Comparison between Subsidy and Cap-and-Trade Policy on Electric Logistics Vehicles Leasing System

Abstract

Electric logistics vehicles (ELVs) can reduce carbon emissions of logistics industry. However, the logistics company is reluctant to adopt ELVs due to the shortages of high purchasing cost, short driving range, and long charging time. This research studies ELVs leasing system which consists of an ELVs manufacturer, an ELVs rental company, and a logistics company. The influence of purchasing subsidies and Cap-and-Trade policy(C&T) on the ELVs leasing system is analyzed and compared. It is found that the logistics company prefers the subsidy policy when the driving range of ELVs is within a certain range. Otherwise, the logistics company prefers C&T policy. For the rental company and the manufacturer, when the subsidy is within a certain range, C&T policy is more profitable. Otherwise, the rental company and the manufacturer prefer the subsidy policy. If the emission reduction benefit is high enough, the C&T policy can lead to more emission reduction. Otherwise, the subsidy policy is better for the environment.