Designing a Model for Managing Emissions from Urban Freight Transportation in the Carbon Market Framework Using Game Theory (Case Study: Tehran)

Document Type : Scientific - Research

Authors
Soheil Ebrahimi 1
Saeid Sherafatipour 2
1 MSc in Transportation Planning, Faculty of Civil and Environmental Engineering,Tarbiat Modares University, Tehran, Iran
2 Assistant Professor at Department of Transportation Planning ,Faculty of Civil and Environmental Engineering,Tarbiat Modares University, Tehran, Iran
10.22119/jte.2025.551347.2748
Abstract
Urban freight transportation in Tehran plays a major role in the city’s air pollution, accounting for nearly 35% of total transport-related emissions. The widespread use of aging diesel fleets, excessive fuel consumption, and inefficient management are among the key contributing factors, resulting in severe respiratory health impacts, high economic costs, and accelerated climate change. Existing measures, such as traffic restrictions and fleet renewal programs, have produced only temporary effects, failing to meet the growing demand for urban logistics. In this context, market-based emission reduction mechanisms, such as carbon trading and cap–reward/penalty (Cap-and-P/S) schemes, defined as setting an emission cap for companies and allowing the trading of emission allowances, offer a more sustainable approach to mitigating CO₂ emissions from urban freight operations. This study applies game theory, particularly Nash equilibrium models, to simulate the strategic behavior of freight companies and assess the effectiveness of carbon policies in reducing emissions. A “do-nothing” baseline scenario projects the annual CO₂ growth in the absence of interventions, followed by two Nash games: one without and one with the inclusion of a rogue player representing high-risk independent drivers. The case study of Tehran demonstrates that cap–and-penalty/subsidy policies can reduce total CO₂ emissions by 13.4% compared to the baseline scenario; however, the presence of the rogue player, who deliberately increases mileage regardless of emissions, diminishes this reduction to about 11%, corresponding to a 2.8-percentage-point loss in policy efficiency. From an operational perspective, the findings indicate that: (1) increasing the carbon penalty rate to above US$490 per ton is necessary to align company activity with the emission cap; (2) reducing the operational upper bound to around 1.1 times the cap effectively controls over-mileage; and (3) integrating economic policies with spatial monitoring in LEZ and CGZ zones yields the greatest impact on both emission mitigation and the behavior of high-risk drivers. Overall, the results provide actionable insights for urban policymakers and transport planners, enabling them to design more effective, data-driven carbon management strategies for mitigating air pollution in Tehran’s freight transport sector.
Keywords
Urban freight, Carbon trading, Game theory, Environmental policy
Subjects
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Quarterly Journal of Transportation Engineering
Volume 17, Issue 1 - Serial Number 66
Autumn 2025
Pages 5207-5221

  • Receive Date 05 October 2025
  • Revise Date 15 October 2025
  • Accept Date 20 October 2025