What happens to traffic growth if emissions are capped? December 2006

Air transport accounts for about 2–3% of total carbon dioxide emissions caused by human activities and was responsible for about 4–6% of all global warming effects. This difference in shares is because a 'radiative forcing impact' factor (see note 1, see page four) of between 1.9 and 3.5 has to be applied to airline emissions because much of it is deposited at high altitude.

A key issue facing the industry is that increases in airline traffic of 5–6% per year — the consensus forecast — are not likely to be offset by expected improvements in fuel (and therefore carbon) efficiency. These average out at about 1–2% per year and result from improvements in airframe, systems and engine technology, higher load factors and better operating techniques.

Results of modelling the fuel efficiency of the world jet fleet

The problem is that by 2050, if other industries cut their emissions significantly, air transport could be one of the biggest contributors (around 15%) to climate change. Emissions from international flights were excluded from the Kyoto Protocol, which was signed in 1997 and came into force in 2004 (domestic flights were included), (see note 2). However, if other sectors such as power generation, manufacturing, agriculture, households and road users are going to be forced to go through a painful and expensive process of 'de–carbonising' then, if air transport is permitted to increase its emissions, it is going to attract hostile criticism. In order to examine possible trends in the emissions at a global level from the growth of air transport to 2025, a model was developed by Andy Hofton, an independent consultant to investigate the effects of various growth assumptions. The starting point was the world fleet of 17,330 jet aircraft — passenger aircraft and freighters -- recorded at the end of 2005 (see note 3). An underlying assumption was made that the growth rates and retirement rates would be steady (e.g. business cycle effects were ignored). It was initially assumed that the average age of the world fleet was 12 years and that aircraft were retired at age 24. This approximates to an average annual retirement rate of 2% of the total fleet. Retirees were considered to be the most fuel inefficient members of the fleet.

It was also assumed initially that the basic fuel efficiency of aircraft types being acquired, both to replace older types and to add capacity for growth, had the best available fuel efficiencies. This corresponded to an improvement of 1% per year due to aircraft efficiency alone (this is close to the rate that new aircraft have historically achieved). This means that new deliveries would be 24% more efficient than those individuals being retired and 12% more fuel efficient than the fleet average. The assumption in the model was that the only changes to the efficiency of the fleet were due to the progressive introduction of new aircraft.

The results of this analysis are shown in the tables below and cover two time periods 2005–2015 and 2005–2025. They cover three possible growth scenarios, corresponding to average annual growth rates of 3%, 5% and 7%. A growth rate of 5% is 'most likely' if no constraints are placed on expansion. A 3% growth rate would correspond to a pessimistic scenario and 7% to an optimistic scenario.

Table 1: Baseline Case -- results based on an assumption that new aircraft being delivered for replacement and growth have a fuel efficiency that corresponds to a 1% improvement per year over earlier designs

This 'baseline case' (see table, opposite) highlights the outcome under a 'most likely' scenario of traffic increasing by 5% per year, and aerospace technology producing its historic rate of improvement in fuel efficiency — about 1% per year. By 2015, traffic will have grown by 63% and emissions 47%. By 2025, traffic will have grown by 165% and emissions by 117%. Using the model, it is possible to explore another issue: what growth factor could be accommodated if a cap on emissions was imposed? This was investigated using the above assumptions — the key assumption being that the only improvements available were from new aerospace technologies and not from higher load factors, better aircraft utilisation or modifications to in–service aircraft. Under the 'baseline case' of Table 1, improvements due to aerospace technology of 1% alone would only allow traffic growth of 0.6% per year.

The basic evaluation was repeated using a much more optimistic assumption. This was that aerospace technology improved more rapidly and that new aircraft being delivered returned an improvement in fuel efficiency equivalent to 2% per year.

Table 2: More optimistic case --results based on an assumption that new aircraft being delivered for replacement and growth have a fuel efficiency that corresponds to a 2% improvement per year over earlier designs

The above case might correspond to a situation under which the introduction of new aircraft technologies for new deliveries are accelerated as a result of the incentive of high fuel prices. It does not assume that the retirement of older aircraft is brought forward. In the Table 2 case, emissions grow at very approximately half the rate of traffic, but will still have risen by 85% by 2025 if traffic grows at a 'most likely' rate of 5% per year. The question: 'what growth factor could be accommodated with no change in emissions?' was again evaluated. Under the case shown in Table 2, improvements due to aerospace technology of 2% alone would only allow traffic growth of 1.1% per year.

In order to examine the upper limits of improvements available from new aerospace technology, the case of a 3% annual gain was evaluated and the results are shown in Table 3 below.

Table 3: Very optimistic case -- results based on an assumption that new aircraft being delivered for replacement and growth have a fuel efficiency that corresponds to a 3% improvement per year over earlier designs

This case (see table on page four) reduces the increase in emissions to 58% at the end of the period (2025) under the most likely scenario.

The question: 'what growth factor could be accommodated with no change in emissions?' results in an answer of 1.5% per year.

In reality, deliveries over the next several years will be of types now in production. Deliveries of the 787 will begin in 2008, but will only become significant after that. A380 deliveries will not begin in volume until after 2010, the A350 will not arrive for several more years. Any new A320/737 replacement is not likely to influence deliveries before 2014. In the next case (Table 4 below), it is assumed that 'super fuel–efficient types' demonstrating a 2% per year improvement over the types they replace become the norm for deliveries from 2013.

Table 4: Rapid aerospace development case -- results based on an assumption that up to 2012 new aircraft being delivered have a fuel efficiency that corresponds to a 1% improvement per year over earlier designs. From and including 2013 the rate of improvement is 2%.

As would be expected, the beneficial effect is later in the time period. Under the most likely growth scenario of 5% per year, traffic has again risen by 165% by 2025, but emissions have grown by 96%. This case might correspond to a more rapid pace of aerospace developments, possibly following a shortage of fuel, or the availability of government incentives to the aerospace industry.

A final case was evaluated. This combined the more rapid introduction of aerospace developments plus an accelerated rate of retirement of older aircraft — from 2% per year to 4% per year from 2010. The results are shown in the table below.

Table 5: Rapid aerospace development case - as for Table 4, but with accelerated rate of retirement from 2010. Even under this case, with the rate of traffic growth of 5% per year, emissions will have grown by 39% by 2015 and 77% by 2025.

The tables confirm that emissions from airlines raise a number of important issues — deliveries of new fuel–efficient aircraft would not alleviate the pain of a cap on emissions. Growth rates would have to be slashed to 1- 2% per year. An early casualty could be ambitions for 5% growth set out for the UK in the 2003 'Future of Aviation' White Paper. They cannot be reconciled with the Government’s objectives of reducing overall carbon emissions by 60% by 2050.