A Long-Term Projection of the
Industrial and Environmental Aspects
of the Hokkaido Economy: 1985-2005
This chapter describes a study that attempts to predict industrial activity and its environmental effects in the central area of Hokkaido for the period 1985 through 2005. An input-output model linked with a small-scale macroeconometric model of Hokkaido was constructed and environmental changes in terms of biological oxygen demand (BOD), nitrogen oxides (NOX), sulfur oxides (SOX), and carbon dioxide (COD) to be emitted by the industrial activities and also by the residents were estimated, to predict the degree of resulting environmental pollution. The study also estimated industrial demands for space, water, fuels, electric power, and workers by individual industries, and the demand of residents in this area for various public utilities.
Although many empirical studies of input-output structures have been reported and published since the seminal work of Leontief ( 1941), an application of input- output techniques to industrial and environmental development in a specific area, for which data on economic and environmental circumstances are very limited, is rare. The study reported here is an attempt to develop an analytical method for this type of work, since it is required for the analysis of regional development.
First, a macroeconometric model of Hokkaido consisting of seventeen structural equations was constructed. This model determines final demands, such as consumption, investment, and interregional trade, with the levels of local and central government consumption and investment and the real growth rate of the national economy as given. Second, a Hokkaido input-output model was used to determine final demands by fifteen industries. The classification of these industries (Table 16.1) reflects the characteristics of changes in the industrial structure of the Hokkaido area from the viewpoint of the technological production process, such as integrated and nonintegrated, processing and combining, basic and nonbasic transformation, and so forth. This model also determines the real output by these fifteen industries as a whole.
Third, by estimating shares of the central area of Hokkaido by industry, real