Airline Emissions of Carbon Dioxide in the European Trading System

John D. Fitzgerald () and Richard S.J. Tol ()

No WP179, Papers from Economic and Social Research Institute (ESRI)

Abstract: A simulation model of international tourist flows is used to estimate the impact of including carbon dioxide emissions from aviation fuels in the European Trading System. The effect on global carbon dioxide emissions from international aviation is minimal: -0.01% at current permit prices, and ?0.13% for the aggressive climate policy advocated by the Stern Review. In the latter case, total CO2 emissions from fossil fuels would fall by 0.004%, and total greenhouse gas emissions by 0.002%. Tourist numbers in Europe would fall by up to 0.6%, and would increase in the rest of the world. If the permits are grandparented, the airlines would receive a subsidy of ?3 bln at current prices, and ?40 bln for the Stern policy. If permits are auctioned, the effect on the airline industry would be minimal. Including aviation in the market for emission permits has almost no effect on the environment and may have a negative effect on the economy.

Keywords: International tourism; tradable permit; carbon dioxide; aviation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-ene, nep-env and nep-tur
Date: 2007-01
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Journal Article: Airline emissions of carbon dioxide in the European trading system (2007)
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