The growth of world air traffic and its impact on climate change

23_NoEco Picture Plane

Driven by economic growth in East Asia, world air traffic has increased at a very rapid pace in the last decades. As more and more people join the middle class in emerging countries, the market for domestic flights is expanding rapidly, which, in turn, boosts demand for commercial flights in different parts of the world. This has contributed a lot to the continuous growth of air traffic, which has quadrupled in 30 years. This is good news for cities like Toulouse, as aircraft production should continue to increase steadily. However, because the environmental impact of the transportation sector is quite high, growth in this sector raises the question of how this trend will affect climate change. While it may seem like we are moving toward an environmental catastrophe, progress in terms of technology and fuel consumption may lessen the ecological footprint of the aeronautical industry.

Air Traffic Around the World

According to the International Civil Aviation Organization – ICAO, a UN specialised agency responsible for international civil aviation standards, 4.3 billion passengers embarked on regular – commercial – flights in 2018, which represents a 6.4% increase compared to the previous year. In perspective, this rate is about twice the growth rate of the world’s real GDP. Nonetheless, this impressive increase is not new: air traffic growth has been very stable in the past decades, doubling every 15 years, and has been resilient to external shocks – such as recessions or the 9/11 terrorist attacks.

Picture_Sébastien Montpetit

Paul Chiambaretto, a Professor of Marketing and Strategy at Montpellier Business School, argues in The Conversation in 2008 that the rapid expansion of air traffic is a result of both demand-side and supply-side factors. On the demand side, he stresses the tight link between the development level of a country and the consumption level of air transport. The International Air Transport Association’s estimate of income elasticity of the demand for airplane tickets is between 1.5 and 2, meaning that a 1% increase in national income implies people buy 1.5 to 2% more tickets. A prime example of this relationship between economic growth and air transport demand is Asia. Passenger traffic in Asia, expressed in revenue passenger-kilometres (RPK) – i.e. the number of passengers multiplied by the distance travelled, a standard measure of air traffic in the industry – grew by 9.5% in the region, which currently accounts for 34.8% of world traffic. Furthermore, planes are now used more than ever for freight transport, which pushes the demand for commercial flights even further.

On the supply side, the emergence of low-cost companies, especially in Europe, has forced other airline companies to lower their prices. For prices to fall, economic theory suggests that the increase in supply must be greater than the increase in demand, which says a lot about the weight that companies such as Ryanair and Easyjet have on the market.

Airplanes and Global Warming

The growth of air transport seems a priori incompatible with the international community’s objective of limiting global warming. Transoceanic flights require tens of thousands of litres of jet fuel for an ever increasing number of departures. In 2017, the transport sector was responsible for 25% of the European Union’s greenhouse gas emissions. Even if air transport generates a small share of these transport emissions, the level of emissions remains very high.

However, new technologies have been implemented by airplane manufacturers to reduce fuel consumption, and consequently mitigate the environmental footprint of aviation. According to the ICAO, aircraft operations are now 70% more efficient than they were in the 1970s. The organisation claims that reducing aircraft noise and emissions is one of its main priorities. Airline companies and manufacturers are committed to deploying new systems that limit greenhouse gas emissions. They mainly focus on three fields: improving airport infrastructures, adapting aircraft technology and increasing the use of sustainable fuels.

In particular, the CORSIA program, adopted in October 2016 in Montreal, Canada, is one of the first binding international environmental agreements in history. This ambitious program aims at maintaining the level of carbon emissions of international aviation at the 2020 threshold. Under the agreement, for the first six years, 65 countries representing 87% of world air traffic, committed to halting the increase in air transport emissions from 2020 to 2026. From 2027, all 191 member countries – with some exceptions for less-developed countries and isolated countries – will be bound by the constraining agreement. As a result of the agreement, a carbon market will be created to force companies that pollute more to buy credits from less polluting companies in order to compensate for their emissions.

At a time when progress concerning the reduction in carbon emissions is scarce, the progress made by the transport industry proves that there is hope. Not only has this sector succeeded in slowing the increase in greenhouse gas emissions despite a high growth in demand, but it has set also ambitious targets for the following decade. Hopefully, many other international initiatives will follow to curb worldwide greenhouse emissions. That being said, it was nice to see Greta Thunberg in Montreal with about half a million people for the Global Climate Strike on 27 September 2019. Greta, may you inspire all of us to fight climate change together!

by Sébastien Montpetit

 

References:

  1. International Civil Aviation Organization. The World of Air Transport in 2018. 2019. https://www.icao.int/annual-report-2018/Pages/the-world-of-air-transport-in-2018.aspx
  2. Schulz, E. (2018). Global Networks, Global Citizens: Global Market Forecast 2018-2037. Airbus GMF 2018.
  3. Chaimbaretto, Paul. Trafic aérien mondial, une croissance pas prête de s’arrêter. The Conversation. 19-05-08. https://theconversation.com/trafic-aerien-mondial-une-croissance-fulgurante-pas-prete-de-sarreter-116107
  4. International Air Transport Association. (2008). Air Travel Demand. IATA Economics Briefing No 9.
  5. Eurostat. Greenhouse gas emission statistics–emission inventories. 2019. https://ec.europa.eu/eurostat/web/environment/air-emissions
  6. Représentation permanente de la France auprès de l’Organisation de l’Aviation Civile Internationale. L’Assemblée de l’OACI adopte une résolution historique relative à un mécanisme mondial pour la compensation des émissions de CO2 de l’aviation internationale. 2019. https://oaci.delegfrance.org/L-Assemblee-de-l-OACI-adopte-une-resolution-historique-relative-a-un-mecanisme

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