Title: Smart transportation and the economic effects of the Quebec-California caps and trade market

Authors: Anastassios Gentzoglanis; Philippe Dumont-Lefrançois

Addresses: Faculty of Business Administration, University of Sherbrooke, 2500, University Bould Sherbrooke, J1K 2R1 Quebec, Canada ' Faculty of Business Administration, University of Sherbrooke, 2500, University Bould Sherbrooke, J1K 2R1 Quebec, Canada

Abstract: There is an increasing trend in the demand for electric vehicles (EV) but consumer choice is very limited compared to the gamut of conventional cars. The demand for the latter is still growing despite their negative impact on the environment and government policies to incentivise the reduction of their use. This paper examines the consumption patterns of the Canadian commuters who travel by car. It estimates the demand for car transportation services for the province of Quebec and makes simulations to predict the evolution of this demand till the year 2040. The estimations of the 'baseline scenario' are made using some key variables such as car price, annual kilometres driven, and the price of substitutes such as public transit. In the first simulation, there is no government intervention to modify the consumption patterns of drivers. A second model is used to investigate the impact of the pollution permits on the demand for vehicles. The new Quebec-California caps and trade (C&T) market is analysed and its impact on the demand for cars and the environment is empirically estimated.

Keywords: car demand; caps and trade; C&T; greenhouse gases; GHG emissions; demand modelling; car transport; price elasticity; risk; tax revenues; smart transport; economic effects; Canada; commuters; simulation; electric vehicles; government intervention; pollution permits; driver behaviour.

DOI: 10.1504/IJATM.2016.076445

International Journal of Automotive Technology and Management, 2016 Vol.16 No.1, pp.70 - 89

Received: 14 May 2015
Accepted: 02 Oct 2015
Published online: 09 May 2016 *

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