Investigating the impacts of the EU ETS emission rights on airline environmental efficiency via a Network Environmental SBM model

Abstract

Based on empirical data from 18 international airlines from 2008 to 2014, this article analyzes the impact of EU emission rights on airline environmental efficiency and calculates the airlines’ emission allowances. Then, we propose a Network Environmental Slack-Based Measure model to discuss the change in efficiency when carbon prices are set at 10, 20 and 30 Euros. The main findings are as follows: (1) Eva Air is the airline with the highest average overall efficiency. (2) For most airlines, their efficiency shows little difference from the original situation, regardless of the carbon price. (3) For airlines with large changes in efficiency, the cost or income from emission rights not only affects the operating expenses but also the fleet size.

Keywords:

• network environmental slack-based measure
• airline environmental efficiency
• EU ETS
• emission rights

Acknowledgements

We are grateful to the anonymous reviewers for their constructive comments which improved this article significantly.

Additional information

Funding

This research was funded by the National Natural Science Foundation of China (Nos. 71403034 and 71701088) and the China Postdoctoral Science Foundation (Nos. 2016M590050 and 2017T100042).