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 strategy12, 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