Sector-specific Decarbonization Effects of High-Speed Rails Expansions

Abstract

We estimate the carbon impact of Japan's high-speed rail expansion using a city-year panel from 2000 to 2020. Rather than relying only on binary station openings, we model continuous network connectivity via Market Access (MA) and use two complementary designs: a staggered difference-in-differences around openings with spatial spillovers and an MA specification identified by two-stage least squares. The instrument is a geography-driven least-cost-path network that mitigates endogeneity in infrastructure placement. Over two decades, CO2 emissions in manufacturing, construction, and tertiary sector decline by 98.373 million tons, about 0.203 percent of national emissions in these sectors. By sector, manufacturing accounts for 85.886 million tons, tertiary sector for 11.417 million tons, and construction for 1.070 million tons. Valued at USD 51 per ton, the implied social benefit is USD 5.017 billion. Most abatement is associated with system-wide connectivity rather than local openings. Mechanism evidence indicates that MA raises activity yet lowers carbon intensity, consistent with process efficiency gains that dominate scale effects, alongside limited evidence on compositional reallocation.

@article{yoo2026sector,
  title={Sector-specific Decarbonization Effects of High-Speed Rails Expansions},
  author={Yoo, Sunbin and Kumagai, Junya and Lin, Hung-Jui and Nakaishi, Tomoaki and Hsieh, I-Yun Lisa},
  journal={Energy Economics},
  volume={158},
  pages={109355},
  year={2026},
  month=jun,
  doi={10.1016/j.eneco.2026.109355}
}