Is there carbon leakage in the European emissions trading system? Evidence from passenger shifts in the aviation market.

Distinguished Research Seminar Series

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Date

17 Feb 2025
Organiser

Department of Industrial and Systems Engineering, PolyU
Time

16:00 - 17:30
Venue

Online via ZOOM

Speaker

Prof. Xavier Fageda

Remarks

Meeting link will be sent to successful registrants

Summary

In this paper, we examine whether the European CO₂ emissions market has led to a shift of connecting passengers from European to non-European hubs, in association with carbon leakage effects and a distortion in competition. By exploiting granular demand data for one-stop routes connecting airports in Europe with Asia, we estimate a Poisson pseudo maximum likelihood model with different fixed effects and various controls that might impact bilateral traffic. Compared to the control group, we find that the scheme has reduced passenger numbers by around 3%. We also find that the fall in passenger numbers is explained by fewer flights.

Keynote Speaker

Prof. Xavier Fageda

Professor
Department of Econometrics, Statistics and Applied Economics, University of Barcelona, Spain

Xavier Fageda is full professor of Applied Economics at the University of Barcelona (UB) and researcher at the Governments and Markets Research Group (GIM). He has a MSc in Economics at University of Warwick (2002) and a PhD in Economics at UB (2004) and has carried out research stays at U. British Columbia and U. Cornell. His research focuses on the analysis of competition and externalities in the transportation sector, and on the econometric evaluation of public policies. He has leaded several competitive projects funded by national or regional governments and has worked on several research contracts with public entities and private firms. He has around 100 scientific publications (WoS) including, among many others, European Economic Review, Journal of Environmental, Economics and Management, Regional Science and Urban Economics, Journal of Economic Geography, Journal of Regional Science, Regional Studies, International Journal of Industrial Organization, Economics of Transportation and Transportation Research (A, E D).