At the Supra-national level.• To look at the demand
impacts of higher travel costs caused by extending the
EU Emissions Trading Scheme just to intra-EU travel
i.e. short-haul markets, the relevant price elasticity
would be derived as follows:
Base elasticity -0.6 (supra-national) multiplied by
1.4 (intra-Europe geographic multiplier) multiplied
by 1.1 (short-haul multiplier) which equals -0.92
So a 10% rise in intra-EU travel costs would lead to a
relative inelastic 9.2% reduction in air travel.