OECD Environmental Performance Reviews: Japan 2025

Like many other OECD countries, Japan is grappling with the triple planetary crisis of climate change, biodiversity loss and pollution. These three crises are deeply interconnected; actions in one area often influence outcomes in others. For example, if not adequately planned, large-scale renewable energy projects to reduce greenhouse gas (GHG) emissions may affect ecosystems, while preserving and conserving forests and marine ecosystems enhance carbon sequestration. Finding ways to minimise trade-offs and maximise synergies is crucially important.

To address the crises effectively, Japan has been promoting, both domestically and internationally, the importance of a “synergistic approach” to climate change, biodiversity loss and pollution. Some major national environmental plans and strategies already reflect this approach, as discussed in the next section. Moreover, buoyed by Japan’s advocacy, recent international commitment statements have encouraged the pursuit of synergies across environmental policies and plans, including the 2023 G7 Hiroshima Leaders’ Communiqué (G7, 2023_[1]) and the 2024 United Nations Environment Assembly resolution on promoting synergies, co‑operation or collaboration for national implementation of multilateral environmental agreements and other relevant environmental instruments (UN and UNEP, 2024_[2]).

Japan recognises the importance of a place-based or territorial approach and the role of subnational governments in addressing the multifaceted and interconnected environmental challenges. This approach has emerged from the understanding that policy challenges and opportunities vary significantly across places, requiring targeted solutions for more effective outcomes. A one-size-fits-all approach is insufficient to address these challenges adequately. In climate policy, for example, GHG emissions, as well as the potential for reductions, can vary significantly across places, as do climate impacts like heat waves, droughts, floods and mudslides. A place-based approach allows national governments to tap the significant potential of subnational governments. In 2019, Japan’s subnational governments were responsible for over 85% of climate-significant public expenditure, well above the OECD average of 63% (OECD, 2024_[3]).

Place-based environmental policies can break down siloed, sector-based approaches, facilitating holistic, systems-wide approaches that address not only environmental challenges (e.g. climate mitigation and adaptation, biodiversity loss, pollution and waste) but also broader economic and social challenges (e.g. economic decline, depopulation). This approach fosters multi-level governance by clarifying the roles of subnational governments and supporting collaboration between these entities and national governments in response to shared policy challenges. Importantly, although local action is essential, its effectiveness will only be fully realised with national support. Therefore, national governments have a key role in promoting a place-based approach to environmental action. They are responsible for establishing the legal and institutional environments that enable subnational governments to implement effective environmental actions. The OECD has developed the Territorial Approach to Climate Action and Resilience (TACAR) framework to support governments in their place-based climate action efforts (Box 2.1).

Given the urgency of addressing the planetary triple crisis, Japan must accelerate efforts to leverage regional and local strengths, minimise trade-offs, and maximise synergies across environmental strategies and plans in an effective manner.

Japan’s diverse geographical and climatic landscape features a long archipelago with distinct climate zones, ranging from the snowy, mountainous regions of Hokkaido in the north to the subtropical climates of Okinawa in the south. This diversity is further complicated by the country's varied topography, which includes extensive coastlines, fertile plains and high mountain ranges.

Japan's regional disparities in social and economic performance are less pronounced than in many other OECD countries. For instance, the labour productivity gaps across large regions1 in Japan are relatively narrow, with only a difference of USD 24 000 per worker between the most and least productive regions. By comparison, the United States has significantly greater regional inequality, with a difference of about USD 100 000 per worker between its most and least productive regions (OECD, 2024_[3]) (Figure 2.1).

Japan presents remarkable diversities in environmental performance (e.g. climate mitigation potential, climate risks, green spaces, municipal waste) across its cities and regions. This highlights the need for tailored environmental policies as this section will explore.

Social, economic and environmental disparities are particularly pronounced between urban and rural regions.2 Rural regions, such as the Tohoku and Chugoku regions, are grappling with significant depopulation (Tsutsumi, 2020_[5]). Rural demographic and economic decline is intertwined with environmental challenges, such as land abandonment and decreased agricultural productivity. Rural areas often lack resources and the capacity to implement environmental policies, making them more vulnerable to climate risks like extreme weather events and resource scarcity.

GHG emissions per capita differ widely across prefectures (TL3 regions). While some prefectures have achieved significant emissions reductions since 1990, only three (Nara, Tokyo and Saitama) have already reached emission levels below 4.7 t CO₂-eq per capita, which is the 2030 emission per-capita benchmark consistent with the International Energy Agency’s Net Zero Emissions scenario for advanced economies (IEA, 2021_[6]; OECD, 2023_[4]). Emissions per capita can differ by a factor of ten between the least emitting prefecture (Nara) and the highest (Yamaguchi). Urban prefectures like Tokyo and Osaka tend to have lower emissions per capita than rural ones. Of the 47 prefectures, 32 (68%) achieved reductions in emissions between 1990 and 2022, including most urban regions. However, several regions – notably Shimane, Nagasaki, Fukui and Tokushima – have seen significant increases in emissions (Figure 2.2).

The sectoral profile of emissions also varies significantly between regions. For instance, Chiba Prefecture exhibits the highest emissions per capita among Japan’s urban regions due to its steel and petrochemicals industries and extensive port activities (Figure 2.3). Further, electricity production in this region relies almost entirely on fossil fuels.

Decarbonising buildings is a key opportunity for Japanese cities to achieve the green transition (see Section 2.4.). Emissions from buildings in Japan, on average, accounted for 1 t CO₂-eq per capita in 2022. It is a major source of emissions in urban regions such as Tokyo and Saitama, where the share of emissions from buildings is around 40% for both (Figure 2.3).

The share of electricity generated from renewable sources varies significantly among regions. Urban regions generate less electricity from renewable sources (36%) than intermediate regions (47%) or rural regions (58%). However, the share also varies within urban or rural regions, a disparity likely attributable to availability of space for solar farms and wind turbines, and the presence of natural resources conducive to renewable energy production. Areas like Nagano, Oita and Yamanashi prefectures have seen higher concentrations of solar power installations, partly due to their large areas of undeveloped land (Yamashita, 2016_[7]). Yamanashi Prefecture is a leading region for solar power generation (Figure 2.4), achieving 92% renewable electricity generation. This is the lowest rate of GHG emissions of all the rural regions in Japan (Figure 2.3) (Yamanashi Prefecture Government, 2024_[8]).

In 2020, 10.6% of the population of Japan was found to be at risk of river flooding compared to the OECD average of 12.9%. Japan is an island nation with an extensive coastline, and 4.3% of its population is at risk of coastal flooding, almost double the OECD average of 2.3%. Nonetheless, this share is lower than in the United Kingdom (4.9%) and Iceland (12.5%), two other island nations of similar size. Globally, exposure to flooding risk tends to be a particular challenge for metropolitan areas due to high population densities. In Japan, exposure to the risk of flooding varies significantly between different metropolitan areas (Figure 2.5). Japan has made good progress in the areas of water-related risk assessment. As of 2024, 98% of municipalities had prepared and disclosed flood hazard maps, which can be an effective tool to prepare for floods and minimise damage (Huang, 2024_[9]).

Cities in Japan are also increasingly exposed to heat stress due to the urban heat island effect. From 2018 to 2023, the population was exposed to an average of 60.1 days per year of strong heat stress.3 This is lower than the OECD average of approximately 64.6 days but still 11 days more than the baseline period of 1981-2010. Japan recorded the highest OECD average for summer daytime urban heat island intensity4 from 2018 to 2022, with a value of 4.5°C compared to the OECD average of 2.4°C. All Japanese cities registered an annual urban heat island intensity above 1°C, and two-thirds experienced a summer daytime heat island effect exceeding 4°C. This challenge is particularly significant for large cities due to reduced ventilation, the proximity of tall buildings, heat generated from human activities, the properties of urban building materials and the limited amount of vegetation. In Tokyo and Osaka, temperatures in urban centres are often six degrees higher than in their surroundings. High temperatures affect public health, energy demand and overall quality of life.

On average, green areas cover only 18% of land in the urban centres of Japanese cities, compared to the OECD average of 42% (Figure 2.6). Although tree cover has increased in 22 of 61 (36%) functional urban areas (FUAs)5 between 2000 and 2022 – including Osaka – it has decreased in 37 FUAs (61%)6 (Figure 2.7). Lack of green space has significant implications for quality of life in cities, and for climate resilience; green space is important for attenuating the urban heat island effect, and for the absorption and retention of water to reduce flood risk.

On average, Japan achieves a relatively low level of municipal waste, at about 330 kg per capita in 2021, compared to the OECD average of 531 kg per capita (OECD, 2024_[10]). There is little variation in municipal waste generation rates between regions, which suggests efforts to prevent waste are being applied consistently across the country (Figure 2.8). However, on average, only about 20% of municipal waste is recycled compared to the OECD average of 24%, which suggests that Japan has room for improvement (Chapter 1).

Compared with other OECD countries, Japan has one of the most comprehensive datasets of statistical information at the subnational level. This database could be expanded further by, for instance, producing and collecting data and statistics at the functional geographical scale (e.g. metropolitan areas, water basins), and at the more granular scale in targeted environmental policy areas (e.g. GHG emissions by sector, energy consumption, biodiversity). Having data and statistics available at a range of subnational territorial scales supports policy makers to develop solutions targeted at the right scale. Tools like the OECD's Territorial Climate Indicators (Box 2.1) and the PLATEAU (Box 2.2) can help bridge capacity gaps at the subnational level.

Japan’s major national environmental plans and strategies illustrate that the national government recognises the role of subnational governments in achieving national environmental goals and targets, although with some variation (Table 2.1).7

Development process: While Japan has made some efforts to engage local governments in the development of its environmental plans and strategies, more targeted engagement would be beneficial. While local governments are able to participate in the development of national plans and strategies by submitting comments during public consultations, they are not often subject to targeted engagement.

• The development of the 6th Basic Environment Plan, Japan's 5th Fundamental Plan for Establishing a Sound Material-Cycle Society, the Plan for Global Warming Countermeasures and the Climate Change Adaptation Plan all involved gathering comprehensive public comments from a wide range of stakeholders, including local governments.

• The National Biodiversity Strategy and Action Plan (NBSAP) of Japan 2023-2030 emphasises the importance of regional biodiversity and encourages local governments to contribute by developing their own local plans (LBSAPs), ensuring that local conditions are considered in the national framework. This localised approach allows for tailored actions that address the unique ecological conditions, cultural practices and economic activities of different regions.

• Japan has an opportunity to strengthen local government engagement in the development of national plans and strategies with the forthcoming GX2040 Vision (under development) and updated Nationally Determined Contribution (NDC) (due 2025). It is welcome that Japan's council for discussing the forthcoming NDC includes the president of the National Governors' Association, and that discussions incorporate opinions from local areas.

Targets and goals: Japan’s environmental plans and strategies increasingly integrate targets and goals set at the local level.

• The 6th Basic Environment Plan prioritises regional decarbonisation, including through specific local initiatives like the 100 Decarbonization Leading Areas (DLAs), which target zero GHG emissions in specific neighbourhoods by 2030. Similarly, the NBSAP tailors biodiversity conservation measures to the ecological and socio-economic contexts of different regions.

• The 5th Fundamental Plan for Establishing a Sound Material-Cycle Society sets numerical targets for key indicators to promote a circular economy. The strategy recognises local perspectives and regional variations and promotes local-level initiatives tailored to the specific needs and resources of different areas.

• While Japan’s current NDC does not set GHG emissions reduction goals for local governments, 60% of subnational governments have committed to achieving net-zero carbon emissions by 2050, either voluntarily or with national support (MOE, 2024_[11]). Japan’s updated NDC (due 2025) could reflect these subnational goals. Local governments are not “parties” formally involved in global climate negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). As such, they are not bound by the resulting agreements. However, many national governments do incorporate local climate action in their national pledges and policies, including NDCs (OECD, 2023_[4]).

• While the 2023 Basic Policy for the Realization of the Green Transformation (GX) (hereafter GX Basic Policy) focuses on national targets and goals, Japan’s forthcoming GX2040 Vision (under development) presents an opportunity to integrate targets and goals for local governments as well.

Implementation: Local governments are already heavily involved in the implementation of national plans and strategies, although not always directly.

• Subnational governments are expected to play a major role in the implementation of the 6th Basic Environment Plan. One of the plan’s core principles is “participation”, aiming to involve all societal actors in environmental conservation efforts, including local governments. Local governments are responsible for executing priority measures for regional decarbonisation and developing local decarbonisation plans. The national government provides financial, technical and informational support to local governments to facilitate these efforts. The plan recognises the role of local governments in promoting structural transformations within their regions and encourages the creation of sustainable communities through interaction and co‑operation between governments, markets and citizens.

• The Plan for Global Warming Countermeasures requires local governments (alone or jointly) to adopt action plans to reduce GHG emissions arising from their own activities and projects.

• The NBSAP of Japan 2023-2030 entrusts local governments with implementing biodiversity conservation plans tailored to their specific regional contexts. The national government provides tools and guidelines to support the process, such as the "Potential Map of Ecosystem Conservation/Restoration" for implementing nature-based solutions for disaster risk management at the local level. All 47 prefectures (TL3) in Japan have now developed and implemented their LBSAPs based on the NBSAP. Additionally, 177 municipalities within these prefectures, representing about 10% of the total number of municipalities in Japan, have also developed and have been implementing their own LBSAPs.

• Under the Climate Change Adaptation Plan, regional councils on climate change adaptation have been formed as regional collaboration spheres among various local actors for implementing adaptation measures​. The Climate Change Adaptation Information Platform (A-PLAT) was also established to collect, organise, analyse and provide information on climate change impacts and adaptation, as well as to offer technical advice and support to local governments and Local Climate Change Adaptation Centers.

• Local governments are key to implementing the 5th Fundamental Plan for Establishing a Sound Material-Cycle Society by co‑ordinating regional recycling systems, managing waste effectively and fostering localised waste-to-energy initiatives. They collaborate with communities, ensuring disaster waste preparedness measures and sustainable practices to meet national goals. Local governments act as key co‑ordinators, assessing local resource conditions and forming alliances with residents, businesses, non-governmental organisations and experts to create tailored, regionally scaled recycling and waste reduction initiatives.

• Implementation initiatives in the GX Basic Policy focus on sectoral and industry actors, with limited direct involvement of local governments. However, local governments play a key role, if indirectly, in driving regional decarbonisation measures and supporting renewable energy projects through, for instance, local regulatory measures. The forthcoming GX2040 Vision could seek to include local governments in its implementation measures more directly.

Ideally, subnational stakeholders should be systematically involved in the development process of national plans and strategies as this helps ensure they reflect local perspectives. The 6th Basic Environment Plan and the NBSAP stand out for their strong integration of local perspectives across targets, development processes and implementation. Implementing regional roundtables could facilitate dialogue between national and local stakeholders by providing a platform for involvement and feedback, allowing for adaptive management and policy adjustments at the national level. For instance, Germany designed the Climate Action Planning framework that engages federal states and municipalities in a collaborative process to set emissions reduction targets. Strong public engagement efforts are also important for keeping community members informed and involved in sustainability initiatives, fostering a sense of ownership and responsibility.

Japan has made impressive progress to incorporate cities and regions in setting specific targets, in line with leading practice in other OECD countries. In France, for example, the Île-de-France region (which includes Paris) has set specific targets to reduce emissions by 40% by 2030 and achieve carbon neutrality by 2050. These targets are part of the region’s comprehensive Plan Climat-Air-Énergie, which aligns with national objectives while addressing the unique urban challenges of France’s most densely populated area (Région Île-de-France, 2022_[12]).

Japan should continue to invest in capacity building for local governments. Providing the necessary tools, knowledge and resources will enable local governments to implement sustainability initiatives effectively. For instance, the government can offer training workshops focused on best practices and new technologies in sustainability. It could also facilitate partnerships between local governments, the private sector and civil society. For example, providing platforms for stakeholders to share ideas and collaborate on sustainability projects could leverage resources, expertise and innovation. To facilitate these partnerships, the government could provide a platform for stakeholders to share ideas and collaborate on sustainability projects.

Some national plans and strategies discuss co-benefits and synergies in environmental and economic fields but often only implicitly. Opportunities for co-benefits and synergies could be more systematically and explicitly highlighted (Table 2.2).

Japan’s Regional Environment Offices (REOs) could play a more central role in engaging subnational governments and aligning environmental policies across different levels of government to better identify and exploit synergies across environmental, social and economic policy objectives. REOs are decentralised branches of the Ministry for the Environment that co‑ordinate and implement national environmental policies at the local level to ensure alignment between national goals and regional needs. By co‑ordinating between national ministries and local governments, REOs can help tailor technical and financial support to meet the needs of cities and regions, particularly small local governments with limited capacity. Strengthening the role of these offices would ensure that national environmental plans and strategies are implemented more effectively, with local governments having the resources and guidance needed.

An illustrative example of this approach is found in Ireland, where four Climate Action Regional Offices (CAROs) were established to support local authorities in developing and implementing climate action plans aligned with national climate goals. CAROs play a vital role in co‑ordinating adaptation and mitigation strategies across regions, providing technical assistance and fostering knowledge-sharing among local governments. They work closely with municipalities to tailor climate initiatives to regional needs, helping to build capacity and strengthen resilience (OECD, 2023_[4]).

Japan has made significant strides in fostering place-based environmental action that simultaneously supports environmental, economic and social resilience at the local level. The most notable examples of this are the two pilot initiatives: DLAs and the Circular and Ecological Economy (CEE) framework. Both initiatives provide a comprehensive framework for place-based environmental action, aiming to leverage local strengths and overcome context-specific challenges.

In 2022, Japan started the DLAs initiative to demonstrate how the country can achieve the 2050 carbon neutrality target through neighbourhood-scale pilot projects, in line with its commitments under the Paris Agreement (MOE, 2021_[13]). To date, 82 projects have been selected in five rounds to advance regional decarbonisation efforts (Annex Table 2.A.1), with plans to extend this to 100 regions. Specifically, local governments and stakeholders receive national grants and technical assistance aimed at fostering innovation in climate mitigation strategies. The DLA addresses specific needs and challenges of diverse regions, including agricultural areas, mountainous regions, fishing villages, remote islands and urban centres.

Prior to the DLAs, Japan developed a Regional Decarbonisation Roadmap in 2021, which presented a robust framework for generating place-based environmental action. The need for the Roadmap stemmed from the fact that subnational governments often face significant barriers to implementing climate action on their own. These barriers include limited financial resources, inadequate technical expertise and a lack of co‑ordination across regions and sectors. Without national support, smaller or less economically developed areas may struggle to invest in large-scale decarbonisation projects. The Roadmap addresses these challenges by providing the necessary funding, expertise and a co‑ordinated framework, enabling regions to pursue decarbonisation in a way that advances national goals while reflecting local conditions. The Roadmap promotes localised strategies tailored to specific needs and strengths. DLAs are integral to the broader Roadmap, as they embody its strategy of tailoring decarbonisation efforts to the unique characteristics of each region.

The 82 DLAs include agricultural areas, mountainous regions, fishing villages, remote islands and urban areas (Annex Table 2.A.1). This diversity illustrates the initiative’s intention to showcase a variety of regional decarbonisation pathways at all territorial levels. While the list includes some of the most dynamic and industrialised urban centres, the largest share of areas skew towards smaller cities and towns, many of which are in rural or semi-urban settings (MOE, 2024_[14]).

The DLAs have been chosen based on criteria aligned with the Roadmap’s objectives, such as existing renewable energy capacity, innovative technological developments, and strong local government and industry commitment to sustainability. Each project combines efforts in climate mitigation with other regional challenges, showcasing the potential for regional actions to drive national environmental progress alongside other social, economic and environmental goals. The greatest number of DLA initiatives address disaster prevention and resilience; agriculture, forestry and fisheries; and resource circulation (Annex Table 2.A.1):

• Disaster prevention and resilience are top priorities, with 29 areas concentrating on interventions that will strengthen institutions and infrastructure in the face of climate risks. This includes efforts to build microgrids, establish disaster prevention agreements with private businesses and use existing infrastructure such as heat pipes.

• Agriculture, forestry and fisheries are also priorities in 28 areas, indicating a strong emphasis on supporting rural economies through, for instance, building new supply chains and improving management bases through the use of solar sharing and fuel conversion.

• Resource circulation initiatives, which cover regional efforts to use unused resources, by-products and discarded technologies, are important in 23 areas.

While many regions focus on pursuing synergies between climate mitigation and circular economy enhancement, synergies between biodiversity and climate mitigation, as well as biodiversity and circular economy enhancement, are underexploited. For instance, few DLAs include biodiversity as part of their decarbonisation efforts (Annex Table 2.A.1). An exception is the Ukiha initiative, which centres on local resources like fruit and tourist farms (MOE, 2024_[14]). Through innovative measures such as producing biochar from pruned branches and reinvesting in conservation efforts, Ukiha creates a model for decarbonising agriculture while promoting biodiversity conservation. This approach shows potential to be scaled up or replicated across other regions.

Introduced in 2018, the CEE framework aims to revitalise regions and make the most of local resources. By strengthening mutual support between urban and rural areas, and promoting circularity and self-reliance, it addresses social, economic and environmental challenges concurrently (Ortiz-Moya et al., 2021_[15]; MOE, 2024_[16]) (Figure 2.9). This framework is implemented through localised Regional Circulating and Ecological Spheres (Regional CEEs) (MOE, 2018_[17]). The CEE framework demonstrates Japan’s commitment to a place-based, territorial approach that leverages local characteristics and assets. Through this framework, the central government provides guidance to subnational governments, which often lack the financial resources, technical expertise and regulatory frameworks to implement effective circular economy practices on their own.

According to a survey by the Ministry of the Environment, 146 subnational governments (in both rural and urban areas) have implemented CEE initiatives to date, including the examples below:

• Nagano Prefecture, renowned for its mountain landscapes, is advancing sustainability through its ambitious “Nagano Comprehensive Five-Year Plan” (IGES, 2019_[18]). The prefecture aims for 100% renewable energy and a self-sufficient society by focusing on community engagement and education, local resource use, sustainable and inclusive city planning, and community-centred renewable energy. This approach seeks to maximise synergies between social, economic and environmental objectives. For instance, the renewable energy and sustainable city planning goals contribute to educational and economic objectives. Initiatives include solar mapping and community-based energy projects, as well as exporting hydropower to urban centres. Within the prefecture, the Ina City municipality applies a forest-based bioeconomy model, with a 50-year forest vision to integrate sustainable timber use and biomass heating, coupled with environmental education.

• Hamamatsu City, host to major industries like textiles and musical instruments, promotes local energy production for local consumption, capitalising on its abundant sunlight and renewable energy potential (IGES, 2019_[18]). In response to energy security needs after the 2011 earthquake, Hamamatsu established its "New Energy Promotion Department" and launched the “Hamamatsu Energy Vision 3”. This focuses on increasing energy self-sufficiency from 4.3% in 2011 to 20.3% by 2030. To further this goal, Hamamatsu Energy Co. Ltd. was founded in 2015 with local investment to manage solar and biomass energy production, aiming for at least 80% of energy to be generated locally. Hamamatsu City’s model enhances resilience by securing local energy independence. This supports local industries while mitigating risks from national energy crises, generating synergies between environmental and economic objectives.

• In Owase City, a decommissioned thermal power plant has been transformed into a hub for sustainable projects. This initiative has catalysed a shift towards a circular economy, leading to projects that promote land-based aquaculture, mega solar power installations and sustainable lumber production. By leveraging these projects, the city is revitalising its local economy, supporting biodiversity and promoting sustainable resource use. A multi-stakeholder council has been established to enhance co‑ordination, ensuring that efforts are scaled appropriately across sectors.

• Shimokawa Town, a rural area known for its rugged winters, has embraced the CEE framework to counteract the challenges of economic decline, depopulation and extreme climate (IGES, 2019_[18]). Shimokawa’s economy once relied heavily on agriculture, forestry and mining. However, as these industries declined and the population fell rapidly, Shimokawa gathered local stakeholders in 1998 to explore sustainable pathways for growth. The 2004 “Grand Design for Forestry Symbiosis” set the foundation for an economy rooted in sustainable forestry, with initiatives focusing on economic resilience, climate resilience and preservation of environmental assets. Alongside these goals, Shimokawa has aimed to foster community well-being through initiatives like the Ichinohashi Bio-Village. This innovative hub combines housing, social services and a low-carbon energy model based on forest biomass to support both the elderly population and foster sustainability (Shimokawa Town, 2018_[19]). The Japanese government has designated Shimokawa Town as an SDGs Future City (Japan Up Close, 2022_[20]).

• Suzu City, a small rural municipality, demonstrates how the CEE approach can revitalise communities facing population decline and isolation (Ortiz-Moya et al., 2021_[15]). Following a population decline from over 38 000 in 1950 to around 14 600 in 2015, Suzu City launched the “Population Vision for Suzu City” in 2016. This aims to stabilise population through sustainable growth that integrates local landscapes into industry to support community resilience and attract younger populations. Central to this effort are Suzu’s Satoyama landscapes and seascapes, which integrate agriculture, forestry and fishing as sustainable assets to foster industry, biodiversity and rural-urban connections. Renewable energy and resource-circulation projects, including wind and solar installations, a biomass plant and community recycling, have contributed emissions reductions alongside community and economic revitalisation. Suzu’s 2018 designation as an SDGs Future City has enabled new partnerships (e.g. with Kanazawa University) and initiatives such as the Noto Satoyama-Satoumi Meister Programme to train younger generations in sustainability.

The DLA and CEE initiatives demonstrate that a place-based approach holds great potential for delivering effective environmental action. Efforts to scale these initiatives should focus on expanding their geographical reach, deepening impact and targeting municipalities with limited financial and technical resources but strong decarbonisation potential.

Implementing awareness campaigns, developing training programmes and establishing a regional support network could enable a larger number of Japanese municipalities to participate in the DLA and CEE initiatives.

• Awareness campaigns can be launched to inform all municipalities about the opportunity to participate in these programmes.

• The national government could partner with representatives from successful DLAs and CESs to conduct training sessions to educate municipalities on potential projects, innovative technologies and approaches.

• Creating a regional support network – through a digital platform, for example – would facilitate knowledge exchange among municipalities already involved in the DLA and Regional CES initiatives, national government officials and other municipalities. This network could promote the sharing of effective strategies, identify challenges and facilitate distribution of resources. It would also help the national government gain insights into the specific issues faced by existing and aspiring DLAs and regional CESs, allowing for more effective allocation of resources and support.

The national government of Japan could look to Costa Rica’s National Decarbonisation Plan for further inspiration on how to scale local environmental action (Box 2.3). It provides inspiration to enhance local action by employing transformative, rather than incremental, approaches.

It is essential for the national government to ensure sufficient human and financial resources to support the DLA and CEE initiatives. For instance, DLAs already receive prioritised support from the national government, including access to specialised funding, technical expertise and regulatory leeway to implement advanced decarbonisation projects. This includes subsidies for local decarbonisation actions, with a budget of JPY 35 billion in 2023. It also includes funding from the Japan Green Investment Corporation for Carbon Neutrality. The latter had a budget of JPY 40 billion in 2022 for corporations that implement decarbonisation projects in addition to the government guarantee for less than five years of JPY 20 billion (MOE, 2024_[22]). Continued financial support in lagging regions where municipalities tend to struggle for financial resources would help ensure these DLAs continue to generate positive impacts.

The efficiency and effectiveness of DLA and CEE initiatives could be improved by developing a more comprehensive framework to monitor and evaluate the impact of local environmental actions they generate. This would involve first taking stock of existing measuring and monitoring frameworks, then assessing data and information gaps. The government could then implement more standardised mechanisms for measuring, monitoring and reporting various indicators at the local scale. This, in turn, would enable the national government to make more informed decisions on how to best direct funding and support to regions.

To fully harness the potential of synergies between the economic, social and environmental objectives (and avoid any associated trade-offs), Japan should carefully examine where synergy-potential remains underdeveloped.

For instance, biodiversity is not well considered in the DLA initiative. Biodiversity conservation can be integrated with climate mitigation and adaptation according to the “nature-positive city” model. “Nature-positive cities” is an emerging concept that takes a holistic approach to integrating nature-based solutions into the design of cities at the metropolitan scale, achieving multiple co-benefits across the environmental, social and economic objectives (WEF, 2024_[23]). Urban parks, for instance, capture carbon in trees and vegetation while helping cities adapt to climate change by providing a cooling effect and absorbing stormwater. At the same time, they can enhance urban biodiversity and improve the well-being of local residents.

Similarly, investing in solar panel recycling technologies can provide opportunities for Japan to embed circular economy principles into its renewable energy strategy. By prioritising infrastructure that facilitates the recycling and repurposing of solar panels and encouraging the design of solar panels with end-of-life considerations, the solar industry can significantly reduce waste and resource consumption. In so doing, it would contribute to both environmental protection and long-term economic viability.

It is also important to design incentives with synergies in mind. For instance, programmes that offer financial support for community-driven renewable energy initiatives can boost local economies and create local jobs, while supporting the country’s climate commitments.

An enhanced role for REOs could also help scale DLA and CEE initiatives. Japan’s REOs could do more to engage with subnational governments and ensure alignment of environmental policies across various government levels. By acting as intermediaries between the national and local governments, these offices could deliver the tailored support needed for smaller prefectures and municipalities to initiate local environmental action, and participate in the DLA and CEE initiatives.

Prefectures could also play a more active role in co‑ordinating between the national and municipal governments, leveraging their place-based knowledge and human, technical and financial capacity. For example, in France, the Regional Conference of the Parties (“Regional COP”) employs a co‑ordinated environmental planning process. Prefectures act as a link between the national government and local municipalities, facilitating the implementation of environmental objectives at the local level (Box 2.4).

National-scale regulatory, institutional and financial frameworks can be leveraged to advance local environmental action in a manner that maximises environmental, social and economic synergies. Japan has already made progress with this in the transition to renewable energies. For instance, the solar-sharing model – implemented, for example, in Sosa City – was made possible by a notice issued by the Ministry of Agriculture, Forestry and Fisheries in 2013 that enabled rural solar expansion through solar sharing. This allows for the simultaneous use of land for agriculture and solar energy production, contributing to both environmental and economic objectives (Magami, 2014_[25]).

Another good example is the Renewable Energy Promotion Areas (REPAs), established under the Act on Promotion of Global Warming Countermeasures. Designated by municipalities, REPAs streamline regulatory processes, allowing subnational governments to align projects with both national and local standards, thus accelerating the deployment of solar, wind and other renewables (MOE, 2021_[26]; Kohsaka and Kohyama, 2022_[27]). REPAs help minimise land-use conflicts and community opposition by being attuned to local social conditions. Approval involves councils and stakeholder bodies to ensure regional consensus (MOE, 2021_[26]). Additionally, the national framework for REPAs supports infrastructure investments that facilitate grid integration, enabling local governments to leverage renewable energy for economic growth and environmental benefits. However, as of May 2024, only 36 of the 1 718 municipalities in Japan had established renewable energy promotion zones (MOE, 2024_[28]) due to the local authorities’ shortage of personnel and information. To address this challenge, the 2024 revision of the Act on Promotion of Global Warming Countermeasures introduced a framework for joint designation of REPAs between prefectures and municipalities. Prefectural involvement is expected to support small municipalities and simplify the designation of zones across multiple areas, especially for large-scale installations like onshore wind facilities.

Prefectures have leveraged local ordinances to manage the trade-offs between renewable energy development and local environmental and social concerns (RILG, 2024_[29]). Hyogo Prefecture's “Ordinance on Harmony between Solar Power Generation Facilities and the Local Environment” 2024 guides solar energy projects to be aligned with the local context rather than simply restricting their installation (Hyogo Prefecture, 2024_[30]). The ordinance requires solar installations to preserve local landscapes, prevent environmental degradation and include disaster prevention measures like ensuring ground stability and proper drainage. The ordinance also requires notification and co‑ordination with neighbours to mitigate negative impacts on the community.

Community opposition can often be a barrier to scaling up place-based environmental action, particularly in the case of renewable energy projects. The solar energy sector's rapid expansion in Japan has led to substantial public resistance, primarily due to concerns over impacts on landscapes, increased landslide risks and other environmental disruptions. Consequently, municipalities have introduced zoning and environmental regulations targeting solar power sites, requiring environmental impact assessments and establishing land-use restrictions to protect cultural and ecological sites (Yamashita, 2016_[7]; Kohsaka and Kohyama, 2023_[31]). As of June 2024, these ordinances total 289. While well intentioned, some ordinances have inadvertently limited suitable land for solar projects, potentially slowing Japan’s transition to renewable energy (RILG, 2024_[29]).

Improving stakeholder engagement could be a pathway to significantly increase local acceptance of environmental actions like solar power installations. In Germany, for instance, agrivoltaics initiatives prioritise sustainable land use and biodiversity while generating renewable energy. They have shown that involving local communities in the decision-making process can improve acceptance and support for solar installations (Rösch and Fakharizadehshirazi, 2024_[32]). In Korea, the government’s support for agrivoltaics, which aims to assist low-income farmers while advancing renewable energy goals, illustrates how public policy can foster community acceptance and participation in renewable energy projects (Tajima, Doedt and Lida, 2022_[33]). France has also implemented agrivoltaics projects that emphasise environmental stewardship and community benefits, thereby showcasing the potential for successful local consensus-building around solar facilities (Tajima, Doedt and Lida, 2022_[33]). The 100 Climate-Neutral and Smart Cities programme, developed by the European Union, engages local communities and stakeholders as a key tool for scaling up (Box 2.5).

Although the national government has provided substantial financial support for environmental action at the local level, the uneven distribution of resources has placed regions with limited fiscal capacity at a disadvantage. This challenge stems, in part, from their dependency on subsidies, which are an uncertain revenue stream, making it difficult to leverage the available financing tools. To address this, Japan could diversify the funding and financing instruments accessible to cities and regions, particularly revenue-raising tools. Mechanisms such as land value capture, biodiversity offsetting, payments for ecosystem services and environmental bonds could help cities and regions mobilise private investment in environmental initiatives. It is essential to embed safeguards to ensure revenue raising is equitable, and that vulnerable and marginalised communities are protected from potential adverse impacts (G20/OECD, 2023_[35]).

Expanding the revenue sources available to subnational governments would help make their projects – including environmental action projects – more attractive and less risky to private investors, and therefore easier to finance. For instance, to address deteriorating water quality, Kanagawa prefecture initiated the “Basic Policy for Water Source Environment Conservation and Restoration” (2005-2025) and launched a funding plan in 2018 through a special water conservation tax. This tax, averaging JPY 890 per taxpayer, funds actions such as water monitoring, river conservation in neighbouring prefectures and public awareness. Support for this plan was high, with 77% of citizens favouring budget spending beyond prefectural limits. This initiative showcases Kanagawa’s commitment to sustainable resource management (IGES, 2019_[18]), including through an innovative funding instrument.

Given the tight public budget, leveraging private investment in local environmental action will be more and more crucial. The growing availability of sustainable finance presents an opportunity for local governments to better meet their investment needs. To enhance local governments’ access to sustainable finance, G20/OECD (2023_[35]) highlighted the need for establishing effective fiscal and regulatory frameworks to facilitate affordable and sustainable finance while ensuring fiscal responsibility. Green financing and transition finance have emerged as a central mechanism for Japan to scale projects that foster environmental and social benefits while delivering economic value (Chapter 1). Green bonds, sustainability-linked loans and impact investing are tools that can attract private capital to sustainable projects. By supporting infrastructure for renewable energy, low-carbon transport systems and sustainable urban development, green financing can contribute to emissions reductions and positive environmental outcomes, while generating employment opportunities and fostering technological innovation.

Japanese urban and rural regions offer distinct opportunities to create synergies between environmental, social and economic objectives, including through climate mitigation and adaptation projects, biodiversity conservation and the circular economy.

Japan’s urban areas play an essential role in advancing environmental policies, while facing specific social, economic and environmental challenges that require tailored responses. High population density and industrial activity require that cities balance climate mitigation with biodiversity conservation and circular economy goals.

GHG emissions from buildings tend to be lower per capita in dense, urban areas because apartments tend to have smaller floor areas and fewer external walls than standalone homes, which makes them more energy efficient. However, GHG emissions from buildings remain a challenge in urban areas. Meanwhile, on a per capita basis, emissions from buildings are higher in rural regions (Figure 2.10), urban areas still account for the absolute majority (54.5%) of total emissions from buildings in Japan (OECD, 2023_[4]).

Across Japanese cities, sustainable building initiatives are integrating innovative energy management and decarbonisation measures that can generate environmental, economic and social co-benefits.

• In Saitama City, the development of digital technology in energy management systems has significantly reduced carbon emissions, while enhancing local economies and improving residents’ quality of life (MOE, 2024_[14]). This approach demonstrates effective mainstreaming of climate objectives within urban policies and showcases synergies between technological innovation, community engagement and sustainable urban development through the integration of renewable energy sources, smart grid technology and Community Energy Management Systems powered by solar and waste energy. Nevertheless, scaling these innovations nationwide poses challenges, particularly in areas with underdeveloped digital infrastructure. Additionally, the up-front costs of advanced systems can be prohibitive for smaller municipalities, limiting widespread implementation and the overall impact of these initiatives. To better inform decarbonisation strategies, Saitama could conduct detailed assessments of building stock and local heating sources to tailor policies effectively to community needs.

• In Ishikari City, the development of a smart industrial space powered entirely by renewable energy – including wind, solar and biomass – aims to decarbonise the industrial area around Ishikari Bay New Port (MOE, 2021_[36]). This initiative not only reduces carbon emissions but also attracts green businesses, such as Kyocera’s zero-emissions data centre, while promoting local energy consumption to revitalise the economy. Additionally, in response to the 2018 Hokkaido earthquake, Ishikari is building a microgrid for autonomous energy supply, further enhancing regional resilience (MOE, 2021_[36]). This dual focus on sustainability and economic revitalisation illustrates how Japan has mainstreamed environment objectives within economic development goals, with the local industrial scale promoting resilience and sustainability. Expanding similar projects to other regions could foster economic revitalisation and promote net-zero transitions on a larger scale.

Innovative solutions are needed to increase the supply of renewable energy in urban areas to decarbonise energy use in buildings. This could include introducing storage batteries and new technology such as perovskite solar cells, and transmitting electricity from other regions where renewable energy generation exceeds their energy demand.

Yokohama’s Minato Mirai 21 District exemplifies collaboration between local government and businesses to achieve carbon neutrality in the commercial sector by 2030. This initiative includes a framework for climate mitigation and adaptation objectives within urban master plans, ensuring strategic alignment with national climate goals. Designated as a DLA by the Ministry of the Environment, Minato Mirai 21 is implementing renewable energy solutions and energy management technologies (City of Yokohama, 2024_[37]). The city’s initiative to recycle plastic waste into new products reduces CO₂ emissions by minimising waste incineration, while supporting a circular economy. This focus on multi-sectoral co-benefits through circular economy projects promotes neighbourhood-level action in an effective manner with benefits beyond climate. Currently, 35 of the 64 eligible businesses in the area have endorsed the decarbonisation initiative. However, reliance on voluntary commitments limits potential impact; more robust regulatory frameworks and economic incentives could sustain and scale up business participation, reinforcing regional and national decarbonisation goals (City of Yokohama, 2024_[37]).

Cities have implemented innovative industrial initiatives that integrate environmental action with economic and social development. For instance, Kitakyushu City’s Eco-Recycling Enterprise Cluster has mainstreamed environmental initiatives, contributing to a reduction of approximately 430 000 tonnes of CO₂ emissions annually while fostering industrial symbiosis (MOE, 2019_[38]). This cluster brings together industries, research institutions and local governments to promote sustainable practices and environmental conservation. It has generated over 1 000 jobs and supported local economic growth, illustrating a strong synergy between sustainability and economic progress (MOE, 2019_[38]). This initiative mainstreams climate objectives into urban policy effectively by linking environmental conservation with economic growth. However, ongoing assessments of local resources could enhance its resilience and identify new areas to support net-zero transitions within industrial sectors.

Japan will need to double down its efforts to minimise the conversion of natural land to urban uses (land artificialisation) and promote mixed-use, high-density and nature-positive urban development, as these are effective policy instruments to generate synergies between climate action, biodiversity and material circularity objectives.

In 80% of OECD FUAs, built-up areas grew faster than the population between 2000 and 2020 (OECD, 2023_[4]) – including every FUA in Japan (Figure 2.11; Figure 2.12). Increasing built-up area per capita tends to be associated with low-density housing and urban sprawl, which leads to higher energy demand and increased transport-related GHG emissions (Burgalassi and Luzzati, 2015_[39]; Hardelin and Lankoski, 2018_[40]). The conversion of natural land to urban uses can contribute to shrinking carbon sinks and higher agriculture, forestry and other land-use emissions. The speed of increase in Japan is among the fastest among OECD countries, despite the country’s population decline (Figure 2.11). In Japan’s three largest FUAs (Tokyo, Osaka and Nagoya), built-up area outpaced population growth by 4.3 percentage points (p.p), 19.6 p.p. and 8.8 p.p., respectively (Figure 2.12). In the Matsumoto FUA, this difference in growth rates exceeded 60 p.p. This means that built-up area grew by 158%, while population decreased by 2% in 2000-20 (Figure 2.12).

In addition to promoting compact urban development, enhancing urban transport connectivity is essential for reducing transport-related emissions, commute times and travel costs while providing inclusive transport options, such as public transit and active mobility. Many urban areas in Japan have advanced sustainable transport initiatives that integrate environmental action with urban mobility, creating effective synergies across multiple goals and offering valuable inspiration for other cities:

• Toyama City is positioning itself as a leader in sustainable urban development with the goal of becoming a Zero-Carbon City. Its comprehensive energy policies focus on promoting renewable energy and conservation. The city’s “Compact City” model, introduced in 2005, concentrates development around transit hubs, reducing GHG emissions and boosting train ridership, which doubled from 2005 to 2019 (Kazuya, 2024_[41]). Toyama aims to double its renewable energy capacity by 2030 and quintuple it by 2050, while also improving energy efficiency through initiatives like Net-Zero Energy Buildings. By the end of fiscal year 2021, the city had reduced CO₂ emissions by 21% compared to 2013 levels. While the Compact City model drives climate action by enhancing transportation connectivity and minimising emissions effectively, integrating biodiversity considerations into urban planning could further strengthen its sustainability efforts. Assessing climate impacts and risks from urban expansion would help Toyama better align its strategies with resilience and adaptation goals (Kazuya, 2024_[41]).

• Utsunomiya City is leading in zero-carbon transportation by developing light rail transit systems and electric buses powered entirely by renewable energy (MOE, 2024_[14]). This initiative aims to improve connectivity within the city and surrounding areas, reduce traffic congestion and lower GHG emissions. The city is also integrating advanced electric mobility systems that use consumer-side control batteries and large-scale storage to enhance sustainable mobility. By prioritising functional urban connectivity and emissions reduction, Utsunomiya demonstrates effective promotion of climate action at the right scale. Assessing community impacts and emission trends could help ensure the ongoing relevance and success of this transit system.

• Kyoto City is actively promoting electric taxis (e-taxis) as a significant step towards decarbonisation and sustainable urban mobility. This initiative aims to improve air quality and reduce GHG emissions, benefiting both public health and the environment (MOE, 2024_[14]). To support this transition, Kyoto has implemented incentives for taxi operators to switch from petrol vehicles, including subsidies for electric vehicles, charging infrastructure and preferential access to dedicated lanes and reduced parking fees for e-taxis (MOE, 2024_[14]). This initiative exemplifies effective neighbourhood-scale co-benefits, with public health and air quality improvements. Assessing the impact on travel patterns and emissions could further optimise and refine the programme by allowing policies to be adapted as needed.

To maximise the impacts of such urban initiatives, it is recommended that they be co‑ordinated with land use and housing policies at the metropolitan (FUA) scale. A metropolitan-scale approach allows for joint action plans whereby groups of neighbouring local authorities can co‑ordinate their actions to achieve more effective results than if they carried out their initiatives in isolation.

This approach has been successfully applied in numerous metropolitan areas globally, with transit-oriented development (TOD) serving as a model that ties climate and energy objectives with urban planning. TOD-based development typically centres around high-density, mixed-used hubs anchored by public transit stations, with density decreasing as development extends outward. A notable example is the “Metro Vancouver 2040: Shaping Our Future” strategy in Canada, a regional growth strategy aimed at reducing GHG emissions by 33% from 2007 levels by 2020, and by 80% by 2050 at the metropolitan scale (OECD, 2023_[4]). This ambitious strategy focuses on stimulating development in urban centres and transit corridors, promoting local employment, recreational opportunities and green infrastructure, and fostering mixed-use, transit-oriented communities to reduce vehicle kilometres travelled (OECD, 2023_[4]). In taking a metropolitan-scale approach, the Metro Vancouver Region demonstrates how co‑ordinated urban planning and transportation investments can enhance both environmental sustainability and quality of life.

While larger, resource-rich cities align their development with climate goals, smaller cities face challenges in implementing similar measures. These disparities create uneven progress towards urban sustainability across Japan. Tailored policy measures are essential for smaller cities to catch up with larger metropolitan areas. One approach is to develop a dedicated decarbonisation strategy for small and medium-sized cities, addressing their unique sustainability challenges with customised solutions. The national government should also provide targeted technical and financial assistance to support renewable energy projects, waste management improvements and enhanced public transportation in these cities.

Compared with urban regions, rural regions are sparsely populated with more available land and natural environment, which creates their unique opportunities and challenges towards the green transition.

As is common in most OECD countries, rural regions in Japan have higher ground transport emissions per capita. GHG emissions from transport decreased by 9% from 1990 to 2022 in Japan, in comparison to a 22% increase on average in the OECD. The achievement can be attributed to Japan's extensive rail infrastructure and improvements in vehicle fuel efficiency. However, per capita emissions from ground transport in rural regions, on average, are 0.8 t CO₂-eq/capita, which is three times higher than in urban regions (2.8 t CO₂-eq/capita) (Figure 2.13). This is likely due to higher rates of vehicle usage and longer travel distances in rural areas. Low population density, together with smaller administrations and lower technical and financial capacity, makes it difficult to provide low-carbon alternatives.

Japan has been using big data to pioneer demand-responsive transport solutions. Already in 2016, more than 200 municipalities offered demand-responsive transport schemes in some form. In some areas, riders can hail on-demand buses using a mobile application, with computers handling the scheduling, routing and dispatching. Such technology can improve the efficiency and coverage of rural public transport (OECD, 2023_[4]). In some places, the local private sector has also been involved in designing routes and financing initiatives in co‑operation with local authorities. For example, Hidakagawa-cho (Wakayama Prefecture) has integrated its bus routes with shared taxis. This allows variation in vehicle size depending on demand at different times, as well as enhanced feeder services and greater frequency. Niseko-cho in Hokkaido has integrated the routes of private buses, municipal welfare buses and school buses. The resulting increase in frequency and reliability then led to more use of buses by the general public (OECD, 2023_[4]).

In addition to replicating such innovative practices, Japan can also tackle the sustainable mobility challenges in rural areas by reducing emissions from private car use through car- and ride-sharing programmes and deployment of electric vehicles. In the province of Alberta (Canada), for example, civil society groups, local businesses, and local and regional governments collectively invest in electric vehicle charging infrastructure to facilitate emission reductions, economic development and tourism. The project has installed 22 charging stations powered by renewable energy sourced from the region (OECD, 2023_[4]).

In response to the energy crisis following the 2011 Great East Japan Earthquake, Japan’s 2012 feed-in tariff spurred a “solar rush”. This encouraged utilities and rural governments to invest in solar energy to offset the nuclear power shortage (Akita et al., 2020_[42]; IEA, 2021_[43]). Rural areas leveraged this growth by offering subsidies and tax incentives to attract projects that would revitalise local economies and use vacant land (Kohsaka and Kohyama, 2022_[27]). Since 2000, multiple waves of local ordinances – guided by national policies – have incentivised renewable energy. At least 34 municipalities and 8 prefectures now offer support like subsidies and tax breaks (RILG, 2024_[29]).

More recently, the DLAs and CES initiatives have successfully supported several renewable energy projects that also contribute to other environment goals while addressing local specific socio-economic challenges:

• Kamishihoro Town’s biogas plant exemplifies the dual benefit of turning waste into valuable energy sources, while contributing to climate mitigation (MOE, 2024_[14]). By using livestock manure to produce biogas, the town enhances energy security, reduces GHG emissions and supports biodiversity through sustainable waste management. The local government has undertaken assessments to identify specific potential and opportunities for enhancing climate resilience and promoting the net-zero transition. This project illustrates how economic resilience and environmental preservation can be intertwined when local resources are managed sustainably. It also demonstrates effective mainstreaming of climate objectives by linking waste management with climate goals. Meanwhile, its local scale ensures resilience to energy disruptions. Further co-benefits could be achieved by exploring uses for the biogas by-products beyond energy supply.

• Sosa City’s “solar-sharing” model exemplifies how agricultural sustainability, renewable energy production and climate mitigation can align through an agrivoltaics approach. This initiative integrates solar panels with agricultural land use, supporting decarbonisation while revitalising the agricultural sector (MOE, 2024_[14]). Concrete targets for the expansion of renewable energy projects have been established and are reflected in the city’s strategic plans. By placing solar panels above fields, Sosa City not only produces renewable energy but also protects and supports agriculture, aligning environmental and economic objectives. The solar-sharing approach is a model of neighbourhood projects with co-benefits beyond climate, as it balances energy security with agricultural vitality. Expanding community engagement and shared ownership models could further enhance local buy-in and participation, thereby strengthening resilience.

• Maniwa City’s biomass town initiative showcases how circular economy principles and climate mitigation can stimulate local economies while preserving natural ecosystems. Clear climate mitigation and adaptation objectives are outlined in Maniwa’s development policies, thereby ensuring alignment with national and international climate goals. By using forest residues for biomass power generation, the city contributes to the decarbonisation of its forestry industry and enhances disaster resilience. In 2006, Maniwa City announced its “biomass town concept” to use forest residues and wood waste effectively (Amanuma, Onoda and Fujino, 2023_[44]). Certified as a biomass town by the national government, Maniwa focuses on biomass power generation to boost resilience to natural disasters, revitalise local industries and conserve biodiversity (MOE, 2024_[14]). In 2020, Maniwa declared itself a Zero-Carbon City, aiming for 100% self-sufficiency in renewable energy through the sustainable use of forest resources and the development of a timber industry cluster (Amanuma, Onoda and Fujino, 2023_[44]). This initiative promotes climate action at the right scale in an effective manner by enhancing local renewable energy sources and fortifying disaster resilience. However, enhanced biodiversity monitoring would strengthen environmental outcomes, ensuring ongoing ecosystem health while supporting economic growth.

• The Ikoma City Civic Power initiative illustrates how local engagement and renewable energy production can foster a socially inclusive energy model that enhances the circular economy and supports climate action. By involving citizens in the production and consumption of renewable energy, Ikoma promotes social cohesion and economic participation alongside environmental objectives. Designated as an Eco-Model City in 2014, Ikoma faces challenges like an ageing population and the revitalisation of industries (MOE, 2021_[36]). It has developed innovative energy management strategies, including the establishment of Ikoma Civic Power Ltd., a citizen-invested power company supplying renewable energy from solar, hydroelectric and biomass sources. These initiatives emphasise social engagement, local energy production and the circular economy, reflecting a thorough understanding of the local energy landscape (MOE, 2021_[36]). In this way, it emphasises effective mainstreaming of climate objectives by involving the community in renewable energy and circular economy practices.

• Goto City’s floating offshore wind power project illustrates how renewable energy can enhance marine biodiversity. Launched by the Ministry of the Environment in 2010 and taken over by Goto City in 2016, the deployment of a 16.8 MW wind farm off the coast is expected to attract marine life, creating synergy between energy production and ecological (METI, 2022_[45]; Energy Tracker Asia, 2024_[46]). This project has increased visitor numbers and boosted regional development, fostering industry clusters related to offshore wind turbine construction and maintenance, significantly contributing to local job creation. In December 2019, Goto City became the first promotion zone under the Act on Utilization of Sea Areas for Renewable Energy, with Goto Floating Wind Farm LLC, including Toda Corporation, selected as the power operator in June 2021. By combining renewable energy with ecological benefits, this initiative fosters co-benefits beyond climate, benefiting both tourism and marine conservation. Future assessments of GHG emission reduction and biodiversity impacts could optimise project outcomes and inform further expansions.

• Shikaoi Town’s biogas and hydrogen initiatives exemplify the synergy between waste management, decarbonisation and circular economy enhancement. Since 2007, the town has operated a biogas plant that converts livestock manure into biogas for effective waste treatment (Sawaji, 2019_[47]). While Shikaoi has made strides in energy transition, further assessments could help identify additional locally available heating sources to ensure effective and sustainable strategies are implemented. In 2015, it established a hydrogen gas station at the plant, producing and selling hydrogen derived from biogas to fuel cell electric vehicles, including those owned by local companies and residents. By promoting climate action at a localised scale, Shikaoi enhances resilience and energy independence, while aligning broader climate goals. The project’s co-benefits could be expanded by exploring hydrogen applications beyond transportation and conducting local ecosystem assessments.

To amplify the impact of these renewable energy initiatives and achieve broader community participation, Japan can draw inspiration from successful international models that enhance scalability and inclusivity of renewable projects. One recommendation is to introduce community-based co‑operative ownership structures similar to those in Denmark and Germany, where local communities hold partial ownership of renewable energy installations:

• Denmark’s Middelgrunden Offshore Wind Farm, partially owned by a co‑operative of local citizens, showcases a model that promotes local buy-in and shares economic benefits with the community (Larsen and Sørensen, 2003_[48]). This approach has increased public acceptance and facilitated quicker deployment of renewable energy infrastructure.

• Germany’s Schönau Power Company (EWS Schönau) provides an excellent example of community-based ownership that could serve as a model for Japan (Hockenos, 2019_[49]). EWS Schönau began in the small town of Schönau in the Black Forest region when local residents, motivated by environmental concerns, took over the town’s electricity grid in the late 1990s (Hockenos, 2019_[49]). Now operating as a co‑operative, EWS Schönau supplies clean energy across Germany and allows local communities and individuals to become shareholders (Hockenos, 2019_[49]). This model has proven successful in fostering local energy independence, increasing energy use and reinvesting profits into further green initiatives.

Implementing a similar co‑operative structure in Japan could support rural areas by distributing economic benefits, fostering stronger local engagement, attracting local investments and improving self-sufficiency, particularly in regions with ageing populations or depopulation concerns.

Circular economy practices have shown potential for overcoming Japan’s challenges related to its ageing and declining population in rural areas. For instance, in Shibushi City, advanced waste separation and recycling processes have significantly reduced landfill waste, showcasing effective local strategies for waste management. Previously lacking incineration facilities, Shibushi has implemented systems that achieve high recycling rates (MOE, 2021_[36]). A key initiative involves collaborating with Unicharm Corporation to recycle used disposable diapers, which constitute a significant portion of landfill waste. This collaboration transforms diapers into materials like refuse paper and plastic, aligning with circular economy principles. The project encourages extensive community participation and partnerships, extending landfill lifespans and reducing methane emissions. Overall, this initiative supports environmental sustainability, enhances the region’s image, attracts visitors and contributes to the city’s economic vitality (MOE, 2021_[36]).

Other sustainable resource management initiatives in rural Japan also demonstrate co-benefits across decarbonisation, biodiversity and flood management:

• Minamisanriku Town, which experienced significant damage from the Great East Japan Earthquake, has focused on restoring seaweed beds in Shizugawa Bay to enhance biodiversity and convert blue carbon into CO₂ credits (Amanuma, Onoda and Fujino, 2023_[44]). The town also promotes biodiversity-conscious forest management, with 70% forest coverage acting as CO₂ sinks. It received Forest Stewardship Council certification in 2015, and local organisations, like Sakyu Corporation, collaborate with the World Wide Fund for Nature to ensure sustainable wood usage (Amanuma, Onoda and Fujino, 2023_[44]). Additionally, the town’s oyster farming has gained certification from the Aquaculture Stewardship Council for environmentally friendly practices, improving efficiency and income for farmers. Organic household waste is also processed into biogas for electricity and liquid fertiliser for farms, aligning environmental and economic goals.

• In Lake Inba, restoration efforts focus on green infrastructure to combat flooding and environmental degradation. Initiatives include restoring abandoned rice paddies and wetlands to slow rainwater run-off, reduce nitrogen and phosphorus levels, and improve water quality. These efforts conserve wetland species and engage the local community in environmental stewardship through tasks like clearing waterways and managing vegetation. Moreover, the collaboration between municipalities within the same water basin is vital for developing a common strategy for water resilience. The synergies in Lake Inba include flood control, water purification, ecosystem conservation, community revitalisation and the creation of scenic landscapes (Amanuma, Onoda and Fujino, 2023_[44]).

Expanding these projects to include climate adaptation targets and community-led resilience assessments could further enhance local environmental and economic resilience (Amanuma, Onoda and Fujino, 2023_[44]; AP-PLAT, 2023_[50]).

The diverse initiatives in rural Japan demonstrate the potential of localised, resource-driven approaches to foster sustainable development that aligns with national climate goals, while revitalising local economies and communities. These efforts showcase how rural areas can lead in advancing circular economy principles, supporting biodiversity and addressing climate adaptation challenges in a way that suits their unique contexts. By mainstreaming climate action, promoting resilience at the local scale, and delivering social and economic co-benefits, rural Japanese communities are proving that sustainable practices can be adapted and scaled to address environmental challenges. As these initiatives continue to evolve, they offer a valuable blueprint for balancing environmental and economic goals across regions, illustrating the importance of community-driven strategies in achieving Japan’s broader sustainability and decarbonisation ambitions.

Japan could consider a strategic approach to promote urban-rural partnerships to minimise trade-offs in rural land use. This approach involves the development of environmental policies at the FUA level aligned with the principles of the Degree of Urbanisation,⁸ to enhance complementarities between urban and rural areas through collaborative projects. These could include joint renewable energy initiatives, shared public transportation systems and co‑ordinated land-use planning. Such an approach seeks to bridge the urban-rural divide, maximising synergies and equitably distributing the costs and benefits of environmental action.

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