Air transportation in a carbon constrained world: Long‐term dynamics of policies and strategies for mitigating the carbon footprint of commercial aviation

With increasing demand for air transportation worldwide and decreasing marginal fuel efficiency improvements, the contribution of aviation to climate change relative to other sectors is projected to increase in the future. As a result, growing public and political pressures are likely to further target air transportation to reduce its greenhouse gas emissions. The key challenges faced by policy makers and air transportation industry stakeholders is to reduce aviation greenhouse gas emissions while sustaining mobility for passengers and time‐sensitive cargo as well as meeting future demand for air transportation in developing and emerging countries. This paper examines five generic policies for reducing the emissions of commercial aviation; (1) technological efficiency improvements, (2) operational efficiency improvements, (3) use of alternative fuels, (4) demand shift and (5) carbon pricing (i.e. market‐based incentives). In order to evaluate the impacts of these policies on total emissions, air transport mobility, airfares and airline profitability, a system dynamics modeling approach was used. The Global Aviation Industry Dynamics (GAID) model captures the systemic interactions and the delayed feedbacks in the air transportation system and allows scenarios testing through simulations. For this analysis, a set of 34 scenarios with various levels of aggressiveness along the five generic policies were simulated and tested. It was found that no single policy can maintain emissions levels steady while increasing projected demand for air transportation. Simulation results suggest that a combination of the proposed policies does produce results that are close to a ‘weak’ sustainability definition of increasing supply to meet new demand needs while maintaining constant or increasing slightly emissions levels. A combination of policies that includes aggressive levels of technological and operations efficiency improvements, use of biofuels along with moderate levels of carbon pricing and short‐haul demand shifts efforts achieves a 140% increase in capacity in 2024 over 2004 while only increasing emissions by 20% over 2004. In addition, airline profitability is moderately impacted (10% reduction) compared to other scenarios where profitability is reduced by over 50% which pose a threat to necessary investments and the implementation of mitigating measures to reduce CO2 emissions. This study has shown that an approach based on a portfolio of mitigating measures and policies spanning across technology and operational improvements, use of biofuels, demand shift and carbon pricing is required to transition the air transportation industry close to an operating point of environmental and mobility sustainability.