Integrated evaluation of policy measures to expand use of environmental friendlyvehicles in China focusing on greenhouse gas reduction
Keyu LU(University of Tsukuba)
Takeshi MIZUNOYA(University of Tsukuba)
Nozaki NORIKO (University of Tsukuba)
Helmut YABAR(University of Tsukuba)
Yoshiro HIGANO(University of Tsukuba)
Keyword: GHG; I/O model; Comprehensive evaluation; New energy industry; Environmental friendly vehicle;
Subsidy; Carbon tax; Balances.

1.Introduction
1.1 BackgroundA rapid expansion of the human activity in recent years
has become to face the new barrier of environmental
issues with overwhelming happiness and benefit.
Environmental problems are the results of the loss ofglobal balance between the environmental burdens byhuman activity and processing capacities of the nature.
As a high population and high economy growth country,
China is facing kinds of serious environmental
problems like Green House Gas emission, Acid rain
and so on.
In this paper, we pay attention on reduction of Green
House Gas emission problem via environmental
friendly vehicles introduction in China. To realize thisobjective effectively, we need pay attention on
introducing new energy industry also.
1.2 Objective of the study

which explicitly includes electricity vehicle
manufacturing sectors; energy sectors; transportationsectors; normal industry sectors; petroleum sectors, areconstructed and the model is expanded to include
household and government sectors so that prices, tax
and subsidies are endogenously determined by LINGO
simulation.

2. Simulation Modeling
2.1 Goal & Scope
The simulation model is an extensive expanded I/Omodel which combined interdependent sub-models ofmaterial balance, value balance and energy balance inChina. It based on nonlinear programming method todecrease GHG discharged by automotive in China anddecrease GHG & air pollutants emission in this region,and find out policy options to maximum economy
activities (GDP).

This paper discusses the current automotive situationand improvement options in China, and suggests anevolution policy by environmental friendly vehicles
introduction to treat with serious GHG emission bynormal automotive, to realize sustainable development
and environmental friendly solutions, through computer
simulation based on Input-Output model.
1.3 Method of the study
In this research, input-output model of China economy,

2.2 Framework
Figure 1 is the model framework of this study. Thisresearch separated social economy into 3
parts---industry sector; government; household. And
make industry into 5 big parts including: petroleum
production sector; normal industry; automotive
manufacturing sector; energy sector; transport sector.
Because we can get enough information throughsimulation by this separation: when we introduce EV&HV, we can know gasoline and diesel price change;know EV and HV manufacturing industry change;know energy supply and energy situation change; knowtransport sector’s GHG emission change; and evenknow GDP change.
Energy from energy sectors to other sectors to beconsumed. When EV manufacturing sector beintroduced, we must support new energy sector bysubsidy, or it will be meaningless (will be proved at
next chapter). Materials are consumed as intermediate
input in industries & intermediate produce, and beconsumed by government and household sector as final
consume (demand). In this paper, carbon tax will be
introduced as a resource of subsidy. Government levy
taxes from industries and spend them as subsidy to newenergy sector and EV&HV manufacturing sector or
new energy sector, transport sector and household.

general account as additional budget when target tax
income is not enough. Set whole China as policy
implementing subject and this research will set thebudget limitation in next research step.
For subsidies, this research will consider 2 implement
ways: to EV&HV manufacturing industry and newenergy sector; or transport sector, household sector andnew energy sector. To find out the better way based on
simulation result analysis.

Figure 1. Framework of model.

2.4 Why consider New Energy Industry?
2.3 Carbon tax and Subsidy
As Table 1 shows, fast charge for EV will discharge
To implement police, consider regional environmental

185g/km CO2, almost same to gasoline vehicle

tax (Carbon tax) as a target tax and carry out subsidy

discharged. So when we introduce EV in China, we

policy. The regional environmental tax is based onmust introduce new energy industry as same time, or it

producer bearing doctrine to levy tax from GHG & air

will be meaningless to introduce EV even cost much.

pollutants emission industries and households—it mustmatch their discharge amount. It is possible to use

Table 1 differences of 3 kind’s vehicle

Gasoline

3. Expected Result

EnergyCO2

CostConsumption

Emission(Yen/KWh)(KJ/km)(g/km)

2689

187

this research will consider all environment limitations
first, and calculate the maximum GDP volume under

9.6

these environment limitations. So the key point is theVehicle
Hybrid1097

76.3

carbon tax rate. Because it will affect economy

3.91

activities and CO2 discharge volume directly, and keep

VehicleElectric

The objective element in this paper is GDP, it means

480

VehicleNormalNormala trade-off relationship between them.

charge:124

charge:1.61

As an expected result, we will get an exact carbon tax

Fast

Fast

rate and the best subsidy policy by computer simulation

charge:185

charge:2.37

under all environment limitations through their model
functions to realize our research objective: decrease
CO2 emission by environment friendly vehicles’

2.5 Case setting

introduction to realize sustainable development.
This paper proposed 4 cases including a base case.
Case 1 introduced Carbon tax policy and pays this part

References:of income as a subsidy to promote hybrid Vehicle[1] MIYAZAWA Kenichi, “Introduction to Input-Output

industry for GHG emission decreasing.

Analysis” (6th version), NIKKEI BUNKO, Nikkei Inc.

In Case 2, more subsidies will be used to promote

September, 1996. (In Japanese)

Electric Vehicle industry and infrastructure either.

[2] UCHIDA Susumu, HIGANO Yoshiro, “AnIn Case 3, more subsidies will be used to promote New

Evaluation of Policy Measures against Global Warming

Energy Industry.

by Promoting Effective Use of Potential Energy inWastes”, 45th Congress of the European Regional
Science Association, CD-ROM, paper number537,

Table 2 Case setting
CarbonSubsidy

Subsidy

Tax

to HV

EV

toand

infrastructure

Subsidy
toNew

energyindustry

Case0

××××

Case1

○○

×

×

Case2

○

○

○

×

Case3○○○○

pp.1-18, 23-27, 2005.8, Vrije Universities Amsterdam.