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Decarbonizing Aviation: Cash for Clunkers in the Airline Industry

Author

Listed:
  • Jan K. Brueckner
  • Matthew E. Kahn
  • Jerry Nickelsburg

Abstract

The durability of the transportation capital stock slows down the pace of decarbonization since newer vintages feature cutting-edge technology. If older vintages were to be retired sooner, the social cost of travel would decline. This study analyzes and explores the viability of a potential cash for clunkers program for the airline industry, which would help to hasten decarbonization of aviation. Focusing on US aviation, our estimation and calculations show that airlines can be induced to scrap rather than sell older planes upon retirement with a payment that is less than the forgone carbon damage. The marginal value of a dollar of public funds used in the program is 8.67, a large value compared to other climate programs. Our estimates are highly conservative because they ignore non-CO2 aviation emissions while using relatively low carbon cost of $51.

Suggested Citation

  • Jan K. Brueckner & Matthew E. Kahn & Jerry Nickelsburg, 2026. "Decarbonizing Aviation: Cash for Clunkers in the Airline Industry," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 13(2), pages 463-494.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/739561
    DOI: 10.1086/739561
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    Cited by:

    1. is not listed on IDEAS
    2. Christian Keuschnigg & Giedrius Kazimieras Stalenis, 2025. "Energy Saving Innovation, Vintage Capital, and the Green Transition," Swiss Finance Institute Research Paper Series 25-83, Swiss Finance Institute.
    3. Zou, Li & Lee, Kiljae K. & Waguespack, Blaise, 2025. "CO2 emissions and airfare in the U.S. domestic air travel market: cost pass-through vs. environmental awareness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 203(C).

    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

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