Greenflation Watch: Aviation (Continued)

Climate policy-makers’ war against cars is, of course, part of a wider war against mobility. Naturally, that includes the effort to curb flying, where, not for the only time, snobbery and climate fundamentalism intersect. It just doesn’t do to let all those dreadful people fly. . . .

I’ve written about this before, here and here, but, as is evident by now, issues such as these don’t go away. The green ratchet doesn’t stop turning.

Bloomberg:

Jetting off to the Mediterranean this summer? I hope you got a good deal, because cheap flights are becoming increasingly hard to find.

You probably had an inkling that the era of absurdly cheap short-haul flights in Europe was coming to an end. After all, according to travel search engine Kayak, summer flights between the UK and the continent are currently one-third more expensive than last year. But two new reports make it clear that this isn’t just temporary turbulence.

It’s the new reality for flying as airlines face a huge decarbonization challenge and tightening climate-compliance laws.

Note the tut-tutting reference to “absurdly” cheap flights.

In any event, those “absurdly” low prices are to be killed off in the name of some (to use a fashionable phrase) “common good”: in this case, helping stop or slow climate change. That these laws will make little practical difference is neither here nor there. It’s donning the hair shirt that matters. Well, that and keeping the rabble out of airports.

Back to Bloomberg:

The first headwind stems from two big changes in the European Union’s Emissions Trading System (EU ETS). Airlines must have enough emissions allowances to cover every metric ton of carbon dioxide released into the atmosphere on flights starting and ending in the European Economic Area, the UK and Switzerland. Right now, they get about half of those allowances for free. But that deal comes to an end in 2026, as the share of allowances they have to pay for starts to rise from 2024. That is effectively going to double their carbon costs over just three years.

The unit price of carbon emissions has also soared recently, topping €100 ($111) for the first time in late February, and it doesn’t seem to be on its way back down. A report by Alex Irving, European transport analyst at Bernstein, puts the resulting cost from these changes for European airlines at about €5 billion in 2027.

That’s just the thin end of the wedge. Over the next three decades, aviation has to transform itself from a polluting industry — planes are responsible for 2.5% of global CO2 emissions — to a net-zero one. Under Destination 2050, the European sector’s plan to reduce emissions, it’ll do that by investing in future aircraft and infrastructure, making operations more efficient, and using alternative fuels and carbon-removal technologies.

A report by research groups SEO Amsterdam Economics and the Royal Netherlands Aerospace Centre, commissioned by airline industry bodies, has put the cost of reaching net zero by 2050 at a whopping €820 billion. . . .

Both reports conclude the sector won’t be able to absorb these costs itself. The changes to the EU ETS alone will slash the operating profit of the continent’s six largest point-to-point airlines (Ryanair Holdings Plc, EasyJet Plc, Wizz Air Holdings Plc, Vueling, Eurowings and Transavia) by an estimated 77%. That means ticket prices will have to be higher, which in turn means that demand destruction is inevitable.

“Demand destruction” is a polite way of saying that flights will become unaffordable for many people.

But wait — there’s more (or less):

Time will tell if rising ticket prices dampen that, but the question remains whether growth is even compatible with ambitions for carbon-neutrality.

The answer might be hard to swallow. Decarbonizing flying is hard enough without the extra passengers. A briefing from the Royal Society, for example, outlined that even meeting existing UK aviation demand with biofuels would require about half of the country’s agricultural land.

Fewer flights is, naturally, the easiest way to slice carbon emissions, and so a demand drop would come with its own climate benefits.

“Climate benefits”? Maybe. At the margins. One day. Meanwhile, I wonder how many new coal-powered power stations China will be building in the next few months.

To her credit, the author of the piece (Lara Williams) at least concedes that “there’s something sad about waving goodbye to the low prices that made globetrotting accessible to millions of people.”

Sad.

And the less well-off will be the worst hit. In order to make some sort of gesture toward the additional, well, mobility inequality that will be created by climate policy in this area, a “frequent-flyer levy” has been suggested, Williams reports, by climate-campaign groups:

[This] might help address that inequality and create a new funding stream for decarbonizing the sector — though it’d be extremely difficult to implement.

In other words, the less well-off would still be kept off the planes, but so would others. And more money would be channeled to Big Climate’s rent-seekers. Win–win.

As Williams notes, such a “levy” (perhaps the term “junk fee” would be better) would be “extremely difficult to implement.” There’s also a matter of privacy to consider, but I’m sure many would-be fliers will be excited to receive their flight ration cards.

And the chances that this sort of thing will be confined to the EU and its sad little imitators such as “Brexit Britain”?

I’ll leave that to you to decide.