Research and analysis

Impacts of carbon pricing on the UK aviation sector

This independent economic research covers the impacts of potential aviation carbon pricing policies on carbon leakage and the competitiveness of the UK aviation sector.

From:
Department for Business and Trade, Department for Transport, and Department for Business, Energy & Industrial Strategy
Published
25 March 2022

Documents

Economic research on the impacts of carbon pricing on the UK aviation sector

https://www.frontier-economics.com/uk/en/news-and-articles/news/news-article-i9172-new-report-investigates-the-impact-of-uk-carbon-pricing-on-uk-aviation/

Details

This independent research was commissioned to develop a robust evidence base on the impacts of potential aviation carbon pricing policies applied to UK departing flights on carbon leakage and competitive disadvantage, to inform the government’s approach to carbon pricing policy for the aviation sector.

The research was jointly commissioned by the Department for Transport and the Department for Business, Energy and Industrial Strategy, and jointly conducted by Frontier Economics and Air Transport Analytics. It was composed of 2 complementary workstreams:

  • qualitative assessment of design options for aviation free allocation in the UK Emissions Trading Scheme (UK ETS)
  • quantitative assessment of illustrative carbon pricing scenarios to test impacts on carbon leakage and the competitiveness of the UK aviation sector
Published 25 March 2022