The potential impacts of emission trading...

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The aviation industry has some emission policy initiatives in place to reduce its carbon emissions. European Union (EU) has implemented the Emissions Trading Scheme (ETS) since 2012 for intra-European commercial flights. In response, airlines started to explore various mean, including alternative jet fuels. However, it is not clear how similar policy schemes would affect domestic carbon emissions if implemented in the United States. This paper integrates U.S. airlines operations optimization and multi-feedstock biojet fuels life cycle assessment model to simulate decisions of bio-jet fuel and commercial aviation industry responding to an emission policy similar to ETS. A detailed account of the two models is presented. We conduct a Monte-Carlo simulation on two scenarios of domestic emission schemes to investigate the adoption of biojet fuels and its impacts on carbon emissions. Our model indicates that implementing an EU ETS-type emission policy for U.S. airlines could achieve the 2050 emission reduction target through a combined effect of biojet fuels consumption and lower passenger demand. A non-parametric sensitivity analysis suggests that the carbon-price growth rate is the most significant factor in affecting the fleet-level carbon emissions.

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