Airlines must reduce CO2 emissions we’re told, otherwise Flipper will boil in the remnants of the last ice floe. This is to entirely miss what it is that we’re trying to do about climate change – make humans current and future as rich as is possible within that resource constraint of the carbon budget. That is, it’s exactly like every other economic problem ever, one of scarce resource allocation, and is going to be solved in the same way as any other economic problem ever, by markets.
Sure, we’ve got to stick a crowbar into the markets, get that carbon price into market prices – the carbon tax – but once we’ve done that we’re good to go. Except, of course, that we get idiots like this insisting that things must be done sector by sector. Which is entirely and absolutely wrong, that’s the opposite of what we’re trying to do. For to the economist everything is a substitute. And what we’d like people to be doing is substituting for emissions among the various possible things that can be done. That’s the way that we’ll reach the lowest possible emissions for our standard of living or, much the same thing, the highest possible standard of living that carbon budget allows us.
To change example a little, say that commuting contributes to emissions. So, do we want people to commute in non-emitting vehicles? On public transport? Walk? How about move house to be closer to work and have a shorter commute? Not commute at all and work over broadband? Climb into the X-Box and live entirely digitally?
Actually, we want all of these things to happen, we most certainly want all of them to be tried – well, die hard PS-2 fans might complain a little. What blend do we want them to happen in? Dunno, whatever gains people the most utility something we a priori don’t know. So, fix the one price change – the cost of fuel to commute – and see what happens. The outcome, the result emerging from our price change, is the correct blend of substitutions. Rather than, say, building tram sets no one uses because they’ve all decided to move house instead.
Excellent, this applies across sectors too, the very point is that this does apply across sectors:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Airlines are failing to take up the most efficient planes in sufficient numbers to make a significant dent in their carbon dioxide emissions, a new study has found.[/perfectpullquote]
We want society as a whole to reduce emissions, sure, but we really aren’t bothered whether airlines do or not. Maybe that’s where we gain the most utility from our limited carbon budget, being able to fly off to the Sun? If it is then that’s where we’d like to spend it, obviously enough.[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The most efficient new aircraft models, such as the Boeing 787-9 and Airbus A350-900 and A320neo, can achieve substantial carbon savings over older models, but no airlines have invested sufficiently in the new types to reach the top levels of energy efficiency, according to a ranking by Atmosfair, a German NGO.[/perfectpullquote]
Now we’re getting into drivel.[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]TUI Airways, the British holiday airline, came top of the rankings for the second year running, reaching just under 80% of the possible optimum level of carbon emissions. TUI Fly, the company’s German counterpart, came in fourth.
British Airways was placed at 74th, with an efficiency rating of D, behind companies such as Aeroflot and Aeromexico. It fell behind many of Europe’s other flag carriers, including Alitalia, Lufthansa, Air France, KLM and Iberia.[/perfectpullquote]
Yes, excellent, so older airlines flying older fleets had higher emissions than those who expanded recently and have newer ones. Great, that’s how the capital cycle works. And no, we don’t want people to throw away perfectly usable older aircraft just because emissions. We want them to use them for as long as it is efficient in the larger sense to still do so. Use the crap out of what we’ve already built then replace with the less emitting when we’re done. We didn’t, for example, close all the coal plants in 1992. Instead we made it clear that at some future point they’d have to go. Thus no one (in the UK) built new ones, those extant weren’t maintained and so they’re all reaching the end of their working lives. This is the Willam Nordhaus view and he really did gain the Nobel this year for his work. Work with the capital and replacement cycle.
But this is religious mania here about climate change so of course it’s worse:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Carbon emissions from airlines grew by about 5% last year, while the number of kilometres flown increased by 6%, according to Atmosfair, showing that much more needs to be done to ensure aviation does not take up an unsustainable amount of the world’s remaining “carbon budget”.[/perfectpullquote]
That’s the logical error. Say, emissions must be only 80% of what they were in the 1990s. OK. We thus need to allocate that 20% we can make somewhere, somehow. If the most valuable allocation is to flying then that’s where the allocation should be. Dunno, maybe it’s to making nappies, could be that the production of beer is more valuable. And what about the unicorn fart factory? The only method we’ve got of deciding among these is to slap the same social cost of carbon onto all emissions and see what people prefer to consume. Fortunately this is also the most efficient method of deciding – as the Stern Review also tells us. As, actually, every economist tells us.
That is, we don’t want to worry about airline emissions at all, we want to worry about total emissions. And that worrying might even lead to us all spending our entire carbon budget upon flying as that’s the most valuable use of it. Demanding sector by sector reductions is simply to misunderstand the basic science of climate change in the first place.