1. Aviation Environmental Economics
Dr. Tim Russo
Department of Economics
Industrial College of the Armed Forces
National Defense University
Fort McNair, Washington, DC
Formerly an Economist for FAA
Formerly a USAF KC-135 Navigator

2. Aviation Environmental Economics
Agenda
Economics
Public Goods
Externalities
Remedies
Environment
Aviation
Noise
Emissions

3. Aviation Environmental Economics
Market Failure
Public Goods
Non-Rival Consumption
Non-Excludable

4. Aviation Environmental Economics
Private Good Demand $
unit
demand2
demand1
Quantity

5. Aviation Environmental Economics
Public Good Demand $
unit
demand2
demand1
Quantity

6. Aviation Environmental Economics
Market Failure
Externalities
Spillovers
The Coase Theorem

7. Aviation Environmental Economics
Remedies
Permit Trading
Regulation
Timing
Benefit/Cost Analysis
Corporate
Government

8. Aviation Environmental Economics
Valuation
Cost Assessment

9. Aviation Environmental Economics
Noise
Emissions
CO2 – Kyoto Protocol
EMBOSS Model

10. Aviation Environmental Economics$
CO2/year
Kyoto Target

11. Aviation Environmental Economics
Analysis by the Forecast and Economic Support Group (FESG) of CAEP/ICAO shows that if emissions by aviation are reduced at lowest cost, the greatest part (about 70%) of the emissions reduction will be the result of a reduction in aircraft kilometres and revenue tonne kilometres (RTKs).
Technology improvement from a shift towards using more fuel-efficient aircraft accounts for the balance (around 30%).
From Aviation and Climate Change, 2002.