The Impact of High-Speed Rail Investment on Economic and Environmental Change in China: A Dynamic CGE Analysis

21 Pages Posted: 28 Jul 2015 Last revised: 29 Jul 2015

See all articles by Zhenhua Chen

Zhenhua Chen

The Ohio State University-City and Regional Planning

Junbo Xue

Chinese Academy of Sciences (CAS) - Institute of Policy and Management

Adam Rose

University of Southern California - Sol Price School of Public Policy

Kingsley E. Haynes

Schar School of Policy and Government, George Mason University

Date Written: May 1, 2015

Abstract

This study investigates the impact of high-speed rail investment on the economy and environment in China using a computable general equilibrium (CGE) model with a focus on the period 2002-2013. The analysis is implemented in a dynamic recursive framework capturing long-run capital accumulation and labor market equilibrium. A national level impact was simulated through direct impact drivers including land use conversion, output expansion, cost reduction, productivity increase, transport demand substitution and induced demand. The results suggest that rail investment in China over the past two decades has been a positive stimulus to both the economy and social welfare, while the effect on CO2 emissions generation has been large. Overall, the economic and welfare contributions of rail investment are achieved primarily through induced demand and output expansion, whereas the contribution from a reduction of rail transportation costs and rail productivity increases were modest. In addition, negligible negative impacts from land use for rail development and the substitution effect among other modes were found. Emissions reduction from substitution of rail for other modes was small and overwhelmed by output expansion due to lowered rail transport costs and induced demand.

Keywords: High-Speed Rail, Land Use, Economic Impact, Environmental Impact, CGE Modeling, China

JEL Classification: C23, R11, R42, R53

Suggested Citation

Chen, Zhenhua and Xue, Junbo and Rose, Adam and Haynes, Kingsley E., The Impact of High-Speed Rail Investment on Economic and Environmental Change in China: A Dynamic CGE Analysis (May 1, 2015). Available at SSRN: https://ssrn.com/abstract=2636385 or http://dx.doi.org/10.2139/ssrn.2636385

Zhenhua Chen (Contact Author)

The Ohio State University-City and Regional Planning ( email )

275 West Woodruff Avenue
Columbus, OH 43210-1138
United States

HOME PAGE: http://u.osu.edu/chen.7172/

Junbo Xue

Chinese Academy of Sciences (CAS) - Institute of Policy and Management ( email )

No.15 ZhongGuanCun BeiYiTiao Alley
Haidian District
Beijing, 100190
China

Adam Rose

University of Southern California - Sol Price School of Public Policy ( email )

Los Angeles, CA 90089-0626
United States

Kingsley E. Haynes

Schar School of Policy and Government, George Mason University ( email )

Founders Hall
3351 Fairfax Dr.
Arlington, VA 22201
United States

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