The social costs and benefits of global aviation: an appraisal method and its application to the evaluation of political measures

• Applicant: Dr. Florian Allroggen
• Subject Area: Traffic and Transport Systems, Intelligent and Automated Traffic
• Term: from 2014 to 2016
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 258837882

Air transport is a means to overcome distances. Consequently, its availability enables interaction between human beings or institutions at different locations. Companies as well as human beings may benefit from these interaction potentials since they may gain in terms of additional profits on new sales markets or in terms of utility while visiting far-away countries. However, resources such as labor, capital or the environment are used to produce transport. Thus, transport causes internal costs, which airlines and/or passengers fully bear (e.g. ticket prices or fuel costs), and external costs such as climate costs or noise costs, which are usually not fully internalized in the absence of governmental market interventions.In the past years, the external costs of air transport have been discussed increasingly. The public debate about aircraft noise at Frankfurt Airport or the debate about the inclusion of aviation into the EU-emission trading scheme (EU-ETS) are prime examples for the rising public interest. This research project sets out to investigate the full social costs and benefits of global aviation. Thus, it specifically provides for a basis to investigate the cost and benefits of political means to internalize the external costs of aviation. For this purpose, an appraisal method is derived from the general cost-benefit-framework in which cost and benefits are weighed interpersonally. Although the resulting methodology will be specifically designed to evaluate the costs and benefits of aviation, it may be modified and applied for other transport modes or even for other industries. In order to assess the cost and benefits of global aviation, the relevant cost- and benefit-categories have to be identified. For each category, an appraisal method is constructed - preferably based on existing approaches. With the help of the resulting methodology, the cost and benefits of global aviation are assessed. In addition, equilibrium models are applied to model impacts of political interventions into aviation markets. From these results, the social cost and benefits of political market interventions such as the introduction of a global aviation emission trading scheme are calculated.

• DFG Programme: Research Fellowships
• International Connection: USA
• Host: Professor Steven R.H. Barrett, Ph.D.