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http://dx.doi.org/10.5762/KAIS.2019.20.3.576

The Effect of Emission Trading System on Air Transport Industry and Airlines' Strategic Responses in Korea  

Yoon, Han-Young (Division of Comprehensive Aviation Studies, Hanseo University)
Lim, Jong-Bin (Graduate School of Global Convergence, Korea National University of Transportation)
Park, Kang-Sung (Graduate School of Global Convergence, Korea National University of Transportation)
Park, Wan-Kyu (Graduate School of Global Convergence, Korea National University of Transportation)
Park, Sung-Sik (Department of Flight Operation, Korea National University of Transportation)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.20, no.3, 2019 , pp. 576-586 More about this Journal
Abstract
Airlines need to reduce their greenhouse gas (GHG) emissions because of the Paris Climate Agreement and ICAO CORSIA. This examined the degree of the strategic responses to which the airlines have made and the problems in the emission trading system (ETS). According to the analysis, the total amount of emission all the airlines made in the last three years was 116% more than the emission allowance imposed by the central government resulting in 10.7 billion KRW additional emission expense. Airlines would also face an increased carbon cost due to the implementation of ICAO CORSIA by purchasing an additional paid-in emission allowance in international routes. Although it is effective to retire the old aircraft early and induce the brand-new fuel-efficient aircraft to reduce GHG emissions, it is impractical in the short-term due to the tremendous amount of investment. To reduce the emission, airlines are washing engines, using ultra-light ULD and carts in the cabin, increasing the use of flaps and preventing the use of APU. On the other hand, these are very limited measures for reducing emissions according to the ICAO's mandatory emission target.
Keywords
Paris Agreement; ETS; Emission Allowance; Strategic Response; ICAO CORSIA;
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