Economic and environmental impacts of agricultural and rural development projects in Japan: evidence from an interregional input–output analysis

Over the past centuries, Japan has developed a distinguished system for irrigated rice culture through cooperation of civil engineering and farming. This system has evolved into public works called the Agricultural Infrastructure Improvement and Rural Development Projects (A&R). We investigated the economic and environmental impacts of A&R using an interregional input–output (IRIO) analysis, with a limited scope on the construction stage. We incorporated an unpublished database on A&R into published IRIO tables to compile a public-work (PW) extended IRIO. The results showed that: (1) PW, particularly A&R, had greater impacts on regional economies of remote regions; and (2) major GHG-emitting input sectors included construction materials, oil/coal products, electricity, transport, as well as fossil-fuel consumptions by PW themselves. Furthermore, scenario analyses, in which PW sectors must suffer a budget cut, were conducted. The results suggested that the national government may well choose different budget allocations according to their objectives. If they aimed to minimize regional discrepancies in economic development, then lighter budget cuts should be imposed on remote regions. Meanwhile, if they aimed at minimizing the losses of National Total Outputs or maximizing the national GHG reduction, then they would face a trade-off, which stemmed from a strong proportional linkage between the outputs and the GHG emissions of PW. To moderate such a trade-off, technological structures of PW should be innovated, including: (1) increase energy efficiency (i.e., reduce consumption of electricity and fossil fuels); (2) reduce construction materials where possible or procure low emission-intensive materials; and (3) reduce wasted materials. © 2017, The Japan Section of the Regional Science Association International.