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A discussion paper published at the University of East Anglia holds that due to the cap-and-trade scheme, a decisions to fly or not has no impact inside the European Union.

Quoting from the press release, Emissions trading schemes limit green consumerism:

The decision to fly or not no longer has any substantial impact on total GHG [greenhouse gas] emissions because emissions from aviation within the EU are included in the EU ETS. Any additional emissions caused have to be reduced elsewhere and vice versa.

The full paper, entitled Private provision of public goods in a second-best world: cap and trade schemes limit green consumerism, by Dr Grischa Perino will be published by the Centre for Behavioural and Experimental Social Science on Wednesday, January 30. As far as I can see, it does not appear to be peer-reviewed.

An blog post by Leo Hickman on The Guardian website responds: Should we stop worrying about the environmental impact of flying?. Hickman writes: Perino appears to adopt a theoretical, idealised vision of the ETS, one that doesn't account for the system's very real flaws, not least its vulnerability to turbulence caused by vested interests and political pressure..

Other economists and anti-aviation activists by Hickman do not really contest the point. He does quote Chris Goodall as saying:

Actually, people don't behave like economists expect them to do. Choosing an ethical lifestyle or a 'green' lifestyle has two effects simply not captured by economists. First, it demonstrates a willingness to pay some price to achieve what one considers a social good. (Sorry, I'm talking like an economist here). If I say I won't fly, it demonstrates to others that their might (just might) be an issue with flying. In other words, there may be (in fact, probably is) a demonstration effect. We are all strongly guided by the ethical actions of those around us. Second, the choice of lifestyle/consumption habits shows elected governments that there is popular support for action. If, say, a substantial number of people said that they were reducing their flying for environmental reasons it allows governments to impose tighter caps on flying emissions, knowing that they have some popular support. (Frankly, I think this is the most important effect of ethical actions).

When a significant amount of travellers decide to take the train rather than the flight, inside the EU, I would expect this to reduce carbon emissions, because there are less flights. But is this true in practice?

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    Back to the question: This seems to be based on a very confused understanding of the cap-and-trade. The argument seems analogous to "I have 1000 euros to spend on my annual holiday. I may as well spend it all on airfares, because I am going to be spending it all anyway." It ignores that last year, I spent 2000 euros on a holiday, and next year I will be spending only 800 euros. I am saving money. (Here "I" am the EU, and the euros represent carbon.) – Oddthinking Feb 1 '13 at 20:17
  • When flying within EU, already quite significant amount of what you're paying for ticket is the CO2 tax. – vartec Feb 3 '13 at 15:22
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    The papers argument sounds similar to "I've just hired a maid, so now I can make as much mess as a like." Sounds great, except that they charge by the hour :S – Ian Feb 5 '13 at 15:17
  • Does the paper factor in increased usage of land-based transportation? Most people who use commercial airlines aren't going on flights just for kicks, they're doing it to get somewhere. – JAB Mar 31 '17 at 14:46
  • @JAB Air-based transportation is more polluting than any other form of regular public transportation, so any shift to other public transportation would reduce environmental impact. If people decide to drive alone in an inefficient car instead of sitting in a packed airplane the difference may be less beneficial. – gerrit Mar 31 '17 at 14:54
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TL;DR yes, decisions to fly do contribute to GHG emissions from regulated sources within the EU, and decisions to not fly contribute to GHG reductions.

The paper is based on a set of assumptions. The paper is internally consistent - that is to say, if the assumptions hold, the conclusions hold. If they do not, there is no basis to accept the conclusion, particularly if the conclusion defies known science & economics (more flying = more emissions, ceteris paribus)

Let's look at some of the assumptions in CBESS Discussion Paper 13-01

The government sets a binding upper bound on negative contributions to the public good ... The immediate implication of cap-and-trade is therefore that any change in emissions by one regulated source is perfectly o set by one or more other regulated sources.

There are several implicit assumptions here:

  1. the binding upper bound is always reached - that within such a scheme we never undershoot; and therefore

  2. that the binding limit for the following period does not take any account of undershoot of any previous caps.

Let's look at those two, within the context of the EU ETS, the cap & trade scheme under discussion.

From Edie Energy, reporting on the UK Parliament's Environmental Audit Committee:

a surplus of emission allowances in the EU ETS worth €4.1bn (£3.3bn) had been accrued by large industrial companies.

From Pinsent Mason, environmental lawyers:

The dramatic drop in the EU carbon price reinforces the fact that urgent action is required, backed by clear legislative support, to structurally reform the EU ETS and to rebalance the supply and demand of allowances in the EU ETS market ...
In its first report on the carbon market (12-page / 225KB PDF), published last month, the Commission proposed six longer-term structural changes to the EU ETS. These could include increasing the EU's carbon reduction target from the current 20% to 30% by 2020, the permanent cancellation of a number of allowances or extending the scheme to cover additional sectors.

So it looks like neither of those implicit assumptions in the report in the question withstand scrutiny, and so its conclusions are unsafe. Which means we fall back to the basic science and economics, which is that reducing those activities that are known to release greenhouse gases, reduces the emissions of greenhouse gases.

So decisions to not fly can contribute to reduced GHG emissions from regulated sources in the EU.

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    Even if/when the cap is reduced to remove the surplus, I think it is worth emphasizing that the summary of the report gives the wrong impression. By reducing flights, the airlines will make less demand, reducing the price of carbon, reducing the price of other goods and allowing marginal activities to proceed where the carbon price originally made them uneconomic. e.g. by not flying, aluminium cans become more affordable and some glass-blowers can work again. The argument that the whole cap will be used anyway ignores opportunity costs - what else could you do with that carbon allotment? – Oddthinking Feb 2 '13 at 14:26

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