Developing Asia’s Competitive Advantage in Green Products: Learning from the Japanese Experience

Right now, governments around the world are spending record amounts of money to kick- start their economies in response to the financial crisis. Fortunately, a great opportunity exists for this fiscal stimulus to be directed towards green economic growth, which can not only provide the new markets and jobs needed immediately for alleviating poverty, but also address the challenges of global warming. Working models already exist, proving that sustainable growth is possible. To achieve this will require social, technical and structural changes, as well as appropriate policies conducive to eco-innovation. For developing countries, there are lessons that can be learned from countries that have already gone through that process. The aim of this paper is to show what lessons can be learnt from the Japanese case. As the world’s second largest economy, Japan is not only one of the most energy-efficient economies in the world; it also produces some of the world’s leading green technologies. This paper focuses on current trends in the green product market and consumer behavior in Japan, which have been influenced by recent government policies, particularly the 15.4 trillion (more than US$100 billion) stimulus package. The aim of this paper is to provide some insight on, and present a repository of selected government policies promoting sustainable development. The scope of this paper will cover areas such as hybrid vehicles, renewable energy, energy efficient home appliances, and green certification schemes. It also provides a brief discussion on the environmental policies of the new Japanese government that came into power on 16 September 2009. The paper attempts to use the most recent data, from June to August 2009, however given the quickly- evolving global environment, these statistics may change drastically by the time this paper is presented.