Effects of Carbon Emission Taxes on Transportation Mode Selections and Social Welfare

Mingzheng Wang, Kuan Liu, Tsan Ming Choi, Xiaohang Yue

Research output: Journal article publicationJournal articleAcademic researchpeer-review

43 Citations (Scopus)


In this paper, we analyze how carbon emissions affect the selection of transportation modes and social welfare by using a two-stage Stackelberg gaming model. Based on this model, the government's optimal carbon-emission tax scheme and the company's optimal transportation mode and production decisions are explored. We find that: 1) whether or not the transport carbon-emission tax can increase social welfare depends on the relationships among the social cost of carbon (SCC), the transportation mode shifting threshold (TMST), and the biggest carbon-emission tax that a company can afford (BCRA); 2) a greater SCC implies a higher probability of improving social welfare via imposing transportation carbon-emission tax; and 3) a smaller TMST or BCRA yields a higher probability of improving social welfare when a carbon-emission tax is imposed. Further study shows that imposing a carbon-emission tax on the product with a higher production cost, a bigger product volume, or a bigger product density can increase the probability of improving social welfare.
Original languageEnglish
Article number7109929
Pages (from-to)1413-1423
Number of pages11
JournalIEEE Transactions on Systems, Man, and Cybernetics: Systems
Issue number11
Publication statusPublished - 1 Nov 2015


  • Carbon-emission tax
  • economic systems
  • social welfare
  • supply chain management
  • sustainability
  • Transportation mode selection

ASJC Scopus subject areas

  • Software
  • Control and Systems Engineering
  • Human-Computer Interaction
  • Computer Science Applications
  • Electrical and Electronic Engineering

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