As an economist, I am trained (brainwashed) to think about the trade-offs involved in making bold policy statements. Like this one (breitbart.com):
The [British] government says it wants a 60 percent cut in carbon dioxide emissions by 2050, compared to 1990 levels, as the nation's contribution toward preventing an increase in temperatures that would threaten a dangerous level of climate change.
So what would it take to cut CO2 emissions by 60% in the UK. Before you answer, consider:
Current [British] government predictions suggest the number of air passengers will grow from 189 million in 2002 to between 350 and 460 million in 2020.
So,
"If the U.K. government does not curb aviation growth, all other sectors of the economy will eventually be forced to become carbon neutral," said Kevin Anderson, who led the [Tyndall Center for Climate Change Research] research team. "It will undermine the competitiveness of U.K. industry."
What does it mean for other sectors to be carbon-neutral? In short it means that net carbon emissions are zero. This could be done by eliminating carbon emissions--which makes it tough to have industrial production--or by permanently storing carbon in other places (called carbon sequestration) by, for example, planting trees. Seems to me it would take a lot of trees to result in a net carbon reduction of 60% in the U.K. Carbon neutrality in all non-aviation economic sectors seems pretty unlikely to me. So what are some of the possible policies to reduce carbon emissions? From the Breitbart article:
Environment Minister Elliot Morley said he accepted the need to reduce emissions, but opposed a tax on aviation fuel.
"The evidence is that people will simply pay the tax and continue to travel and we won't actually stop the growth," Morley told British Broadcasting Corp. TV.
What is the elasticity of demand for air travel in the U.K.? Seems to be some disagreement.
Environmental pressure group Friends of the Earth, however, said it favored an aviation fuel tax.
"The Department of Transport's own models on aviation growth show dramatic reductions in air travel when assumptions are added for fuel taxes and other factors," the group's director Tony Juniper said in a statement.
"Aviation is a rogue sector and its environmental impact is out of control. Climate change is the most urgent challenge facing humanity and yet aviation policy is doing the opposite of what is needed."
What does the Environment Minister favor?
"I actually think there are other ways of doing it. The most effective one is to include aviation within carbon trading schemes, so there is an absolute limit on the amount of emissions from the aviation sector."
Britain is pressing for aviation to be included in the second phase of the EU Emissions Trading Scheme, which begins in 2008, according to the Department for Environment, Food and Rural Affairs.
The emissions trading scheme allows European companies that emit less carbon dioxide than allowed to sell unused allotments to those who overshoot the target.
Tax the polluters or allow trading of emissions subject to quotas? Designed properly, both policies should achieve the same outcome (less carbon). It's just a matter of who gains and who loses.
