Carbon leakage in aviation policy

The inherently global, connected nature of aviation means that carbon leakage from aviation policy does not necessarily behave similarly to leakage from other sectors. We model carbon leakage from a range of aviation policy test cases applied to a specific country (the United Kingdom), motivated by a desire to reduce aviation CO2 faster than achievable by currently-planned global mitigation efforts in pursuit of a year-2050 net zero CO2 target. We find that there are two main components to leakage: one related to passenger behaviour, which tends to result in emissions reductions outside the policy area (negative leakage), and one related to airline behaviour, which tends to result in emissions increases outside the policy area (positive leakage). The overall leakage impact of a policy, and whether it is positive or negative, depends on the balance of these two components and the geographic scope used, and varies for different policy types. In our simulations, carbon pricing-type policies were associated with leakage of between +50 and −150% depending on what is assumed about scope and the values of uncertain parameters. Mandatory biofuel use was associated with positive leakage of around 0–40%, and changes in airport landing costs to promote more fuel-efficient aircraft were associated with positive leakage of 50–150%.Key policy insights Carbon leakage in aviation policy arises from airline responses (typically positive leakage) and passenger responses (typically negative leakage).Depending on the geographical scope, policy type and values for uncertain parameters, leakage may be between around −150 to +150%.Of the policies investigated in this study, leakage was typically most negative for carbon pricing and most positive for environmental landing charges.Absolute values of leakage are smallest where policies are considered on the basis of all arriving and departing flights.