“The environmental challenge in aviation: Can airport charges be part of the solution?” (joint with Xavier Fageda)
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Abstract: The environmental footprint of aviation is progressively becoming a major contributor to greenhouse gas emissions, thereby aggravating climate change. Furthermore, aviation also generates local pollution that produces harmful effects on human health. New and disruptive technological innovations (such as electric or hydrogen-powered aircraft) are far from being successfully applied to aircraft propulsion systems. In the meantime, this paper studies the effects of market-based measures by means of a theoretical setup along with an empirical application. The analysis allows concluding that the pass-through rate of emission charges to full prices is relatively low, as compared to that of non-emission charges. Instead, emission charges have a marked effect on aircraft vintage, as they spur the use of newer and cleaner aircraft. In this situation, compensating rises in emission charges by lowering non-emission charges can be an efficient and effective strategy to generate incentives for airlines to renew their fleets smoothly.
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