Airline emissions of carbon dioxide in the European trading scheme

Carbon dioxide emissions from international aviation are small but growing much faster than other greenhouse gas emissions. To date, aviation emissions have been excluded from climate policy, inter-alia because it is an international industry regulated by consensus. Recently, however, the European Commission has announced that aviation emissions will be part of the European Trading System (ETS)
for carbon dioxide. Specifically, permits will be needed for all emissions from flights from and to an airport in the European Union.1 This note investigates the implications for emissions, for travel patterns, and for the financial position of airlines.