NRI Papers
No. 160 February 1, 2011
  Blue Gold in Japan
--Policy idea on creating a new water trading system coping with expected water issues in Japan based on comparison studies--
 
Tetsuji UEMURA and Masaaki UTO

The World Economic Forum Annual Meeting 2009 in Davos warned that the world economy might collapse owing to a lack of fresh water within two decades if we continue to use fresh water resources at the current pace. While the focus of this annual meeting was to address the economic crisis currently facing the world, the meeting identified water shortage as one of the pending major global crises, proving that water resources have become essential for sustainable economic growth.

Efforts to deal with the growing shortage of fresh water resources might lead to the introduction of an institutional framework either for the international trading of virtual water resources or regulation of the total amount in the same way as is done for the greenhouse gas emission trading system. Japan, which is a large emitter of carbon dioxide and is also a major importer of virtual water, is again likely to experience difficulty in international water resource management as it did in the control of CO2 emissions.

In Japan, which is a country blessed with abundant fresh water resources, many dams have been built in the mountainous regions for controlling floods and providing stable water supplies throughout the year. Large amounts of fresh water resources are currently stored in reservoirs. Because Japan is faced with a declining population, some of these fresh water resources can be allocated in the future for non-conventional purposes other than irrigation, industrial use and urban use. According to the projections of this study, the amount of unused water is expected to reach around 10 billion m3 per year by 2040.

Alaska in the US, Canada and Turkey are well known as having an abundance of fresh water resources. While it is now only a theoretical projection, Japan also has the potential of being a country with an abundance of fresh water resources. Therefore, the export of fresh water can be considered as a new opportunity for Japan to grow during the period of a declining population.

Contents
I Introduction
II Methodology
III Results
IV Discussion and Analysis
V Concluding Remarks

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