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The Greening of Japan

Japanese companies are starting to offer their customers eco-friendly

From her organic food co-op to the electric gadget that turns her kitchen waste into compost, Keiko Sakurada is living the green life.

This full-time homemaker offers no save-the-earth speeches to explain why she works hard to pollute less. Her new home says it all: a three-story, solar-panel-topped house largely made from recycled and recyclable materials by Misawa Homes Co., one of Japan's largest home builders. "I just feel satisfied that I'm living in an environmentally friendly way," she says in a voice as soft as her angora sweater.

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Welcome to the greening of Japan, brought to you by Japan Inc., and a quiet but gradually emerging contingent of buyers like Mrs. Sakurada.

It's hard to overstate the irony of this turn of events. Once the targets of environmentalists worldwide, some Japanese firms were notorious in the 1960s and 1970s for polluting the air, the sea, and the land - and injuring thousands of people in the process. Both the state and corporations seemed willing to sacrifice the environment for economic growth.

Even today, Japan remains in many respects a throwaway society. The cultural affinity for beautiful presentation, for example, routinely translates into elaborate and wasteful packaging.

But consumers are now getting more green shopping options.

Take the Toyota Prius. It's the world's first mass-produced automobile powered in part by an electric motor. The company says the car, which debuted here in December 1997, will reach US and European showrooms next year.

Leading in a vacuum

Demand for such big-ticket environmental items remains modest, since they are more expensive than their conventional counterparts. But the fact that they are on the market at all indicates that the greening of Japan is taking place because some major Japanese companies are showing the way.

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In part, the corporations are leading by default. Although surveys show a growing popular inclination to live a greener life, Japan's environmental movement has sagged since its antipollution heyday in the 1960s and '70s.

And Japan's government is laissez-faire when it comes to promoting a more environmentally friendly economy, despite a long history of aggressively guiding companies toward more traditional economic goals, such as high exports.

"The only thing the companies can do is show consumers a choice" between environmentally friendly products and their conventional counterparts, shrugs an official at Japan's Ministry of International Trade and Industry, speaking on condition of anonymity. He adds that all but a few consumers have been unwilling to pay premium prices for green goods.

The government has passed a series of recycling laws, it encourages environmentally friendly procurement practices by public agencies, and is developing plans to require more elaborate environmental labeling, but the official says the greening of Japan must be driven by "market mechanisms" rather than "regulation."

Future profits in green goods?

So be it, it seems. Both Toyota and Misawa Homes all but admit they are taking losses on their eco-friendly projects for now - and not because there is any intrinsic merit in marketing such goods. Both companies see future profits in going green, and, in classic Japanese fashion, they are collecting market share early.

These two companies are exceptional, but green thinking is catching on in corporate planning. Japan is leading the world in the number of companies and organizations that have met the criteria for ISO 14001 registration, an internationally agreed-upon set of standards for environmental management.

(Japan has 1,542 registrations, second-place Germany has 1,250, and the US comes in 10th at 330, according to a German government official who tracks the issue.)

Activists caution that there is a long way to go. "The Japanese government is like a developing country's," says Toshihiko Goto, co-chair of a private organization called the Environmental Auditing Research Group. In other words, it is still too concerned with economic growth and too little concerned with protecting the environment. He cites Japan's waste stream - brimming over with all that throwaway packaging - which mainly goes up in smoke, since Japan still relies heavily on incineration to get rid of garbage. While some big companies understand that "a green image will pay," Mr. Goto says, most businesses are too focused on near-term profits to consider the environment.

Saying thanks with Prius

"I wanted to do what I could do," says Hiroko Aoshima, an executive at a medical-equipment manufacturer in Shizuoka, southwest of Tokyo, about her decision to buy a Toyota Prius. It was her way, she explains, of saying "thank you" to the earth. But she counts herself as one of a very few consumers who have started to realize "that they are the ones who have to change this society." Companies and the government are not yet doing nearly enough to protect the environment, she adds, because "they are only going after their self-interests."

In fact, Hiroyuki Watanabe, Toyota Motor Corp. board member, unabashedly insists that his company is building the Prius in pursuit of its own interests, not to satisfy any governmental or environmental imperatives.

"We are a for-profit company and our goal is to produce a marketable product which uses environmentally sound technology." He acknowledges that Toyota may be losing money on the car, but adds that improvements in technology and higher sales may put the Prius into the black over the life of the model. And the future possibilities are huge: He and other Toyota executives speculate that the Prius's "hybrid" combination of internal combustion engine and electric motor could power as much as a third of all vehicles within a decade or less.

In almost every respect, the Prius drives and looks like a trim compact sedan - except for the sticker on the window, which in Japan is nearly $3,000 higher than that of a similar, conventionally powered car. Government subsidies cut the extra cost to the Japanese consumer at least in half, but like many green products, the Prius is pricey.

It runs initially on a battery-powered electric motor that produces zero emissions. At higher speeds, the car automatically starts to rely on its 1.5-liter engine - and energy from the engine and braking is used to recharge the battery.

Look ma, no charging time

Satisfied customers say the operation is seamless; drivers have to look at a display panel to know which power source is moving the car. And the combination eliminates the colossal drawback of electric vehicles: finding the time and place to charge the batteries.

Driven in stop-and-go urban congestion, the Prius gets twice the fuel economy (roughly 60 m.p.g.) of a similar size conventional car and produces 1/10th the harmful emissions allowed under Japanese law. Toyota's Mr. Watanabe says that the company will make modifications so the Prius will be similarly clean and efficient in the US and Europe, where drivers spend more time on highways and less time idling in traffic.

Toyota says the car has done well, selling more than 18,000 in the first year, and Mr. Watanabe says Toyota is now consistently selling more than 2,000 Prius cars a month. The company plans to sell 20,000 cars a year in the US and Europe starting sometime next year.

Those numbers are impressive for a partially electric vehicle, but pathetic when compared with sales of comparable conventional cars. Last year, for instance, Toyota sold more than 654,000 Corollas and more than 178,000 Coronas.

A house Bob Villa would love

Misawa executive Masahiro Sato takes his time showing off the features of a model of the Hybrid-Z home, explaining how recycled materials have been used in making the exterior ceramic tiles and the "M-wood" composite material that covers many inside surfaces.

The super-quiet appliances, he continues, can be set to run at night, when electricity is cheaper, and the windows are triple-paned for added insulation. The whole house is factory-assembled which facilitates lower-cost construction by crane, instead of by carpenter, and it means the house eventually can be disassembled for recycling.

Mr. Sato says the Hybrid-Z is roughly 13 percent more expensive per square foot than a comparable conventional house - and that includes the cost of the solar panels that cover half or all of the roof, depending on the model. It may take owners as long as three decades to recoup their investment in the panels through savings on their electricity bills, despite government subsidies.

"The buyers want to make a contribution to the environment," Sato says. So far there haven't been too many buyers since sales began last July; the company has signed contracts to build 737 Hybrid-Z houses, 60 percent with the solar panel system. That number pales in comparison with Misawa's annual production of about 300,000 homes.

"We do believe that this project is a success," says Sato, a crisp, blue-suited salesman who heads Misawa's ceramics planning division. But he adds: "I don't think we're making much money."

Sakurada and her husband didn't buy their Hybrid-Z to save money; their main motive is, as Sato observes, to make a contribution to the environment. Sakurada also recycles, shops at a co-op, and finds ways to take home products in her own containers. She wants to live lightly on the land and takes pleasure in doing so.

Sakurada equates buying the Hybrid-Z house with owning a nice car, which costs money to purchase, maintain, and insure. People buy nice cars because they want to own them, she argues, not because they need them. With her two children out of the house, Sakurada says she and her husband opted for the Hybrid-Z because they wanted to.

"The fact that we are producing our own electricity is very exciting," she says with a smile.

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