Work

Allocation structures and incentive mechanisms of carbon credit: a systematic review

Year: 2026

Type: review

Abstract: This study examines how carbon-credit-related allocation and incentive mechanisms are designed to influence stakeholder participation, coordination, and behavioural responses, with particular attention to their applicability in the transport sector. Despite the importance of transport decarbonisation, integrating carbon-credit mechanisms with operator decisions and user behaviour remains challenging. This review systematically examines recent literature using four analytical dimensions: structure type, model type, incentive type, and emission scope, to identify how allocation rules, incentive structures, actor responses, and emission recognition are addressed in existing studies. The reviewed literature frequently examines multi-actor governance arrangements alongside single-actor designs, including public–private coordination and mechanisms combining market-based instruments with financial support. Game-theoretic and optimisation models are frequently employed, whereas survey-based approaches examining user acceptance and behavioural responses receive comparatively limited attention. Furthermore, direct emissions remain the predominant basis for emission recognition, with less emphasis on life-cycle emissions. These findings indicate that existing studies often simplify the relationships between institutional rules, operator decisions, user behaviour, and recognised emission reductions. This limitation is particularly relevant to transport, where policy outcomes depend on both the feasibility of low-carbon service provision and users' willingness to adopt available alternatives. Overall, this review highlights the need for integrated carbon-credit mechanisms that connect allocation rules, incentive design, operator and user responses, and credible emission recognition to support sustainable transport decarbonisation.

Source: Carbon Management

DOI: 10.1080/17583004.2026.2743964

Authors: Hyunwoo Lee, Sangpil Ko, Jun Lee, Jeong Whon Yu

Institutions: Korea Railroad Research Institute, Ajou University

Language: English

Topic: Climate Change Policy and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $1,590