Stage 1 of the high speed rail study essentially ignores the issue of CO2 emissions. But pricing CO2 emissions and rising fuel costs are perhaps the most plausible economic drivers of HSR, so even at this stage it’s worth doing some rough analysis to see what firstly emissions trading, and secondly higher jet fuel prices, might do to fuel costs.
Airliner emissions impact the climate in several ways. The first, the CO2 in their exhaust, is easy to calculate from their fuel burn and has the same impact as any other release of CO2 into the atmosphere. However, the contrails and other non-CO2 greenhouse gases also produce a complex mix of effects, which are not as well quantified. this report quotes one study as estimating that, on average, the effects of aviation emissions on climate are about 1.9 times that as would result from the CO2 alone. An earlier estimate from the IPCC used a figure of 2.7; however, a major area of uncertainty (at least from what I’ve been able to read so far) is the warming effects of cirrus clouds formation induced from contrails. One paper linked from Wikipedia suggests that cirrus cloud formation may have a considerable impact, possibly even as much as all the other impacts combined. A further complication is that the estimates in the papers examine the cumulative impact of aviation to date, rather than the incremental impact of an additional flight, which is presumably a more appropriate basis for applying a “carbon price” (actually an emissions price).
But somehwere along the line, a multiplier will be applied to emissions from aviation; and for the purposes of this exercise, we’ll set lower and upper bounds for this at 1 and 4 respectively.
Jet fuel is, by international treaty, untaxed. It appears that the difference between the oil price and the jet fuel price is about 40USD per barrel. As a very rough approximation, then, we’ll assume that that refining margin is constant, and thus the jet fuel price will be the oil price + 40USD.
Aircraft are getting more fuel efficient over time. Leaving out routing, scheduling, and passenger loading improvements, from this document it seems that the specific fuel consumption of aircraft has been going down by about 0.7% per year. As a baseline, I’ll assume that efficiency continues to improve at this rate; while we may reach the limits on engines at some point, aircraft manufacturers also have the opportunity to move away from the “tube with wings” design to something more efficient.
Anyway, I’ve plugged all these into an spreadsheet and estimated the fuel and carbon costs for the Melbourne-Sydney air route in a number of scenarios. The results are summarized in the graph below:
The first entry is the current fuel cost estimate. The second is what would happen with an initial $23/tonne carbon tax, using a 1.9 multiplier for the non-CO2 effects. As you can see, it doesn’t make a whole lot of difference.
The next scenario is for 2020, with oil prices at $150 per barrel and the carbon price at $50. Even so, the total fuel+carbon costs for the flight remain under $50.
Then, we look at four scenarios for 2036, which is a year that crops up repeatedly in the HSR study. All four scenarios assume an oil price of $200 per barrel.
The first is a baseline scenario, with a carbon price of $100 per tonne (taken as a plausible number from the 2008 Garnaut Review scenarios) and a radiative forcing of 1.9. The fuel+carbon price has roughly doubled from 2011, to around $56. The second scenario has a forcing of 4, which pushes the cost up to just under $70. The third scenario involves a $150 carbon price – well above the Garnaut estimate – and a multiplier of 4, working out to around $80.
However, if the carbon price and multiplier really are that high, the airlines would almost certainly change their practices. Most notably, they could fly lower, which might increase fuel burn a little but would essentially eliminate the effects of contrails and cirrus cloud formation. To reduce their fuel burn, they could fly a little slower. Over the Melbourne-Sydney route, even flying turboprops would probably only add around 10-15 minutes to the flight. So, for scenario d, I assumed an unchanged fuel burn but a multiplier of only 1.5, which brings us back to similar costs as scenario a).
My conclusions from this are straightforward – you’re going to have to assume extremely high oil and carbon prices (and, remember, increasing one tends to decrease the other) if you expect these factors to make HSR cost-competitive with aircraft on the east coast air routes. Even then, changes to flight practices and known technology could eliminate much of the cost impact.
AIUI, jets use a lot of fuel simply waiting on the tarmac. Some of this may be needed to test the engine and other emergency systems, but one can easily imagine electric vehicles dragging them into position.
I also understand that if the jets fligh higher, this also reduces fuel (there being less drag and turbulence).
“Even then, changes to flight practices and known technology could eliminate much of the cost impact.”
Airlines are in the business of making money.
Do you seriously think that they currently burn fuel unnecessarily, run inefficient planes (fuel per passenger mile), or fly them at non-optimal altitudes?
Speculative cost burdens based on flight path will make them move things about, with the burden of a huge amount of infrastructure and useless government.
Duncan, an efficient plane and flight practice in 2011 is not the same thing as an efficient plane and flight practice under different rules in 2036.
If airlines know that contrails will cost them a fortune in emissions pricing, they will fly at lower altitudes to avoid them if they can minimize their costs that way. Furthermore, in the long term they can choose aircraft optimized for that flight profile.
For instance, an alternative they might consider on a short-haul route like Sydney-Melbourne is turboprops. Airbus could whip up an airline version of the A400M tomorrow (or, at least, within a few years).
A fact not widely known, and yet one of the great crimes against good tax (and climate change) policy. I was under the impression jet fuel for domestic routes was taxed (although far more lightly that road transport fuels) and it was only jet fuel on international routes that was entirely tax free.
Hands up who would be willing to pay more for next winter’s European holiday? Anyone? Anyone? What about the next month’s academic junket (sorry “conference”) in Mexico? Anyone?
Nope, didn’t think so…
Lorax, you might be right.
I think that inter-EU aviation is either already in, or likely to be included in the next round of the EU ETS. Not sure if they’re applying a multiplier though.
Hands up who would be willing to pay more for next winter’s European holiday? Anyone? Anyone? What about the next month’s academic junket (sorry “conference”) in Mexico? Anyone?
Nope, didn’t think so…
Well since I already go to the trouble to purchase offsets for flights, I can say yes, me please. And I’m neither a martyr nor Robinson Crusoe there.
“QANTAS will be forced to lift international airfares to Europe from next January after being slapped with a penalty by the European Union because Australia does not have a price on greenhouse gas emissions.”
OBR, yet another reason for Australia to adopt a carbon price
Robert,
did you read my last para ?
“Speculative cost burdens based on flight path will make them move things about, with the burden of a huge amount of infrastructure and useless government.”
wilful @ 6: When I fly domestically I buy offsets as well. Its like $1.73. I don’t for a moment imagine that it offsets the damage it does to the atmosphere, but its all that’s on offer.
Given that a return flight to Europe pumps more CO2 into the air than a typical car does over an entire year (not to mention the warming effect of contrails) its somewhat surprising that I can buy an offset for a pittance. A year’s worth of road fuel taxes is probably an order of magnitude greater, even though the flight has a greater warming effect.
But suggest that air travel is massively underpriced in terms of the environmental damage it causes, and you are typically met with abuse, denial, or the topic is completely avoided (as it was by Robert above).
No-one wants to confront this issue. No-one.
Ran some figures on air and car travel between Brisbane and Sydney:
For air:
Distance=728 km
Litres/passenger km=0.043 (Airbus A320)
Tax @10/tonne=$0.85
For state of art diesel car”
Distance=925 km (Pacific Highway)
No. Passengers=4
Litres/100km=3.0
Tonnes CO2/passenger for trip=0.019
Tax @10/tonne=$0.19
Even if we get to $100/tonne CO2 it is hard to see HSR being justified without serious subsidies. Better to concentrate on improving existing systems. (The Qld tilt train operates at up to 160 km/hr)
JohnD at first glance your figures demonstrate that air travel is more costly than car travel when we compare tax@$10 per tonne. But how many cars travelling on the Pacific Highway have 4 passsengers?
How do your calculations prove that high speed rail is not cost effective?
Surely high speed rail will be attractive when freight companies can make large savings moving containers from the Melbourne to Sydney or Brisbane freight terminals before being offloaded for their suburban journeys. That passengers can be shifted will be a bonus but not a raison d’etre for building the high speed rail link. NB the HSR will need new dedicated realigned track fenced to stop animals straying onto it.
Lorax, I buy my offsets from Greenfleet. I’m not suggesting they’re the gold standard, but they’re a lot more than $1.73. You need to do more research. Greenfleet estimate that one long distance flight is 1.9 tonnes of carbon, 5 tonnes of total warming impact. 19 trees, equalling $63. That’s my offset.
I don’t see you getting any abuse or denial, and I’m sure Robert will address your points if he feels he needs to. Stop being churlish.
Billie @12, I don’t think there is any intention that a high speed freight rail service would carry freight. The point of high speed rail is shorter travel time, for passenger convenience. Most freight doesn’t need to get from Sydney to Melbourne in three hours. Overnight is sufficient. Some of the high speed rail skeptics think the money would be better spent building a more effective low speed freight rail network.
Lorax, I think the question of whether people are prepared to pay more for air travel is is really about whether people are prepared to pay more for anything to reduce the impact of greenhouse gas emissions.
If you believe the current polls, the answer is “no”. But we’ll see what happens on July 1 2012, when most of the sound and fury will promptly disappear and we’ll discover that we can, indeed, cope with the cost of doing something about climate change without THIS TOXIC TAX DESTROYING AUSTRALIAN INDUSTRY or whatever wildly over the top claim Tony Abbott is making this week.
Billie @12: The figures @12 are to play with. That is why I quoted the figures for a tax of $10/tonne to simplify your arithmetic.
Even at $100/tonne the tax only adds $8.50 to the air fare. The point I am making is that there are plenty of much more cost effective ways of reducing emissions at this point in the clean-up process. HSR should only proceed if the investment can be justified.
@8 – Robert, I disagree. It is actually a good reason to say “See you in court”. Aren’t we supposed to be able to rely on International bodies like the WTO to adjudicate whether this sort of protectionism is allowable?
wilful @ 6: The $1.73 was for a 90 minute domestic flight in Australia. The same distance by car would use at least 40 litres in a very efficient car. The fuel excise is 38c/L, so I’m paying $15.20 in taxes by car.
Compare that to the recent bleating from the aviation industry about the carbon tax:
I’m guessing that means the current excise is a few cents a litre, or roughly one-tenth the excise for road fuels.
This not really about air travel, it is about travel.
Many of the people who opposed the NBN also oppose the high speed rail services.
Interesting:
Both projects will assist in the reduction of CO2 emissions, perhaps they should be honest and join toxic tony in his campaign and stop offering non sufficing “solutions”.
Huggy
A consistent theme of much that i write on LP is that climate action should start with the more cost efficient actions in terms of cost per tonne CO2 abatement. The point I am making @16 is that high speed rail is most unlikely to be one of these cost efficient actions.
By contrast, NBN will reduce emissions by eliminating the need for a lot of travel. Conroy should have included an emission reduction benefit in the case for the NBN.
The pricing and tax payable on international jet fuel seems to be one of the more contentious issues facing airlines and governments. Middle eastern airlines flying into Australia must be paying an embarrassingly small price for jet fuel in their home countries if domestic fuel prices such as 10c/ltre in Saudi Arabia apply. It would be interesting to know what effect these international costs might play in domestic transport costs if any. Is the EU application of a tariff on international carriers from non-ETS countries applied differentially? If not then it can’t be long coming, if it has the potential to undermine low C domestic transport options.