This paper analytically examines the effects of unilateral greenhouse gas(GHG) regulation on the aviation industry and global GHG emissions. Our results suggest that such regulation may lead to and increased in aviation fees charged by the implementin...
This paper analytically examines the effects of unilateral greenhouse gas(GHG) regulation on the aviation industry and global GHG emissions. Our results suggest that such regulation may lead to and increased in aviation fees charged by the implementing country. The increased fees may weaken the competitiveness of its domestic airlines, resulting in a decline in he connecting flights between the domestic hub and spoke airports, while an increase in the foreign connecting flights. Taken together, these effects might actually lead to an increase in the total (global) GHG emissions, The conditions for this somewhat counter-intuitive result to arise are identified. The analysis suggests the importance of adopting a global approach towards aviation GHG emissions. Finally, the effects of implementing the Kyoto Protocol in the aviation industry are examined.