The determinants of CO2 emissions of air transport passenger traffic: An analysis of Lombardy (Italy)

We study the determinants of aviation CO2 emissions by designing an econometric model applied to a panel data set covering all flights departing from Lombardy, Italy over the 1997–2011 period. We consider two dimensions of CO2 emissions: total and per available seat kilometer. The latter is a measure of emission efficiency. We focus on different categories of determinants: technical progress; aircraft and network carrier management; policy/business decisions that may not be oriented to limiting CO2, but may indirectly affect it by offsetting projected outcomes of policies adopted to reduce emissions (e.g., the EU Emission Trading Scheme (ETS) or the ICAO Carbon Offsetting and Reduction Scheme for International Aviation); and others. We find that although aircraft size increases total emissions, it reduces emissions per available seat kilometers (ASK), while the route distance increases total emissions and decreases emissions per ASK, implying that CO2 is less of a problem for long-haul connections. Technical progress decreases CO2 emissions per ASK with an estimated elasticity equal to −0.06%. Last, liberalization in the EU market has generated the development of low-cost carriers, which in turn have lowered CO2 emission per ASK, that is, liberalization in Europe has brought the collateral effect of reducing the CO2 externality per passenger.