IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v183y2016icp984-994.html
   My bibliography  Save this article

Exploring the impacts of the EU ETS emission limits on airline performance via the Dynamic Environmental DEA approach

Author

Listed:
  • Cui, Qiang
  • Wei, Yi-Ming
  • Li, Ye

Abstract

In this paper, we analyze the impacts of the EU ETS emission limits on airline performance, which are calculated based on the historical emission data of 2004–2006. A new model, Dynamic Environmental DEA, is proposed to analyze the impacts on 18 large global airlines from 2008 to 2014. Different from existing models, the model depicts the real regulatory process and considers the carry-over activities for two consecutive years. We calculate the emission limits based on real emissions during 2004–2006 and simulate their impacts on 18 airlines. We then analyze the impacts when the basic emission limits are based on real emissions from 2005 to 2007. The main findings are (1) Although the airlines have a longer buffer period when the real emissions are from 2005 to 2007, few other differences exist regarding the emission limits of the baseline 2004–2006 period. (2) The airlines can adapt the requirements of the EU ETS in the long term by making their own adjustments. (3) Air China has the largest potential expandable outputs among the 18 airlines.

Suggested Citation

  • Cui, Qiang & Wei, Yi-Ming & Li, Ye, 2016. "Exploring the impacts of the EU ETS emission limits on airline performance via the Dynamic Environmental DEA approach," Applied Energy, Elsevier, vol. 183(C), pages 984-994.
  • Handle: RePEc:eee:appene:v:183:y:2016:i:c:p:984-994
    DOI: 10.1016/j.apenergy.2016.09.048
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261916313496
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Atakelty Hailu, 2003. "Nonparametric Productivity Analysis with Undesirable Outputs: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1075-1077.
    2. Wang, Wei-Kang & Lu, Wen-Min & Tsai, Chia-Jen, 2011. "The relationship between airline performance and corporate governance amongst US Listed companies," Journal of Air Transport Management, Elsevier, vol. 17(2), pages 148-152.
    3. Zhang, Yue-Jun & Wei, Yi-Ming, 2010. "An overview of current research on EU ETS: Evidence from its operating mechanism and economic effect," Applied Energy, Elsevier, vol. 87(6), pages 1804-1814, June.
    4. Edwards, Holly A. & Dixon-Hardy, Darron & Wadud, Zia, 2016. "Aircraft cost index and the future of carbon emissions from air travel," Applied Energy, Elsevier, vol. 164(C), pages 553-562.
    5. Greer, Mark, 2009. "Is it the labor unions' fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 779-789, November.
    6. Tsai, Wen-Hsien & Lee, Kuen-Chang & Liu, Jau-Yang & Lin, Hsiu-Ling & Chou, Yu-Wei & Lin, Sin-Jin, 2012. "A mixed activity-based costing decision model for green airline fleet planning under the constraints of the European Union Emissions Trading Scheme," Energy, Elsevier, vol. 39(1), pages 218-226.
    7. Anger, Annela, 2010. "Including aviation in the European emissions trading scheme: Impacts on the industry, CO2 emissions and macroeconomic activity in the EU," Journal of Air Transport Management, Elsevier, vol. 16(2), pages 100-105.
    8. Anger, Annela & Köhler, Jonathan, 2010. "Including aviation emissions in the EU ETS: Much ado about nothing? A review," Transport Policy, Elsevier, vol. 17(1), pages 38-46, January.
    9. Winchester, Niven & McConnachie, Dominic & Wollersheim, Christoph & Waitz, Ian A., 2013. "Economic and emissions impacts of renewable fuel goals for aviation in the US," Transportation Research Part A: Policy and Practice, Elsevier, vol. 58(C), pages 116-128.
    10. Hoang, Viet-Ngu & Coelli, Tim, 2011. "Measurement of agricultural total factor productivity growth incorporating environmental factors: A nutrients balance approach," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 462-474.
    11. Li, Ye & Wang, Yan-zhang & Cui, Qiang, 2015. "Evaluating airline efficiency: An application of Virtual Frontier Network SBM," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 81(C), pages 1-17.
    12. Sueyoshi, Toshiyuki & Goto, Mika, 2014. "DEA radial measurement for environmental assessment: A comparative study between Japanese chemical and pharmaceutical firms," Applied Energy, Elsevier, vol. 115(C), pages 502-513.
    13. Miyoshi, Chikage, 2014. "Assessing the equity impact of the European Union Emission Trading Scheme on an African airline," Transport Policy, Elsevier, vol. 33(C), pages 56-64.
    14. Zhou, Wenji & Wang, Tao & Yu, Yadong & Chen, Dingjiang & Zhu, Bing, 2016. "Scenario analysis of CO2 emissions from China’s civil aviation industry through 2030," Applied Energy, Elsevier, vol. 175(C), pages 100-108.
    15. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Weak and strong disposability vs. natural and managerial disposability in DEA environmental assessment: Comparison between Japanese electric power industry and manufacturing industries," Energy Economics, Elsevier, vol. 34(3), pages 686-699.
    16. Malina, Robert & McConnachie, Dominic & Winchester, Niven & Wollersheim, Christoph & Paltsev, Sergey & Waitz, Ian A., 2012. "The impact of the European Union Emissions Trading Scheme on US aviation," Journal of Air Transport Management, Elsevier, vol. 19(C), pages 36-41.
    17. Wei, Yi-Ming & Mi, Zhi-Fu & Huang, Zhimin, 2015. "Climate policy modeling: An online SCI-E and SSCI based literature review," Omega, Elsevier, vol. 57(PA), pages 70-84.
    18. Atakelty Hailu & Terrence S. Veeman, 2001. "Non-parametric Productivity Analysis with Undesirable Outputs: An Application to the Canadian Pulp and Paper Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 605-616.
    19. Cui, Qiang & Li, Ye, 2015. "Evaluating energy efficiency for airlines: An application of VFB-DEA," Journal of Air Transport Management, Elsevier, vol. 44, pages 34-41.
    20. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    21. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    22. Bhadra, Dipasis, 2009. "Race to the bottom or swimming upstream: Performance analysis of US airlines," Journal of Air Transport Management, Elsevier, vol. 15(5), pages 227-235.
    23. Adler, Nicole & Martini, Gianmaria & Volta, Nicola, 2013. "Measuring the environmental efficiency of the global aviation fleet," Transportation Research Part B: Methodological, Elsevier, vol. 53(C), pages 82-100.
    24. Färe, Rolf & Grosskopf, Shawna & Lundgren, Tommy & Marklund, Per-Olov & Zhou, Wenchao, 2012. "Productivity: Should We Include Bads?," CERE Working Papers 2012:13, CERE - the Center for Environmental and Resource Economics.
    25. Veronique Distexhe & Sergio Perelman, 1994. "Technical Efficiency and Productivity Growth in an Era of Deregulation: the Case of Airlines," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 130(IV), pages 669-689, December.
    26. Rolf Färe & Shawna Grosskopf, 2003. "Nonparametric Productivity Analysis with Undesirable Outputs: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1070-1074.
    27. Cui, Qiang & Kuang, Hai-bo & Wu, Chun-you & Li, Ye, 2014. "The changing trend and influencing factors of energy efficiency: The case of nine countries," Energy, Elsevier, vol. 64(C), pages 1026-1034.
    28. Cui, Qiang & Li, Ye & Yu, Chen-lu & Wei, Yi-Ming, 2016. "Evaluating energy efficiency for airlines: An application of Virtual Frontier Dynamic Slacks Based Measure," Energy, Elsevier, vol. 113(C), pages 1231-1240.
    29. Tone, Kaoru & Tsutsui, Miki, 2010. "Dynamic DEA: A slacks-based measure approach," Omega, Elsevier, vol. 38(3-4), pages 145-156, June.
    30. Arjomandi, Amir & Seufert, Juergen Heinz, 2014. "An evaluation of the world's major airlines' technical and environmental performance," Economic Modelling, Elsevier, vol. 41(C), pages 133-144.
    31. Mallikarjun, Sreekanth, 2015. "Efficiency of US airlines: A strategic operating model," Journal of Air Transport Management, Elsevier, vol. 43(C), pages 46-56.
    32. Capobianco, Heloisa Márcia Pires & Fernandes, Elton, 2004. "Capital structure in the world airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(6), pages 421-434, July.
    33. Albers, Sascha & Bühne, Jan-André & Peters, Heiko, 2009. "Will the EU-ETS instigate airline network reconfigurations?," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 1-6.
    34. Robin Sickles & David Good & Lullit Getachew, 2002. "Specification of Distance Functions Using Semi- and Nonparametric Methods with an Application to the Dynamic Performance of Eastern and Western European Air Carriers," Journal of Productivity Analysis, Springer, vol. 17(1), pages 133-155, January.
    35. Sgouridis, Sgouris & Bonnefoy, Philippe A. & Hansman, R. John, 2011. "Air transportation in a carbon constrained world: Long-term dynamics of policies and strategies for mitigating the carbon footprint of commercial aviation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1077-1091.
    36. Li, Ye & Wang, Yan-zhang & Cui, Qiang, 2016. "Has airline efficiency affected by the inclusion of aviation into European Union Emission Trading Scheme? Evidences from 22 airlines during 2008–2012," Energy, Elsevier, vol. 96(C), pages 8-22.
    37. Yang, Hongliang & Pollitt, Michael, 2010. "The necessity of distinguishing weak and strong disposability among undesirable outputs in DEA: Environmental performance of Chinese coal-fired power plants," Energy Policy, Elsevier, vol. 38(8), pages 4440-4444, August.
    38. Derigs, Ulrich & Illing, Stefan, 2013. "Does EU ETS instigate Air Cargo network reconfiguration? A model-based analysis," European Journal of Operational Research, Elsevier, vol. 225(3), pages 518-527.
    39. Zhi-Fu Mi & Yue-Jun Zhang, 2011. "Estimating the 'value at risk' of EUA futures prices based on the extreme value theory," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 35(2/3/4), pages 145-157.
    40. Cui, Qiang & Kuang, Hai-bo & Wu, Chun-you & Li, Ye, 2013. "Dynamic formation mechanism of airport competitiveness: The case of China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 47(C), pages 10-18.
    41. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    42. Zhou, P. & Zhou, X. & Fan, L.W., 2014. "On estimating shadow prices of undesirable outputs with efficiency models: A literature review," Applied Energy, Elsevier, vol. 130(C), pages 799-806.
    43. Winchester, Niven & McConnachie, Dominic & Wollersheim, Christoph & Waitz, Ian A., 2013. "Economic and Emissions Impacts of Renewable Fuel Goals for Aviation in the US," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 155003, Agricultural and Applied Economics Association.
    44. Murty, Sushama & Robert Russell, R. & Levkoff, Steven B., 2012. "On modeling pollution-generating technologies," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 117-135.
    45. Vespermann, Jan & Wald, Andreas, 2011. "Much Ado about Nothing? – An analysis of economic impacts and ecologic effects of the EU-emission trading scheme in the aviation industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1066-1076.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:transe:v:104:y:2017:i:c:p:52-68 is not listed on IDEAS
    2. repec:eee:appene:v:199:y:2017:i:c:p:13-24 is not listed on IDEAS
    3. repec:eee:transa:v:100:y:2017:i:c:p:121-134 is not listed on IDEAS
    4. repec:eee:trapol:v:60:y:2017:i:c:p:131-142 is not listed on IDEAS
    5. repec:eee:jaitra:v:69:y:2018:i:c:p:190-204 is not listed on IDEAS
    6. repec:eee:transa:v:106:y:2017:i:c:p:130-143 is not listed on IDEAS
    7. repec:eee:appene:v:204:y:2017:i:c:p:509-524 is not listed on IDEAS
    8. repec:eee:appene:v:204:y:2017:i:c:p:607-619 is not listed on IDEAS
    9. repec:eee:transa:v:113:y:2018:i:c:p:20-34 is not listed on IDEAS
    10. Xu, Xin & Cui, Qiang, 2017. "Evaluating airline energy efficiency: An integrated approach with Network Epsilon-based Measure and Network Slacks-based Measure," Energy, Elsevier, vol. 122(C), pages 274-286.
    11. repec:eee:transa:v:111:y:2018:i:c:p:96-107 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:183:y:2016:i:c:p:984-994. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.