Aviation and Climate Change: Economic Perspectives on Greenhouse Gas Reduction Policies - Aviation and Climate Change: Economic Perspectives on Greenhouse Gas Reduction Policies -

Aviation emissions and climate impacts Introduction Aviation CO2: from the emission to global warming Non-CO2 effects from aviation Example for mitigation options: alternative routing Summary References Renewable fuels for aviation Introduction The need for renewable jet fuel Drop-in capability Renewable aviation fuels: technology options and current use Hydroprocessed Esters and Fatty Acids (HEFA)Thermochemical pathways Gasification and Fischer-Tropsch synthesis Hydrothermal liquefaction (HTL)Pathways involving fermentation Alcohol-to-Jet (AtJ)Direct microbial conversion to hydrocarbons Renewable non-biogenic processes Power-to-Liquids (PtL)Solar-thermochemical fuels Current commercial use of renewable jet fuel The potential of renewable jet fuel Specific greenhouse gas emissions Production potential Economic aspects Outlook Notes References Air transport and the challenge of climate change – how aviation climate change policies work Introduction Economic efficiency and climate change mitigation policies Command and control policy Taxes Emissions trading schemes (ETSs)The workings of an ETS Free permits or not?The CORSIA scheme Interactions between policies - the waterbed effect Specific issues Aviation and intermodal competition Indirect emissions Pass through Assessing policies Choosing amongst policies: the political economy dimension Notes References ETSs and aviation: implementation of schemes in the EU and other countries Introduction The rationale of an aviation ETS How ETSs are applied to aviation Which greenhouse gases?The inclusion of aviation in the EU ETS Benchmarking Auctioning The special reserve Penalties Implementation: reduced geographical scope Benchmarks Auctioning The special reserve Progress of intra-EU scheme Impact on airline costs Distortions and effects The impact on airline pricing Price elasticities of demand Other aviation ETS schemes New Zealand China (Shanghai)Summary and conclusions Notes References International action and the role of ICAO The Kyoto process Kyoto process and aviation Climate research ICAO Overview ICAO and environment ICAO and climate change activities ICAO and a market-based measures system IATA position and engagement Current status and the way forward The likelihood of international action References ICAO’s new CORSIA scheme at a glance – a milestone towards greener aviation?Introduction Background and genesis of CORSIA Emergence and design of the EU ETS for aviation Design and functioning of CORSIA Expected impacts and limitations Conclusion Notes References Voluntary carbon offset schemes in the airline industry: why did they fail?Introduction Aviation and climate change Policies to mitigate the climate change impact of air transport: some efficiency considerations Efficiency criteria for climate policy GHG reduction instruments: survey and brief assessment Supply side measures Demand side measures Assessment of voluntary carbon offset schemes Excursus: key terms2 An overview of the carbon market The regulated carbon market under the Kyoto Protocol The voluntary carbon offset market Voluntary carbon offset schemes in practice Main providers Functioning Critical assessment Conclusion Notes References Roadmap to decarbonising aviation Introduction The context Can aviation be decarbonised?Regulating at what level?European efforts Europe’s decarbonisation strategy T&E decarbonisation pathway Measures to cut fuel demand Business as usual Design and operational efficiency Pricing aviation and eliminating subsidies Options for carbon pricing Other options for taxing aviation Modal shift Decarbonising aviation fuels Advanced biofuels Synthetic e-fuels Safeguards Advanced sustainable biofuels Electrofuels Current limits to fuel blending Achieving fuel switching A new dedicated EU policy for alternative fuels in aviation GHG - low carbon fuel standard for aviation Decarbonising aviation results Aviation’s non-CO2 effects Policy Conclusions Appendix A Calculations and inputs Appendix В Elasticities Price elasticities Income elasticities Accounting for price and income elasticities Evolution of aviation segments projections Appendix C Sensitivity analysis References Intermodal dimension of climate change policy Risk of climate change and challenges for transportation Climate impacts and contribution of different transport modes Market interventions by taxation, emission trading and subsidization Taxation and emission trading Subsidization of operation, infrastructure provision and manufacturing Aviation Railways Modal comparison of subsidization Potential of modal shift in long-distance transport HSR network expansion: limits to growth Planned HSR network in Spain Other examples for risks of over-investment in HSR Checks for sustainability of airport and HSR investments Integrated planning and assessment Life-cycle analysis including wider economic impacts Opportunity calculus Conclusions Notes References Scenarios for future policies – potential costs and competitive impacts of different market-based measures for the limitation of all climate relevant species from aviation Introduction AviClim methodological approach Selected economic results Costs for the aviation sector under the market-based measure Costs and competitive impacts for airline groups under the market-based measure Airline groups investigated Methodological approach for modelling the cost impacts of the market-based measures under consideration Results for different airline groups Conclusions and recommendations References Inclusion of international aviation emissions under the Paris Agreement’s Nationally Determined Contributions (NDCs)Overview Paris Agreement wording on international transport emissions Examination of NDCs and action taken to date Attribution of emissions What role for IMO and ICAO Level of ambition resulting from inclusion in NDCs Conclusion and recommendations Note References Review and further directions Introduction The road ahead By how much should air transport reduce its emissions?Setting out the (air transport) emissions problem The tax and policy environment Low demand elasticities and high costs of emissions reduction: does including air transport matter?The implications of the wider economic benefits of air transport Minimising cost and maximising effectiveness Are policies complementary or redundant (the inaterbed effect)?Targeted or direct policies Tradability — is trade always desirable?Taxes, subsidies and constraints - implications for the dead weight losses Broader aspects - handling non-CO2 emissions and incidence Beyond CO2 - policies to reduce other greenhouse gases Who pays? Determining the incidence The political economy of emissions reduction in air transport Impacts on airline competitiveness Reducing emissions from air transport Progress so far Which policies are best? A menu of policy options Priorities Notes References