We develop a duopoly model to analyse the environmental impact of high-speed rail (HSR) introduction in a market for travel served by air transport. We take into account the effects on the environment of induced demand, schedule frequency and HSR speed simultaneously, and we show that competition between the two modes may be detrimental to the environment depending on the magnitude of the pollution level of HSR relative to air transport. We conduct a simulation study based on the London-Paris market and we find that the introduction of HSR increases local air pollution (LAP) but decreases greenhouse gases (GHG) emissions. Moreover, we perform a sensitivity analysis of our results towards the level of HSR and air transport emissions. We find that modal competition is more likely to be detrimental to the environment when HSR emissions are not significantly lower than air transport emissions. Furthermore, we find that modal competition is more likely to be detrimental to the environment in the case of a fully private HSR, than in the case of a mixed public/private-owned HSR that takes into account the surplus of consumers and the surplus that the air transport operator brings about. Finally, we provide an interpretive discussion of the results with respect to the different mitigation strategies available to the two transport modes and the EU policy measures for the environmentwhich might affect HSR and air transport emissions.

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