Is the opening of high-speed rail conducive to aviation carbon reduction? Evidence from Beijing-Shanghai market in China

We take the Beijing-Shanghai high-speed rail (HSR) as a case and utilize a random-coefficient discrete choice model (BLP model) integrated with counterfactual simulations to systematically evaluate the impact of HSR opening on aviation market structure and carbon emissions of the transportation system. The results show that after the entry of the Beijing-Shanghai HSR, the absolute values of own-price elasticity and cross-price elasticity of airline passengers decrease by 15.65% and 17.98%, respectively, leading to a 22.12% reduction in air passenger traffic volume. If only the aviation sector is considered, the substitution effect of HSR can reduce carbon emissions by 123,400 tons in 2012, equivalent to imposing a carbon tax of $2.78 per airline ticket. However, with induced travel, the system-wide net effect depends on what additional HSR passengers would have done without HSR. If they would not have traveled or would have used conventional rail, total emissions rise by 915,900–1,398,400 tons in 2012 in some scenarios. If they are mainly diverted from private cars, the net effect is much smaller and can become negative. Further simulations indicate that a reduction of HSR’s unit carbon emission intensity by 40% to below 0.014272 kg/pkm would achieve a net reduction in overall carbon emissions. The study reveals that the emission reduction effectiveness of HSR strongly depends on the cleanliness of the power grid and the utilization rate of HSR capacity. This paper provides empirical evidence for carbon neutrality strategies in the transportation sector and emphasizes the need for policy trade-offs between environmental benefits from modal substitution and externalities from induced travel.