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Article
Does carbon pricing reduce air travel? Evidence from the Australian ‘Clean Energy Future’ policy, July 2012 to June 2014
Journal of Transport Geography
  • Francis Markham, Australian National University
  • Martin Young, Southern Cross University, Australia
  • Arianne Reis, University of Western Sydney, Australia
  • James Higham, University of Otago, New Zealand
Document Type
Article
Publication Date
1-1-2018
Peer Reviewed
Peer-Reviewed
Abstract

Aviation emissions are an important contributor to global climatic change. As growth in travel demand continues to outstrip improvements in the fuel efficiency of air travel, the aviation contribution to climate change is likely to grow substantially. Consequently, measures that effectively reduce travel demand are required if atmospheric carbon concentrations are to be limited. The efficacy of the Australian Clean Energy Future policy which placed a $23.00AUD (FY 2012) to $24.15 AUD (FY 2013) per tonne levy on carbon-dioxide equivalent emissions from July 2012 to June 2014 is tested. Specifically, time-series regression is used to estimate the effect of this carbon price policy on the level of domestic passenger kilometres flown in Australia, while adjusting for costs of production (i.e. fuel and labour costs), economic activity (i.e. gross domestic product), competitive effects (i.e. airline capacity), and exogenous shocks. There was no evidence that the carbon price reduced the level of domestic aviation in Australia. Carbon pricing measures may have to be levied at a greater rate to affect behavioural change, particularly given the limited potential for future aviation efficiency gains.

Disciplines
Citation Information

Markham, F, Young, M, Reis, A & Higham, J 2018, 'Does carbon pricing reduce air travel? Evidence from the Australian ‘Clean Energy Future’ policy, July 2012 to June 2014', Journal of Transport Geography, vol. 70. pp. 206-214.

Published version available from:

https://dx.doi.org/10.1016/j.jtrangeo.2018.06.008