Emission Pricing and Capital Replacement: Evidence from Aircraft Fleet Renewal

Arbeitspapier

This paper empirically studies how emission pricing affects capital replacement and adoption of embodied environmental technology. A pricing policy encourages firms to accelerate retirement of old capital assets and replace them with newer more efficient assets, but this may crowd out replacements outside the policy. Using asset-level data from the airline industry, I show that the inclusion of intra-European aviation in the European Union Emissions Trading Scheme decreased the retirement age of 'regulated' short-haul aircraft by 2.8 years (14 percent), while the retirement age of 'unregulated' long-haul aircraft increased by 2 years (11 percent). Accounting for the higher emissions of long-haul operations, the net environmental benefit of induced fleet renewal is virtually zero and may even be negative. This demonstrates that regulators must consider the impacts beyond regulated capital when environmental policies are incomplete.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Tinbergen Institute Discussion Paper ; No. TI 2022-060/VIII

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Technological Change: Choices and Consequences; Diffusion Processes ; Air Transportation ; Nonrenewable Resources and Conservation: General ; Climate; Natural Disasters and Their Management; Global Warming ; Environmental Economics: Technological Innovation ; Environmental Economics: Government Policy
• Thema: Environmental policy ; emission pricing ; carbon leakage ; capital replacement ; technology adoption ; airline industry

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): de Jong, Gerben
• Ereignis: Veröffentlichung
• (wer): Tinbergen Institute
• (wo): Amsterdam and Rotterdam
• (wann): 2022

Weitere Informationen

• Handle: http://hdl.handle.net/10419/265836
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ