(1) Fundamental structure of ecological system which is the basis of economic activities<br>Nature is a circulating and open system. It is obvious if human loses the balance with nature, the impact will be not only on humanity but also on others. Human should pay attention to external effects, visible and invisible, of the system of nature. We should not forget the basic fact that fundamental goods of existence belong to nature itself which we utilize without paying the cost as if they are free goods.<br>Since the Industrial Revolution, we have succeeded in raising the standard of material living by developing natural science, accumulating know-hows and transforming these achievements into technological innovations. The prosperity, however, has been built upon sacrifices of ecosystem, because our goal was the maximum growth of economic system and the maximum profits. We have reached the point where the materials and energy (through-put) which economic system has taken from ecosystem exceed the capacity of ecosystem (natural capacity of purification including recycling capacity, etc.). Ecology has given warnings to us in this regards.<br>Therefore, we should create a new economic system in order to achieve coexistence between eternal existence of humanity and other living existence. The new economic system should be based on the principle of coordination and adjustment between economic system and ecosystem. Environmental degradation in the 21st century cannot be prevented without addressing this fundamental point. We should change our way of seeing nature as just inputs for our economic activities. More importantly, the economic process of nature has essential functions to sustain lives. We should recognize not only use of resources as marketable goods but also environmental benefits (environmental goods) which we utilize free of charge like free goods.<br>We didn't have this recognition and mistook the economic process of nature which comes out of ecosystem. Now, we should consider the through-put value of ecosystem centering on nature as potentials which have multiple functions in circulation and movement of materials and energy. What is requested strongly is to analyze the relationship between economic system and natural environment or ecosystem and to recreate the economic system.<br>(2) Classification forest ecosystems and management principles<br>In order to achieve balanced objectives of utilization and preservation of nature, management to make use of potentials of forest is necessary in a region.<br>(i) Forests with high function of timber production should be preserved and utilized as “economic forests” to enhance yields.<br>(ii) Forests with high function to supply water sources should be enhanced its functions as “water source forests” and water source functions making use of natural vegetation as natural forests.<br>(iii) Forests with high function of disaster prevention should be preserved as “disaster prevention forests”.<br>(iv) Forests with high function for health and leisure should be preserved as “forests for health” and facilities enabling go fulfill its functions fully should be stalled in vicinity without major destruction of forest ecosystem.<br>(v) Forests with high cultural function such as primeval creatures should be preserved as “cultural forests”.<br>As discussed above, “economic forests”, “water source forests”, “disaster prevention forests”, “forests for health” and “cultural forests” should be maintained as basis of forests management and control.<br>(3) Economic instruments for preservation and utilization of forests<br>In order to establish a development system to utilize ecology of forests, a proper mechanism is needed in terms of forest maintenance. Energy of private sectors can be introduced in forms of separation system, trusteeship and utilization of pensions.