A significant volume of literature already exists concerning the inclusion of aviation in the EU-ETS. Most of the research laid its focus on specific industry levels such as the individual airline, the aviation industry in general or macroeconomic aspects. In this context, these studies tried to anticipate market reactions triggered by the EU-ETS by analyzing specific issues such as the financial impact on airlines, changes in competitive behavior or implications for the overall industry development. As a consequence, the existing studies took only a limited market view and made assumptions about expected developments in specific fields of the aviation industry. However, at the time of writing this thesis, conclusions about the scope of impact could hardly be drawn from existing impact assessments because of the wide range of issues that exceeded the scope of most impact studies. Hence, a broader research approach is needed which takes different analytical perspectives to describe the scope of impact of the EU-ETS and depict potential effects for the aviation industry.

Master's Thesis from the year 2013 in the subject Business economics - Operations Research, grade: 2,3, University of Cologne, language: English, abstract: A significant volume of literature already exists concerning the inclusion of aviation in the EU-ETS. Most of the research laid its focus on specific industry levels such as the individual airline, the aviation industry in general or macroeconomic aspects. In this context, these studies tried to anticipate market reactions triggered by the EU-ETS by analyzing specific issues such as the financial impact on airlines, changes in competitive behavior or implications for the overall industry development. As a consequence, the existing studies took only a limited market view and made assumptions about expected developments in specific fields of the aviation industry. However, at the time of writing this thesis, conclusions about the scope of impact could hardly be drawn from existing impact assessments because of the wide range of issues that exceeded the scope of most impact studies. Hence, a broader research approach is needed which takes different analytical perspectives to describe the scope of impact of the EU-ETS and depict potential effects for the aviation industry.

Introduced in January 2005, the EU Emissions Trading Scheme (ETS) is the worlds first large-scale greenhouse-gas trading programme. The scheme covers all 25 EU Member States and aims to help member states achieve compliance with their commitments under the Kyoto Protocol. The EU Environment Council in December 2005 agreed that the inclusion of the aviation sector in the ETS was the best way forward on aviation emissions compared to other policy initiatives, and urged the Commission to bring forward a legislative proposal by the end of 2006. The Committees report considers a range of issues including: current and projected levels of air traffic and its environmental effects; policy sustainability on environmental and economic grounds; determining geographical scope and the limits for inclusion of flights and airlines, allocation methods and trading entities; the impact on air fares and air freight charges; and alternative policy options including fuel taxes; carbon offset schemes and investment in new technologies.

In February 2009, the European Union Directive 2008/101/EC was approved, clarifying how emissions from the aviation sector will be included in the European Union Emissions Trading Scheme (EU ETS). According to this directive, starting from 1st January 2012, all aircraft operators (nearly 4000), flying to or from any airport in EU territory will be included in EU ETS. This dissertation aims to provide qualitative and quantitative information about the consequences for aviation industry to be included in European Union Emissions Trading Scheme (EU ETS) for the first trading period (2012). In this study, with empirical data, a scenario approach has also been used to quantify the potential 2012 CO2 emissions from aviation industry. So that, a scale of the possible total financial burden that aviation sector will be under for their CO2 emissions in the first trading period of EU ETS (2012) is calculated. According to the calculations, 2012 CO2 emissions of the flights covered under EU ETS can vary from 231.242 million tonne of CO2 to 277.036 million tonne of CO2 and the cost of 2012 CO2 emissions for the aviation sector can be between 967.47 million Euro and 2.54 billion Euro.

We estimate the economic impacts on US airlines that may arise from the inclusion of aviation in the European Union Emissions Trading Scheme from 2012 to 2020. We find that the Scheme would only have a small impact on US airlines and emissions, and that aviation operations would continue to grow. If carriers pass on all additional costs, including the opportunity costs associated with free allowances, to consumers, profits for US carriers will increase. Windfall gains from free allowances may be substantial because, under current allocation rules, airlines would only have to purchase about a third of the required allowances. However, an increase in the proportion of allowances auctioned would reduce windfall gains and profits for US airlines may decline.

This book provides a concise and convenient compilation of the EU directives and decisions concerning the inclusion of aviation into the existing greenhouse gas emission allowances trading scheme (ETS). An introduction has been added to set out the European and international context. Furthermore, some practical templates for reporting annual emissions and tonne-km data are included, as well as a list of useful contacts. The 2003 ETS Directive introduced emission trading for energy-intensive installations on a European level. Subsequently, the 2004 Linking Directive made further flexible mechanisms of the Kyoto Protocol available. In 2008, the Aviation Directive took EU ETS to the next level, as it included aviation in the scheme. This directive has been accompanied by the 2007 Monitoring and Reporting Guidelines (MRG), revised on April 16, 2009, which provides detailed guidance regarding determination of emissions and tonne-km data and streamlining the compliance cycle consisting of monitoring, reporting, and verification (MRV) duties. The book is a timely and welcome addition to the literature in the field and should be of interest to anyone dealing with aviation and environmental law.