26 Feb 2018

How to green and improve flying in one step

Here's a simple idea: Governments agree to charge $0.10/liter tax on aviation fuel, which is currently untaxed due to a 1947 decision to "help aviation grow."

Well, aviation has grown, and it's now too large for its harms to be ignored.

This tax would increase the price of fuel by 20 percent (it now averages $0.50/liter worldwide) and thus the cost of flying.

Such a price increase will be unpopular with airlines that want everyone flying all the time (it's their business after all), but it would also have three positive effects:*
  1. The amount of fuel used would drop by a bit as airlines try to find ways to reduce this cost and some people decide not to fly. Both of these changes are good for reducing high-altitude (and more harmful) GHG emissions.
  2. Innovators and airlines would work harder to reduce fossil-based energy sources in planes. Such switches might occur via bio-fuels or "electric planes" but my bet is that hybrids (jetfuel for takeoff; electric for cruising) would be first to market.
  3. Governments with the potential to earn money from the tax (approximately $20 billion per year) will compete to provide quality fueling services. (There's a risk they will also compete to lower the tax back to zero, but that can be limited by, e.g., sharing tax revenue evenly among departure and destination airports.)
  4. Want more? Read this pdf.
Bottom line: Airline travel is not a human right, and it produces lots of harmful pollution. Tax fossil fuel used in aviation to "help" airlines find ways to use less.

* Most of this logic also applies to ship fuel, but there are many more ships burning a much larger range of fuels with technology that's harder (IMO) to switch over to clean energy.

1 comment:

DB said...

During the late 00s when oil prices were spiking, I got the sense that airlines were researching everything they could to minimize fuel usage (you may remember some of the articles about pilots frightened that they were taking off with too little fuel to make a safe landing if they had to reroute). All of the large carriers were rushing to update their fleets with smaller, more efficient planes to compete with the low cost carriers.

I guess my point is that raising taxes now might have some small marginal effect (and I'm a fan of pricing in the externality, especially if the proceeds go towards, say, carbon offsets). But, I'd be surprised if we'll see substantial technological advances & fuel economy R&D investment with effective oil prices so low. Also, especially for the transformative technologies you're hoping for, deployment will likely require immense capital expenditures, even though fleets were fairly recently modernized for many large carriers and the next major replenishment cycle is far off. I don't see aviation R&D investment as price elastic to fuel cost right now.

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