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Developing a low-carbon economy and reducing carbon dioxide emission have become a consensus for both academics and practitioners. However, the existing literature did not pay enough attention in interrogating the impacts of Carbon Tax (CT) and Carbon Quota (CQ) policy on distribution costs and carbon dioxide emission in the field of vehicle routing problem. Moreover, the investigated subsidies factor is also incomplete. This research stands on the position of the company to study the impact of CT and CQ policy on aforementioned two aspects. A mathematical model is developed to achieve the best low carbon vehicle routing under the optimal policy. The optimization goal of this research is to minimize the total cost that includes vehicle-using, transportation, CT, CQ, and raw material subsidy costs. An improved optimization algorithm, namely Genetic Algorithm-Tabu Search (GA-TS), is proposed to solve a …