IMPACT ANALYSIS OF ENVIRONMENTAL TAX AND TECHNOLOGICAL IMPROVEMENT ON INTERCITY TRANSPORTATION IN JAPAN -BASED ON MONOPOLISTIC COMPETITION THEORY

Transcription

1 IMPACT ANALYSIS OF ENVIRONMENTAL TAX AND TECHNOLOGICAL IMPROVEMENT ON INTERCITY TRANSPORTATION IN JAPAN -BASED ON MONOPOLISTIC COMPETITION THEORY AOTO MIMURO: RESEARCH FELLOW OF THE JAPAN SOCIETY FOR THE PROMOTION OF SCIENCE, JAPAN, FOR CORRESPONDENCE: TAKAAKI OKUDA: EXECUTIVE CHIEF RESEARCHER, CHUBU INSTITUTE FOR SOCIAL AND ECONOMIC RESEARCH, JAPAN Ths s an abrdged verson of the paper presented at the onferene. The full verson s beng subtted elsewhere. Detals on the full paper an be obtaned fro the author.

2 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA IMPACT ANALYSIS OF ENVIRONMENTAL TAX AND TECHNOLOGICAL IMPROVEMENT ON INTERCITY TRANSPORTATION IN JAPAN BASED ON MONOPOLISTIC COMPETITION THEORY Aoto MIMURO: Researh Fellow of the Japan Soety for the Prooton of Sene, JAPAN, Eal for orrespondene: au@urban.env.nagoya-u.a.jp Takaak OKUDA: Eeutve hef researher, Chubu Insttute for Soal and Eono Researh, JAPAN ABSTRACT Shftng to a sustanable nterty transportaton syste, whle antanng balane between nreased envronental osts and aeleratng deregulaton to prove eono effeny, s a very portant poly ssue. The present study sulates the pat balane between envronental ta posed on rude ol ports, whh s a ost-up fator and fuel onsupton proveent whh s a ost-ut fator n Japan s nterty transportaton setor n the tough deregulaton arket. Keywords: nterty transportaton, envronental ta, fuel effent proveent,. INTRODUCTION. Bakground and objetve In the frst half of 2 st entury, provng the eono effeny n transport setor has been very portant ssue suh as to be ore ofortable and heaper. However, provng the envronental effeny suh as reduton of CO2-esson fro transport setor has beoe ore portant ssue sne around 990 n Japan.. Despte the urrent balane between eono and envronental effeny (Fg-), Envronental effeny Eonoal effeny Fgure Ibalane between envronental and eono effeny th WCTR, July 5-8, 20 Ro de Janero, Brazl

3 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA Inreased varety Iproveent of onvenene Inreased frequeny Vrtuous yle Inreased deand Inreased opportuntes to aqure proft Epandng Avaton arket Dereased opportuntes to aqure proft Shrnkng Avaton arket Dereased frequeny Vous rle Dereased deand Dereased varety Degradaton of onvenene Fgure 2 Relatonshp of benefts and osts of the avaton ndustry sustanablty n nterty transport has beoe an nreasngly portant ssue. In ths study, nterty transport nludes three transport odes suh as avaton, Hgh-speed ral and hghway. In ths setor, any ountres have ntrodued deregulaton poles to prove eono effeny. Espeally n avaton arket, deregulaton aelerates opetton between arlnes, and level of serve has been proved. Furtherore, provng the serve level nreases avaton deand beause of the nrease of flght frequeny. However, n rural areas, deregulaton has aelerated a dereasng deand and frequeny beause low avaton deand eans low profts for arlne. These stuatons ause a vous rle, and studes are addressng the hallenge of dentfyng ethods to sulate these stuatons (Fg-2). For the future, easures to redue the envronental pat ust be ntrodued to further redue CO 2 -essons, and envronental ta s beng onsdered as one suh easure. However, envronental ta, whh s a ost-up fator for arlne operators, ay ause operators to nrease passenger fares to antan ther proftablty. Introdung envronental taes n the nreasngly tough opettve arket n the near future wll derease frequeny even ore rapdly. To analyze the pat of the ntroduton of envronental ta under deregulaton, we ust develop a new odel to epress the ehans of arlnes hangng behavor n response to taaton and passengers behavor n response to fares and frequenes. Furtherore, nteraton between arlnes and passengers are portant n eplanng the pat of taaton. As an addtonal onsderaton, tehnologal proveents suh as lower fuel-onsupton tehnologes have been developed for nterty transportaton. In the avaton arket, proved fuel onsupton has beoe nreasngly portant n redung CO 2 -essons. However, no quanttatve analyss has yet studed both the pats of envronental ta as a ost-up fator and tehnologal proveents as ost-ut fators. The present study apples the onopolst opetton theory, orgnatng n the feld of eonos, to epress the above-desrbed ehans. Ths study develops a new analyt odel based on the onopolst opetton theory to desrbe the vous rle trggered by ntrodung taaton nto the avaton arket and to quanttatvely evaluate the pat of both envronental ta and tehnologal proveent. th WCTR, July 5-8, 20 Ro de Janero, Brazl 2

4 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA Here, the ter nterty transportaton spefally eans long-dstane trps usng vehles suh as arraft or hgh-speed ral for passenger transportaton (Fg-)..2 Struture of ths paper Ths paper onssts of seven setons. The frst seton s the ntroduton, nludng the study s bakground and purpose. The seond seton revews prevous studes evaluaton approah and eono and envronental effeny after revewng European ountres envronental taaton systes. Ths seton eplans the study s perspetve. The thrd seton eplans the onopolst opetton theory, developed n the feld of eonos sne the 980s, and desrbes the relatonshp between the avaton arket ehans and ts theory before developng the sulaton odel. The fourth seton eplans the strutures of the new sulaton odel, whh proves the evaluaton of the pat of envronental ta on the nterty transportaton setor. The ffth seton presents the odel s albraton before startng the sulaton. The sth seton dsusses the results of the pat-analyss sulaton. The fnal seton onludes ths study and suggests ssues to be dealt wth n future researh. 2. LITERATURE REVIEW 2. Changes n the evaluaton syste fro the perspetve of eono effeny evaluaton Many studes eane the nterty transport arket fro the perspetve of eono effeny Okuura (2004, 2005) and Kaneko et al. (2006) attepted to organze the transton of researh and hallenges. Fg- s the flow of hangng researh tops n the avaton researh, and shows the ponts of ths study. In the 960s, growng probles of the natural onopolst stuaton due to huge fed-osts and dereasng avaton deand n eah ar Orgn-Destnaton pars were eaned by studes. Ths ehans s eplaned wth the Prevous studes Ths study Modelng of supply-sde behavor n avaton arket Iperfet-opetton theory Duopoly olgopoly theory Strateg nterdependene Short ter:pre opettonbertrand Long ter :Quantty opettoncournot Free-entry/ Free-et Monopolst theory Contestable theory Seven assuptons New assupton: Dfferene of goods Monopolst opetton theory Not nluded n the estng fraework of perfet opetton. Copetton stuaton n Japan Monopoly Duopoly/ olgopoly (All Npon ways Japan lne) Aeleraton of deregulaton Many opanes are Under tough opetton Fgure Developent of odelng approahes sne 960s theory of onopolst whh s one of the theores of perfet opetton However, nreasng avaton deands due to eono growth have revealed the neffeny of onopolst stuatons, and so studes started nvestgatng ethods for provng the th WCTR, July 5-8, 20 Ro de Janero, Brazl

5 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDAavaton arket syste s effeny. The new theory the ontestable-arket theory onsderng free-entry and et ehanss, has been used as a easureent for provng the arket ondton. Ths theory onveys that deregulaton should be aelerated when all ts seven hypotheses are satsfed. After arduous dsussons n the USA, deregulaton poles based on ths theory were pleented, but they aused duopolst and olgopolst ondtons beause the real arket ould not satsfy all seven hypotheses sultaneously. In reent studes, the Cournot and Staklelberg opetton odel has been proved. 2.2 Changes n the evaluaton syste fro the perspetve of envronental-effeny evaluaton In the EU, any envronental poles have been pleented. Karen et al. (2007) sulated the pat of envronental taaton on avaton fuel and doest and nternatonal traff deands. Anger (200) also sulated the pat of EU-ETS on the avaton arket usng the dyna energy-envronent-eonoy odel. However, ssues est whle onsderng envronental taaton s pat on the tough opetton arket beause these odels retan the supply-sde behavor after taaton. Moreover, t s portant to prove the supply-sde odel beause arket ondtons wll soon beoe eeedngly opettve. 2. Dsusson ponts of odellng for future poly evaluaton The urrent trend of developng sulaton odels has foused on eah aspet suh as nterty transportaton and eono effeny or nterty transportaton and envronental effeny. In ondtons where the arket beoes ore opettve, the odelng approah should nlude both eono and envronental effenes. In partular, ths study assues the followng two ondtons: ) arket ondton: ore opettve and 2) envronental poles ondton: ntrodung envronental ta. Ths study develops a new sulaton odel based on the onopolst opetton theory, as studed n the feld of eonos, to evaluate both these pats. Ths odel also sulates the pat of tehnologal proveent to evaluate the balane between nreasng ta rates and tehnologal proveent rates. Ths study s odelng proveents enable us to deterne the optal balane between eono and envronental effenes n the avaton arket.. THEORY OF MONOPOLISTIC COMPETITION. Hstory, features and four prerequstes th WCTR, July 5-8, 20 Ro de Janero, Brazl 4

6 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA The hstory of the onopolst opetton theory has aelerated after Krugan (977) publshed Inreasng Returns, Monopolst Copetton, and Internatonal Trade n the feld of eonos, espeally n trade theory. Untl the 970s, analyt odel has establshed assuptons suh as perfet arket opetton and onstant returns to sale, but Krugan found that these assuptons lead to prese sulaton results beause they neglet the dfferenes between opanes. To prove odel strutures, Krugan and Helpan ntrodue two assuptons, perfet-opettve arket and eonoes of sale, n the so-alled new trade theory. Fg-4 shows dfferenes aong theores, lassfed nto four Perfet opetton ategores: ) Nuber of opanes, 2) Free-entry and -et, ) Eonoes of sale (nternal), and 4) Produt dfferentaton. Eah assupton s eplaned as follows: Assupton ) Nuber of opanes One of the benefts of assung that there are any opanes s the splfaton of the odel struture beause t breaks the strateg nterdependene assupton, whh s set n the theory of olgopolst and duopolst opetton. Ths assupton leads to a new assupton that one opany produes only one produt. Assupton 2) Free-entry and free-et Free-entry and free-et eans that all opanes are n the tough opettve arket, and ajorty of the opanes are always atteptng a new entry to aqure proft. Copanes are requred to ontnually reate dfferentaton produton to avod etng the arket, whle onsderng pres. Ths assupton enables us to epress the phenoenon that opetton ontnues untl the eess profts reah zero n the long ter. Assupton ) Eonoes of sale (nternal) Ths assupton requres usng a funton that onsders the fed osts at the ndvdual opany level. Under the equlbru ondton n the long ter, pre and argnal ost wll be equally affeted by Assupton 2. Assupton 4) Produt dfferentaton Eah opany wll fae a downward-slopng deand urve that s separate and dstnt fro the behavor of others. Copanes wll dfferentate to reap the benefts, resultng n a hgher noe and prng as hgh as possble. However, ths proess wll result n a downward-slopng deand urve as the d-sze ar arket as a whole lost ts deand and was not aepted by the onsuer, thereby affetng etreely hgh pred opanes. Here we found varous opanes that have eperened ths phenoenon. Monopolst Contestable Market Olgopoly duopoly Monopolst opetton Nuber of opanes Many one Many Few Many Free entry and et Yes Yes Yes No Yes eonoes of sale No Yes Yes Yes No Yes Produt dfferentaton No No No No Yes +α:strateg deson akng No No No Yes No Fgure 4 Dfferenes aong theores of eonos.2 Relatonshp between the onopolst opetton theory and avaton arket Ths seton eplans the relatonshp between the theory of onopolst opetton and the arket ondtons n avaton setor (Fg-5). Assupton ) Many opanes n avaton arket th WCTR, July 5-8, 20 Ro de Janero, Brazl 5

7 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA The assupton that one opany produes only one produt s nterpreted as one arlne operates only one flght between regons, thereby enablng us to onsder that there are any opanes n the avaton arket. However, n real avaton arket, there are low frequent network between loals. Ths stuaton s not ft for the assupton set by the theory. To overoe ths dfferene, ths study proves the odel struture developed by Dt Stgltz (977) to sulate the ase of lower-frequeny n avaton arket. Assupton 2) Free-entry and free-et Entry nto the avaton arket eans nreasng frequenes between regons, and et eans dereasng frequenes. Assupton ) Eonoes of sale (nternal) Consderng Assupton, one arlne operates only one flght, the fed ost oprses the arraft and antenane ost of operatng a one-way flght. Ths assupton enables us to onsder the ssue of how to redue the fed ost, whh s the key fator n nreasng arlnes proft argn. Assupton 4) Produt dfferentaton Produng a serve dfferent fro other arlnes to obtan ore passengers nurs neessary addtonal ost. lnes set slghtly hgher pres to reover ost but not eessvely hgher beause f arlnes set a very hgh pre, they redue ther arket share. In ths study, the optal balane between reoverng ost and obtanng revenue s adjusted by ark-up fators. Assued Postve arket ) Copetton arket 2) Fed ost Monopolst Postve opetton ) Many opanes 2) Free entry/ et ) Eonos of sale 4) Produt dfferentaton Theory nterpretaton Postve ) Iproveent of ther own odel 2) Nuber of flghts ) Type of arraft 4) Avaton serve dfferentaton Fgure 5 Relatonshp between the onopolst opetton theory and the future avaton arket 4. SIMULATION MODEL 4. Model struture Ths seton eplans the odel struture based on the onopolst opetton theory. It onssts of three sub-odels as entoned below. ) Deand-sde odel 2) Supply-sde odel ) Equlbru ondtonal forula th WCTR, July 5-8, 20 Ro de Janero, Brazl 6

8 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA Frst, n Seton 4., we desrbe the deand-sde odel s essental struture based on the general theory of onsuer behavor, before provng the odel oponent orrespondng to the onopolst opetton theory. Seton 4.4 s the supply-sde odel. Fnally, Seton 4.5 establshes the onvergene ondton. 4.2 Features of the analyss odel Ths seton eplans the ters frequently used n ths odel. The ajor ters are as follows, : the regon of orgn, j: destnaton regon, k: transportaton ode nludng hgh-speed ral and arraft. Two addtonal fators are σ elastty of substtuton between transportaton odes and n: frequeny of avaton fro regons to j. 4. Deand-sde odel 4.. Constant Elastty of Substtuton-type utlty funton Fg-6 depts the entre struture of the utlty funton based on onstant elastty of substtuton (CES). Utltes n a regon (u ) onssts of two oponents, onsuptons for transportaton ( k ) or other goods ( ). The onsuptons for transportaton onsst of two transportaton ode, hgh-speed ral and avaton. The CES-type utlty funton other onsung funton and traff funton are entoned below. EOS: EOS: EOS: 2 n n n n n Utlty n regon:u Trp fro to j: : Ral Ral: EOS: Elastty of Substtuton Others: Fgure 6 CES utlty funtons u a j a 2 2 (4.a) Ral Ral a a (4.b) Here, α, α, α Ral and α are the paraeters of CES-type funtons. : entre traff deand n nterty transportaton setor only, nludng hgh-speed ral and avaton users, : nueral unt, : traff deand by ar, Ral : traff deand by hgh-speed ral. σ : the elastty of substtuton between traff deand and other onsuptons. σ 2 : the elastty of substtuton between hgh-speed ral and avaton, and σ : the elastty of substtuton aong arrafts. Transportaton users are selet transportaton ode to aze ther utlty under budget onstrants. For eaple, nrease n σ 2 eans that transportaton user are senstve to pre hange for hoe of transportaton ode. The ter σ 2 s set by albraton usng urrent data, as Seton 5 eplans n greater detal. th WCTR, July 5-8, 20 Ro de Janero, Brazl 7

9 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA 4..2 Generalzed ost The ost struture s sple, oposed by fare and te value. The equaton s as follows: k k k p ( T ) (4.2) Here, k : generalzed ost, p k : fare, T k : rate of te-value for pre. Addng fare and te value s an portant approah to epress the generalzed ost, but ths odel uses an Ieberg-type struture to orrelate to the onopolst opetton theory. Usng the Iebergtype struture 2 Ral Ral 2 2 (4.5a) enables us to alulate ore easly beause t uses only ultplaton and not addton. Consderng te value s very portant for researh on nterty transportaton beause te s an portant fator n transportaton-ode seleton for a long-dstane trp. 4.. Budget onstrant Budget onstrant s an portant fator for onsuers n hoosng a transportaton ode. The equaton of budget onstrant s as follows. k k I (4.) k j Here, I : total noe n regon. The frst ter on the left sde of the equaton s the total onsupton aount for transportaton n regon. The seond ter s the total for other goods; s the standard pre of ths alulaton; and any transportaton generalzed ost ( k ) s relatve aganst. The fnal ter on the rght sde of the equaton s the total noe n regon, alulated by usng average noe data per year and person, dvded by regon populaton Utlty azaton Mau utlty s alulated by the Lagrange-ultpler ethod usng the CES-type utlty funton under budget onstrants (Fg-7). The deand funtons are as follows: I ' (4.4a) 2 (4.4b) Ral Ral 2 Ral (4.4) Here, generalzed ost funtons and the utlty funton are also alulated as follows: th WCTR, July 5-8, 20 Ro de Janero, Brazl 8

10 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA th WCTR, July 5-8, 20 Ro de Janero, Brazl 9 CES type utlty funton j k a a u Budget onstrant k k j k I Lagrange's ethod of undeterned ultplers n n n I L p u L I u L : 0 : 0 ) ( ), ( Transportaton deand funton k k k Fgure 7 Calulaton flow by Lagrange s ethod 4..5 Modfed deand funtons based on the onopolst opetton theory Deand funtons alulated n equaton (4.4b) s odfed to ensure onssteny wth the onopolst opetton theory. The theory used n ths study s based on researh by Dt and Stgltz n 977. The new deand and budget-onstrant funtons are as follows. n (4.6) Y n (4.7) Here, () s transportaton deands n eah arraft n s the nuber of varetyρ s elastty of substtuton () s generalzed ost n eah arrafty s total ost for avaton, wth () alulated usng Lagrange equaton. Y n n (4.8) ) ( ) ( ) ( ) ( n (4.9) ) ( ) ( (4.0) The Lagrange ultpler s gven as follows: ' j (4.5b) ' I u (4.5) ) ( n (4.)

11 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA Here, s avaton generalzed ost, and budget for avaton Y s as follows. Y (4.2) To alulate the (), nsertng equaton (4.2) nto (4.0). ( Y ) ( ) To alulate the (), by substtutng equaton(4.2) nto (4.). We obtan the followng equaton: (4.4) In ths equaton, for a gven value of elastty alternatve, the alulated funton s a downward-slopng deand urve. In equaton (4.), () s equal to n under equlbru. n n (4.5a) p n n ( T k ) (4.) (4.5b) σ s greater than.0 n ths odel n equaton (4.5a), wth dereasng frequeny n, avaton s generalzed-ost ( ), nreases. 4.4 Supply-sde odel 4.4. Proft funtons Supply-sde odels eplan the behavor of avaton opanes n the tough opetton arket. Ths odel also apples the onopolst opetton theory, and the proft funton s epressed as follows: p q w a MC w b q w F (4.6a) q n n n n () Here eah harater s defned as follows: q n : Avaton deand n eah arraft a MC : Unt for varable ost per unt seat b MC :Unt for fuel ost per seat F :Unt for fed ost w a : Varable ost w b : Fuel pre w F a : Fed ost b MC th WCTR, July 5-8, 20 Ro de Janero, Brazl 0 n F (4.6b) Equaton (4.6a) s forulated for eah avaton opany. In equaton (4.6), the frst ter on the rght sde s revenue, the seond s varable ost, and the last s fed ost. Varable osts are dvded nto fuel ost and others. In ths study, tehnologal proveent s epressed by the hange of b MC whh eans hangng fuel effeny s tehnologal proveent. Ths odel does not onsder the dfferene of produtvty between avaton opanes

12 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDAbeause the Dt Stgltz odel whh s based on the theory of onopolst opetton does not onsder the produtvty to ake sple forula Proft azaton proble The proft-azaton proble s appled to the frst-order ondton of proft azaton wth respet to equaton (4.6) and to the partal dervatve of both sdes wth respet to the aount of produton, q()=q n ; thus, we obtan the followng equaton. q p p wa amc wb bmc 0 (4.7) q p q The ark-up μ s set as follows. q( ) p( ) (4.8) p( ) q( ) By nsertng equaton (4.8) nto (4.7), the fare per eah flght(p n ) s alulated as follows. pn w a a MC wb b MC (4.9) Aordng to the theory of perfet opetton aong arket ondtons, fares and argnal osts are equal beause μ s fed to zero, whh eans that fares are unaffeted by the arkup μ thereby dereasng frequeny of avaton. However, n the onopolst opetton theory, fares equal to argnal osts nreased by the ark-up μ. For eaple, when the frequenes of avaton derease, the ark-up μ and fares (p n ) nrease, whh n turn nreases traff deands. The ark-up μ s forulated as a funton of the avaton frequeny as follows: S n 2 2 (4.20) The ark-up μ s alulated by the Dt Stgltz odel: μ=/σ. However, n the avaton arket, the nteraton between fares and ark-up wth low frequeny OD s portant n evaluatng the pat of envronental ta, a ost-up fator. In ths odel, the ark-up μ s based on Takeda (2007) to epress the above-entoned ondtons. However, f the nubers of frequenes n are set to nfnte μ s onstant wth respet to the reproal of the elastty of substtuton. For ore nforaton, refer to Takeda (2007). th WCTR, July 5-8, 20 Ro de Janero, Brazl

13 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA 4.4. Methods of envronental taaton In ths sulaton, envronental ta s ntrodued as an upstrea taaton ehans, whh eans that t affets all transportaton odes nludng avaton and hghspeed ral through nreased fuel osts. Fg-8 depts the envronental-ta pat flow. Taaton s ntrodued between port and purfaton, and purfaton-busness opanes are the ta payers. The rates of envronental ta are set n ters of unts of tons arbon. Petroleu and Coal Ta Mnng Iport avaton fuel ta Purfaton Jet Fuel Copany Gasol ta et Consuer lne Other fuel others eletrty Envronental ta EX)20,000 JPY/t C ralway Ta for the prooton of Power Resoures Developent Fgure 8 Taaton ehans Refneent of sulaton odel by taaton and tehnologal proveent Ths odel needs to prove the partal equatons to epress the taaton pat on fuel pre. In addton, the odel ust epress tehnologal proveents by dereasng fuel onsupton, whh n turn redues operatng osts. To nlude ths pat, equaton (4.6) s proved as follows onsderng taaton pat and tehnologal proveent. z ( ) wb b MC wb b MC (4.2) The ter β s the rate of nrease n the fuel pre aganst the urrent fuel pre durng the sulaton perod, and z s proveent rates of fuel onsupton aganst the urrent rate. Equaton (4.22) replaes equaton (4.6) as follows: n p q n wa a MC z ( ) wb b MC qn w F F 0 (4.22) Equaton (4.9) s also replaed beause equaton (4.22) has proved. pn wa a MC z ( ) wb b MC (4.2) However, ths researh does not apply the onopolst opetton theory to the ralway arket. The ntroduton of envronental ta as upstrea taaton affets eletr osts, whh s a ehans epressed by provng the equaton of generalzed ost as follows: Ral Ral rp Ral r p Ral TRal (4.24) Here, r: rates of eletr ost n fares, and βral: nreasng rates of the eletr ost aganst the urrent rate. 4.5 Equlbru ondtons/ Nubers of operatng frequeny The equlbru ondton s represented by equaton (4.25) whh eans that alulatons wll stop when the proft of eah arlne beoes zero. Aordng to the onopolst th WCTR, July 5-8, 20 Ro de Janero, Brazl 2

14 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA opetton theory, opanes ontnue to plae new entres nto the avaton arket untl onopolst proft beoes zero. The varables are the nubers of frequenes. In ths study, nreasng operatng osts fro taaton redues avaton opanes profts, and subsequently, a few opanes et the arket untl the deft equals zero. The nubers of operatng frequenes for avaton opanes are alulated by the followng two equatons. n p qn wa a MC ( ) wb b MC qn w F F 0 (4.25) n S 2 2 (4.26) Usng equaton (4.25) and (4.26), the nubers of frequenes are deterned as follows: bmc F qn a MC nn (4.27) S b MC F a MC qn Calulaton flow Fg-9 depts the alulaton flow startng wth the ntroduton of envronental ta and endng wth the zero proft ondton on equaton (4.25). Frst, envronental ta nreases fuel osts for avaton (β), and eletr osts for ralways (βral). The ter β nreases fares for avaton (pn). The synthet transportaton pre () nreases by nreasng both generalzed osts of avaton () and ralway (Ral). Then, utlty dereases beause noes are fed, but total osts nrease. After passengers ode hoe under budget onstrants, avaton deand dereases ore than the ralway deand beause the unt of CO2-esson per person n the avaton arket s greater than that for ralways. Dereasng the avaton deand akes the proft non-zero; the avaton frequeny, n, s adjusted untl the proft beoes zero. Repeated oputaton ends when proft equals zero, and ertan outputs suh as frequenes n, ark-up rates μ, traff volue and utlty u are obtaned. u I / Utlty n regon u Deand Sde others Trp fro to j Ral Ral( 2 ) sae ta rate wth ar n p n T Supply sde wa a MC wb b MC qn wf F 0 pn fare 0 0 Stop Realulaton Other ost Generalzed ost wa a MC wbbmc Fuel ost Env ta Endogenous varable n S n 2 2 Transportaton ost n n Env ta lne's proft funton Total ost ( 2 ) 2 Ral deand Ral q n q nq n pn qn ( ) ( ) j Fare () Start Markup Inreasng Markup due to derease of flght freeny th WCTR, July 5-8, 20 Ro de Janero, Brazl

15 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA 5. CALIBLATION Fgure 9 Calulaton flow 5. Data set Ths study uses any data fro 2005 n Japan. Data of traff volue n 2005 orgnates fro the Inter-Regonal travel survey, organzed by Japan s Mnstry of Land, Infrastruture and Transport (MLIT). Data on transportaton networks and fares for ral and ar are obtaned fro the Natonal Integrated Transport Analyss Syste and MLIT, but we use only regular eonoy lass fares and apply only one fare to eah OD par. Data on the frequeny of avaton and arraft sze orgnates fro the JTB tetable. Rates of fuel and other osts aganst total varable osts are obtaned fro data n seurtes reports publshed by All Nppon ways and Japan lne n 2005, aordng to whh we set the fuel rate as 25%. CO 2 -esson per unt s (g-co 2 /apta/k) for avaton and (g-co 2 /apta/k) for ralway. 5.2 Paraeter estaton The equatons for estatng the paraeter are as follows. ln ln ln (5-a) ral ar ral ar ral ar ln ln 2 ln (5-b) The estatng paraeter s equal to the estate, σ and σ 2, as eplaned n Seton 4... Equaton (5-a) alulates the alternatve elastty varable between traff and other onsuer produts. Equaton (5-b) alulates the alternatve elastty varable between ralways and arlnes. The regresson analyss enables us use these equatons to evaluate the alternatve elastty varable fro the estng data. The paraeter estaton ethod follows the study of Okuda (2008), whh an be referened for ore nforaton on alulatng α and σ. The nuber of the total saples s 2,2. Ths saple aggregates data of OD trps between 50 regons, but t eludes ertan data suh as transportaton deands for nner-ty areas and between eah prefeture n a etropoltan. Frst, the result of an alternatve elastty varable between traff and other onsued produts s σ = The R-squared s 0.7, and the ultple orrelaton oeffents are Seond, the result of an alternatve elastty varable between ralways and arlnes s σ 2 = The R-squared s 0.70, and the ultple orrelaton oeffents are Ths fndng suggests that utual arlne and ralway substtuton ours easly for the sae transportaton route. The last paraeter, σ, s only set by senaro beause of no data between eah opany. Ths study sets σ equal to 0, whh s greater than σ 2 to satsfy the assupton of theory that σ has to be greater than σ 2. th WCTR, July 5-8, 20 Ro de Janero, Brazl 4

16 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA 6. CALCULATION RESULTS 6. Current nterty network struture n Japan, 2005 Fg-0 depts the avaton-network struture n Japan, Ths study fouses on the traff leavng fro Ah Prefeture to other regons. The sze of the gray-olored rle ndates the avaton ode share, and the thkness of the sold blak arrows ndates avaton frequeny. Fg- depts Japan s hgh-speed ral network n The sze of the grayolored rle ndates the ralway ode share. In ths alulaton, the envronental taaton rate s set to 4,000 (JPY/ton-arbon), whh s greater than 2,400 (JPY/ton-arbon) proposed by Mnstry of the Envronent, to assue ore severe ondtons. Aa a a y A 5 H a aa5 T a ay T aa 7 a ay T aa a ay T Ha a ay 80(%) 40 0 T a a ay T ya 5 a ay : Aa a T aa 7 a ay 航空シェア 0 400k :Aa y Raay a Raay 5 Fgure 0 Avaton network n Ah Fgure Hgh-speed ralway network n Japan prefeture 6.2 Ipat analyss by envronental taaton (Envronental taaton: Supply-sde) Fg-2 depts the aount of ar-fare nrease for flghts departng fro the Ah prefeture. For eaple, fares nrease to l,400 (JPY/person) n the Iwate prefeture, approately to l,000 (JPY/person) n Yaagata and Aoor prefetures, for whh avaton s a ajor aess ode but whh are areas wth less total deand, and approately to 400 (JPY/person) n other prefetures. The reason for these fare nreases s the nreased ark up, onsderng equaton (4.2). Fg- depts the nreasng rate of ark-up (μ) after taaton. In Iwate and Yaagata prefetures, t s.2%, and n Aoor t s.9%. Fro the relatonshp n equaton (4.26 dereasng avaton frequenes nrease the ark-up rate (Fg-4).The rates of dereasng frequeny n Iwate, Yaagata, and Akta Aoor prefetures are 9.%,.7%, and 6.%, respetvely, although for other areas, t s only.5%. Fro the above-desrbed th WCTR, July 5-8, 20 Ro de Janero, Brazl 5

17 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA (JPY) Fgure 2 Inreasng aount of avaton fare after taaton Fgure Inreasng rate of the ark-up after taaton Inreasng rate of ark up μ(%) Current frequenes a day n a OD Const Fgure 4 Relatonshp between the nreasng rate of ark-up and urrent frequenes a day of avaton n an OD trp Fgure 5 Dereasng rate of the frequenes of avaton after results, the dereased nubers of flghts (Fg-5) operated by avaton opanes nreased the arlnes prng power, so that they ould rase fares to obtan greater proft. 6. Ipat analyss by envronental taaton (Envronental taaton: Deand-sde) Fg-6 depts the dereasng rate of total traff deand (frequenes) after taaton. In Fg-6, Iwate and Aoor prefetures eperened the greatest pats of redued volue, 7.2% and 6.%, respetvely, wth Fgure 6 Dereasng rate of total deand after taaton n Ah Fgure 7 Dereasng rate of avatontraff volue after taaton n Ah th WCTR, July 5-8, 20 Ro de Janero, Brazl 6

18 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDAother prefetures, suh as bg tes, reevng less pat; for eaple, Hokkado, northern n Japan, had a 2.8% derease, Fukuoka, bggest ty n western Japan, 2.2%, and Tokyo only 0.2%. A dereasng aount of total traff deand (volue) per year, for Hokkado, Fukuoka, and Tokyo, s 9,000 (person/year), 2,000 (person/year), and 5,000 (person/year), respetvely. Espeally n Tokyo, people an ore easly hange ther transportaton ode fro avaton to ralway than the resdents of other regons beause Tokyo s hghspeed ral serve level has a hgh frequeny, so Fgure 8 Inreasng rate of the resdents need not derease transportaton after taaton. ralway deand after taaton n Ah Dereasng avaton deand and nreasng ralway deand reflet the fators that nfluene the reduton of the aount of total traff deand after taaton. Fg-7 depts the dereasng rates of avaton leavng fro the Ah prefeture: Aoor s 0.7%, Iwate.%, and Yaagata 24.7%o. Yaagata has the Yaagata Shnkansen lne (Hgh-Speed Ral), akng t easy for resdents to hange the transportaton ode fro avaton to ralway. Fg-8 shows the nreasng rates of ralway deand fro the sae regon. However, all prefetures ust aept the stuaton that they annot onvert the entre derease n avaton deand to nreased ralway deand beause ralway fares also nrease wth taaton. Thus, fators ausng a derease n the total traff deand wth the ntroduton of envronental ta have been found to be dfferent n that they an easly onvert to another transportaton ode. Low apablty for a shft fro avaton to ralway auses a greater reduton of total traff. If paraeter σ = 7, the pat by taaton s nreased to 0% opared wth the urrent ondton that the paraeter σ = 0. However, when σ = 20, the pat s dereased to 5%. Future studes should set paraeter σ arefully to sulate realty ore aurately. 6.4 Ipat analyss by envronental taaton (Envronental taaton and tehnologal proveent) Ths seton analyzes the results of the sulaton onsderng both the pats of envronental ta and tehnologal proveent. The taaton rate s set at 4,000 (JPY/tonarbon), as entoned n Seton 6.. Tehnologal proveent s set at 5.0% fuel effeny proveent n arraft engnes over urrent engne perforane. Ths sulate s useful for understandng the balane between the speed of tehnologal proveent and envronental ta Fg-9 depts the hange rate n the total traff deand fro Ah prefeture opared wth no taaton and the tehnologal-proveent ondton. Fg-20 depts the rate of hange of only avaton frequeny. Tehnologal proveent nreases the total traff deand under the taaton of 4,000 (JPY/ton-Carbon) beause the pats of taaton as a ost-up fator for arlnes are less than those of fuel-effeny proveents as ost-down fators. For eaple, n Iwate and Aoor prefetures, nreased avaton deand up to 2.0% s observed before taaton. In addton, the frequeny before taaton also nreases up to.0% n these regons. However, ths sulaton does not nlude tehnologal proveents th WCTR, July 5-8, 20 Ro de Janero, Brazl 7

19 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA Fgure 9 Inreasng rate of total traff deand after taaton fro Ah Fgure 20 Inreasng rate of avaton frequenes after taaton fro Ah n ralways; so, regons suh as the Ah prefeture n whh the ralway share s hgh show a dereased total deand beause they do not beneft fro avaton nnovatons. 7. CONCULUSION AND FUTURE STUDIES In ths study, a odel was developed by applyng the onopolst opetton theory to epress the arlne arket s vous rle under deregulaton and the nfluene of taaton was evaluated by quanttatvely assung the ntroduton of upstrea taaton as an envronental ta n the nterty transportaton passenger-traff setor. Therefore, the envronental ta of 4,000(JPY/t-C) was found to have the followng three effets. ) The upstrea taaton s effet on the transportaton deand hanged aordng to area wth a degree of alternatve dffulty to ralroad aess. As n a ase study for OD fro Ah, n areas wth few operaton faltes orgnally, the rate of derease n ar-transportaton use was espeally rearkable, for eaple, arrvng at Iwate dereased by approately 9%. In addton, n areas wth alternatve dffulty to ralroad aess, a an fator n the dereasng total transport deand was a anelaton of usng ar transportaton aused by fare s nrease refletng taaton. Thus, the loal dstrbuton of taaton s effet beae lear. 2) Taaton aused the nuber of operaton faltes to derease by approately 0% n areas wth few operaton faltes suh as Iwate and Aoor. Beause of the odel used for the ark-up as a funton of the nuber of operaton faltes, the nreased rate of a ark- -up n Iwate and Aoor was approately 5% hgher. fare also nreased n Iwate by approately l,400 (JPY/person) and n others by an average of 400 (JPY/person). Ths nrease resulted fro a vous rle, whh dereased the nuber of operaton faltes, nreased the ark-up. and fares, and dereased the deand, represented by a onopolst opetton odel. ) Tehnologal proveent of the effeny of arraft engne up to 5% nreases the total traff deand under the taaton of 4,000 (JPY/ton-Carbon) beause taaton s effets as ost-up fator for arlnes were less than those fro fuel-effeny proveents as ost- th WCTR, July 5-8, 20 Ro de Janero, Brazl 8

20 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDAdown fators. The result of ths sulaton suggests that the taaton rate for fuel should be set onsderng tehnologal proveent to derease the pat by taaton and to keep balane between eono and envronental effeny. Future studes should sulate realty ore strtly by, for eaple, nreasng the nuber of ase studes, nludng road and freght transportatons. Taaton s eono pat s also portant n ontrollng the total deand. Future studes should adopt the Meltz odel struture, whh s proves upon the Dt-Stlgtz odel that does not onsder dfferenes n produtvty. 8. REFERENCE Papers Anger, A (200): Inludng Avaton n the EU ETS: Ipats on the Industry, CO2 Essons and Maroeono Atvty n the EU, Journal of Transport Manageent No. 6, 200, pp. l Bauol, W J, Panzer, J C and Wllg, R D (986): Contestable Markets and the Theory of Industral Struture. New York: Harourt Brae Jovanovh Brander, J A and Zhang, A (990): Market Condut n the lne Industry: An Epral Investgaton, RAND Journal of Eonos, Vol.2, No.4, pp Chaberln, E H (9).: The Theory of Monopolst Copetton, Cabrdge, Mass.: Harvard Unversty Press,Vol.8, Dt, A K and Stglt, J E (977): Monopolst Copetton and Optu Produt Dversty, The Aeran Eono Revew, Vol. 67, No. (Jun., 977), pp Fuj, H (995): Deregulaton and Soal Welfare n Monopolst Copetton, Hattor, Y, Moroto, R, Shbahara, N, Kato H and Ito, Y (200): Applyng LCA to Interregonal Ultra-Hgh-Speed Passenger and Freght Transport Syste, Journal of Infrastruture Plannng Revew,Vol.4, CD-ROM(28) Helpan and Elhanan (990): Monopolst Copetton n Trade Theory, Speal Paper n Internatonal Fnane, No. 6 Ishkura, T and Tanse, K (2008): A doest Deand Model for Analyss of port Copetton Stuaton, Researh Report of Natonal Insttute for Land and Infrastruture Manageent,Vol.8 Kkuh, T (2006): New Developents n Monopolst Copetton Trade Theory, Natonal eonoy journal 94(2), pp Krugan, P R (979): Inreasng Returns, Monopolst Copetton and Internatonal Trade, Journal of Internatonal Eonos, Vol.9, pp Mayor, K and Rhard, S J Tol (2007): The Ipat of the UK Avaton Ta on Carbon Dode Essons and Vstor Nubers, Workng Paper FNU- Muro, A and Okuda, T (2009): A study on ntrodung Bauol-Oates ta and re dstrbuton of the ta revenues nto nterty transport setor n Japan, Journal of global envronent, Vol.7, pp Okuura, M (200): Proposng Approah for Interty Transportaton( Speal sesson No.805), Journal of Infrastruture Plannng Revew Vol.27, CD-ROM Okuura, M, Nakagawa, D, Yaaguh, K, Tsuhya, K, Okuura, Y, Hno, S and Tsuka, M (2002): Tops on Analyss and Evaluaton of Inter-Urban Transportaton (Speal sesson), Journal of Infrastruture Plannng Revew Vol.25, CD-ROM th WCTR, July 5-8, 20 Ro de Janero, Brazl 9

21 Ipat analyss of envronental ta and tehnologal proveent on nterty transportaton n Japan Based on the onopolst opetton theory Aoto MIMURO, Takaak OKUDA Proeedngs of the Conferene on Energy, Eonoy, and Envronent, Vol., 8 Takeda, S (2007): The leture of Appled General Equlbru Analyss for Trade Poles, RIETI Dsusson Paper Seres 07-J -00 Book Muraka H, Takahash, N, Katou, K and Sakakbara, Y (2006): Mnerva Tet Lbrary pp. 75 2, Mnerva Bookstore Data on governent offe Mnstry of Land, Infrastruture, Transport and Tours (2005): The atual ondton of the Trunk Traveler Flow -Analyss of natonal trunk passenger pure flow data ~ Mnstry of Land, Infrastruture, Transport and Tours NITAS(Natonal Integrated Transport Analyss Syste) Mnstry of Land, Infrastruture, Transport and Tours (2006) Transton of the greenhouse effet gas esson n a transportaton seton, et. Others All Nppon ways Co., Ltd., The 56 th ter fnanal report Japan lnes Co., Ltd., The Hese 7 fsal-year ter fnanal report ended Marh JTBtetable(2005)JTBpublshng th WCTR, July 5-8, 20 Ro de Janero, Brazl 20