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The CORSIA climate agreement on international air transport as a game

Author

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  • Proost, Stef
  • Vander Loo, Saskia

Abstract

The CORSIA climate agreement requires the signatories to cap their bilateral international aviation carbon emissions to 85% of the level of 2019. Signatories can satisfy the cap by using offsets and sustainable aviation (SAF) fuels.This international agreement faces three handicaps: the agreement must be self-enforcing, very cheap offsets and SAF’s with a high indirect emission are not credible and offsets and SAF’s do not guarantee climate neutrality. We study the participation decision of a country to join or not CORSIA in a Nash context. It is shown that there are pairs of countries for whom it is beneficial to join CORSIA if their climate benefit is higher than half the cost of offsets or SAF fuels. The numerical model illustration for the 10 most important countries shows that only a few countries are likely to effectively participate and will do this via offsets rather than via SAF blends.

Suggested Citation

  • Proost, Stef & Vander Loo, Saskia, 2024. "The CORSIA climate agreement on international air transport as a game," MPRA Paper 121484, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:121484
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    References listed on IDEAS

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    1. Proost, Stef, 2024. "Looking for winning policies to address the climate issue in EU-aviation," Journal of Air Transport Management, Elsevier, vol. 115(C).
    2. Ulrike Kornek & Robert Marschinski, 2018. "Prices vs quantities for international environmental agreements," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 1084-1107.
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    5. Brueckner, Jan K. & Kahn, Matthew E. & Nickelsburg, Jerry, 2024. "How do airlines cut fuel usage, reducing their carbon emissions?," Economics of Transportation, Elsevier, vol. 38(C).
    6. Brueckner, Jan K. & Abreu, Chrystyane, 2017. "Airline fuel usage and carbon emissions: Determining factors," Journal of Air Transport Management, Elsevier, vol. 62(C), pages 10-17.
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    Cited by:

    1. Ovaere, Marten & Proost, Stef, 2025. "Strategic climate policy in global aviation: Aviation fuel taxes and efficiency standards with duopolistic aircraft producers," Economics of Transportation, Elsevier, vol. 41(C).

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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