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How Do Airlines Cut Fuel Usage, Reducing Their Carbon Emissions?

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  • Jan K. Brueckner
  • Matthew E. Kahn
  • Jerry Nickelsburg

Abstract

Airline fuel consumption is costly for the firms and for society as well due to a climate-change externality. We study how fuel price changes affect cost-minimizing choices by airlines that have implications for the extent of this externality. The airline industry’s capital stock can be easily inventoried as a set of long-lived, durable aircraft. This portfolio approach allows us to study the utilization and composition of the capital stock at a highly disaggregated level. Changes in airline operations directed toward conserving fuel can be an important path toward lower emissions.

Suggested Citation

  • Jan K. Brueckner & Matthew E. Kahn & Jerry Nickelsburg, 2023. "How Do Airlines Cut Fuel Usage, Reducing Their Carbon Emissions?," CESifo Working Paper Series 10478, CESifo.
    • Handle: RePEc:ces:ceswps:_10478
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    References listed on IDEAS

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    1. Alessandro Gavazza, 2011. "Leasing and Secondary Markets: Theory and Evidence from Commercial Aircraft," Journal of Political Economy, University of Chicago Press, vol. 119(2), pages 325-377.
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    3. Brueckner, Jan K. & Abreu, Chrystyane, 2020. "Does the fuel-conservation effect of higher fuel prices appear at both the aircraft-model and aggregate airline levels?," Economics Letters, Elsevier, vol. 197(C).
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    7. Fageda, Xavier & Teixidó, Jordi J., 2022. "Pricing carbon in the aviation sector: Evidence from the European emissions trading system," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
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    Cited by:

    1. Huang, Robert & Kahn, Matthew E., 2024. "An economic analysis of United States public transit carbon emissions dynamics," Regional Science and Urban Economics, Elsevier, vol. 107(C).

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    More about this item

    Keywords

    airlines; fuel; climate change; carbon emissions;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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