Models Explaining the Levels of Forest Environmental Taxes and Other PES Schemes in Japan

Between 2003 and April 2016, 37 of 47 prefectures (i.e., sub-national local governmental units) introduced forest environmental taxes-local payment for environmental services (PES) schemes. These introductions are unique historical natural experiments, in which local governments made their own political decisions considering multiple factors. This study empirically evaluates models that explain normalized expenditures from forest environmental taxes as well as other PES schemes (subsidies for enhancing forests' and mountain villages' multifunction, and green donation) and traditional forestry budgets for Japan's 47 prefectures based on the median voter model. Results demonstrate that the median voter model can particularly explain forest environmental taxes and forestry budgets. Specifically, the past incidence of droughts and landslides is positively correlated with the levels of forest environmental taxes. The higher the number of municipalities in a prefecture, the lower the amount of forest environmental tax spent on forests. Moreover, the number of forest volunteering groups, possibly an indicator of social capital in the forest sectors, had strong positive correlations with the levels of forest environmental taxes and forestry budgets. Other PES schemes and forestry budgets had unique patterns of correlations with the examined factors.