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Much Ado about Nothing? – An analysis of economic impacts and ecologic effects of the EU-emission trading scheme in the aviation industry

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  • Vespermann, Jan
  • Wald, Andreas

Abstract

From 2012 on, all CO2 emissions from flights departing from or arriving at airports within the European Union have to be offset. We analyze the economic and ecological impacts that are caused by an inclusion of the aviation industry into the proposed emissions trading scheme (ETS). Building on the now fixed system design we employ a simulation model to estimate the impacts of the scheme. Our results indicate that financial impacts are highly dependant on external settings, such as allowance prices and demand growth. We show that the financial burden on the aviation industry will be rather modest in the first years after the introduction of the system and therefore induce only low competition distortions. Likewise, emission reductions within air transportation will be comparably low. While aviation will induce a decline of emissions in other sectors, significant absolute reductions within air transportation can only be reached by a more restrictive system design.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:transa:v:45:y:2011:i:10:p:1066-1076
    DOI: 10.1016/j.tra.2010.03.005
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    References listed on IDEAS

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    Cited by:

    1. Wang, Kun & Fu, Xiaowen & Luo, Meifeng, 2015. "Modeling the impacts of alternative emission trading schemes on international shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 35-49.
    2. 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.
    3. Li, Yao & Fan, Jin & Zhao, Dingtao & Wu, Yanrui & Li, Jun, 2016. "Tiered gasoline pricing: A personal carbon trading perspective," Energy Policy, Elsevier, vol. 89(C), pages 194-201.
    4. repec:eee:appene:v:195:y:2017:i:c:p:837-849 is not listed on IDEAS
    5. repec:eee:trapol:v:60:y:2017:i:c:p:131-142 is not listed on IDEAS
    6. repec:eee:enepol:v:106:y:2017:i:c:p:298-309 is not listed on IDEAS
    7. 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.
    8. Sheng, Dian & Li, Zhi-Chun & Fu, Xiaowen & Gillen, David, 2017. "Modeling the effects of unilateral and uniform emission regulations under shipping company and port competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 99-114.
    9. Zanin, Massimiliano & Delibasi, Tuba Toru & Triana, Julio César & Mirchandani, Vaishali & à lvarez Pereira, Emilio & Enrich, Alberto & Perez, David & Paşaoğlu, Cengiz & Fidanoglu, Melih & Koyuncu, , 2016. "Towards a secure trading of aviation CO2 allowance," Journal of Air Transport Management, Elsevier, vol. 56(PA), pages 3-11.
    10. repec:eee:transa:v:106:y:2017:i:c:p:130-143 is not listed on IDEAS

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