The rehabilitation of regional economy has been a crucial issue in Japan since the burst of bubble economy. However, considering the worsening environmental problems such as the global worming, it must be attained under the harmony with the reduction in environmental burden.
The input-output analysis is a useful tool to examine economic structural problems related to economic growth, the industrial structure and the environment. Various studies have attempted to apply input-output models to the estimation of environmental burden and related studies.
This study aims to develop an analytical tool to examine the relationship between economic activities and induced environmental burden in Japanese regions. The regional input-output model was employed for the purpose. The model was calibrated using data for 1990, 1995 and 2000. The comparative studies between Okayama prefecture and Kanto region has revealed that the environmental efficiency of Okayama prefecture is relatively low due to the accumulation of heavy and petrol-chemical industries. The promotion of processing and assembly industries and service industries is required to improve the sustainability of economy in Okayama prefecture.