The Double-Edged Sword of Dynamic Pricing: Bidirectional Modal Shift and Carbon Leakage in High-Speed Rail

While pricing policy has emerged as a critical demand-side lever for decarbonizing mobility, its bidirectional effects on modal shift remain unexplored. Dynamic pricing in high-speed rail (HSR) creates a double-edged environmental outcome: advance discounts attract passengers from aviation, yet last-minute premiums may reverse these gains. Using 2.4 million price observations from Madrid–Barcelona (2019), we introduce a carbon leakage framework that quantifies this phenomenon within a multi-source validated framework. Our analysis reveals a structural tension: while early-bird pricing attracts 274,431 annual passengers from aviation—saving 23,650 tonnes CO2/year—last-minute scarcity premiums systematically drive passengers back to air travel. Multi-source calibrated elasticity (ε=−0.95, validated through triangulation across CNMC corridor data, meta-analytic evidence, and recent empirical studies within the range [−1.91,−0.75]) shows that 22.3% of last-minute tickets exceed the EUR 120 aviation threshold, creating 1511 tonnes CO2 leakage annually (6.4% offset of gross savings). Critically, this leakage ratio is shown to be structurally independent of elasticity specification, being determined by the price distribution shape rather than demand parameters. Scenario analysis suggests that under static assumptions, price caps at EUR 110–120 would eliminate leakage while preserving an estimated 94% of operator revenue, though general equilibrium effects remain unmodeled. These findings identify illustrative scenario thresholds for carbon-aware revenue management, demonstrating that demand-side decarbonization requires not only attracting passengers to sustainable modes but also preventing their reversal to high-carbon alternatives.

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Publication Details

Journal
Sustainability
Published
2026-03-12
DOI
https://doi.org/10.3390/su18062802
Primary Topic
Aviation Industry Analysis and Trends
Type
article
Field-Weighted Citation Impact
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article

The Double-Edged Sword of Dynamic Pricing: Bidirectional Modal Shift and Carbon Leakage in High-Speed Rail

Xinyu Gou, Zhibin Xing, Chenghao Xing
Sustainability
Aviation Industry Analysis and Trends
article

The Double-Edged Sword of Dynamic Pricing: Bidirectional Modal Shift and Carbon Leakage in High-Speed Rail

Xinyu Gou, Zhibin Xing, Chenghao Xing
article en

Abstract

While pricing policy has emerged as a critical demand-side lever for decarbonizing mobility, its bidirectional effects on modal shift remain unexplored. Dynamic pricing in high-speed rail (HSR) creates a double-edged environmental outcome: advance discounts attract passengers from aviation, yet last-minute premiums may reverse these gains. Using 2.4 million price observations from Madrid–Barcelona (2019), we introduce a carbon leakage framework that quantifies this phenomenon within a multi-source validated framework. Our analysis reveals a structural tension: while early-bird pricing attracts 274,431 annual passengers from aviation—saving 23,650 tonnes CO2/year—last-minute scarcity premiums systematically drive passengers back to air travel. Multi-source calibrated elasticity (ε=−0.95, validated through triangulation across CNMC corridor data, meta-analytic evidence, and recent empirical studies within the range [−1.91,−0.75]) shows that 22.3% of last-minute tickets exceed the EUR 120 aviation threshold, creating 1511 tonnes CO2 leakage annually (6.4% offset of gross savings). Critically, this leakage ratio is shown to be structurally independent of elasticity specification, being determined by the price distribution shape rather than demand parameters. Scenario analysis suggests that under static assumptions, price caps at EUR 110–120 would eliminate leakage while preserving an estimated 94% of operator revenue, though general equilibrium effects remain unmodeled. These findings identify illustrative scenario thresholds for carbon-aware revenue management, demonstrating that demand-side decarbonization requires not only attracting passengers to sustainable modes but also preventing their reversal to high-carbon alternatives.

SustainabilityVol. 18(6)
Southwestern University of Finance and Economics (CN), City University Malaysia (MY), SEGi University (MY)
Industry, innovation and infrastructure
Openalex Percentile: Top 29%
Aviation Industry Analysis and Trends
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