exe-cuters, and streamlining
of a financial sector and regulatory system.
(3) Proposal
for establishing a financial mechanism
Recently, private
investment projects are not limited to conventional projects of
power generation, and road construction, but begin to include projects
of building water supply and sewage infrastructure regarded as environmental
sector projects. In these fields of environmental conservation and
infrastructure building, however, Japanese companies seem to lag
behind American or European companies in Asia. While extensive risk
management capacity to oversee an entire project is a requisite
in these fields, Japanese companies including Japanese banks have
fewer experiences and rather small capacities in this respect. Therefore,
it is necessary for the government of Japan to actively support
Japanese companies for their activities in environment and energy
fields, in view of transferring the experiences of Japanese companies
in pollution prevention and energy saving. Since it is especially
difficult for the "small to medium companies" in developing
countries to procure environmental investment, overseas assistance
including that from Japan would be desirable. A "rural"
area is also a region of slower economic development and less chance
of overseas fund procurement, yet imposes more serious environmental
damages. Concerning the financial assistance program of future,
these "small to medium companies" and "rural area"
will be Important.
4. Proposal and
summary
(1) Basic philosophy
behind the introduction of environmental technology transfers
We must address
global environmental problems beyond the frameworks of nations,
regions, and generations. In developed countries, people are increasingly
aware of the importance that, to maintain and advance the world
order in post-cold-war era, the major issue would be to contribute
to improving social-life in global level (environment, safety,hygiene,
and welfare). Furthermore, what we must do is to develop a system
to found and foster an industry to accommodate global social improvement,
and the principle participant of such a system is, first of all.
a private company. On the other hand, the efforts of private companies
alone will not realize the goal, however high the long-term prospect
of market development in these fields is. While private companies
continue to conduct, based on their long-term strategy, detailed
marketing activities to develop and transfer technologies appropriated
for developing countries, the public sector must Implement practical
measures to encourage and support such activities.
(2) Proposal
for active use of environmental information
1 ) Name the
relevant institution in recipient countries : To activate the
exchange of information between developed countries, it is necessary
to designate specific institutions that can provide systematic infrastructure
as appointed windows for information exchanges. (For example, the
National Environmental Protection Agency of China Is attempting
to develop environmental technology data base in cooperation with
Tsinghua University.)
2) Better substances of information : Beside the currently
available technology information, must incorporate more substantial
information such as available project fund, cost benefit in terms
of LCA (life cycle assessment), proven technologies of successful
projects, and advice on localization.
3) Add a function of consultation : Must make a consulting
system to promote a project and to match needs and seeds.
4) Standardizing key words on information gathering : To
enable those in China and Japan to properly and quickly access the
necessary information, and to realize environmental assessment and
environmental businesses based on the common standards, the institutes
that provide data must standardize the definition of key words and
the composition of data base.
5) Roles and cooperation : It is necessary to clarify and
define how to work jointly and cooperatively with other data base
systems and what role each system shall take.
(3) Proposal
on the fund procurement
As a measure to
encourage investment for environmental conservation in developing
countries, the Government of Japan need to review the following
two essential items.
1) Promote
and activate Japan Money / "Yen" for environmental conservation
aids
As actual measures: (i) more packages of benefits such as free funds,
additional reduction of loan interests, increased use of leasing
system, etc.; (ii) more active implementation of two step loans
and fund establishment that will Increase the flow of funds to small
and medium-scale companies in developing countries, while meticulously
analyzing the needs for funds, host country's environmental policies
and measures, and Japan's funds for pollution prevention; (iii)
review the possibility of establishing an environmental conservation
fund, an infrastructure developmcnt institute, or an intermediating
agency etc., that would cover whole Asiatic region, instituted as
Japan's own or by the joint investment of Asian nations under the
initiative of Japan, for a measure to strengthen risk sharing network
among countries and between private and public sectors.
2) Supporting
the reduction of "trade cost" between businesses
-
Must dissipate
information through the establishment of a system for embassies
and JETRO to plan and support technological exposition overseas,
and the publishing of brochures to promote Japan's environmental
conservation technologies.
-
In view of
long-term prospect, it will bring competitive advantages to
Japanese companies, if financial assistance are offered to universities,
public research institutes and private companies for the research
and development works on environmental conservation technologies
directed toward develop-ing countries, since such activities
will compress local cost in developing countries.
-
As an instrument
for creating markets and activating market mechanisms, various
schemes, such as "Joint Implementation" and "Tradable
Permits" In case of a global warming issue, should be emphatically
implemented on the cooperation between public and private sectors.
(4) Conclusion
In case of promoting
international cooperation for environmental technology transfers
to developing countries of Asia, we must activate market mechanism
and develop an industry of such field, so to secure the dissipation
of transferred technologies. For this, private companies must proceed
with the development and transfer of technologies accompanied by
much patience and long term vision. The public sector such as governments,
on the other hand, must take on roles of leading such activities
and offering strong support to them. The joint efforts of public
and private sectors including local governments will play an important
role for realizing the effective transfer of appropriate technologies.
(Above is the
abstract and summary of the Research Committee Report published
in June of 1997. Itoh of GISPRI)
