The law of unintended consequences 2: the hub and the rub
In the last blog post, Chris detailed some of the effects of market-distorting taxes on passenger choices. Another example of the law of unintended consequences appears in this month’s Lufthansa Policy Brief . From 2012 all airlines taking off or landing in the European Union will have to pay for their emissions under the European Union Emissions Trading Scheme (ETS) for aviation. Trouble is, travellers between the USA and Asia will increasingly switch to routes that do not hub via Europe to avoid these extra charges. And here’s the rub: these flights could end up emitting more CO2 as they travel further to avoid Europe.
Lufthansa’s article gives the example of a flight from New York to Delhi. If the flight hubs via Frankfurt (12,326 km) the plane will emit 336 tonnes of CO2 but if it avoids the EU ETS to hub via the Middle East (13,204 km), it will emit 360 tonnes of CO2. The longer flight will produce 7% more carbon emissions. This is just one example: the same situation would work for many services that currently hub through Europe.
Emissions trading is one of a number of tools that can help airlines reduce emissions. But it must be implemented in the right way. The airline industry is a global industry; climate change is a global problem; we need a global solution. The EU’s regional approach will just lead to “carbon leakage” with passengers choosing flights outside the EU where possible. Rather than go for these sorts of regional schemes, governments must thrash out a global solution under the auspices of the UN body of which they are all members, the International Civil Aviation Organization (ICAO).
Posted: October 2nd, 2008 under aviation, carbon emissions, environment, Policy.
Tags: Carbon Leakage, emissions reductions, flight routing, unintended consequences
Comments
Comment from Haldane
Time October 31, 2008 at 1:43 pm
Will,
I couldn’t agree with you more that the industry must focus on working together to confront the environmental challenges we face and the opportunities that come from becoming more efficient. I can’t speak for the information that Lufthansa released, but I used the map from the publication as an example of the unintended consequences that any regional approach to emissions trading will have on an international industry. The same scenario would work for any routes flown by any airlines hubbing close to the European Union zone.
Haldane
Comment from Texas family vacation ideas
Time February 18, 2009 at 2:49 pm
I would guess that the economic considerations of using more fuel would discourage airlines from flying the longer route and save carbon emissions. As long as the ETS fees are “reasonable” relative to fuel costs, the situation above won’t happen.
Add to that the value of a US Europe flight and a Europe Asia flight.
Comment from Will Lofberg
Time October 30, 2008 at 11:42 am
In many different ways the airline industry is working together to reduce its environmental impact. This fiercely competitive industry regularly co-operates to deliver many ecologically-efficient outcomes, be they technology trials, lobbying of governments on air space or sharing best business practices to reduce fuel burn and C02.
In contrast to this collaboration, it was disappointing to see Lufthansa recently publish this ‘policy brief’ which contained a misleading and deceptive account of C02 emissions from Emirates in contrast to their own performance.
In the German language issue of their policy brief, Lufthansa claimed an Emirates flight from the US to Dubai connecting to India (or flights from ‘Gulf States’ as they euphemistically call it) would create 24% more ‘air pollution’ than a Lufthansa flight from the US to Germany connecting to India.
A few weeks later, Lufthansa released an English version of the same document but mysteriously their maths changed and the claim dropped from 24% to 7%. Their distance, C02 tonnage and percentages are oddly incorrect. An Emirates New York flight in the earlier edition was some 2,500km longer. These errors were not corrected to recipients of the German version so German speaking ‘decision makers in politics, media and business’ remain misled.
Any airline can select a particular favourable route to benefit their own airport-to-airport timings, pricing or even emissions; Emirates could certainly do so to paint Lufthansa unfavourably.
Lufthansa should avoid playing games with their readers and instead issue them with an apology.
Our industry and the environment are best served when we concentrate on technology and business efficiency rather than brickbats through distorted and false statistics.