Aviation Environmental Economics

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Aviation Environmental Economics
Dr. Tim Russo Department of Economics Industrial
College of the Armed Forces National Defense
University Fort McNair, Washington, DC Formerly
an Economist for FAA Formerly a USAF KC-135
Navigator
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Aviation Environmental Economics
Agenda

• Economics
• Public Goods
• Externalities
• Remedies
• Environment
• Aviation
• Noise
• Emissions

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Aviation Environmental Economics

• Economics
• Market Failure
• Public Goods
• Non-Rival Consumption
• Non-Excludable

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Aviation Environmental Economics
Private Good Demand

unit
demand2
Quantity
demand1
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Aviation Environmental Economics
Public Good Demand

unit
demand2
Quantity
demand1
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Aviation Environmental Economics

• Economics
• Market Failure
• Externalities
• Spillovers
• The Coase Theorem

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Aviation Environmental Economics

• Economics
• Remedies
• Permit Trading
• Regulation
• Timing
• Benefit/Cost Analysis
• Corporate
• Government

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Aviation Environmental Economics

• Environment
• Valuation
• Cost Assessment

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Aviation Environmental Economics

• Aviation
• Noise
• Emissions
• CO2 Kyoto Protocol
• EMBOSS Model

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Aviation Environmental Economics

CO2/year
Kyoto Target
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Aviation Environmental Economics
Analysis by the Forecast and Economic Support
Group (FESG) of CAEP/ICAO shows that if emissions
by aviation are reduced at lowest cost, the
greatest part (about 70) of the emissions
reduction will be the result of a reduction in
aircraft kilometres and revenue tonne kilometres
(RTKs). Technology improvement from a shift
towards using more fuel-efficient aircraft
accounts for the balance (around 30). From
Aviation and Climate Change, 2002.