Aviation Growth and Carbon Emissions: Predictions Through 2050

This paper models the future of carbon emissions from the US domestic airline market through the year 2050. Building off previous research which predicted dire consequences for the future of aviation emissions if left unregulated, this paper utilizes recent data to create more accurate predictions for airline growth using a vector auto-regression. Using data from the Federal Reserve Bank of St. Louis (FRED) and the Energy Information Administration (EIA), I first estimate the relationship between fuel consumption, carbon emissions, US GDP, kerosene price, airfare price, revenue passenger miles (RPM) and load factor from 1983 through 2019. I then use these estimates to inform predictions for the future of fuel consumption and aviation emissions if the industry is left unregulated through 2050, using low and high growth scenarios. I find that if left unregulated, carbon emissions from US aviation would likely grow by 7.5% or 39.2% in my low and high growth scenarios, respectively. I then modeled the effect of a carbon tax on carbon emissions based on kerosene price and GDP growth and found that a tax would need to be drastically high to hold emissions constant. Thus, my model predicts only moderate growth in aviation emissions through the year 2050, but shows that it would be extremely costly to hold emissions at current levels