Economic and Environmental Effects of the Introduction of a Cap-And-Trade Policy in Aviation (Project 31)
Beginning in 2012, the European Union is planning to include aviation in its existing emissions trading scheme. Project 31 will analyze the effects of a potential introduction of a U.S. cap-and-trade policy in the aviation industry. Analyses will be conducted through the joint application of the Aviation Environmental Portfolio Management Tool, in particular the APMT Economics module, and a global model of economic growth and greenhouse gas emissions, the MIT Emissions Prediction and Policy Analysis (EPPA) model. Whereas the outputs of the EPPA model will provide information on the world economy, changes of greenhouse gas emissions and the expected cost of carbon, APMT Economics will analyze changes of the operating costs of airlines, demand, and airline fleets.
The medium term outcomes of Project 31 will be an assessment of different implementation scenarios of cap-and-trade in aviation and the economic and aviation related impacts. In the long run, further tool development is envisaged to evaluate other research questions involving aviation environmental policy, such as the introduction of alternative jet fuels.
Sponsor Award Number: 06-C-NE-MIT
Source Category: Federal Research Grant
Principal Investigator: John Reilly and Ian Waitz