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
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Aviation Environmental
Economics
Agenda
 Economics
 Public Goods
 Externalities
 Remedies
 Environment
 Aviation
 Noise
 Emissions
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Aviation Environmental
Economics
 Economics
 Market Failure
 Public Goods
 Non-Rival Consumption
 Non-Excludable
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Aviation Environmental
Economics
Private Good
Demand
$
unit
demand2
demand1
Quantity
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Aviation Environmental
Economics
Public Good
Demand
$
unit
demand2
demand1
Quantity
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Aviation Environmental
Economics
 Economics
 Market Failure
 Externalities
 Spillovers
The Coase Theorem
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Aviation Environmental
Economics
 Economics
Remedies
 Permit Trading
 Regulation
 Timing
 Benefit/Cost Analysis
 Corporate
 Government
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Aviation Environmental
Economics
 Environment
 Valuation
 Cost Assessment
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Aviation Environmental
Economics
 Aviation
 Noise
 Emissions
 CO2 – Kyoto Protocol
 EMBOSS Model
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Aviation Environmental
Economics
$
Kyoto Target
CO2/year
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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.
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