Using personal carbon dioxide trading to promote cleaner cars

Abstract

A personal carbon dioxide trading system for private car users is proposed to promote the adoption of low-emission vehicles. Each person in the system is allocated a fixed carbon dioxide allowance, which can then be traded in a carbon dioxide market. A quantitative model is developed to analyse the influence of such a system on the decisions made by potential buyers of low-emission vehicles. The results show that carbon dioxide price, personal mobility budget and personal carbon dioxide allowance are the key factors influencing buying decisions. The carbon dioxide market can reach equilibrium when the price equals the critical price. It is only when the critical price is exceeded that the system can achieve a significant effect on emissions reduction. A numerical simulation is used to verify the model with different parameters. Finally, some suggestions are offered as to how governments could implement a personal carbon dioxide trading policy to promote cleaner cars in future.