The inclusion of aviation in the EU Emissions trading system: an economic and environmental assessment
The concept of this paper was originated in ICTSD’s research and policy dialogues under the Global Platform. The study shows that the impact on net emissions covered by the EU ETS could be large, as with growing aviation emissions, operators will have to buy allowances from other sectors in the EU ETS. This, in turn, will drive down emissions in these other sectors. There may also be changes in competitiveness and tourism. The impact on trade between Europe and developing countries is likely to be small, though this may vary between products and regions.
The incorporation of aviation into the EU ETS is, however, the first instance of imports being included into a domestic carbon pricing strategy, and should therefore be seen as part of a bigger picture. Indeed the inclusion of aviation in the EU ETS is an example of a ‘response measure’ to climate change that may impact the opportunities that trade has for contributing effectively to sustainable development. A clear understanding of the inter‐linkages between response measures and their possible socio-economic impacts on developing countries in particular is, therefore, crucial. This paper aims to add to the information available to countries and stakeholders regarding the breadth and scope of response measures, as well as their potential implications for development.
The paper scrutinizes the upcoming climate regulation of aviation transport from an environmental and economic perspective. In addition to shedding light on issues relating to emissions and to demand, competitiveness and trade in the aviation sector, the paper also serves to highlight the first example of imports being included into a domestic carbon pricing strategy, which is part of a bigger picture.
for full text: http://ictsd.org/downloads/2011/09/faber_aviation.pdf