Environmental and economic impact of modal shift policy in China’s freight transportation

Abstract

The shift from road to rail in freight transportation is a crucial policy for reducing carbon emissions, but the effectiveness of the modal shift policy remains unclear. To evaluate the contribution of such modal shift to carbon neutrality in the transportation sector, this study employs a computable general equilibrium (CGE) model and introduces an innovative method to integrate time costs into the model. The results indicate that modal shift could cumulatively reduce carbon emissions by 175Mt to 198Mt between 2021 and 2060, with China’s gross domestic product (GDP) projected to decline by 0.08% to 0.10%. However, when accounting for the time cost, GDP losses could be more than three times higher than if time costs were excluded. Moreover, early rapid modal shift leads to greater carbon reductions and smaller economic losses compared with constant speed and late rapid modal shift.