Tourism & CC Challenges & Opportunities - Global Commons Institute

Situational Analysis
• Airlines will try to avoid the EU ETS by changing routes to maximize fuels bunkered outside the EU, with the
consequence that 20% of fuels will not be affected by the EU ETS.
• Costs of auctioned EUAs are €30 in 2012 and €40 in 2020, while emission reduction units will be traded at
€40 in 2012 and €50 in 2020.
• A factor 2 is applied to all traded emissions exceeding caps, accounting for non-carbon impacts at flight
altitude.
• Costs apply to all flights that originate in or arrive at EU airports, whether for EU or other airlines; there will
be no other trading schemes for aviation anywhere in the world before 2020.
Based on the above assumptions, the average cost per ton CO 2
will amount to US$52.4 in 2012 and US$96.3
in 2020 (currency converter www.oanda.com; 1 Euro = 1.54109 US Dollar). When calculating cost increases for
particular journeys, it is however not the full amount of emissions released during a flight that is subject to emission
trading. This is because the EU ETS will not affect all emissions, as only flights starting or ending in the EU will be
affected, for instance when travellers use connecting flights from a hub outside the EU. It is assumed that in 2012,
80% of the overall kilometres covered by travellers from EU source markets are covered by the EU ETS. In 2020
this share will decrease to 75% due to rescheduling by airlines (choosing other hubs/itineraries). Consequently,
additional cost of emissions for flights would be US$42.2 in 2012 and US$72.3 in 2020 per ton CO 2
(Gössling et
al. 2008a).
In order to understand how the EU ETS will affect flights to the Caribbean, emissions caused by these flights have
to be calculated. As shown in table 9, the emission calculators provided online by voluntary offset providers arrive
at widely varying amounts of emissions for identical flights. This is partially because of the use of ‘uplift factors’, i.e.
the integration of non-carbon emissions in calculations. As the EU ETS only considers emissions of CO 2
, the focus is
here entirely on this greenhouse gas. Based on Gössling et al. (2008a), we use an emission factor of 0.122 kg per
passenger kilometre (pkm). Distances are derived from the emissions calculator provided by Atmosfair, which is a
very exact tool for flight distance calculations (www.atmosfair.de; see technical annex of emissions calculator).
For a sample of flights to the Caribbean (cf. table 9), flights would include return distances of emissions would
thus entail in between 4,730 pkm (Toronto, Canada – Havana, Cuba) and 14,110 pkm (London, UK – Havana,
Cuba). This translates into emissions of in between 0,577 and 1,721 t CO 2
. At prices of in between US$731-1,401
(Toronto-Havana) and US$1,330-2,045 (London-Havana), which seem to represent flight costs from main markets
to the various destinations (cf. table 11), costs for travel to the region would increase by 2012, or US$24.3 (Toronto-
Havana) and US$72.6 (London-Havana), all else being equal. This corresponds to air fare increases of in between
1.7-3.3% (Toronto-Havana) and 3.6-5.5% (London-Havana). These additional costs do however not reflect changes
in the overall costs of holiday-making, as the flight may only account for one third of the costs of a holiday. As
Njegovan (2006: 34) states for the UK, “the share of air fares in total expenditure on holidays abroad is, on average,
somewhere in the range between 25% and 35%”. Consequently, air fare price increases should be seen against
the overall cost of the journey rather than the increase in air transport prices alone. For the price ranges presented
above, the overall costs of holiday-making would thus increase by in between 0.6-1.8% in 2012. NOTE that this
is a scenario where a global emission trading system similar to that in the European Union would be established.
Currently, these increases in prices would only be relevant to the European source markets. The development in the
period 2012-2020 is likely to be characterized by further price increases, with projected costs of US$72.3 per t CO 2
in 2020. There are many uncertainties, however, how this will affect travel behaviour, given changes in income, fuel
prices and other travel cost parameters.
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