May we take the plane?

When was your last flight? 

Mine was in autumn 2019, just before the pandemic. A week and a half’s vacation in New York (I liked it very much). Since then no flights, which has been less about Corona but because I travel mostly Germany and sometimes Europe. You often can take the train for that. 

I travel exemplary, I could say, and point my finger at frequent flyers. But things are a bit more complicated.

At first glance, the matter is straightforward. Flying sucks. No means of transport emits more climate-damaging gases per capita. The carbon footprint of travelling by plane is devastating (see chart below).

source: Our World in Data

At a second glance, however, things look differently. At least in some parts of the world. 

Intra-European flights have been part of the so-called European Emissions Trading System (EU ETS) since 2012. With that system, the question of whether your decision to take the plane harms the climate has to be answered anew. Because the EU ETS ensures that the total amount of climate-damaging gases emitted no longer depend on individual decisions. Wether you board a plane for a flight within the European Union, or you don’t, that will not change the carbon footprint in any way. Why is this?

Let me explain. 

First, what is the EU Emissions Trading System?  

The EU ETS is considered a key tool to gradually decrease the burning of fossil fuels and encourage the deployment of renewable energy. It works on the principle of “cap-and-trade“. That means an absolute limit (cap-) is set on the total amount of greenhouse gases that can be emitted each year. This cap is being reduced over time so that total emissions decrease. To transmit emissions, one must buy emissions allowances in the form of certificates, which are traded (and-trade) with someone else as needed. And since the amount of certificates is being reduced over time, the price of buying certificates rises steadily.

Since the EU ETS was introduced in 2005 (with Intra-European flights joining in 2012), those emissions covered by the EU ETS have been cut by 42.8 per cent. The reduction targets are not only achieved with pinpoint accuracy but also do so at the lowest possible cost. 

This is simply because someone who is able to cut emissions at a low cost has the most incentive to do so. They save the difference between the costs of lowering the emissions and the price they had otherwise to pay for the emission certificates.  

But there is a problem with the EU ETS: it does not exist in all CO2-emitting sectors in Europe. Currently, the emissions trading system covers, besides Intra-European flights, only power and heat generation plus energy-intensive industrial installations. That accounts for only about 40 per cent of all CO2-emitting sectors. Luckily this will change. The European Union agreed recently to integrate the road sector and buildings into the emission trading system by 2028. Then most of the climate damaging CO2 emissions within the European Union will be included in that system. 

What does all this mean for our personal decision about whether we should travel by plane?

If air traffic is part of an emissions trading system, the total emissions of climate-damaging gases no longer depend on the demand for flights. This leads to a decisive change. With ETS, the moral question of flying moves from the individual to a societal level. Then society determines how much CO2 will be emitted and how steep the reduction path towards fewer emissions should be. 

The effects of this decision are still noticeable for each air traveller, namely in the price they have to pay for their tickets (the scarcer the number of certificates, the higher the price). But individual behaviours doesn’t influence any longer how much CO2 is ultimately emitted.

Such a system has advantages and disadvantages. The decisive advantage: climate goals set by society and realised with a cap-and-trade system are achievable with pinpoint accuracy. 

In addition, we no longer get into the moral dilemma we are currently constantly stuck in. Can I still fly in times of global warming? With flights integrated into a well-working ETS, the answer is: Yes. 

Well, there is still one issue. Since the amount of emission is limited by the ETS, the emissions you “use” while flying can’t be used by someone else. So there is still a bit of a moral dilemma. But that dilemma is no longer about the climate; it has become a social question. 

Most economists, me included, recommend introducing emissions trading for all industries, preferably worldwide. But strangely enough, the EU ETS doesn’t receive much attention and isn’t appreciated and praised by climate activists. 

Why is that? 

Probably because such a system replaces the need for “good action”. With an established ETS, you no longer have to decide whether you want to save the climate or do things that eventually emit greenhouse gases. In such a system, you have to pay for a CO2-emitting life (with that money going straight to society).  

We are not used to dealing with environmental issues in this way. We grew up believing that fighting climate change means personal sacrifice. We can hardly imagine a life in which such sacrifices are barely noticeable because they had become part of the market system. 

But this switch from individual to social sacrifice is necessary. Because this is how social coexistence is successful in the long run.

Coexistence in large societies always works best when the individual does not have to choose between their personal well-being and that of others. If, instead, decisions they make in their favour are to the benefit of others. Emissions trading systems create such mutual benefits. 

So you could say “Bon voyage”! But sadly, and as said, the EU ETS only applies to intra-European flights. Even though there are 23 emissions trading systems worldwide (covering around 9 per cent of global emissions), the EU ETS is the only supranational system. So at least for international flights, it is only within the European Union where you can think of boarding a plane without having a bad conscience. I hope that this will change soon. Air travel is a global affair. This is why we need, the sooner the better, a global emissions trading system. 


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