Sustainable management of growth in European air travel

Air travel is a small but rapidly-growing contributor to European emissions of greenhouse gases, which are now widely accepted to be a cause of dangerous climate change (IPCC 2007). The environmental impact of aviation is out of proportion to its economic benefits, with aviation accounting for 3% of greenhouse gas emissions but only 0.6% of value added to the EU economy (EU 2006), and average emissions per passenger kilometre from air travel twice as high as from rail travel (Mendes and Santos 2008). With carbon emissions from aviation increasing by 73% from 1990 to 2003, a period in which overall EU emissions fell by 5.5% (Wit et al 2005), and forecast to double again between 2005 and 2020, the sector threatens to undermine European efforts to combat climate change. Compared with other sources of carbon emissions, air travel raises particular concern both environmentally, due to the heightened impact of certain greenhouse gases when emitted at high altitude, and ethically, since flying is primarily an activity of the rich whilst it is the poor who are likely to be worst affected by climate change (Williams 2007).

Data on the purpose of flights within Europe are not collected (Mendes and Santos 2008), but figures from the UK suggest that business trips account for around a quarter of international flights, the remainder being conducted primarily for leisure purposes (Dargay & Hanly 2001). Although the discussion here focuses on passenger travel, it should be noted that the market for worldwide air freight has also grown in recent years at double the rate of the world economy (Gillingwater et al 2003).

International air travel is exempt from emissions-reduction obligations under the Kyoto Protocol, and until now there have been few regulatory measures targeted at reducing the environmental impact of aviation. However, there is a growing voluntary market in carbon offsets paid for by air travellers, and from 2012 airlines will be required to buy permits under the European Union's Emissions Trading Scheme (EU-ETS) to cover emissions from all flights arriving or departing at EU airports (EU 2009). In addition, environmental groups have staged high-profile campaigns aimed at persuading individuals not to travel by air (Staniland 2009). Here I review the likely impact of these and other measures to reduce or mitigate the contribution made by European aviation to climate change.


Voluntary carbon offsets

In recent years a substantial market has developed for voluntary carbon offsets, through which concerned consumers seek to cancel out the emissions resulting from their activities by paying for emissions reductions elsewhere. Many airlines and travel companies now offer customers the opportunity to offset their emissions for an extra charge as part of the ticket sales process (Gogoi 2008). Voluntary carbon offsets worth $331 million were traded globally in 2007, nearly half of them in Europe, although offsetting of emissions from air travel accounted for only a small fraction of these purchases (Hamilton et al 2008). The majority of voluntary offsets are purchased by corporations (Bellassen & Leguet 2007), which have sought to promote a 'green image' by mitigating the emissions resulting from business travel and other activities (Taiyab 2006).

Sellers of offsets generally achieve emissions reduction either through forestry or through eco-efficiency schemes. Forest-planting appeals to many consumers, but is not a sustainable way of absorbing greenhouse gases, as a large additional area of land must be permanently afforested to cope with each year's emissions. Eco-efficiency schemes, which seek to cancel out emissions from one activity by promoting measures that reduce ongoing emissions from other sectors, offer better long-term potential for offsetting.

Among the many organisations currently offering offsetting schemes, there are dramatic differences not only in the method of offsetting but in prices, emissions-calculating formulae and verification methods, and the establishment of common standards may be necessary to ensure the efficacy and credibility of offsetting schemes. Voluntary offsetting has also been criticised on the grounds that it gives no economic incentive to airlines to improve their efficiency, and reduces the moral incentive for consumers to reflect on the sustainability of their lifestyles (Gössling et al 2007). Due to these concerns, many sellers of carbon offsets have expressed the view that voluntary offsetting should be only a temporary step towards the establishment of more formal mechanisms for managing global carbon emissions (Harris 2007).


Regulatory control

The main instrument of greenhouse gas emissions regulation in the European Union is its Emissions Trading Scheme (EU-ETS), under which major polluters are allocated permits for the emission of carbon dioxide. Those that exceed their allowances must buy additional permits from those who have not used their full allowances. Permits can also be supplemented by credits earned through emissions-reduction projects carried out under the Kyoto Protocol. Aviation was excluded from the earliest phases of the EU-ETS, but the scheme is set to be extended to cover flights within the EU from 2011 onwards, and all flights arriving or departing at EU airports from 2012 (EU 2009). It is proposed that 85% of the permits allocated to the aviation industry be distributed free to airlines, in proportion to their average recent emissions, with the remainder auctioned at the discretion of EU member states. Some have argued for a greater proportion of permits to be auctioned, to reduce the risk of over-allocation and provide funds that could be used for environmental projects, but this would reduce the political acceptability of the scheme due to a perception of increased costs (Kopsch 2009). Since airlines are likely to be net buyers of permits (Mendes & Santos 2008), the effect of EU-ETS will be equivalent to an increase in fuel prices, and the resulting costs are likely to be passed on to customers through increased fares (FitzGerald & Tol 2009).

The price of permits in EU-ETS depends on the number allocated and on market conditions, and cannot be predicted with certainty, but a future price range of Eur10-40/tonne CO2 is commonly assumed (Dray et al 2009). Even at a moderately high emissions price of Eur30, the cost of a typical flight would increase by no more than Eur9 (Wit et al 2005). Price elasticity of demand for air travel is fairly low (e.g. Albers et al 2009), and the EU (2006) therefore anticipates that the effect of EU-ETS on the demand for air travel will be very small, with demand growth reduced from 142% to 135% by 2020. This is good news for the aviation industry, but will do little to reduce emissions. The anticipated permit prices are also lower than typical estimates of the costs of global warming to society, which Stern (2006) puts at $85 (approximately Eur60) per tonne of CO2 emitted. In other words, the emissions charges under EU-ETS may prove insufficient to fully internalise the environmental cost of air travel.

It is widely feared that the taxation of air travel by the EU, in the absence of wider global regulation, will place European airlines and other travel-dependent sectors of the economy, notably tourism, at a disadvantage against international competitors. Worst hit will be long-haul airlines operating out of EU hub airports, which could lose up to 3% of their passengers following the imposition of emissions charges (Albers et al 2009). It has been suggested that airlines might reduce their exposure to EU-ETS charges by re-routing long-haul flights via non-EU hubs such as Zurich (Fitzgerald & Tol 2007), which could be environmentally counter-productive as well as damaging to EU economies. However, emissions charges are just one of a number of factors determining the cost-effectiveness of different long-haul routes, and Albers et al (2009) conclude that the charges are unlikely to be high enough to prompt major changes to route networks. Models show that the imposition of emissions charges in the EU will induce some shift in tourist flows, with Central and Eastern Europe gaining visitors whilst island destinations such as Cyprus and Ireland are disproportionately harmed, although Tol (2007) argues that "the effect is too small to warrant strong opposition". On routes where there is no alternative to flying, medium-distance trips will be favoured over both long-haul and short-haul flights (the latter being more energy-intensive due to the fuel consumption involved in take-off and landing). Under some circumstances, environmental regulation may have the perverse consequence of encouraging longer flights: a recent rise in air passenger duty in the UK actually increased emissions by reducing the price differential between long- and short-haul destinations (Mayor & Tol 2007). The overall effect on the tourist industry of measures to curb aviation depends on the willingness of tourists to substitute domestic for foreign holidays, or to substitute other modes of transport such as rail for air travel, factors that are poorly known and often unaccounted for in models (Tol 2007).

It is hoped that emissions charges will stimulate not only changes in passenger behaviour, but also a greater emphasis on efficiency by airlines and (indirectly) by aircraft manufacturers. New aircraft models are more fuel-efficient on average than their predecessors, and the IPCC projects an improvement in fuel efficiency of at least 43% between 2000 and 2040, although 20-26% may be a more realistic figure (Peeters et al 2005). Such gains are worthwhile, but far too small to offset the expected increase in air travel. Since aircraft typically remain in service for 40 years, it also takes time for newer and more efficient aircraft to displace older models in airlines' fleets (Morrell & Dray 2009).

Since fuel consumption can never be reduced to zero, the decarbonisation of air travel must ultimately involve the development of alternative fuel sources. Due to the long operating life of aircraft and the technological barriers involved in developing novel energy sources such as hydrogen (Haglind et al 2006), research has focused on 'drop-in fuels' that can be used in existing aircraft. If suitable fuel could be produced from organic sources, air travel could theoretically be made totally carbon neutral, provided that none of the energy used in the production and distribution of the fuel were derived from fossil sources (Vera-Morales & Schäfer 2009). Aviation would continue to have some effect on climate through the emission of nitrous oxides and vapour trails at high altitude, but these persist over shorter time periods than carbon dioxide (Williams 2007). 'Biodiesel' for terrestrial use is already produced in many countries using vegetable oils derived from local crops such as soybean, rapeseed, oil palm and coconut. The high freezing point and presence of certain impurities make conventional biodiesel unsuitable as a jet fuel, although better refining processes are being developed which overcome these difficulties. A more fundamental problem with the production of biofuel is that it demands large amounts of land and water, diverting resources away from food production. This could be avoided if the fuel were produced from algae or from cellulosic feedstocks (fast-growing woody species) which can be cultivated on land unsuitable for conventional agriculture, although the technology to produce jet fuel from these sources is at an early stage of development (Vera-Morales & Schäfer 2009).


Public attitudes

Despite high-profile campaigns against air travel by organisations such as Greenpeace, studies have indicated that public awareness of the environmental impact of aviation is in fact quite low. Among tourists surveyed in Zanzibar (the majority of whom were degree-educated), only 17% associated air travel with environmental problems, while in a New Zealand survey only 12% of tourists believed that tourism contributes to climate change (Gössling & Peeters 2007). Even travellers who are well-informed seek to avoid psychological responsibility for the environmental consequences of their actions through 'denial mechanisms' such as include emphasising the need for personal comfort, a belief in technological solutions, placing blame on others, mistrust of governments, and doubting the effectiveness of personal action. Stoll-Kleeman et al (2001) suggest that these barriers could be overcome through greater involvement of citizens in climate change mitigation, perhaps by giving local community groups responsibility for organising sustainability projects using revenues raised from environmental taxes. Potential does exist for measures targeting the environmental impact of aviation to receive public support, with surveys indicating that 80% of European air passengers are "willing in principle" to pay an extra charge reflecting the carbon emissions from their flights (Brouwer et al 2008).


Involvement of other stakeholders

Though airlines have the greatest control over emissions reduction (Wit et al 2005), other parties are also involved. More flexible air traffic control systems are expected to reduce greenhouse gases emissions per passenger kilometre by 5% by 2015, through more efficient routing of flights, and better integration of air traffic management among European countries could further reduce inefficiencies (Williams 2007). Air traffic control could also influence the environmental impact of aviation by restricting the altitude at which aircraft fly (Williams et al 2002). Airport design is another factor in reducing emissions: it has been estimated that the new Airbus A380 could have been made 11% more fuel-efficient if its wingspan were broader than the 80-metre limit imposed by standard airport layouts (Gössling & Peeters 2008). In order to encourage improvements in these areas, legal responsibility for emissions could be placed on airport operators and aviation authorities (who would then pass on the cost to users) rather than directly onto airlines (Tol 2007, Kopsch 2009).

Travel agencies can also play a role in reducing the impact of air travel, by helping customers calculate and minimise the environmental footprint of their journeys. The provision of such a service to ethically-minded consumers and businesses could provide a useful selling point for travel agencies whose business has been undermined by the Internet (Dubois & Ceron 2008).



Economic efficiency and social equity demand that air travellers pay for the environmental costs resulting from their flights. Voluntary offsetting and legally-mandated emissions trading are positive steps towards this, but should not be expected to drastically curb emissions from aviation over the next couple of decades. Air travel is already an expensive activity carried out mainly by the affluent, and the industry is thus less sensitive to increases in the cost of energy than other sectors of the economy. Business travellers are particularly insensitive to price increases (Dargay & Hanly 2001), although many corporations are enthusiastic buyers of voluntary carbon offsets. The very high charges required to make a real impact on the level of emissions from aviation would be not only politically unacceptable but economically irrational, since emissions reduction can be had far more cheaply in other sectors of the economy (Tol 2006).

Although it is unlikely to achieve major reductions in demand, pricing of emissions is nevertheless a useful way of encouraging the aviation industry to take responsibility for its environmental impact and implement measures to reduce this impact. Such measures include the development of more fuel-efficient aircraft, smarter air traffic control systems, and aeroplane fuels derived from renewable sources. Although emissions will continue to grow in the short term, models show that emissions reduction below present-day levels is possible by 2050 through a combination of these measures (Dray et al 2009). Such changes will be vital if air travel is ultimately to become a sustainable industry.



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This was originally written as an essay for MSc Ecological Economics at the University of Edinburgh

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© Andrew Gray, 2010