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Airline emissions of carbon dioxide in the European trading system

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  • John FitzGerald
  • Richard S. J. Tol

Abstract

A simulation model of international tourist flows is used to estimate the impact of including carbon dioxide emissions from aviation fuels in the European Trading System. The effect on global carbon dioxide emissions from international aviation is minimal: -0.01% at current permit prices, and ?0.13% for the aggressive climate policy advocated by the Stern Review. In the latter case, total CO2 emissions from fossil fuels would fall by 0.004%, and total greenhouse gas emissions by 0.002%. Tourist numbers in Europe would fall by up to 0.6%, and would increase in the rest of the world. If the permits are grandparented, the airlines would receive a subsidy of ?3 bln at current prices, and ?40 bln for the Stern policy. If permits are auctioned, the effect on the airline industry would be minimal. Including aviation in the market for emission permits has almost no effect on the environment and may have a negative effect on the economy.

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Bibliographic Info

Article provided by Ifo Institute for Economic Research at the University of Munich in its journal CESifo Forum.

Volume (Year): 8 (2007)
Issue (Month): 1 (04)
Pages: 51-54

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Handle: RePEc:ces:ifofor:v:8:y:2007:i:1:p:51-54

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Keywords: Emissionshandel; Kohlendioxid; Luftverkehr; Europäische Wirtschafts- und Währungsunion; Emissions trading; Carbon dioxide; Air transport; European Economic and Monetary Union;

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References

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  1. Tol, Richard S. J., 2005. "The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties," Energy Policy, Elsevier, vol. 33(16), pages 2064-2074, November.
  2. Tae H. Oum & Waters, W.G. & Jong Say Yong, 1990. "A survey of recent estimates of price elasticities of demand for transport," Policy Research Working Paper Series 359, The World Bank.
  3. William D. Nordhaus, 2006. "The "Stern Review" on the Economics of Climate Change," NBER Working Papers 12741, National Bureau of Economic Research, Inc.
  4. Jacqueline M. Hamilton & David J. Maddison & Richard S.J. Tol, 2004. "The Effects Of Climate Change On International Tourism," Working Papers FNU-36, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2004.
  5. Wohlgemuth, Norbert, 1997. "World transport energy demand modelling : Methodology and elasticities," Energy Policy, Elsevier, vol. 25(14-15), pages 1109-1119, December.
  6. Andrea Bigano & Jacqueline M. Hamilton & Richard S.J. Tol, 2005. "The Impact Of Climate Change On Domestic And International Tourism: A Simulation Study," Working Papers FNU-58, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2005.
  7. Jacqueline M. Hamilton & David J. Maddison & Richard S.J. Tol, 2003. "Climate Change And International Tourism: A Simulation Study," Working Papers FNU-31, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2003.
  8. Witt, Stephen F. & Witt, Christine A., 1995. "Forecasting tourism demand: A review of empirical research," International Journal of Forecasting, Elsevier, vol. 11(3), pages 447-475, September.
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Cited by:
  1. Colm McCarthy & Sue Scott, 2008. "Controlling the Cost of Controlling the Climate - The Irish Government’s Climate Change Strategy," Working Papers 200807, School Of Economics, University College Dublin.
  2. Karen Mayor & Richard S. J. Tol, 2008. "Scenarios of Carbon Dioxide Emissions from Aviation," Papers WP244, Economic and Social Research Institute (ESRI).
  3. Karen Mayor & Richard S. J. Tol, 2008. "European Climate Policy and Aviation Emissions," Papers WP241, Economic and Social Research Institute (ESRI).

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