Can we build a circular economy in Japan? - Eiji Hosoda

Title: Research on theoretical analysis and organizational analysis that contributes to the construction of a circular economy

Professor Eiji Hosoda, Faculty of Economics, Keio University

Eiji Hosoda, professor of economics at Keio University, is engaged in research to use economic theory to explore how a circular economy can be established in Japan, from both scholarly and policy standpoints.
With the current double limitations of resources, namely the peaking of natural resource extraction along with the possible exhaustion of landfill space, a high level of circulative use of resources is becoming more and more important. Professor Hosoda has worked on economic analyses of waste material processing and recycling, within the arena of environmental economics. He is now targeting theoretical and organizational analysis to contribute to the establishment of a high-level circular economy, in order to overcome the problems caused by these double resource limitations.

In 1985 I got back from studying in England.
I was very concerned about what would happen to our natural environment if Japan continued on in the way it was.
At the same time, I didn't see any future in just creating mathematical, abstract economic models. So I decided to study the environment.
At the time there was much discussion about global warming and the waste material problem.
I decided to address the waste issue, and ended up working on the problem of how to construct an economy for the circulative use of resources.

A circular economy is made up of the skillful combination of the arterial economy - namely, the economy of resource extraction, design, production, logistics, sales, and consumption - as well as the venous economy, namely the economy of recovery of the residue, collection, transport, processing, and recycling.
Until now, research in economics has focused almost completely on the arterial economy or arterial markets, while very little research has been done on the characteristics of the venous economy or venous markets.
By analyzing and studying characteristics such as the double asymmetry of information and the existence of the informal sector, Professor Hosoda has been able to gain a comprehensive view of the two economies.

When thinking about the venous economy, namely the economy of recovery of the residue - collection, transport, processing, and recycling, and in considering the limitations of that economy, we must then rethink how things are produced, how things are distributed, and how things are consumed in the arterial economy.
That is, we're in an era where, based upon the consideration on how to dispose of end-of-life products properly, that is thinking about activities in the venous economy beforehand, the structure and function of the arterial economy must be determined.
The truth is, the amount of waste discharged has decreased significantly in these past ten years. The reason why is that many recycling acts have been implemented, and, furthermore, the Waste Managing and Cleansing Act has been revised many times for establishing the foundation for waste material processing methods, so the amount of waste material generated has slowly decreased. And the amount of waste that must be landfilled has decreased as the amount of recycling has increased.

Professor Hosoda has explained that when it comes to high level of circulative use of resources, the existence of "soft laws" is extremely important. "Soft law" means a code shared by a society, such as social norms, behavioral norms, and corporate social responsibility.
By combining these with actual laws, or "hard laws," it should become easier to realize a circular economy.
This is what Professor Hosoda is trying to demonstrate by means of theoretical models and organizational research models based on field work.

I believe the final step I must take as a researcher is to work hard to contribute to creating a circular economy that promotes circulative use of resources, consolidating the arterial and venous economies as a single entity to conserve resources and eliminate waste.
I will also try to reflect those basic ideas in a clear outline of policies, and then make it a reality.

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