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

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  • Brueckner, Jan K.

    (University of California, Irvine)

  • Kahn, Matthew E.

    (University of Southern California)

  • Nickelsburg, Jerry

    (UCLA)

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

  • Brueckner, Jan K. & Kahn, Matthew E. & Nickelsburg, Jerry, 2023. "How Do Airlines Cut Fuel Usage, Reducing Their Carbon Emissions?," IZA Discussion Papers 16189, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16189
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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.
    2. Li, Shanjun & Kahn, Matthew E. & Nickelsburg, Jerry, 2015. "Public transit bus procurement: The role of energy prices, regulation and federal subsidies," Journal of Urban Economics, Elsevier, vol. 87(C), pages 57-71.
    3. Christopher R. Knittel, 2012. "Reducing Petroleum Consumption from Transportation," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 93-118, Winter.
    4. 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).
    5. Thomas Klier & Joshua Linn, 2010. "The Price of Gasoline and New Vehicle Fuel Economy: Evidence from Monthly Sales Data," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 134-153, August.
    6. 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).
    7. Matthew E. Kahn & Jerry Nickelsburg, 2016. "An Economic Analysis of U.S Airline Fuel Economy Dynamics from 1991 to 2015," NBER Working Papers 22830, National Bureau of Economic Research, Inc.
    8. Brueckner, Jan K. & Abreu, Chrystyane, 2017. "Airline fuel usage and carbon emissions: Determining factors," Journal of Air Transport Management, Elsevier, vol. 62(C), pages 10-17.
    9. M. Selim Aktürk & Alper Atamtürk & Sinan Gürel, 2014. "Aircraft Rescheduling with Cruise Speed Control," Operations Research, INFORMS, vol. 62(4), pages 829-845, August.
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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

    airline fuel consumption; energy conservation; carbon dioxide emissions;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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