Climate Change and Tourism - UNEP - Division of Technology ...

UNWTO, 9 July 2008
Mitigation Policies and Measures
be significantly affected, eventually reducing the growth of the number of long-haul trips and possibly
increase the length of stay for these trips (if people go, they will do so for a longer period to save on the
cost of the trip per day).
Fuel taxes could be added on top of fuel prices, which would be of particular relevance given the
current state of non-taxation of fuels for aviation in contrast to fuel used by surface-bound means of
transport. For instance, the current price of one litre of fuel for cars is roughly one Euro higher in the
European Union than the price of one litre of kerosene. At present, kerosene sells at about € 0.31 per
litre. This means that an increase by a factor of four for fuel costs would double ticket prices with major
impacts on aviation volumes. Fuel taxes for aviation are difficult to implement legally, though, as there
are a large number of bilateral agreements stating tax exemption for fuels. In contrast, emission charges
target the source of the impact and theoretically it is possible to adjust the charge to the climate-effect
of a particular flight. Legally, it is possible to introduce emission charges unless they are very closely
correlated to fuel consumption. 702
Irrespective of the policy instrument more research has to be carried out to determine the emissions of
a particular flight, especially if non-carbon emissions were to be included. ICAO has started to develop
a methodology for calculating emissions based on aircraft type, class of travel and route.
Box 32 Emission trading for aviation
Out of the various options to address emissions from aviation, emission trading is the only one
that is in principle supported by a number of airlines and aviation organizations. Emission trading
is favoured over the taxation of fuel or emissions, because it allows achieving emission reductions
at the lowest cost, as well as putting caps on emission levels. The European Commission (EC) thus
envisages including emissions from intra-European flights in the EU ETS from 2011 and all other
aircraft flying into and out of the EU from 2012. However, this will mean to include aviation in the
general trading system of the European Union, with the consequence that aviation will continue
to grow. Several studies have shown air travel to be rather price-inelastic, 704, 705 and at prices of
US$ 20 per ton of permit, ticket prices for aviation will become only marginally more expensive.
For instance, a return-flight from the US to Europe (New York to Paris) would become US$ 24 more
expensive. The aviation sector is thus likely to further expand in such a common trading system,
while other sectors will have to achieve over proportionally large emission reductions.
Several publications have shown that emission reductions are cost-negative or – neutral, when
companies implement measures to avoid low – or moderate amounts of greenhouse gas emissions.
For instance, the IPCC WG3 Report 706 shows that emission reductions in the order of 15–30% are
feasible at costs of up to US$ 20 per ton of CO 2 -eq. However, further emission reductions become
rapidly more expensive. Countries in the European Union are already struggling to achieve the
20% reduction goal agreed upon by 2020. As the 20% reduction goal only represents the first step
in global emission reductions, with > 50% reductions needed by 2050, it is clear that there may
be considerable problems in achieving further reductions in the medium-term future.
This has several implications with regard to the role of aviation. First, if aviation enters the EU ETS,
pressure on other sectors to reduce emissions is likely to increase. This will have the consequence
that economically feasible reductions (at < US$ 20 per ton of CO 2 -eq.) will be more rapidly carried
out in these sectors, and thus sooner lead to a situation where further reductions become more
costly. For instance, there is already considerable debate by the Swedish industry that electricity
will become more expensive because of aviation buying (scarce) emission rights. High electricity
prices would in turn affect the costs of production. Note that the current trading system foresees
only limited ‘imports’ of emission reductions generated through the CDM; i.e., reductions have to
a large extent to be carried out within the European Union. Second, aviation is growing rapidly at
the moment, with an increasing number of people in the European Union regularly using aircraft.
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