01623346

Component

The implementation of personal carbon trading (PCT) on road transportation recently has been considered in the literature in order to mitigate CO2 emissions. This paper focuses on the importance of analyzing the consequences of implementing this scheme. The differences between two different equilibrium prices, i.e., type 1 and type 2 prices, were examined. The type 1 price is the equilibrium price of the carbon permit, considering only the current transport demand. However, the type 2 price is the equilibrium price, which considers changes in behavior related to choosing the mode of transportation after the policy is implemented. The utility maximizing equilibrium price is developed for multi-modes with many origin and destination pairs (O-Ds). By illustrating the simple example problem for two modes with a single O-D, the importance of considering the type 2 price is emphasized. Determining where to set the type 1 equilibrium price is done using an optimization tool. The changes in the demand for transport modes are demonstrated by the logit model. Then, the type 2 price is derived by an iterative search algorithm, and the welfare analysis is performed. Compared to the type 1 equilibrium state in the example, in the type 2 equilibrium state, the authors observed a 41% decrease in price, a 36% increase in automobile demand, and a 4% increase in welfare.

This paper was sponsored by TRB committee ADD40 Standing Committee on Transportation and Sustainability.

01618707

17-04364

English

18p

2017

Transportation Research Board 96th Annual Meeting

Digital/other

Figures; References; Tables

Carbon taxes; Emissions trading; Equilibrium (Economics); Highway transportation; Prices

Economics; Finance; Highways

Transportation Research Board Annual Meeting 2017 Paper #17-04364

TRIS, TRB, ATRI

Dec 8 2016 11:40AM