The End of Cheap Flights in Europe?

Deciding not to fly due to environmental reasons can be painful when you look at the cost of flights online.  I looked into flight costs from London to Munich and they were a third of what I pay for  the train and are three times as quick.  People think you’re crazy for not flying; however this is because they do not include the external costs of that flight.

Europe’s climate market is supposed to factor in these hidden costs i.e. the carbon cost.  Trains are already included in the carbon market, but planes have enjoyed a couple of extra years of unpaid pollution.  In 2012 that is going to change. Planes or more correctly flyers will have to pay for the carbon they emit.

Environmentalists rejoice this move, but will it make much difference to the flying habits of Europeans?

I do not think it will at first.  At current prices it will push a Brussels to New York trip up by € 12 and European return flight up a massive € 1.80 to € 9.  Now these are not breath taking amounts of money; however the price of carbon should hopefully soon begin to rise.

The price of carbon is currently too low due to oversupply of credits which have resulted in a low carbon price.  This is partly due to the recession, but more importantly due to the permits given to each country.   Countries not wanting to disadvantage their local industry overestimated their needed carbon permits.  The EU made the mistake of permitting them.  Of course trading carbon is new and will take some time before it gets established i.e. before the mechanisms are ironed out, all markets are covered and all branches are included.  As mentioned previously the most advantageous way of taxing carbon is personal carbon allowances, but carbon markets are the first step.

The cost of carbon however is not the only threat to cheap flying

The majority of costs incurred to airlines are through the massive amounts of fuel that they need to keep those chunks of metal in the air. The cost of kerosene, which is the main fuel for planes, is dependent on the price of oil. Oil prices only know one direction and that is upwards.   The increasing price of oil and other fossil fuels is forcing us to find alternatives.  Alternatives for electricity production are more numerous and this will increase trains advantage yet further.  The flying industry is clutching at straws such as biofuels which have already been largely discredited as a sustainable energy source.

The inclusion of flying into the European carbon market is only the first step in shifting modern travel to more environmentally forms.  Its initial impact will be too small, but the price of carbon like the price of oil is set to soar.  Flying has been enjoying tax cuts for too long, but that is soon about to change.

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One Response to “The End of Cheap Flights in Europe?”

  1. Billy Clarke says:

    Interesting post & I totally agree.

    I ask myself why they do not charge fuel duty either. Surely that will also have a massive effect on the cost of flying ie increase the cost by 20%!

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