Carbon Abatement Technology Transformation and Correlated Risks in the Airline Industry

Lei Xu, Han Yin, Min Sun (), Mengyu Wang, Kaiwen Shen and Jie Ji
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Lei Xu: Economics and Management College, Civil Aviation University of China, Tianjin 300300, China
Han Yin: School of Transportation Science and Engineering, Civil Aviation University of China, Tianjin 300300, China
Min Sun: Economics and Management College, Civil Aviation University of China, Tianjin 300300, China
Mengyu Wang: Economics and Management College, Civil Aviation University of China, Tianjin 300300, China
Kaiwen Shen: Economics and Management College, Civil Aviation University of China, Tianjin 300300, China
Jie Ji: School of Arts, Design & Architecture, University of New South Wales, Sydney, NSW 2052, Australia

Sustainability, 2025, vol. 17, issue 4, 1-22

Abstract: The airline industry is currently navigating a pivotal period characterized by rapid development and increasing global pressure to reduce carbon emissions. Airlines, as the first to be significantly impacted, must actively manage their carbon footprints, adopt carbon abatement technologies, and address the inherent risks in this transformation. This paper examines the risk factors correlated with the technology transformation of carbon abatement and proposes effective abatement strategies. Using panel data of China Southern Airlines from 2009 to 2023 and applying the Logarithmic Mean Divisia Index (LMDI) method based on the Kaya identity, we analyze the differential impacts of various factors on unit carbon emissions. Multiple scenarios, derived from the influences of these factors, are constructed, and the Monte Carlo algorithm is employed to simulate the impact and volatility of correlated risks in the technology transformation for the abatement of carbon emissions. The findings are as follows: on the one hand, carbon emissions are strongly driven by energy consumption (0.99), flight volume (0.941), flight hours (0.931), transportation turnover (0.923), and take-off frequency (0.833). On the other hand, technology (56%) and scale (54.74%) significantly reduce unit carbon emissions, while take-off frequency negatively impacts emissions (−35.19%). Technology-related risks are controllable and relatively stable, whereas scale-related risks are highly uncertain. Additionally, operation-related risks can be partially hedged to ensure a certain level of risk controllability.

Keywords: airline industry; carbon emission abatement; technology transformation; correlated risks (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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