How carbon pricing reshapes transport demand and regional economies in Japan
Peer-Reviewed Publication
Updates every hour. Last Updated: 22-May-2026 11:16 ET (22-May-2026 15:16 GMT/UTC)
A new study examines how carbon pricing affects Japan’s transport sector and regional economies. Using a multi-regional computable general equilibrium (CGE) model, the research evaluates the impacts of a 10% emission reduction target. The results indicate that achieving this target requires a carbon price of approximately 4,153 JPY per ton of CO₂, with only a modest aggregate GDP loss. The policy also reshapes transport demand, shifting activity away from high-emission modes such as water and air transport toward lower-carbon alternatives like rail. The findings highlight that policy design—particularly the coverage of the transport sector and the redistribution of carbon tax revenues—plays a crucial role in balancing efficiency and regional equity.
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