The Carbon Footprint Emerging Environmental Challenges for Sustainable Aviation Dr. Michael W. Tretheway InterVISTAS Consulting Inc.
strategic transportation & tourism solutions
2009 AAAE/FAA Forecast Conference 1 April 2009
Will Anyone Care ? strategic transportation & tourism solutions
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Spiritual Messaging "Making selfish choices such as flying on holiday or buying a large car are a symptom of sin.” – "Sin is not just a restricted list of moral mistakes. It is living a life turned in on itself where people ignore the consequences of their actions." • Richard Chartres Bishop of London
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Sophisticated Messaging on Roads & Rail Routes to LHR 6
Coming Soon to North America Climate Change issue is not confined to Europe – North American attitudes are shifting rapidly – Aviation will be targeted
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The Carbon Footprint strategic transportation & tourism solutions
Historic EU GHG Emissions ƒ EU GHGE grew by 87% (1990 and 2004)
Development of EU-25 international aviation GHG emissions
ƒ Emissions from other sectors declined. Source: Commission of the European Communities, Summary of the Impact Assessment: Inclusion of Aviation in the EU Greenhouse Gas Emissions Trading Scheme (EU ETS), December 2006.
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Some Good News – Efficiency Gains 0.9
CAGR : -1.9%
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
0.0 1980
CO2 Emissions per Passenger Mile - Pounds
US Domestic Aviation CO2 Emissions per Passenger Mile 1980 – 2004
Year
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.
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However, Rapid Growth in Air Travel US Domestic Air Travel 1980 - 2004 700
Passenger Miles (Billions)
600
500
4.0% : R CAG
400
300
200
100
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
0
Year
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.
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Total Emissions Continue to Climb‌ US Domestic Aviation CO2 Emissions 1980 - 2004 Total CO2 Emissions - Billions of Pounds
400 350
2.0% : R G A C
300 250 200 150 100 50
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
0
Year
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.
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How Does this Compare to Auto?
US CO2 Annualized Growth Rates 1980 - 2004
Air Travel
Automobile /Motorcycle
Emissions per Passenger Mile
-1.9%
-0.9%
Passenger Miles
4.0%
1.2%
Total Emissions
2.0%
0.3%
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007
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Technology is Not Enough A study by the Intergovernmental Panel on Climate Change (IPCC) concluded that
“the increase in aviation emissions attributable to a growing demand for air travel would not be fully offset by reductions in emissions achieved through technological improvements alone” Source: US General Accounting Office, “Aviation and the Environment: Aviation’s Effects on the Global Atmosphere Are Potentially Significant and Expected to Grow” 14
What About Increasing Load Factors? US Domestic Average Load Factors 1980 - 2004 80 70
Load Factor (%)
60 50 40 30 20 10
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
0
Year
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.
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However, Decline in Average Number of Seats US Domestic Average Seats per Aircraft 1980 - 2004 150
CAGR: -0.8
%
Seats per Aircraft
125
100
75
50
25
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
0
Year
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.
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Minimal Effect on Average Number of Passengers per Aircraft… US Domestic Seats Occupied per Aircraft 1980 – 2004 100
CAGR: 0.2%
Seats Occupied per Aircraft
90 80 70 60 50 40 30 20 10
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
0
Year
Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.
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The Future – A Larger Share of a Larger Pie US CO2 Emissions 2005 vs. 2030
Aviation
~ 4%
2005
~ 5.5%
Aviation
2030
– Aviation emissions will increase 65% by 2030 – Total emissions will increase by 25% by 2030 Source: Energy Information Administration
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Solutions strategic transportation & tourism solutions
Solutions Do Nothing – but public sentiment is changing – there will be a political solution imposed on industry
Carbon Tax Cap and Trade Voluntary Offsets
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Carbon Tax An economist’s dream – charge users what it would cost to offset carbon – but no requirement to actually offset
Tax Revenues – would generate substantial tax revenues • domestic aviation in Canada: $120 million ?
– tax neutrality (e.g., BC) • reduce other taxes paid • but imposes burden on aviation
– multiple jurisdictions may dually tax emissions 21
Carbon Tax Stable, known cost – cap and trade schemes • may have escalating or variable costs • may be based on erroneous calculations
total payment varies with business cycle
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Cap & Trade Imposes limit on emissions – limit typically declines, in order to meet Kyoto targets
Administration – Cap/quota imposed on an industry – cap allocated to firms
If you cannot stay within quota – then you must buy quota from another firm in another sector – e.g., new pulp & paper plant reduces emissions by more than its quota, so sell excess reduction to airline 23
Cap & Trade May raise cost of travel – investment to achieve cap • although in many sectors, these investments are cost reducing
– purchase of quota
May be prone to error – initial industry quota – allocation of quota – inequitable quota assignment • e.g., ‘free’ quota to new entrants • This will look like slots
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Cap & Trade ƒ Strongly preferred by environmentalists – achieves actual reductions
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Examples from the EU Cap & Trade – The EU plans to add aviation to its Emissions Trading Scheme (ETS) starting in 2011
Carbon Tax – Starting in 2009, the UK is replacing air passenger duty with a “per flight” tax based on carbon emissions
Note the double ‘solution’
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Voluntary Carbon Offsets CO2 emissions countered by financial contributions to: – Energy efficiency projects – Renewable energy projects – Tree planting (considered suspect offset)
Voluntary offsets will mitigate negative economic impacts of GHGE reductions – Most price sensitive will not volunteer
Carbon offsetting provides a viable “transition strategy” – until more permanent solutions are available
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Carbon Offset Sales, 1991 to 2006
© Copyright 2007, Stefan Gössling et al, Journal of Sustainable Tourism Vol. 15, No. 3
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Price Impact on Air Travel Less than you might think – air travel is thought of as ‘price elastic’ • 10% price increase typically reduces travel by 13%
– but when price increase affects all routes, carriers, destinations and modes • air travel is observed to be price inelastic • 10% price increase reduces travel by only 6% 29
Price Impact When all carriers and modes affected – e.g., fuel cost increase or carbon tax
Then 10% increase in fares reduces travel by only 6%
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Forecasting Issues Carbon Impacts will have to be managed – Thus, a need to forecast carbon footprint
Will need to project – Traffic movements by type of aircraft – Phase in of fleet replacement • And deployment of new technologies (737/A320 replacement in 2016?)
– Changes in operational procedures 31
Carbon Forecast Global Aircraft Emission Projections Hypothetical Scenario
Traffic Growth @4% pa
3.00
2.50
Offsets
Offset reduction effect Effect ETS Normal emission reduction
1.50
797/A360 Y3 aircraft
"Normal Emission Reduction per RPK
1.00
remaining emissions 737/A320 replacement Widebody replacement
0.50
Remaining Carbon 20 33
20 32
20 31
20 30
20 29
20 28
20 27
20 26
20 25
20 24
20 23
20 22
20 21
20 20
20 19
20 18
20 17
20 16
20 15
20 14
20 13
20 12
20 11
20 10
20 09
-
20 08
Index (2008-1.0)
2.00
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Thank You strategic transportation & tourism solutions
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