July 29, 2019 / 1:59 PM / 3 months ago

Breakingviews - Only taxes can close aviation’s carbon gap

An Australian commercial aircraft prepares to land in the haze at Sydney's International Airport July 15, 2014.

LONDON (Reuters Breakingviews) - Aviation’s dreams of a green future rest on second-hand cooking oil and wishful thinking. By 2050, the industry wants to halve net CO2 emissions from 2005 levels even though traffic is set to treble. It’s hard to see electric planes or jet fuel made from plants or kitchen grease flying to the rescue. Instead, governments may have to squash demand by imposing carbon taxes.

Unlike carmakers, which can switch to zero-carbon batteries, or power stations that can run on wind, nuclear or solar, airlines are stuck with fossil fuels. Basically, nothing matches jet fuel in pound-for-pound punch. Nor are there signs of that changing much by mid-century.

In 2017, airlines produced 850 million tonnes of CO2, just 2.3% of humanity’s total. But rapid expansion of routes, mainly in Asia, means emissions are on course for 2.7 billion tonnes annually by 2050, the International Civil Aviation Organization estimates. That’s 8 times the industry’s mid-century target of a net 325 million tonnes.

Various things can reduce that 2.7 billion tonnes figure. The ICAO assumes fuel-efficient engines will cut 700 million tonnes a year by 2050. More direct routes and letting planes cruise at higher altitudes should remove another 200 million tonnes, and carbon off-sets like tree-planting another 200 million. To hit their mid-century environmental goal, airlines must therefore find another 1.3 billion tonnes of collective CO2 savings – in itself over 50% more than the 850 million tonnes pumped into the atmosphere in 2017, when airlines collectively burnt nearly 2.5 billion barrels of jet fuel.

Replacing that amount of jet fuel – 3.8 billion barrels - with biofuels looks a stretch. Jatropha, an easy-to-grow plant seen as a promising source of oil, yields perhaps 10 barrels of jet fuel per hectare. Switching entirely to jatropha would thus mean ploughing up 375 million hectares, more than a third of the United States.

That points instead to a demand-led drive to cut the appetite for air travel. A study commissioned for the European Commission last year estimated that 10% on ticket prices – considerably more than the 1.5 euros per flight outlined this month by France - leads to an 11% demand drop while having minimal impact on economic growth. Europe could start by enforcing its 0.33 euro per litre duty on jet fuel. Convincing others to follow might be easier than growing all those plants.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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