The CORSIA climate agreement on international air transport as a game

Stef Proost and Saskia Vander Loo

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Aviation; climate; international climate agreement; fuel efficiency aviation; offsets; biofuels (search for similar items in EconPapers)
JEL-codes: Q54 Q58 R48 (search for similar items in EconPapers)
Date: 2024-03-10
New Economics Papers: this item is included in nep-ene, nep-env and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:121484

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