Public policy approaches to reduce aviation emission
Introduction
It is useful to think of the public policy toolbox as a continuum ranging from (i) information-based approaches aimed to correct a lack of awareness, be that among consumers, the private sector (including information asymmetries in the vertical supply chain), or even among public decision-makers; through (ii) incentive-based approaches which facilitate (as opposed to enforce) change by using the market or other economic instruments that mandate specific behavior and often have legal and/or financial consequences for non-compliance. In most instances, government policy would involve a mix of these approaches (Dietz and Stern 2002; Keohane et al. 1998; OECD 2002; Stavins 2002; United States Congress 1995; Wilbanks and Stern 2002). A cap-and-trade MBM would essentially represent a combination: a directive-based approach would set an absolute cap, and an incentive-based approach would create flexible trading mechanisms that reduce marginal abatement costs as emissions are kept below the cap. Incentives can also have a split personality: be that positive/rewards-based, for example subsidies, or negative/punitive, for example taxes.