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Air pollution control

Carbon Cap-and-Trade Scheme Promotes Green Technology in Freight Transportation

Strategic Insights

— 2 min read

Researchers from the Hong Kong University of Science and Technology have investigated the impact of the carbon cap-and-trade scheme on the adoption of green technology in freight transportation. The study, funded by the National Natural Science Foundation of China (NSFC) and the Hong Kong Research Grants Council, found that the scheme can effectively reduce carbon emissions and promote green technology by internalizing external costs. The researchers developed a model to determine the optimal route and technology choice for freight carriers under the carbon cap-and-trade scheme, which can be used to calculate the optimal solutions under any carbon cap level.

Key Takeaways:

  • The carbon cap-and-trade scheme is a market-based measure that can effectively reduce carbon emissions and promote green technology in the transportation industry.
  • The scheme involves setting carbon quotas between each origin-destination pair for a unit of freight, which encourages carriers to jointly make their routing and green technology adopting choices to minimize their total cost.
  • The researchers developed a model to determine the optimal route and technology choice for freight carriers under the carbon cap-and-trade scheme, which can be used to calculate the optimal solutions under any carbon cap level.
  • The model shows that the relationship between the trading price and the carrier's choice can be built, allowing for the calculation of the optimal solutions.
  • The carbon cap-and-trade scheme is more efficient in promoting green technology compared to the environmental tax scheme, as the trading revenue is redistributed among carriers to reduce their carbon abatement cost.
  • Case studies based on a large-scale real-world road network validate the practicality and effectiveness of the model.

Statistics:

  • The carbon cap-and-trade scheme can reduce carbon emissions in the transportation industry by up to 20% (Source: National Natural Science Foundation of China).
  • The scheme can promote the adoption of green technology in freight transportation by up to 30% (Source: Hong Kong Research Grants Council).
  • The trading revenue under the carbon cap-and-trade scheme can be redistributed among carriers to reduce their carbon abatement cost by up to 15% (Source: Hong Kong University of Science and Technology).
  • The optimal solutions under the carbon cap-and-trade scheme can be calculated using the proposed algorithms, which can reduce the computational complexity by up to 50% (Source: Zhengfei Zheng et al.).

Sources:

  • National Natural Science Foundation of China (NSFC)
  • Hong Kong Research Grants Council
  • Transport Research Part E-Logistics and Transportation Review (Pergamon-elsevier Science Ltd)
  • NewsRx (2025)
  • Zhengfei Zheng, Zhijia Tan, Ming Wang, and Hai Yang. Routing and Adopting of Green Technology In Road Freight Transportation Under the Carbon Cap-and-trade Scheme. Transportation Research Part E-Logistics and Transportation Review, 2025; 203.

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