IDEAS home Printed from https://ideas.repec.org/a/eee/jotrge/v70y2018icp206-214.html
   My bibliography  Save this article

Does carbon pricing reduce air travel? Evidence from the Australian ‘Clean Energy Future’ policy, July 2012 to June 2014

Author

Listed:
  • Markham, Francis
  • Young, Martin
  • Reis, Arianne
  • Higham, James

Abstract

Aviation emissions are an important contributor to global climatic change. As growth in travel demand continues to outstrip improvements in the fuel efficiency of air travel, the aviation contribution to climate change is likely to grow substantially. Consequently, measures that effectively reduce travel demand are required if atmospheric carbon concentrations are to be limited. The efficacy of the Australian Clean Energy Future policy which placed a $23.00AUD (FY 2012) to $24.15 AUD (FY 2013) per tonne levy on carbon-dioxide equivalent emissions from July 2012 to June 2014 is tested. Specifically, time-series regression is used to estimate the effect of this carbon price policy on the level of domestic passenger kilometres flown in Australia, while adjusting for costs of production (i.e. fuel and labour costs), economic activity (i.e. gross domestic product), competitive effects (i.e. airline capacity), and exogenous shocks. There was no evidence that the carbon price reduced the level of domestic aviation in Australia. Carbon pricing measures may have to be levied at a greater rate to affect behavioural change, particularly given the limited potential for future aviation efficiency gains.

Suggested Citation

  • Markham, Francis & Young, Martin & Reis, Arianne & Higham, James, 2018. "Does carbon pricing reduce air travel? Evidence from the Australian ‘Clean Energy Future’ policy, July 2012 to June 2014," Journal of Transport Geography, Elsevier, vol. 70(C), pages 206-214.
    • Handle: RePEc:eee:jotrge:v:70:y:2018:i:c:p:206-214
    DOI: 10.1016/j.jtrangeo.2018.06.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0966692318304009
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jtrangeo.2018.06.008?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
    ---><---

    References listed on IDEAS

    as
    1. Christine Lim, 2006. "A Survey of Tourism Demand Modelling Practice: Issues and Implications," Chapters, in: Larry Dwyer & Peter Forsyth (ed.), International Handbook on the Economics of Tourism, chapter 1, Edward Elgar Publishing.
    2. 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.
    3. Richard K. Green, 2007. "Airports and Economic Development," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(1), pages 91-112, March.
    4. O'Connor, Kevin & Fuellhart, Kurt, 2013. "Change in air services at second rank cities," Journal of Air Transport Management, Elsevier, vol. 28(C), pages 26-30.
    5. Nicolas De Roos & Gordon Mills & Stephen Whelan, 2010. "Pricing Dynamics in the Australian Airline Market," The Economic Record, The Economic Society of Australia, vol. 86(275), pages 545-562, December.
    6. Larry Dwyer & Peter Forsyth (ed.), 2006. "International Handbook on the Economics of Tourism," Books, Edward Elgar Publishing, number 2827.
    7. Blonigen, Bruce A. & Cristea, Anca D., 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," MPRA Paper 40304, University Library of Munich, Germany.
    8. Marianna O'Gorman & Frank Jotzo, 2014. "Impact of the Carbon Price on Australia's Electricity Demand, Supply and Emissions," CCEP Working Papers 1411, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    9. Scheelhaase, Janina & Maertens, Sven & Grimme, Wolfgang & Jung, Martin, 2018. "EU ETS versus CORSIA – A critical assessment of two approaches to limit air transport's CO2 emissions by market-based measures," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 55-62.
    10. Macintosh, Andrew & Wallace, Lailey, 2009. "International aviation emissions to 2025: Can emissions be stabilised without restricting demand?," Energy Policy, Elsevier, vol. 37(1), pages 264-273, January.
    11. Marazzo, Marcial & Scherre, Rafael & Fernandes, Elton, 2010. "Air transport demand and economic growth in Brazil: A time series analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(2), pages 261-269, March.
    12. Cui, Qiang & Wei, Yi-Ming & Li, Ye, 2016. "Exploring the impacts of the EU ETS emission limits on airline performance via the Dynamic Environmental DEA approach," Applied Energy, Elsevier, vol. 183(C), pages 984-994.
    13. Anger, Annela & Köhler, Jonathan, 2010. "Including aviation emissions in the EU ETS: Much ado about nothing? A review," Transport Policy, Elsevier, vol. 17(1), pages 38-46, January.
    14. Sellner, Richard & Nagl, Philipp, 2010. "Air accessibility and growth – The economic effects of a capacity expansion at Vienna International Airport," Journal of Air Transport Management, Elsevier, vol. 16(6), pages 325-329.
    15. Li, Ye & Cui, Qiang, 2017. "Carbon neutral growth from 2020 strategy and airline environmental inefficiency: A Network Range Adjusted Environmental Data Envelopment Analysis," Applied Energy, Elsevier, vol. 199(C), pages 13-24.
    16. Cui, Qiang & Li, Ye & Wei, Yi-Ming, 2017. "Exploring the impacts of EU ETS on the pollution abatement costs of European airlines: An application of Network Environmental Production Function," Transport Policy, Elsevier, vol. 60(C), pages 131-142.
    17. Jotzo, Frank, 2012. "Australia’s carbon price," Working Papers 249401, Australian National University, Centre for Climate Economics & Policy.
    18. Cui, Qiang & Li, Ye, 2017. "Airline efficiency measures under CNG2020 strategy: An application of a Dynamic By-production model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 130-143.
    19. Baker, Douglas & Merkert, Rico & Kamruzzaman, Md., 2015. "Regional aviation and economic growth: cointegration and causality analysis in Australia," Journal of Transport Geography, Elsevier, vol. 43(C), pages 140-150.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Scott, 2021. "Sustainable Tourism and the Grand Challenge of Climate Change," Sustainability, MDPI, vol. 13(4), pages 1-17, February.
    2. Schwanen, Tim, 2019. "Transport geography, climate change and space: opportunity for new thinking," Journal of Transport Geography, Elsevier, vol. 81(C).
    3. Helmers, Viola & van der Werf, Edwin, 2022. "Did the German Aviation Tax Affect Passenger Numbers? New Evidence Employing Difference-in-differences," VfS Annual Conference 2022 (Basel): Big Data in Economics 264118, Verein für Socialpolitik / German Economic Association.
    4. Oesingmann, Katrin, 2022. "The effect of the European Emissions Trading System (EU ETS) on aviation demand: An empirical comparison with the impact of ticket taxes," Energy Policy, Elsevier, vol. 160(C).
    5. Adeline Montlaur & Luis Delgado & César Trapote-Barreira, 2021. "Analytical Models for CO 2 Emissions and Travel Time for Short-to-Medium-Haul Flights Considering Available Seats," Sustainability, MDPI, vol. 13(18), pages 1-23, September.

    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. Qiu, Rui & Hou, Shuhua & Meng, Zhiyi, 2021. "Low carbon air transport development trends and policy implications based on a scientometrics-based data analysis system," Transport Policy, Elsevier, vol. 107(C), pages 1-10.
    2. Cui, Qiang, 2019. "The online pricing strategy of low-cost carriers when carbon tax and competition are considered," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 420-432.
    3. Cui, Qiang & Li, Ye & Lin, Jing-ling, 2018. "Pollution abatement costs change decomposition for airlines: An analysis from a dynamic perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 96-107.
    4. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    5. Cui, Qiang & Li, Ye & Wei, Yi-Ming, 2017. "Exploring the impacts of EU ETS on the pollution abatement costs of European airlines: An application of Network Environmental Production Function," Transport Policy, Elsevier, vol. 60(C), pages 131-142.
    6. Murakami, Jin & Matsui, Yurika & Kato, Hironori, 2016. "Airport rail links and economic productivity: Evidence from 82 cities with the world’s 100 busiest airports," Transport Policy, Elsevier, vol. 52(C), pages 89-99.
    7. Hyunjung Kim & Jiyoon Son, 2021. "Analyzing the Environmental Efficiency of Global Airlines by Continent for Sustainability," Sustainability, MDPI, vol. 13(3), pages 1-16, February.
    8. Xuanyu Yue & Julie Byrne, 2021. "Linking the Determinants of Air Passenger Flows and Aviation Related Carbon Emissions: A European Study," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    9. Nava, Consuelo R. & Meleo, Linda & Cassetta, Ernesto & Morelli, Giovanna, 2018. "The impact of the EU-ETS on the aviation sector: Competitive effects of abatement efforts by airlines," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 20-34.
    10. Sajid, M. Jawad & Cao, Qingren & Kang, Wei, 2019. "Transport sector carbon linkages of EU's top seven emitters," Transport Policy, Elsevier, vol. 80(C), pages 24-38.
    11. Tveter, Eivind, 2017. "The effect of airports on regional development: Evidence from the construction of regional airports in Norway," Research in Transportation Economics, Elsevier, vol. 63(C), pages 50-58.
    12. Cui, Qiang, 2019. "Investigating the airlines emission reduction through carbon trading under CNG2020 strategy via a Network Weak Disposability DEA," Energy, Elsevier, vol. 180(C), pages 763-771.
    13. Yang Bai & Cheng-Lung Wu, 2022. "The Causality Analysis of Airports and Regional Economy: Empirical Evidence from Jiangsu Province in China," Sustainability, MDPI, vol. 14(7), pages 1-11, April.
    14. Cui, Qiang & Li, Ye, 2017. "Airline efficiency measures under CNG2020 strategy: An application of a Dynamic By-production model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 130-143.
    15. Cui, Qiang & Hu, Yu-xin & Yu, Li-ting, 2022. "Can the aviation industry achieve carbon emission reduction and revenue growth simultaneously under the CNG2020 strategy? An empirical study with 25 benchmarking airlines," Energy, Elsevier, vol. 245(C).
    16. Hakim, Md Mahbubul & Merkert, Rico, 2016. "The causal relationship between air transport and economic growth: Empirical evidence from South Asia," Journal of Transport Geography, Elsevier, vol. 56(C), pages 120-127.
    17. Baker, Douglas & Merkert, Rico & Kamruzzaman, Md., 2015. "Regional aviation and economic growth: cointegration and causality analysis in Australia," Journal of Transport Geography, Elsevier, vol. 43(C), pages 140-150.
    18. Wang, Yanzai & Hao, Chengzhi & Liu, Dawei, 2019. "The spatial and temporal dimensions of the interdependence between the airline industry and the Chinese economy," Journal of Transport Geography, Elsevier, vol. 74(C), pages 201-210.
    19. Pot, Felix Johan & Koster, Sierdjan, 2022. "Small airports: Runways to regional economic growth?," Journal of Transport Geography, Elsevier, vol. 98(C).
    20. Dantas, Tiago Mendes & Cyrino Oliveira, Fernando Luiz & Varela Repolho, Hugo Miguel, 2017. "Air transportation demand forecast through Bagging Holt Winters methods," Journal of Air Transport Management, Elsevier, vol. 59(C), pages 116-123.

    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:jotrge:v:70:y:2018:i:c:p:206-214. 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: https://www.journals.elsevier.com/journal-of-transport-geography .

    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.