Impact of Cap-and-Trade vs. Carbon Tax Policy on Vehicle Routing

Transportation is the largest contributor to Ontario’s total GHG emissions, responsible for approximately one third of GHG emissions. GHG emissions in the transportation sector can be reduced through improvements in 1) vehicle engine and fuel efficiency 2) carbon content of the fuel; 3) using alternative modes of transportation; 4) system operations (e.g. assigning traffic in a way to ensure smoother traffic flow and educating drivers to drive more efficiently). This paper focuses on the last component for the case of fleet vehicle routing. Until recently, most vehicle routing problems (VRP) were solved to find routes that would generally minimize distance, or time. However, increasing concerns about the external costs of transportation (such as emissions) from governments and customers are forcing companies to consider “greening” their operations by considering their fleet GHG emissions and thus attempting to solve the routing problem with more complex objectives. In this paper, the green vehicle routing problem (GVRP), a relatively new extension of the VRP, will be utilized for this purpose. The problem will be formulated for a firm that is assumed to have rich information about the emissions costs through the use of simulated driving cycles obtained from previous research. The objective of this paper is to investigate the differences and assert their statistical meaningfulness when routing vehicles to optimize total distance, time and emissions. The paper compares the effects of carbon taxes and cap-and-trade, the most widely used policies in carbon pricing.


  • English

Media Info

  • Media Type: Web
  • Pagination: 1 PDF file, 522 KB, 15p.
  • Monograph Title: Canadian Transportation Research Forum 50th Annual Conference - Another 50 Years: Where to From Here?//Un autre 50 ans : qu'en est-il à partir de maintenant? Montreal, Quebec, May 24-26, 2015

Subject/Index Terms

Filing Info

  • Accession Number: 01605024
  • Record Type: Publication
  • Source Agency: Transportation Association of Canada (TAC)
  • Files: ITRD, TAC
  • Created Date: Jul 26 2016 5:04PM