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Economic Impact Of Subsidy Policies To Electric Vehicle Society In Toyohashi City In Japan — A Cge-Modeling Approach



    (Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan)


    (Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan)


    (Graduate School of Architecture and Civil Engineering, Toyohashi University of Technology, Toyohashi, Japan)


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.

Suggested Citation

  • Yuzuru Miyata & Hiroyuki Shibusawa & Tomoaki Fujii, 2018. "Economic Impact Of Subsidy Policies To Electric Vehicle Society In Toyohashi City In Japan — A Cge-Modeling Approach," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(02), pages 409-429, March.
  • Handle: RePEc:wsi:serxxx:v:63:y:2018:i:02:n:s0217590817400185
    DOI: 10.1142/S0217590817400185

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    References listed on IDEAS

    1. Shamsunnahar Khanam & Yuzuru Miyata, 2012. "New Industrial Structure Coping With The Economic Impacts Of Shifting Production To Battery-Based Electric Vehicles In Toyohashi City In Japan-A Cge Modeling Approach-," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 105-125, December.
    2. Karplus, Valerie J. & Paltsev, Sergey & Reilly, John M., 2010. "Prospects for plug-in hybrid electric vehicles in the United States and Japan: A general equilibrium analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(8), pages 620-641, October.
    3. Hirte, Georg & Tscharaktschiew, Stefan, 2013. "The optimal subsidy on electric vehicles in German metropolitan areas: A spatial general equilibrium analysis," Energy Economics, Elsevier, vol. 40(C), pages 515-528.
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    Cited by:

    1. Jiang, Hong-Dian & Xue, Mei-Mei & Liang, Qiao-Mei & Masui, Toshihiko & Ren, Zhong-Yuan, 2022. "How do demand-side policies contribute to the electrification and decarburization of private transportation in China? A CGE-based analysis," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    2. Zhang, Hao & Cai, Guixin, 2020. "Subsidy strategy on new-energy vehicle based on incomplete information: A Case in China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 541(C).
    3. Lin, Boqiang & Wu, Wei, 2021. "The impact of electric vehicle penetration: A recursive dynamic CGE analysis of China," Energy Economics, Elsevier, vol. 94(C).

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