Carbon labelling for flights

Carbon labelling for flights [1]

Overview:

Carbon labels on flights are a specific form of eco-labelling. Carbon labels clearly show the carbon footprint of products to 'nudge' people into changing consumption habits. They are a soft policy measure that encourages people to choose the itinerary with the lowest carbon footprint when purchasing a flight, without actively limiting consumer choices. Studies show significant differences in emissions for flights between the same destinations. Carbon labels give visibility to these differences and influence consumer choices.

As a soft measure that does not actively constrain choices, the success of the carbon labels depends on their ability to change behaviour. Often, those most likely to be influenced by carbon labels are "environmentally minded". However, the extent to which even they are affected varies (Juvan and Dolnicar, 2014b). To date, the impact of such soft measures on consumer behaviour has not been shown to be significant. Soft measures cannot be considered alternatives to policies like carbon pricing, or technology-based regulations on fuel and aircraft type, which have a known quantifiable impact.

For carbon labels to be most effective, people need to understand the information provided and its significance, trust it, and understand how to change their behaviour in response. It is important to ensure consistency in presenting the information, the methodology sued in calculating emissions, and the input data used.

Currently, there is no universally accepted format for carbon labels, though the presentation of the information determines how effective it is in nudging behaviour. Some existing labels are aircraft-specific or airline-specific rather than flight-specific, which does not help consumers choose between different flight options.

The methodology and input data used for calculations also differ. Data required for flight-specific labels include distance, aircraft type, freight and passenger load factors, seating configuration and fuel consumption. Fuel consumption data is typically not available to the public, and emissions calculators furthermore tend to provide estimates based on a "typical" flight rather than a specific aircraft and actual load factors. Many existing emissions calculators, therefore, vary widely in calculated CO2 emissions for the same flight, some by as much as 540% (Baumeister, 2018; Juvan and Dolnicar, 2014a).

Many existing carbon labelling practices are not effective due to poor communication and lack of standardisation. For carbon labels to be more effective, studies indicate a variety of best practices:

Carbon labels should have a single globally recognised system and cover all commercial passenger flights, making them easily comparable.
Carbon labels should be enforced by an independent authority and be mandatory for all flights.
Simply presenting kilograms of CO2 emitted by a flight is too abstract. Only 5% of respondents of a survey of environmentally-minded tourists felt it would help decision-making (Gössling and Buckley, 2016). Emissions set in contrast to an annual climate budget may build more awareness (Baumeister 2018).
The use of colour coding in carbon labels has been reportedly more successful in influencing behaviour, likely due to its similarity to the EU appliance energy rating system. The previously mentioned survey of environmentally-minded tourists showed that 26% would be influenced by a colour-coded label, though only 2% would be strongly influenced by one (Gössling and Buckley, 2016). Most studies that use a colour scale rely on the familiar green to red spectrum (green for the lowest carbon footprint, and red for the highest). However, studies to date do not provide firm guidance on how its upper and lower bounds should be determined in the context of aviation.
Providing information on the labels about the purpose and goals of the label has been shown to increase preference for lower-emission flights significantly over labels that did not provide additional context.

Evidence from other eco-labelling initiatives, such as energy efficiency ratings on appliances, may be relevant in designing the most effective labels and estimating their impact. For example, a study of Chinese refrigerator purchasing habits showed that energy efficiency labelling had little impact on purchases on the lower end of the price range, but had greater influence at the higher end (Wang, et al., 2021). An EU study of energy efficiency labels found that letter grades are more easily understood and more influential than numeric scales (London Economics, 2014).

ravellers are generally very price elastic, which means there is limited evidence to suggest that carbon labels could significantly shift the behaviour of the general public. However, with time, if there is a standard, globally recognised system in place, it may increase the transparency of the environmental impact of flying. As a result, carbon labelling may interact with other decarbonisation measures. For example, it may incentivise airlines to undertake other decarbonisation initiatives such as voluntarily renewing fleets and demonstrating this improvement via the carbon labels.

Impact on CO₂ emissions:

The difference in emissions between flights

There is a significant difference in CO2 emissions of specific flights, so there is potential for emission savings if travellers choose the cleaner flight option. However, the success of carbon labels depends on whether they sufficiently influence decision making, which remains an open question.

A US-based study (Baumeister, 2018) found the following differences in carbon emissions per passenger for a sample of short-, medium- and long-haul flights depending on the airline, route, and aircraft and even between flights of the same airline, route and aircraft.

Short-haul, Los Angeles to San Francisco (LAX-SFO) – 69 kg for most efficient non-stop flight vs. 362 kg for the least efficient flight connection via Dallas/Fort Worth (DFW).
Medium-haul, Los Angeles to New York (LAX-JFK) – 271 kg for the most efficient non-stop flight vs. 642 kg for the least efficient flight connection via San Francisco (SFO).
Long-haul, Los Angeles to London (LAX-LHR) – 571 kg for the most efficient flight vs. 1152 kg for the least efficient flight. There are also significant differences between long-haul flights for the same route operated by the same airline. Of the two non-stop daily British Airways flights, one produced 776 kg CO2, the other 902 kg CO2 per passenger.

Another study found that flights from San Francisco to Miami can vary by more than 0.7 US tons (635 kg) CO2 per passenger (Sanguinetti and Amenta, 2021).

Willingness to pay for cleaner flights

Studies reach varying conclusions about the willingness to pay for cleaner flights. One stated-preference study found that labelling flights as green, yellow and red, did not increase willingness to pay for the most efficient flights (labelled as "green"), but they did help consumers avoid flights labelled as "red". Participants were only willing to pay more if they avoided red-labelled flights; they were unwilling to pay more for a green flight if a yellow-labelled flight was available. However, participants were willing to make tradeoffs in flight time and spend more time travelling if it meant taking a green-labelled flight (Baumeister, Zeng, and Hoffendahl, 2020).

On the other hand, a stated-preference study of employees at the University of California, Davis, looking specifically at flight choices for business travel, found a very high willingness to pay for lower-emission flights: USD 203 per tonne of CO2 saved for domestic flights; USD 276 tonne CO2 saved for international flights. Employees were not paying out of pocket for the flights. The rate of willingness to pay is an order of magnitude higher than is often seen in carbon offset programs. However, unless their employer supports this choice, rather than solely considering the price of tickets for business travel, employees cannot follow through on decisions based on carbon labels in practice (Sanguinetti and Amenta, 2021).

Lower emission flights in this study depended on the origin airport. In the multi-airport study area, flights from the larger airport in San Francisco (SFO) were often more direct, and therefore less emitting, when compared to the more convenient airport in Sacramento (SMF). Encouraging business travellers to choose SFO-based greener flights resulted in fewer emissions, even when accounting for additional terrestrial travel. These findings cannot be generalised to all multi-airport regions since the relative desirability of the airports depends on local travel options, travel times etc. (Sanguinetti and Amenta, 2021).

Costs:

There are limited costs associated with the carbon label itself, apart from administering the label program and ensuring flight search tools include a standard label system.

There may be additional costs to the consumer associated with taking a greener flight based on the carbon labels. Often direct flights are less emitting but are also more expensive for travellers.

In some cases, there may be cost savings associated with taking a greener flight. A study of University of California, Davis, employees found that the institution could save USD 56 000 annually due to the willingness of travellers to take advantage of greener, and cheaper non-stop flights from a more distant hub airport rather than travel from the more convenient local airport for medium distance flights (Sanguinetti and Amenta, 2021). However, this is a result of a specific case where travellers were choosing between origin airports.

Co-benefits:

Carbon labels can help consumers avoid the least environmentally friendly choices. As a secondary effect, they may help raise baseline standards in the aviation industry.
Some studies suggest that as consumers make more informed choices, they could send signals of their environmental priorities to the airline industry (Baumeister 2018). Yet others suggest that airlines do not identify pressure from customers as a driver of ecological ambitions (Baumeister and Onkila, 2018). If airlines were to improve environmental performance, this could be made visible through carbon labels.
Carbon labels can help close the gap between the information available to producers and consumers on the environmental impact of products, which creates greater awareness.
From an airline's perspective, some studies have found that an independently enforced carbon label and broader participation from the industry could help airlines overcome the suspicion of greenwashing their services (Baumeister, Zeng, and Hoffendahl, 2020). Airlines could use their environmental actions to their competitive advantage.

Other considerations:

Carbon labelling currently lacks standardisation in methodology, data and label design which could lead to confusion and lack of credibility, harming the future adoption and effectiveness of standardised carbon labels. There is also a risk that they could contribute to consumer information overload. If carbon labels are based on flight categories such as route, then the greenest long-haul flight may be rated more favourably than a less efficient short-haul flight when in reality, the long-haul flight emits more CO2. Carbon labels may also shift the focus away from price-based measures that are more effective in changing consumer behaviour.

The effect of carbon labels without carbon budgets and commitments is not expected to be significant. These institutional level policies are crucial to prioritise low-emission travel. Studies on the willingness of participants to pay for cleaner flights showed significant willingness in the context of business travel. Participants suggested that changes in institutional policies would determine their decision to take lower-emission flights. Unless employers support this choice, rather than solely considering the price of tickets for business travel, employees are unlikely to be able to make decisions based on carbon labels in practice. Since business travel accounts for 33-40% of civil air travel, this could have a significant impact (Sanguinetti and Amenta, 2021). Institutional travel policies based on carbon emissions should also be paired with institutional carbon budgets to ensure total business travel decisions contribute to decarbonisation. Choosing the greenest flight but flying often is unlikely to result in significant emission savings.

Some behavioural elements worth noting are as follows:

Environmentally conscious consumers are most likely to be influenced by carbon labels. However, the magnitude of this impact is still limited (Gössling and Buckley, 2016; Juvan and Dolnicar, 2014b).
Survey participants across multiple studies expressed hesitation that carbon emissions would be a primary decision factor when choosing flights. Price elasticity of demand for aviation tends to be quite high, especially for leisure travel. In addition, flight time, layover and airport, as well as trip timing (day and time), were more important factors. Carbon emissions were more likely to be considered if the other elements were comparable between options.
The purpose of air travel can also act as a justification and a barrier to change. For example, leisure travel is associated with more hedonistic behaviour, so travellers may feel less of a sense of responsibility to choose the cleaner option. If travelling for work, they may be limited by their employer's policies (Gössling and Buckley, 2016).
Human decision-making cannot always be explained by purely rational logic. "Rationally" speaking, there is no difference between emissions savings on domestic versus international flights, yet there are observed differences in willingness to pay for CO2 savings between the two types. This behaviour demonstrates that how choices are framed (the choice architecture) and how travellers interpret choices significantly impact final consumer decisions. This further highlights the importance of label design and content to account for cognitive biases and heuristics (Sanguinetti and Amenta, 2021).

Sources:

Baumeister S. (2018) Climate Change Mitigation Potentials of Carbon Labels in the Aviation Industry, https://jyx.jyu.fi/handle/123456789/58649

Baumesiter S., and Onkila T. (2018) Exploring the potential of an air transport eco-label, http://ejtr.vumk.eu/index.php/volume18/541-v18rp57

Baumeister S., Zeng C. and Hoffendahl A (2020) The effect of an eco-label on the booking decisions of air passengers, https://doi.org/10.1016/j.tranpol.2020.07.009

Gössling S. and Buckley R. (2016) Carbon labels in tourism: persuasive communication? https://doi.org/10.1016/j.jclepro.2014.08.067

Juvan E. and Dolnicar S. (2014) Can Tourists Easily Choose a Low Carbon Footprint Vacation? https://doi.org/10.1080/09669582.2013.826230

Juvan E. and Dolnicar S. (2015) London Economics (2014) Study on the impact of the energy label and potential changes to it on consumer understanding and on purchase decisions, https://ec.europa.eu/info/sites/default/files/impact_of_energy_labels_on_consumer_behaviour_en.pdf

Sanguinetti A. and Amenta N. (2021) Nudging consumers toward greener air travel by adding carbon to the equation in online flight search, https://escholarship.org/uc/item/70d421zg

Upham, P., and Bleda, M. (2009) Carbon Labelling: Public Perceptions of the Debate. Tyndall Centre, https://www.research.manchester.ac.uk/portal/files/46303123/FULL_TEXT.PDF

Wang B. et al. (2021) Effect of energy efficiency labels on household appliance choice in China: Sustainable consumption or irrational intertemporal choice? https://doi.org/10.1016/j.resconrec.2021.105458