Economic Impacts of an Electric Vehicle Society in Toyohashi City, Japan-A CGE Modelling Approach

Abstract

In this paper we explore economic impact of promotion and realization of an electric vehicle society (EVS). More concretely, this paper emphasizes on a CGE -modelling approach to evaluate the following issues: entire economic impacts of subsidies for promotion of an EVS, the possibility of carbon dioxide (CO 2) emissions and prices reduction, industrial structure change towards an EVS, and model shift occurs towards an EVS. Our simulation results demonstrate that after applying 20% subsidies to five industries, such as electric vehicles (EVs) manufacturing and transhipment, solar, cogeneration, and other transhipment 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 motivating that decreasing proportions are found in oil, coal product, mining, heat supply and gasoline vehicles (GVs) transhipment industries. Moreover, all the commodity prices decrease though in industries where subsidies are presented prices shrink appreciably. Hence, Toyohashi City's economy shows a direction where the demand for conventional vehicles and energy use are decre ased, conversely, the demand for EVs and renewable energy are increased that displays different lifestyles from the current. Thus, introducing 20% subsidies to EVs manufacturing and transhipment, solar, cogeneration, and other transhipment can really represent a realistic alternative society to EVS, both in terms of economic development and CO 2 emissions reduction. In this study therefore it is clear that model shift occurs to EVS, and thus we suggest for promotion of new industrial structure to introduce an EVS in Toyohashi city, Japan. The proposed model even can be expanded to the other cities in Japan and other countries in the world which are similar to this area.