How would ambitious CO₂ prices affect air transport?

In the last years, scientists as well as political activists proposed the introduction of ambitious prices for all CO₂ emitting sectors, including aviation. Suggested prices range from about 45 to 350 € per ton of CO₂ . Such prices are considered an indispensable element of a strategy aiming at stabilizing the global temperature increase well under 2.0 degrees Celsius (Paris objective). For comparison: As of May 2020, the price for European Emission Allowances in the European Emission Trading Scheme was about 20 €/t CO₂ . European Air Transport has been participating in this scheme on a mandatory basis since 2012.How would such ambitious CO₂ prices affect air transport? How likely are a significant increase in airfares and a corresponding decrease in demand? This paper investigates the potential impacts of high CO₂ prices on airfares and growth in aviation. For this, the authors analyze the relevant literature and conduct some model-based estimations. In addition, the authors provide a rough estimate of the economic impacts in case not only CO₂ but all climate relevant species from aviation (NOᵪ, SOᵪ, H₂O, aerosols, contrails and contrail cirrus) would become subject to emission pricing.

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  • English

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  • Accession Number: 01765133
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Feb 4 2021 8:29PM