Beware Emissions Trading, Airlines Stand to Make Billions


The science journal Nature warns that a short-term effect of the European Commission‘s plan to include the airlines in the continent-wide market for greenhouse gas emissions will likely reap the industry billions, at least initially.

The world’s airlines, including many firms who have lobbied aggressively against climate-change legislation, could make billions of euros from a planned emissions-reduction scheme, say economists studying the situation.

The resulting rise in cost to individual airline tickets will be too small to deter customers, they add, so the reduction in greenhouse gas emissions will be miniscule —at least in the short term.

…The windfall is a consequence of the way emissions trading works. Industries in the scheme are allocated carbon dioxide permits that are traded in as emissions are generated. The permits can be sold if a firm emits less than its allowance, or bought if they wish to exceed it. Because industries are initially given almost enough permits to cover their usual amount of emissions, they should be able to continue business much as usual.

But experience with other industries already in the scheme shows that they treat permits as assets — the permits are currently worth around US$5 per tonne of carbon. To compensate for having to lose the assets when accounting for their emissions, the firms charge extra for products. In the case of the electricity sector, this is estimated to have generated an extra $1.5 billion in annual profits for British firms between 2005 and 2007.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.