Monday, August 10, 2009

The Economic Impact of the ETS

According to a new report issues by the consulting firm Point Carbon, the European Union's plan to bring civil aviation into its emissions trading scheme (ETS) could cost the airline industry €1.1 billion.  See Press Release, Point Carbon, Airlines May Face €1bn Carbon Trading Cost From 2012 (Aug. 3, 2009) (available here).  As the press release states:

To indicate the scale of the possible cost, at today’s spot price, €14.40 per tonne of CO2 (as at 21 July 2009), the cost to the industry would be over one billion euros (€1.1 billion). “Emissions trading will increase cost pressure on airlines. They will look to pass on at least some of this cost to passengers”, said Andreas Arvanitakis, co-author of the report and a senior analyst at Point Carbon. 

British Airways faces the largest shortfall of the EU-registered airlines at 3 million tonnes of CO2 in 2012, equivalent to €43m at today’s spot price for carbon. This is more than the total shortfall for all Spanish airlines. However, American carriers will face the largest bill. The scheme will cover all flights that land or take off within the EU, including those operated by companies registered elsewhere, so intercontinental flights are covered. 

“The American carriers in the scheme will be the first sector in the US to be drawn into mandatory international emissions trading, even though it is implemented by the EU,” Mr Arvanitakis said. “This comes just as an emissions trading bill is being considered by Congress and the Administration is engaging in international climate negotiations.”  US airlines Delta Air Lines and United Airlines come in ahead of British Airways, with shortfalls of 3.5mt and 3.3mt respectively. Qantas and American Airlines come in with predicted shortfalls of 2.6mt and 1.7mt respectively.

Those interested in reading the full report may do so by contacting Point Carbon at one of the e-mail addresses listed at the bottom of their press release.

http://lawprofessors.typepad.com/aviation/2009/08/the-economic-impact-of-the-ets.html

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Comments

The report is available for sale according to a representative of PointCarbon that I contacted. It is £1495 /€1745 for a single user, or £1995/€2325 for a 'library' copy.

Posted by: Shelley Hession | Aug 12, 2009 6:09:02 AM

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