Abstract
This study examines the impact of using hybrid vehicles for passenger transportation on carbon emissions in the Japanese energy system. A partial equilibrium model of the energy sector has been developed to forecast changes in the energy system out to the year 2040. The model can account for changes in technology capacities, fuels, and consumption in response to policy initiatives, such as taxes. The authors find that hybrid vehicles are more efficient in reducing carbon dioxide emission than conventional vehicles. Hybrid vehicles have a great impact on reducing carbon emissions when BTU taxes are imposed, which in turn has the advantage of encouraging a more diverse set of technologies and fuels. (Author/publisher).