Designing a carbon-trading incentive scheme for mode shifts in multi-modal transport systems

The pressing need to reduce greenhouse gas emissions triggers the imperative for efficient travel demand management. Previous studies have explored budget-based and aggregated incentive programs, which place a significant financial burden on governments and tend to be limited in contributing to effective behavior change in practice due to budget issues. This study proposes a personal carbon trading travel incentive (PCTTI) mechanism, to encourage private car commuters shifting to using public transit. The incentive budget for PCTTI is sourced from the revenue generated through selling carbon emission reductions resulting from commuters’ travel mode shifts. To determine the optimal incentives, we developed an incentive scheme optimization model based on the Stackelberg game model. Numerical analysis reveals the significant potential of the PCTTI to reduce carbon emissions and travel costs across various scenarios within a multi-modal transportation system. This potential is evident amidst changes in the fixed costs of car travel, carbon trading prices, the use of different travel modes, the value of time, and the prevalence of electric vehicles. The advantages are most pronounced when the carbon trading price exceeds 40 CNY/ton, and when the usage of public transit, the value of time, and the proportion of electric vehicles each fall below 0.4, 50 CNY/hour, and 0.4, respectively.