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Effectiveness of carbon pricing policies for promoting urban freight electrification: analysis of last mile delivery in Madrid

Author

Listed:
  • Jose L. Arroyo

    (Universidad Pontificia Comillas)

  • Ángel Felipe

    (Universidad Complutense de Madrid)

  • M. Teresa Ortuño

    (Universidad Complutense de Madrid
    Universidad Complutense de Madrid)

  • Gregorio Tirado

    (Universidad Complutense de Madrid
    Universidad Complutense de Madrid)

Abstract

This research analyzes the effect of carbon pricing policies in transport electrification. It combines a heuristic algorithm to solve the Green Vehicle Routing Problem with Multiple Technologies and Partial Recharges with an economic Total Cost of Ownership model. The paper compares the performance of battery electric (BEV) and internal combustion vehicles (ICEV) for last mile delivery, using real data of Madrid (Spain). The results show that carbon pricing is scarcely effective when daily mileage is low (precisely when BEVs require incentives), and its effectivity increases as mileage increases (precisely when it is not so necessary to incentivize BEVs). Hence, carbon pricing is not an effective tool for promoting electric vehicles in the short term, and as a result, any political decision to fix CO2 prices must be adopted with a long-term view in mind. Specifically for the case of Spain, this research shows that current aids to BEVs are insufficient, with the exception of some regions like Madrid, which complement national subsidies with regional ones.

Suggested Citation

  • Jose L. Arroyo & Ángel Felipe & M. Teresa Ortuño & Gregorio Tirado, 2020. "Effectiveness of carbon pricing policies for promoting urban freight electrification: analysis of last mile delivery in Madrid," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(4), pages 1417-1440, December.
    • Handle: RePEc:spr:cejnor:v:28:y:2020:i:4:d:10.1007_s10100-019-00627-y
    DOI: 10.1007/s10100-019-00627-y
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    2. Tomáš Settey & Jozef Gnap & Dominika Beňová & Michal Pavličko & Oľga Blažeková, 2021. "The Growth of E-Commerce Due to COVID-19 and the Need for Urban Logistics Centers Using Electric Vehicles: Bratislava Case Study," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    3. Dietmar Göhlich & Kai Nagel & Anne Magdalene Syré & Alexander Grahle & Kai Martins-Turner & Ricardo Ewert & Ricardo Miranda Jahn & Dominic Jefferies, 2021. "Integrated Approach for the Assessment of Strategies for the Decarbonization of Urban Traffic," Sustainability, MDPI, vol. 13(2), pages 1-31, January.
    4. Gil Ribeiro, Carolina & Silveira, Semida, 2024. "The impact of financial incentives on the total cost of ownership of electric light commercial vehicles in EU countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    5. Josefa Mula & Marija Bogataj, 2021. "OR in the industrial engineering of Industry 4.0: experiences from the Iberian Peninsula mirrored in CJOR," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 29(4), pages 1163-1184, December.

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