The 75 per cent solution: tourism (repost from 2007)

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John Quiggin
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We won’t be travelling anywhere much  by air for some time to come, so this is a good time to reconsider our whole approach. I thought I’d start by digging out this post from 2007.

A lot of discussion of climate change is based on the implicit or explicit premise that, since we use energy in everything we do, and most energy is derived from carbon-based fuels, large reductions in CO2 emissions will require radical changes in the way we live. Some people welcome this prospect, but most do not.

Having looked at this problem in various different ways, I’m convinced that this premise is wrong, and that quite modest changes, many of which would follow more or less directly from the imposition of a suitable cost on CO2 emissions, could achieve large reductions in emissions. I’ve argued this at the macro level, based on demand elasticity estimates, and also at the micro level in terms of road transport. I thought it might be a good idea to attempt more micro estimates and, while I was visiting Cairns last week, my thoughts naturally turned to long-distance tourism.

So, this is hoped to be the first in a series where I consider the question: Could we reduce emissions in a given sector of the economy by 75 per cent in a way that wouldn’t substantially change the services delivered by that sector?

A few ground rules for the exercise before I start – there may be more as I go along.

1. I’m looking at changes over a time span of a few decades, enough that existing capital stocks are turned over. So I assume that price incentives are enough to encourage a shift to the most fuel-efficient technologies currently in use, but I don’t make any big assumptions about future innovations induced by higher prices. To take the road transport example, I can assume replacement of Hummers by Prius (BTW, what is the plural of Prius?) but I don’t invoke hydrogen fuel cells or similar exotica.

2. I’ll take it as given that the services enjoyed in the late 20th century qualify as not involving radical changes. In the case of road transport again, I might assume a return to the vehicle occupancy rates of 1990 (about 10 per cent higher than today).

3. I’m looking at reductions in emissions to deliver the existing volume of services, not taking account of growth in demand, which needs separate assessment. It’s just an exercise in arithmetic to combine the two. For example, if you predict a 60 per cent increase in demand under business as usual, then a 75 per cent reduction brings total emissions back to 40 per cent (0.25*160) of the original level, which is about what is probably needed to stabilise climate.

With these ground rules, the case of long-distance tourism turns out to be surprisingly easy, especially thanks to this piece by Justin Rowlatt who’s already looked at the question. The current airline fleet has a fuel efficiency of around 4.8 litres/passenger/100 km.[1] Replacing this fleet with the models now being introduced, the Boeing 787 and Airbus A380, will reduce this by about 50 per cent . This is going to happen anyway, and the only role for higher prices is to accelerate the scrapping of the older planes in the existing fleet.

To get a further 50 per cent reduction is even easier (this was the idea that got me started). All you need to is double the length of the average holiday and halve the frequency. I don’t have good numbers, but it’s clear that this would just take us back to the situation that prevailed a few decades ago when air travel was more expensive. Going back a bit further, travel was so expensive that young Australians typically planned a single trip to England that was to last a year (and, as far as such travel was concerned, a lifetime).

Two reductions of 50 per cent combine to give 75 per cent, so it’s all done. But that was so easy, it seemed worth trying for more. What would be involved in reducing emissions by 85 per cent, from 25 per cent of the original level to 15 per cent? That requires a further 40 per cent.

According to the International Air Transport Association, cited by Rowlatt, there’s an easy (in terms of impact on travellers, at any rate) 12 per cent to be gained from improved air traffic control. You could get another 12 per cent (at least) by packing more economy seats into planes (the A380 can take 800, at which Rowlatt estimates fuel consumption of 1.9 l/100 pkm. For the final leg, we’ll need the first actual cut, a 25 per cent reduction in the number of long-distance trips, to be replaced by local holidays with extra spending money from the saving in travel costs.

So, to sum up, let’s look at the impact of an 85 per cent reduction in emissions, achieved as outlined above. Suppose the baseline is eight one-week long-distance holidays over some given period. After the 85 per cent reduction we’d have three two-week long-distance holidays and two one-week local holidays instead. On the plane, we’d be packed in about as tight as at present, maybe a bit less so, and of course there will be lots of nice new features like free WiFi to keep us entertained.

Even with a hefty surcharge on emissions, total expenditure on airfares would fall, so there would be more money to spend on the actual holiday, not to mention the flow of revenue to governments that could be returned in tax cuts or improved services.

No doubt all this would take some adjustment. But The End Of Civilisation As We Know It, it’s not.

fn1. Because airplane emissions are injected directly into the upper atmosphere, where they do more damage, this figure can’t be compared directly with fuel efficiency measures for cars. Roughly speaking, you need to double the airplane emissions figures before doing a comparison. Of course, that doesn’t affect the calculations that follow which are all about proportional reductions.