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Assessing the equity impact of the European Union Emission Trading Scheme on an African airline

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  • Miyoshi, Chikage

Abstract

The European Union Emission Trading Scheme (EU ETS) included aviation activity in 2012, with free emissions allowances being allocated to each airline. The EU ETS is a market-based measure, which the European Union has introduced for aiming at reducing emissions and meeting the targets specified under the Kyoto Protocol. One of the largest issues is equity. The first multinational emission trading scheme resulted in many regulatory issues and objections by a number of countries and airlines concerning its legality under the Chicago Convention. In addition, under the Kyoto Protocol, ratified countries have different responsibilities and roles based on whether they are Annex I or non-Annex I countries. Hence, this paper attempted to investigate the equity issues by measuring the impact of the EU ETS on an African airline compared to airlines in an Annex I country. The results of case study indicate that there are some differences in terms of equity between Annex I and non-Annex I carriers and their passengers. The instrument is proven to be cost-effective; however, the economic rationality arguments seem to be weak with respect to the volatility in individual behaviour and the vulnerability of non-Annex I carriers which is caused by competition with Annex-I carriers. A transparent distribution of revenue from the EU ETS could be one way of moderating the equity gap between carriers and passengers.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:trapol:v:33:y:2014:i:c:p:56-64
    DOI: 10.1016/j.tranpol.2014.02.010
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pagoni, Ioanna & Psaraki-Kalouptsidi, Voula, 2016. "The impact of carbon emission fees on passenger demand and air fares: A game theoretic approach," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 41-51.
    2. 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.
    3. repec:eee:transa:v:112:y:2018:i:c:p:71-84 is not listed on IDEAS
    4. Miyoshi, Chikage & Ibáñez, Eva Ruiz, 2016. "Are fuel-efficient aircraft worth investing in for non-Annex country airlines? An empirical analysis of Kenya Airways with an aircraft appraisal cost–benefit analysis model," Transport Policy, Elsevier, vol. 47(C), pages 41-54.
    5. repec:eee:transa:v:106:y:2017:i:c:p:130-143 is not listed on IDEAS

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