Air transport and high-speed rail competition: environmental implications and mitigation strategies

We develop a duopoly model to analyse the environmental impact of high-speed rail (HSR) introduction in a market for travel served by air transport. We take into account simultaneously the effects on the environment of induced demand, schedule frequency and HSR speed and we show that competition between the two modes may be detrimental to the environment depending on the magnitude of the pollution level of HSR relative to air transport. We conduct a simulation study based on the London–Paris market and we find that the introduction of HSR increases local air pollution (LAP) but decreases greenhouse gases (GHG) emissions. Moreover, we perform a sensitivity analysis of our results towards the level of HSR and air transport emissions. We find that modal competition is more likely to be detrimental to the environment when such ratio is relatively high. Furthermore, when mixed public/private-owned HSR takes into account the surplus of consumers and the surplus that the other (air) transport operator brings about, we find that modal competition is more likely to be detrimental to the environment than in the case of a fully private HSR. Finally, we provide an interpretive discussion of the results with respect to the different mitigation strategies available to the two transport modes and EU policy measures for the environment – which might jointly affect the ratio between HSR and air transport emissions.