Emissions Cap-and-Trade Approaches for Managing Urban Road Mobility

This paper develops a methodology to analyse the impact of emission taxes for private vehicles for controlling and reducing atmospheric pollution. The main feature of the proposed approach is the integration of emissions from individual emitters (private vehicles) in Emissions Trading Markets designed for macro-emitters. The presented approach consists of two hierarchical levels. At upper level the emissions trading for macro-emitters (cities or consortium of cities) is considered. In this work three emission trading schemes are proposed and studied: i) Fixed emission rights per city, ii) Auction market for the emissions, which tries to reach the environmental objectives at the minimum cost, and iii) Emissions cap-and-trade scheme. These trades allow the system to provide an efficient scheme in a cost-efficiency sense and equity among regulated cities. At lower level the behaviour of the users of the traffic network is modelled for each city. A multi-user equilibrium model with elastic demand and pollution taxes estimates the emissions produced. The lower level represents the emissions market for private vehicles in which the emission taxes paid per user depend on travelled kilometres and the type of the vehicle. The price for each ton of (greenhouse gas) emissions is fixed in the Emissions Trading Market. The three schemes have been solved with a fixed point approach and a numerical study has been carried out to motivate pros and cons of the above schemes.