The focus of existing policy to reduce CO2
f
rom air travel has been on trying to manage air travel
demand by raising the price of travel for passengers.
Even the recent debate on emissions trading in Europe
has focused on the costs it will impose on airlines and
their passengers.
The results contained in this report show that policies that
aim to reduce emissions by managing demand, through
raising the price of air travel, are likely to fail. Tourists
are shown to be very sensitive to prices for air travel on
competing airlines or to alternative destinations. However,
at the national or supra-national level these choices
cancel each other out and the overall market is much less
sensitive to the cost of air travel. It is economic growth and
incomes that are found to have been the key drivers of air
travel demand, and those drivers are expected to remain
particularly strong in the developing markets of Asia.
Decoupling emissions from travel growth needs to focus
not on demand management but on mechanisms to bring
about emission reduction measures from technology,
infrastructure and operations.
Climate policies will need to focus on creating incentives
where there can be effective investment in emissions
reductions. The major potential would appear to be on
decoupling emissions from travel growth, through supply-
side innovations, rather than trying to manage demand
through raising the price of travel.
There is a need to look beyond rudimentary economic
instruments (e.g. passenger taxes) that seek to manage
demand by raising the price of travel for the passenger in
order to incentivise effectively the various players along
the air transport value chain who can invest in emission
reduction.
IATA’s four pillar climate strategy
12
, which was endorsed
by the Assembly of the International Civil Aviation
Organisation in 2007, focuses action on emission
reduction measures from technology, infrastructure,
operations and those brought about by well designed
economic instruments