Airlines Embrace Pollution Plan That Could Cost Them $24B

Airlines are paying for any additional growth after 2020, not for current pollution.

Cap and trade limits emissions, but then allows you to buy off that limit by paying what amounts to a fine, but a fine that is directed at certain uses (sustainable energy, etc.). One could argue it's not really a market based solution to the problem, since unless the "trade" is high enough, there's no real reason to address the actual problem -- emissions. Making fuel more expensive would force companies to adjust to an immediate operating cost, rather than being able to lobby for higher "caps" or lower "trades". You are essentially creating a new market (with its own rules and inefficiencies), instead of trying to manage an existing one.

The problem with taxing the oil coming out of the ground is the incredibly complex nature of an unstable global market that is managed largely by a small number of players artificially controlling the price and a whole futures market trying to hedge against that roller coaster. It's also a market that wars are literally fought over. Finally, it's political suicide since it will impact consumers directly in the amount it costs them to fill their cars instead of indirectly, which they are less likely to blame on oil taxes.

cap and trade is pure political theater where politicians can decide who providing credits, so favorite sons type stuff. If we just tax the stuff coming out of the ground at the source the politicians cannot play favorites in the credit game.

its one way that countries try to avoid fair trade as it gets harder to follow the money. it also lets politicians unfairly subsidize some businesses over others because of whom runs them, not what benefit they provide.

so tax it once and get it done with

The finance industry loves cap and trade schemes as it creates a new market to trade and create financial products for.

The generally accepted solution is a carbon tax that increases over time. The tax can even be revenue neutral with everyone getting an equal share of a year end rebate.

But it seems like credits needed aren't proportional to emissions, but emissions growth.

If I understand the accord correctly, the difference is existing emissions are grandfathered in/exempt. The offsets are only required on emissions growth (new emissions above current levels). So a new entrant would have to pay the "tax" on all new flights while the legacy carriers only pay on the difference from present flights.

Why would you bother making the system more complicated. If it's determined that use of fuel creates emission problems, then just tax it at the start and don't try to worry about every industry to come.

>> Why wouldn't the tax on fuel be a barrier to competition too, under your reasoning? To grow, the smaller airline would need more fuel, and so would be paying more.

Under the proposal, nobody pays anything if they maintain their current emissions. But if a small airline grows and takes market share from a big one, the small one will have to buy credits and the big one will be able to sell credits. The little guy in effect pays the big guy for taking his market share.

If you tax the fuel directly, everyone gets a cost increase right away which they should pass on to their customers. But it doesn't have adverse effects on the free market like the credit system does. You fly more planes, you'll pay more taxes but in proportion to your new revenue so it doesn't really matter.

I think the difference is that under a tax, air travel can still expand without bound as people are willing to pay more for the air travel, but if you cap emissions, then air travel can't expand, regardless of whether people are willing to pay more than the cost of the environmental damage.

(And yes, folks, the environmental damage from any one use is bounded; it can't possibly cost more than the cost to undo that damage. If your model of the environmental damage implies it is infinity, it's just wrong, and it's driving bad policy.)

You are thinking of a very specific type of pollution such as sulphur oxide. Ships have zero emission standards and burn very low grade fuel. Cars/jets etc have the sulphur removed from their fuel. However, this stuff tends to go away fairly quickly, in terms of long term pollution such as CO2 they are very low.

Don't forget Jet fuel takes a lot of processing and produces a lot of pollution before it's added to the aircraft.

Agreed, it should be noted that most shipping related pollution has a short half life in the atmosphere and are released far from people limiting it's impact. However, the impact near ports can be rather significant and it will travel over a large area.

Compare jet travel to other forms of hauling humans around, and they start to look pretty good. Of course we're not going to be stacking people into ship cargo holds; that comparison is pointless.