Urban logistics two-level distribution network design under carbon tax

Various initiatives are being taken globally to curb the excessive emissions of carbon dioxide. Considering the upcoming carbon tax policy in China, a two-level urban logistics distribution network is addressed under carbon tax. A new convex MIP model, balancing logistics operation cost and carbon emission cost, is then established. The popular optimization kit, GLPK, is proposed to solve the model exactly. Subsequently, a real case is studied and results show in detail the effectiveness of the model. When carbon tax ranges from 0.01 to 0.10 RMB yuan per kg CO_2eq, only by fine tuning logistics distribution network configurations without further huge capital investments, the logistics operator can achieve cost saving up to 19.4%, while carbon emission could be decreased tremendously, by around 47.8% at its most. Our contributions are three-fold. First, the model proposed reflects both economic and environmental benefits of urban logistics networks. Second, sensitive analysis is made for carbon tax´s influences on logistics network design. Third, some feasible and cost-effective measures together with modest policy suggestions are put forward for industrial player and urban policy makers.