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Climate Policy in Transportation Sector: Role of Carbon Pricing

In: Carbon Pricing in Japan

Author

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  • Kazuyuki Iwata

    (Matsuyama University)

Abstract

This chapter focuses on climate countermeasures in the Japanese transport sector. We introduce the Japanese complexed automobile tax system and then calculate the Japanese effective carbon rate (ECR) on automobiles. In addition to the discussion of the ECR, this chapter offers a simple examination of the efficiency of electric vehicles (EVs) from the viewpoint of cost-benefit because it is expected that EVs will become the most popular eco-friendly vehicle in the future. Two remarks are found in our analysis. First, although the carbon tax rate on fuel consumption is small in Japan, compared to the European countries, the ECR is rather high. For further improvement of climate policy, the Japanese government should shift its attention to vehicle usage from vehicle purchase and possession. Second, under the basic assumption (i.e., representative owners do not recharge their EVs at home but at outdoor fast chargers), the diffusion of EVs is not an efficient measure for reducing GHG emissions. If owners recharge their EVs at home once of every two charges, the net benefit becomes positive Therefore, the opportunity cost of waiting for recharges is a key factor in whether EVs can play a role in mitigating climate change.

Suggested Citation

  • Kazuyuki Iwata, 2021. "Climate Policy in Transportation Sector: Role of Carbon Pricing," Economics, Law, and Institutions in Asia Pacific, in: Toshi H. Arimura & Shigeru Matsumoto (ed.), Carbon Pricing in Japan, chapter 0, pages 61-78, Springer.
    • Handle: RePEc:spr:eclchp:978-981-15-6964-7_4
    DOI: 10.1007/978-981-15-6964-7_4
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