Evaluation of emission trading scheme effectiveness in freight transportation

Decarbonisation for the freight transportation sector has long been a difficult global problem. ETS is seen as an effective market-based measure to achieve CO2 emission reduction in many industries in the short term. However, no comprehensive transportation ETS has been designed and the potential effectiveness in the freight sector has not been verified. A freight energy-emission-economic impact model (FE3IM) is proposed to investigate the feasibility of freight transportation ETS. The energy, emission, and economic impacts of transportation ETS are quantified in this paper. In order to achieve the most effective ETS design, some important elements are adjusted to observe their impact on emission reduction. An empirical study of China's freight sector shows that ETS has a significant impact on emission reduction. In addition, ETS can also help adjust the transport structure and promote electrification. However, the current ETS design makes it difficult to achieve emission abatement goals. More radical measures are needed to achieve the emission peak. Improving carbon pricing, reducing free allowances, or increasing subsidies for new energy vehicles will play a positive role in achieving the CO2 emission abatement objective.