We have pragmatically but accurately evaluated the natural capital of a small northern town, Shimokawa, Hokkaido, Japan. The key industries are forestry, wood manufacturing, and agriculture. From an environmental perspective, Shimokawa was nominated as a Japanese FutureCity. Consequently, the total natural capital value (NCV) of the forest and agricultural lands was calculated to be 1.326 billion USD/year (or 24,161 USD/ha/year) and 44 million USD/year (or 19,692 USD/ha/year), respectively, in 2012. The sum of these NCVs was more than 7 times greater than the yearly gross production of the town, although the forest had a higher NCV because of the larger area (54,862 ha for forest area), compared with 2953 ha for agricultural area. This substantial NCV is mainly generated by sustainable forest management. The timber account showed that the annual tree growth was greater than the annual harvest of trees. The CO account derived from a one-year calculation showed that the town served as a CO sink at 107,249 t-CO/year due to the large amount of annual tree growth and CO storage in the harvested wood products even if CO was emitted from industries and households. The forestry and wood manufacturing industries, as well as agriculture, created socioeconomic effects for the townspeople, ranging from job creation, study tours, and social welfare. This NCV accounting for Shimokawa town ensures the sustainable use of valuable environmental assets and will help other communities recognize their own NCV accounts.
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