IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v171y2022ics0301421522004827.html
   My bibliography  Save this article

Novel quota and tax regime design approach for green transition: A case study on Switzerland's aviation industry

Author

Listed:
  • Keshavarzzadeh, Amir H.
  • Thut, Caspar
  • Andersen, Daniel
  • Lingsch, Levi
  • Patt, Anthony G.

Abstract

In the present study, a novel approach for calculating optimal quota and tax regimes is investigated. A meta-heuristic framework has been developed to find the optimal quota regime for the national or worldwide aviation industry. The minimization of ticket prices and CO2 emissions are considered to be objective functions. The results of the current study indicate that implementing optimized quotas is more effective than intensive tax regimes. To elaborate, much more important than the value of the carbon price is the shape (convexity or concavity) of the tax regime. The optimal tax regime shape is also obtained. Based on the optimal quota and tax regime, the concept of golden time and value is introduced. In the golden time window, investing in Sustainable Aviation Fuels (SAFs) will be the most cost-effective. Furthermore, the results demonstrate that neither the sole introduction of quotas nor the imposition of high carbon taxes are beneficial from an economic and decarbonization standpoint. Thus, an optimized quota regime should be employed. These quotas should be introduced as soon as possible, and their implementation should be combined with political efforts to introduce a carbon tax and policies supporting the development of an alternative jet fuel industry.

Suggested Citation

  • Keshavarzzadeh, Amir H. & Thut, Caspar & Andersen, Daniel & Lingsch, Levi & Patt, Anthony G., 2022. "Novel quota and tax regime design approach for green transition: A case study on Switzerland's aviation industry," Energy Policy, Elsevier, vol. 171(C).
    • Handle: RePEc:eee:enepol:v:171:y:2022:i:c:s0301421522004827
    DOI: 10.1016/j.enpol.2022.113263
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421522004827
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2022.113263?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brueckner, Jan K. & Zhang, Anming, 2010. "Airline emission charges: Effects on airfares, service quality, and aircraft design," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 960-971, September.
    2. Jiang, Changmin & Yang, Hangjun, 2021. "Carbon tax or sustainable aviation fuel quota," Energy Economics, Elsevier, vol. 103(C).
    3. Mayor, Karen & Tol, Richard S.J., 2007. "The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers," Transport Policy, Elsevier, vol. 14(6), pages 507-513, November.
    4. Becken, Susanne & Mackey, Brendan, 2017. "What role for offsetting aviation greenhouse gas emissions in a deep-cut carbon world?," Journal of Air Transport Management, Elsevier, vol. 63(C), pages 71-83.
    5. John D. Sterman & Rebecca Henderson & Eric D. Beinhocker & Lee I. Newman, 2007. "Getting Big Too Fast: Strategic Dynamics with Increasing Returns and Bounded Rationality," Management Science, INFORMS, vol. 53(4), pages 683-696, April.
    6. González, Rodrigo & Hosoda, Eiji B., 2016. "Environmental impact of aircraft emissions and aviation fuel tax in Japan," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 234-240.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiang, Changmin, 2021. "Aviation tax and railway subsidy: An integrated policy," Transportation Research Part B: Methodological, Elsevier, vol. 146(C), pages 1-13.
    2. Hamdan, Sadeque & Jouini, Oualid & Cheaitou, Ali & Jemai, Zied & Granberg, Tobias Andersson & Josefsson, Billy, 2022. "Air traffic flow management under emission policies: Analyzing the impact of sustainable aviation fuel and different carbon prices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 14-40.
    3. Jiang, Changmin & Yang, Hangjun, 2021. "Carbon tax or sustainable aviation fuel quota," Energy Economics, Elsevier, vol. 103(C).
    4. Chen, Yilin & Hou, Meng & Wang, Kun & Yang, Hangjun, 2023. "Government interventions in regional airline markets based on aircraft size—Welfare and environmental implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    5. Talwar, Chetan & Joormann, Imke & Ginster, Raphael & Spengler, Thomas Stefan, 2023. "How much can electric aircraft contribute to reaching the Flightpath 2050 CO2 emissions goal? A system dynamics approach for european short haul flights," Journal of Air Transport Management, Elsevier, vol. 112(C).
    6. Joseph B. Sobieralski & Sarah M. Hubbard, 2020. "The Effect of Jet Fuel Tax Changes on Air Transport, Employment, and the Environment in the US," Sustainability, MDPI, vol. 12(8), pages 1-15, April.
    7. Proost, Stef & Van Dender, Kurt, 2012. "Energy and environment challenges in the transport sector," Economics of Transportation, Elsevier, vol. 1(1), pages 77-87.
    8. Becken, Susanne & Stantic, Bela & Chen, Jinyan & Connolly, Rod M., 2022. "Twitter conversations reveal issue salience of aviation in the broader context of climate change," Journal of Air Transport Management, Elsevier, vol. 98(C).
    9. Malcolm Brady, 2021. "A Game-Theoretic Model of Strategic Interaction Using Advertising: Simulating the Evolution of the Cournot Nash Equilibrium under Different Competitive Scenarios," Games, MDPI, vol. 12(4), pages 1-16, November.
    10. D’Alfonso, Tiziana & Jiang, Changmin & Bracaglia, Valentina, 2016. "Air transport and high-speed rail competition: Environmental implications and mitigation strategies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 261-276.
    11. Chen, Dan & Yin, Jianan & Xu, Feng & Huang, Chen & Li, Ziyu, 2023. "A market-based framework for CO2 emissions reduction in China's civil aviation industry," Transport Policy, Elsevier, vol. 143(C), pages 150-158.
    12. Saeed P. Langarudi & Carlos G. Silva & Alexander G. Fernald, 2021. "Measure more or report faster? Effect of information perception on management of commons," System Dynamics Review, System Dynamics Society, vol. 37(1), pages 72-92, January.
    13. John Vourdoubas, 2021. "Is the De-carbonization of Air-transportation to and from the Island of Crete, Greece Feasible?," Environmental Management and Sustainable Development, Macrothink Institute, vol. 10(3), pages 62-75, August.
    14. Xinghua Fan & Xuxia Li & Jiuli Yin, 2019. "Impact of environmental tax on green development: A nonlinear dynamical system analysis," PLOS ONE, Public Library of Science, vol. 14(9), pages 1-23, September.
    15. Stefan N. Groesser & Niklas Jovy, 2016. "Business model analysis using computational modeling: a strategy tool for exploration and decision-making," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 27(1), pages 61-88, February.
    16. Langley, Paul & Rieple, Alison, 2021. "Incumbents’ capabilities to win in a digitised world: The case of the fashion industry," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    17. Sam Meng & Tien Pham, 2017. "The impact of the Australian carbon tax on the tourism industry," Tourism Economics, , vol. 23(3), pages 506-522, May.
    18. Álvarez-Albelo, Carmen D. & Hernández-Martín, Raúl & Padrón-Fumero, Noemi, 2017. "Air passenger duties as strategic tourism taxation," Tourism Management, Elsevier, vol. 60(C), pages 442-453.
    19. Mayer, Robert & Ryley, Tim & Gillingwater, David, 2015. "Eco-positioning of airlines: Perception versus actual performance," Journal of Air Transport Management, Elsevier, vol. 44, pages 82-89.
    20. Gössling, Stefan & Scott, Daniel & Hall, C. Michael, 2015. "Inter-market variability in CO2 emission-intensities in tourism: Implications for destination marketing and carbon management," Tourism Management, Elsevier, vol. 46(C), pages 203-212.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:171:y:2022:i:c:s0301421522004827. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.