Effectiveness evaluation of freight subsidy policy from a broader clean production view – Case study of the Yiwu-Ningbo container freight corridor, China

Abstract

The effectiveness of a specific freight subsidy policy is typically evaluated by a single indicator, i.e., decrease of road freight volume or emissions, from a civilian perspective. However, the approach from a narrow clean production perspective ignores the influences of the policy on other entities (e.g., shippers and consignees). This study proposes an evaluation framework based on cost-benefit analysis (CBA) from a broader view, i.e., more elements related to benefit and cost are incorporated in the CBA, to comprehensively and accurately assess the effectiveness of freight subsidy policies. Accordingly, the necessary and sufficient condition for an effective subsidy policy is derived. Then, this framework is employed for a case study of the Yiwu-Ningbo container freight corridor. The results indicate that, whether the subsidy policy is effective largely depends on the connotations of benefit and cost in the CBA. Moreover, the current subsidy policy of the Yiwu-Ningbo case is ineffective, unless time cost can be decreased by shortening the rail transportation chain time from the supply side, or by increasing the time upper threshold from the demand perspective. These results remind policy makers that when issuing or revising subsidy policies, they need to carefully consider the implementation background. Otherwise, these policies may lead to resource waste from a broader clean production view.