• Passenger taxes are ineffective for reducing CO2 emissions. This is not just because demand is relatively price insensitive at a national and supra-national
level. It is also because raising the cost of travel
for the passenger does nothing to incentivise the manufacturer to produce new airframes or engines, nothing to incentivise the fuel company to produce a clean fuel, nothing to incentivise the EU to implement a Single European Sky, nothing to incentivise ANSPs to straighten routes and reduce stacking, nothing to incentivise airports to reduce taxiing emissions, and nothing to incentivise airlines to improve operations and renew their fleet.
• Emissions trading can be more effective, if well designed. By a direct linkage to emissions it incentivises operational and fleet improvements.
If well designed, to be open to trading with other industries and global, it allows the reduction of CO2 emissions to take place in industries where reductions are most efficient. However, even emissions
trading has little impact on the key technology and infrastructure pillars.