Abstract: In order to quantitatively analyze the energy consumption and emission effects of private capital investment in public transportation,system dynamic approach was used to analyze the cumulative effects of private capital investment in public transportation from the environmental perspective. The validity of system dynamic model of private capital investment in public transportation was verified by the operation data of Jinan public traffic. Simulation results show that the fuel consumption and emission reduction are obvious when the private capital invests in public transport considering passenger value compared to without private capital investment and traditional private capital investment. The cumulative reductions of fuel consumption,CO2,CO,SO2 and PM10 emissions are 398 Kilo liters,109 tons,542 kilograms,1.6 kilograms,and 77.3 kilograms respectively during 100 months compared to without private capital investment. This research verifies the superiority of private capital investment in public transportation considering passenger value from the environment perspective,and supplies a theoretical support for administrators to evaluate the effects of private capital investment systematically.