Carbon-mitigating air transport: Analysis of current policy instruments

Abstract

This chapter provides a review of the environmental policies implemented on aviation industry in order to mitigate greenhouse gas emissions. The four-pillar approach adopted by various aviation stakeholders is first described with a focus on market-based measures. The extent to which these measures could affect the air ticket price is examined by an emission fee scheme implemented in a selected flight network within the United States. Since the prevailing carbon price plays a critical role, three scenarios of unit carbon price are examined. The results indicate moderate increase in air fares after the emission fee implementation which in turn may lead to air travel demand decrease.