> An appropriately high tax on jet fuel would price the airline industry out of business.
Why would it? Looking around it looks like fuel makes up 30% of airline's expenditures. Disregarding profits, that means $300 of a $1000 plane ticket is for fuel. The current world wide price for jet fuel is $3.76/gal, and burning a gallon of jet fuel produces 9.57kg of co2. One source says carbon needs to be priced at least $100/tonne[3], which is in line with current prices in the EU. With that price, the price of carbon is expected to add $0.96 per gallon, or a 26% increase in fuel costs. However, it would only raise overall expenditures by 7.7%. I doubt that's doubt that's going to bankrupt airlines. Consumers will probably fully absorb the cost.
Airline margins are already razor thin, about 10%, so increasing costs by that much would make them very close to not profitable. Not profitable industries die
Air travel will get more carbon efficient. The whole idea behind a carbon tax is that we start low and hike gradually, giving the market time to respond (rather than flipping a switch and raising ticket prices 7% overnight). Of course, the longer we wait the faster we have to hike prices (the timeline compresses), so it's hard to feel bad for industries that have resisted carbon taxes for the last decades. Moreover, if climate science is correct, the consequences of doing nothing far outweigh the loss of cheap air travel (of course, that's just a worst-case scenario; we absolutely don't have to choose between those two outcomes).
You realize that companies can raise prices? That's wha I meant by "Consumers will probably fully absorb the cost" last comment. Supermarket margins are even thinner than 10%, yet they aren't going broke during this inflation spree.
Economics 101: raising prices reduces demand. If airlines raise prices less people will fly — demand for flights is fairly elastic — further eating margins. Grocery stores sell food, the ultimate inelastic item.
Wouldn't regulating the industry put it out of business?
Taxing the fuel allows the industry to evolved towards an optimal solution. Regulating it does not.
Just look at how government regulation of the production, distribution, and price of infant formula resulted in mass shortages, as the manufacturers are unable to adapt.
Taxing carbon would impact airlines much less than you might think.
A carbon tax high enough to basically kill off all ICE cars and fossil fuel power plants would modestly impact airfare costs. Airlines are convenient and take very direct routes while getting extreme fuel efficiency per passenger.
Pandemic saw reduced passengers but it also saw vast reductions in flying down to as low as 9% of normal operations. So it had a smaller impact on averages than you might assume.
In normal operations they are about 100 passenger miles per gallon of fuel and that’s straight line paths with 80% full aircraft.
The only global number was: “In 2018, CO₂ emissions totalled 747 million tonnes for passenger transport, for 8.5 trillion revenue passenger kilometres (RPK), giving an average of 88 gram CO₂ per RPK.[2] A 88 gCO₂/km represents 28 g of fuel per km, or a 3.5 L/100 km (67 mpg‑US) fuel consumption.”
Anyway that’s not measuring direct fuel consumption in flight but estimating fuel used by the industry to transport passengers. Sort of like including fuel transportation costs to gas stations as part of a cars fuel efficiency. It’s also using US numbers to do so which likely overstate fuel consumption.
It's right on the wikipedia page, under "Operations":
> In 2018, the US airlines had a fuel consumption of 58 mpg‑US (4.06 L/100 km) per revenue passenger for domestic flights
We should take a system-wide view. The relative efficiency of any particular plane is irrelevant if the entire system depends on other, wasteful aspects. Let's consider the energy required to run an airport, including the infrastructure leading to the airport.
Why would it? Looking around it looks like fuel makes up 30% of airline's expenditures. Disregarding profits, that means $300 of a $1000 plane ticket is for fuel. The current world wide price for jet fuel is $3.76/gal, and burning a gallon of jet fuel produces 9.57kg of co2. One source says carbon needs to be priced at least $100/tonne[3], which is in line with current prices in the EU. With that price, the price of carbon is expected to add $0.96 per gallon, or a 26% increase in fuel costs. However, it would only raise overall expenditures by 7.7%. I doubt that's doubt that's going to bankrupt airlines. Consumers will probably fully absorb the cost.
[1] https://www.iata.org/en/publications/economics/fuel-monitor/
[2] https://impactful.ninja/the-carbon-footprint-of-aviation-jet...
[3] https://www.reuters.com/business/cop/carbon-needs-cost-least...