ECONOMIC IMPACT OF SUBSIDY POLICIES TO ELECTRIC VEHICLE SOCIETY IN TOYOHASHI CITY IN JAPAN — A CGE-MODELING APPROACH

Yuzuru Miyata, Hiroyuki Shibusawa () and Tomoaki Fujii ()
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Yuzuru Miyata: Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan
Hiroyuki Shibusawa: Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan
Tomoaki Fujii: Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan

The Singapore Economic Review (SER), 2018, vol. 63, issue 02, 409-429

Abstract: In this paper, we explore the economic impact of promotion and realization of an electric vehicle society (EVS). More concretely, this paper emphasizes a computable general equilibrium (CGE) modeling approach to evaluate the following issues: economic impacts of subsidies for promotion of an EVS, the possibility of price reductions, industrial structure change toward an EVS, and modal shift occurring toward an EVS. Our simulation results demonstrate that after applying 5–25% up subsidies to five industries, such as electric vehicle (EV) manufacturing, EV transport, solar power, cogeneration and other transport, the total industrial output and city GDP increase. A large growth rate is found in industries where subsidies are introduced alone with non-ferrous metal industry. However, it is interesting that decreasing proportions are found in oil and coal product, mining, heat supply and gasoline vehicle (GV) transport industries. Moreover, all the commodity prices decrease since subsidies are given to some industries. Hence Toyohashi City’s economy shows a direction where the demand for conventional vehicles and energy use are decreased, conversely, the demand for EVs and renewable energy are increased illustrating a different life style from the current one. However, it does not mean that the total CO2 emission is decreased. EV society makes some industrial outputs larger. Due to the fact that some industrial outputs are increased, CO2 emissions of EV manufacturing and nonferrous metal are increased more than decreased industries. Thus, introducing 5–25% subsidies to EV manufacturing, EV transport, solar power, cogeneration and other transport can really represent a realistic alternative society to EVS if the total CO2 emission can be reduced. Therefore, we have to think what can make the total CO2 emission reduced.

Keywords: CGE model; electric vehicle; economic impact of subsidies; CO2 emissions; Toyohashi City; Japan (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0217590817400185

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