ABSTRACT
A growing share of total emissions due to air transport need not mean that there is an insuperable problem if climate change policy is handled efficiently. Suppose that a country relies on an emissions trading scheme as its main emissions reduction mechanism. As the air transport grows rapidly, emissions from the industry will exceed the permits allocated to it, and it will be a net buyer of permits. Important example of a market imperfection comes about from the imposition of quantitative limits on behaviour. One case of this is with slot limits which are imposed in many busy airports. When a country or region imposes an emissions reduction policy which works through increasing the price of air transport services, there is a possible effect on its airlines’ competitiveness. The chapter also presents an overview of the key concepts discussed in this book.
