Journal of Air Transport Management 17 (2011) 199e205

Contents lists available at ScienceDirect

Journal of Air Transport Management

journal homepage: www.elsevier.com/locate/jairtraman

Aviations inclusion in international climate policy regimes: Implications for the

Caribbean tourism industry
Laurel Pentelow a, Daniel J. Scott b, *
a
b

Faculty of Law, University of Ottawa, Ontario, Canada

Department of Geography, Faculty of Environment, University of Waterloo, 200 University Avenue West, Waterloo, Ontario, Canada N2L 3G1

a b s t r a c t
Keywords:
Climate policy
Aviation
Caribbean
Tourism

Nations with tourism dependant economies are becoming increasingly concerned about the inclusion of
aviation in greenhouse gas mitigation policy for international bunker fuels and more recently adaptation
policy proposals. The central concern is that such policies will increase the cost of traveling by air,
therefore reducing visitor arrivals to long-haul, tourism-dependent destinations, often small island
developing states. This study used a tourism arrivals model to examine the implications of currently
proposed climate policies for the worlds most tourism dependant region e the Caribbean. Results
indicate that under current proposals for both mitigation and adaptation focused climate policy,
reductions in tourist arrivals from the major markets of Europe and North America would be negligible
versus business as usual growth projections Only under the most stringent mitigation policy scenario.
Which may portend a post-2020 policy regime, is a signicant decrease in tourist arrivals predicted. Of
the climate policies assessed, the adaptation policy had the potential to provide greater economic
benets to the Caribbean region.
2010 Elsevier Ltd. All rights reserved.

1. Introduction
The worlds small island developing states (SIDS) are estimated
to contribute less than 1% of global greenhouse gas emissions
(GHG), but are projected to be some of the most impacted by
a changing climate (Mimura et al., 2007). Their vulnerability has
been explicitly recognized in Article 4.8 of the UN Framework
Convention on Climate Change which states that, .the Parties
shall give full consideration to what actions are necessary under the
Convention. to meet the specic needs and concerns of developing country Parties arising from the adverse effects of climate
change and/or the impact of the implementation of response
measures, especially on: (a) small island countries, (b) countries in
low-lying coastal areas . (d) countries prone to natural disasters
. (United Nations, 1992).
To date, much of the focus on SIDS has been with regards to their
vulnerability to the physical impacts of climate change, such as
sea level rise, water resources, coral reefs, and sheries, but the
implications of climate policy for the economies of these nations

* Corresponding author.
E-mail address: dj2scott@uwaterloo.ca (D.J. Scott).
0969-6997/$ e see front matter 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jairtraman.2010.12.010

are another potentially salient impact in the shorter term. The

implications of international GHG mitigation policy for bunker fuels
and thus transportation costs and tourism are of particular consequence for increased prices on goods being imported by air as well as
the potential decline in number of tourist arrivals and expenditures.
The Caribbean SIDS are thought to be highly vulnerable to
climate change (Mimura et al., 2007). The Caribbean is also arguably the most tourism dependant region in the world, as tourism
represents over 12% of GDP in the region and exceeds 50% GDP in
several nations (World Travel and Tourism Council, 2007, UN
Department of Economic and Social Affairs, 2010). The tourism
economy is also thought to be one of the greatest at risk to climate
change (Gossling and Hall, 2006). Regional leaders and the tourism
industry have voiced their concern that international climate policy
will negatively affect their tourism economy, and in response to the
European Unions (EU) announcement that aviation would be
incorporated into it Emissions Trading System (ETS), the Caribbean
Hotels Association and Caribbean Tourism Organization (2007), Put
forth a joint statement emphasizing that every effort must be made
to ensure that future consumer movements and government action
in the EU to address climate change . does not deter potential
European travellers from taking vacations in the Caribbean.
Similar statements have been put forth by concerned nations in the

200

L. Pentelow, D.J. Scott / Journal of Air Transport Management 17 (2011) 199e205

South Pacic as well as by Australia and New Zealand (Forsyth et al.,

2007; Scott et al., 2008).
Efforts to include the aviation industry in climate change
mitigation policy have come about as an understanding of the
contribution air travel makes to global GHG emissions and radiative forcing has increased, and despite energy efciency and
emission reduction gains within the aviation sector (Peeters and
Middel, 2007). With projected growth rates in revenue passenger
kilometres of 5% annually (Boeing, 2008), aviations contribution to
total global GHG emissions could undermine mitigation efforts
undertaken by other sectors (Bows et al., 2009; Clark, 2009;
Lee et al., 2009). Climate policy proposals have also emerged
whereby air travel is used as a mechanism to fund climate change
adaptation in developing countries. An example is the International Air Passenger Adaptation Levy (IAPAL)1 which has been
proposed by the Group of Least Developed Countries as a way to
increase contributions to the Kyoto Protocol Adaptation Fund.
IAPAL is projected to raise between $8 and $10 billion dollars
annually (in the rst ve years of operation) for adaptation projects
in the poorest countries. The International Air Transportation
Association, (2008) (IATA) has expressed concern over this
proposal because they believe that the extra cost would cause lost
tourism revenues for many island nations (Greenaironline, 2009).
Other mitigation proposals continue to emerge in the wake of this
increasing concern over aviations contribution to climate change.
The objective of this study was to determine whether the
current proposals to include international aviation in climate
change mitigation or adaptation policy could cause a decline in
tourist arrivals that would be signicant enough to adversely affect
the economies of the Caribbean nations. A tourist arrivals model
was used to assess the potential impact of different climate change
policy scenarios on tourist arrivals from major markets in EU and
North America (NA) to individual Caribbean nations over the next
decade. Following a description of the methodology, region-wide
results are presented and the differential impacts for individual
countries discussed. The paper concludes with a comparison of the
relative benets of the disparate policy proposals for Caribbean
nations.

2. Methods
Gossling et al. (2008) were the rst to examine the impact of
aviation sector mitigation policies on ight costs and tourist
arrivals to SIDS around the world. This study is conceptually
similar to Gssling et al. in that it uses the economic measure of
price elasticity as the determinant of a persons reaction to
a change in the price of a roundtrip plane ticket, but it is operationalized in a very different way. Some of the major differences
between the two studies include: this analysis uses an aviation
sector industry emissions calculator to determine tonnes of
carbon emitted for roundtrip ights (International Civil Aviation
Organisation, 2009), while Gssling et al. determined emissions
through their own calculations; aviation growth rates are taken
from an industry projection for RPKs, while Gssling et al. used
the value of >100% in aviation from 2005 to 2020, taken from the
Commission of the European Communities; the threshold for
main source market arrivals is 60% and it is 70% in Gssling; we
model 19 scenarios, while Gssling et al. modeled four; and
while our includes the cost of oil as a parameter, Gssling et al.
did not.

1
http://unfccc.int/les/kyoto_protocol/application/pdf/maldivesadaptation131208.pdf.

We focus on 21 Caribbean countries (CARICOM nationseminus

Montserrat and St. Kitts & Nevis because of lack of data - plus
Dominican Republic, Cuba and Puerto Rico which are major tourist
destinations). The model assumes that an ETS will be implemented
in both of the major tourism markets for the Caribbean (the EU and
NA countries of the US and Canada) and that both will begin to
require aviation to participate in trading as of 2012. Only the EU has
such plans currently in place, but discussions of an ETS in Canada
(National Round Table on the Environment and the Economy,
2007), the US (American Clean Energy and Security Act of 2009),
or as a joint system (Dyck, 2010) has been ongoing. Because the EU
ETS is already in place and plans for aviations inclusion are
detailed, model parameters (such as emission caps and implementation timelines) are based on the EU legislation.
The model was constructed with the following variables:
A business as usual arrivals to any given country.
B price elasticity.
C percentage change in the price of a ight.
D 2005 arrivals reported to any given Caribbean nation.
E growth rate for any given country based on average tourism
arrivals.
F the ticket cost (with an increase from ETS incorporated).
G the percentage change in the ticket cost from oil price
uctuations.
H original (2008 USD) cost of a roundtrip plan ticket between
a given market-destination pair.
I the percentage increase in ticket price from carbon allowances needed to meet ETS requirements
J the tonne(s) of carbon above the ETS cap.
K the cost of a tonne of carbon on the open market.
L the tonne(s) of carbon within the 15% beneath the ETS cap.
M the cost of a tonne of carbon in the closed auction system.
N the projected emissions (from a roundtrip).
O the percentage of projected regional emissions above the
ETS cap.
P the projected regional emissions within the 15% beneath the
ETS cap.
Q a 2009 roundtrip emissions between any given marketdestination pair (taken from the International Civil Aviation
Organization (ICAO) online calculator).
R the aviation efciency factor (in this case 1.5).
S projected emissions for the entire origin region.
T the baseline emissions for the origin region t the year
(between 2005 and 2020) for which the calculation is being
performed for.
U the annual aviation growth rate for the same origin region.
V the ETS cap.
W the annual percentage change in oil prices.
X projected arrivals in 2020 under a scenario where climate
policy and future oil price are considered.
Y the percentage of operating cost of a ight for which fuel
accounts.
The base equation for the model is:

X AB  C
To be able to input the values for these variables, other calculations
are required. Values for A and C are detailed below. Price elasticity (B) value is taken from previous studies. The calculation of
tourist arrivals to any of the study area countries under a BAU
scenario is:

A D  Et2005

L. Pentelow, D.J. Scott / Journal of Air Transport Management 17 (2011) 199e205

201

Table 1
Factors help constants.
Variable

Values inputted
(Scenarios A&B)

Values inputted
(Scenario C)

Sources (A&B/C)

Annual aviation sector fuel

efciency improvement
factor
Aviation growth rates (in RPK)

1.5%

Same as A&B

Kahn et al., 2007

4.8%/year between North America

eLatin America (for 2007e2027);
4.7%/year for Europeelatin America
(for 2007e2027)
2012: 97% of baseline (2004e2006
average aviation emissions);
2013e2020: 95% of baseline

Same as A&B

Boeing, 2008

2012: 90% of baseline

(2004e2006 average aviation
emissions); 2013e2020:
80% of baseline
Same as A&B
Same as A&B

EurActive, 2008/similar to caps

used in Gossling et al. (2008)
(which are derived from EU ETS
proposals at the time)
Airticketsdirect.com, 2008
International Civil Aviation
Organisation, 2009

CO2 Emission cap

Flight price
Flight segment related
emissions
Location of airports

Tourist arrivals
by air

Market-destination country specic

Market-destination
country specic
Calculations were undertaking using
one main airport location in each origin
and destination country. For the origin
countries the airports were located in
Toronto (Canada); New York City
(United States); Paris (France);
Frankfurt (Germany); Rome (Italy);
Amsterdam (the Netherlands);
Barcelona (Spain); London
(United Kingdom)
Market-destination country specic

The percentage change in the price of a ight was completed using

the following equations:

These calculations follows a four step sequence: (1) Business as

usual tourist arrivals and related air travel emissions; (2) the
change in the cost of air travel due to the introduction of ETS in the
EU and NA markets; (3) the change in the cost of air travel due to
global oil price; and (4) the air travel price elasticity values used to
determine the overall change in arrivals.
Each step requires inputs of variables with a range of values
which are predetermined from industry, academia and government
estimates. As the model is run, most variables are held constant to
isolate the impact of the changing cost of carbon and price of oil.
Table 1 outlines the values for the full set of variables used in the
model and associated sources.
While the variables in Table 1 are kept constant, the prices of
carbon and oil as well as price elasticity estimates are not. For these,
a range of values was used (Table 2). Although 19 scenarios are
modeled as part of a sensitivity analysis, using different combinations of low-medium-high range of the modied variables in Table
2, the discussion will focus on the three marker scenarios with the
lowest impact on tourist arrivals (A), the highest impact on arrivals
using current mitigation policy characteristics (B), and the ambitious climate policy scenario (C) which indicates what impacts on
tourist arrivals could be like if mitigation policy pursue deeper
emission cuts using higher costs of carbon.

Same as A&B

Same as A&B

UN World Tourism
Organisation, 2007

2.1. Cost of carbon

Projections for what carbon emission allowances will cost in the
future contain a great deal of uncertainty. A high and low estimate
of the cost of carbon is used in this model in an attempt to cover the
spectrum of possibilities. This range was derived from projections
of banking institutions, arms-length government agencies, academics studies and climate exchanges. The low value used was $16/
tonne (European Climate Exchange, 2009) and the high value used
was $61/tonne (Fortis, 2008). The value used to indicate the cost of
carbon under a more ambitious climate mitigation policy was $200/
tonne (based on National Round Table on the Environment and the
Economy, 2007).
While it is possible that the cost of a tonne of carbon falling
within the 15% of auctionable credits below the ETS cap will be
different from the cost of a tonne of carbon that exceeds the same
cap, when looking at data from the UK Phase II auction (Europa,

Table 2
Modied variables values for mitigation policy scenarios.
Variable

Scenario A

Scenario B

Scenario C

Carbon
Price
Oil Price

$16/tonne

$61/tonne

$200/tonne

$56.50 in 2005
and $77.90 in
2020

$56.50 in 200
and $132.10
in 2020

Price
Elasticity

1.04
(NA and EU)

1.7
(EU) and1.4(NA)

$56.50 in 2005,
$76.50 in 2012
and $132.10 in 2020
(assumes projections
to 2012 are accurate
under reference
scenario (a) and then
linear growth to the
high projection scenario
in 2020)
1.295 (EU) and
1.195 (NA)

(a)The reference oil price projection assumes current laws and policies remain
unchanged whereas the high oil price scenario attempts to quantify the uncertainty
that exists when projecting long-term oil prices (US Energy Information
Administration, 2008).

202

L. Pentelow, D.J. Scott / Journal of Air Transport Management 17 (2011) 199e205

2009) and the European Climate Exchange (2009), the price was
within 0.15 and therefore the same value was used for all carbon
emission allowances throughout the study.

23.1

Scenario C

2.2. Oil price

28.9

Global oil prices are notoriously difcult to predict, as was well

illustrated during the JulyeDecember 2008 timeframe where the
average monthly cost of oil went from $133/barrel in July and then
dropped to $40/barrel in December (US Energy Information
Administration, 2008). These uctuations obviously provide challenges for scenario development. Oil price was an important
component for this model and therefore a reference projection and
a high oil price projection were used in an attempt to capture much
of the uncertainty in oil prices out to 2020. Forecasts from the US
are used which predict oil price to peak at $77.9/barrel in 2020
under a reference scenario and $132.1/barrel under a high price
future. The International Air Transport Association (2008) estimates are in line with the high oil price projection from EIA, which
have a barrel of oil costing $131 in 2020.
2.3. Price elasticity
Previous estimates of price elasticity are taken from the travel
and tourism literature. Past studies have estimated the price elasticity of tourism in numerous forms: destination specic
(Papatheodorou, 1999), visitor origin (Syriopoulos and Sinclair,
1993), travel type (Crouch, 1995). Others have looked at the price
elasticity of air travel (Njegovan, 2006) and more specically some
have considered long-haul air travel. The latter studies are what
inform the price elasticity values used in this model. A low price
elasticity value of 1.04 is used for both NA and EU (Gillen et al.,
2004). The high price elasticity value used for NA is 1.4 and for
the EU is 1.7 (InterVISTAS Consulting INC., 2007).
The model was run using the variables and input values
described in Section 2.1. Each scenario was run for all 21 Caribbean
countries and their signicant EU and NA market countries. A
signicant market country was considered to be any nation in the
EU or NA which alone (or in combination) accounted for at least
60% of total arrivals to any given destination. This percentage was
chosen because it was discovered that beyond 60% the number of
market countries increased signicantly for some destinations and
that many of these same market countries were not located in the
EU or NA and therefore were not the focus of the study.
Scenarios A and B are considered to be the most probable for the
time period ending in 2020, while scenario C (representing an
ambitious climate policy scenario) is run as an example of what
could happen post-2020, in the event more stringent policy
initiatives are undertaken to reduce GHG emissions more rapidly.
Tables 1 and 2 illustrate the different value of each variable used in
the scenario C model run, compared to those in scenarios A and B.
On top of these direct comparisons, scenario C is also modied to
take into consideration the non-CO2 impacts that air travel has on
the changing climate and consequently, emissions are multiplied
by 2.7 (Intergovernmental Panel on Climate Change, 1999).
3. Results
Fig. 1 illustrates a timescale of visitor arrivals under a BAU
scenario as well as under scenarios A, B and C. Declines in tourist
arrivals through to 2020 versus the BAU scenario, ranged from 1.3%
to 4.3% under scenario A and B, and as much as 24% under scenario
C. Model results indicate that until a more rigorous climate mitigation policy is undertaken, the impact on tourist arrivals to the
Caribbean region will remain negligible.

Scenario B

29.8

Scenario A

30.2

BAU

10

15

20

25

30

35

Bn Dollars USD

Fig. 1. Projected arrivals in the Caribbean region (2000e2020).

Although scenarios A and B had only a relatively small projected

regional impact on tourist arrivals, certain individual Caribbean
nations were found to be more signicantly impacted by the
introduction of new mitigation policy on international aviation. Of
the 21 destination countries examined, Barbados and the Bahamas
were the most impacted (showing a 1.8%e6.3% and 2%e6.9%
reduction in tourist arrivals versus BAU, respectively, in 2020 under
scenarios A and B). Conversely, Dominica, St. Vincent and the
Grenadines and Cuba were projected to be the least impacted in the
region. Scenario A results show reductions in 2020, versus BAU, of
0.5%, 0.8% and 0.9% for Dominica, St. Vincent and the Grenadines
and Cuba and scenario B reductions for the same countries of 1.6%,
2.4% and 2.8% versus BAU. Table 3 provides the results of the policy
scenarios for the 21 Caribbean nations analyzed.
The Caribbean region relies heavily on the travel and tourism
industry as part of its regional GDP, one estimate puts it at 14.5%
(World Travel and Tourism Council, 2008). However, some nations
within the region are far more reliant on tourism and thus more
economically vulnerable to changes in tourism growth as a result of
new mitigation policies or energy price uctuations. Comparing
projections from the (World Travel and Tourism Council, 2004) on
the percentage of GDP tourism contributes to each nations (out to
2014) revealed that the two most vulnerable nations to mitigation
policy changes, Barbados and the Bahamas, also have very high
percentage of their GDP tied to tourism, 59.3% and 68.9%, respectively. Although three other islands show higher tourism reliance,
none of those three are shown to have been impacted by the model
parameters in a way that is above the regional average.
Given that under the scenarios modeled for aviations inclusion
in an ETS there will be less visitor arrivals versus BAU, it is also true
that the destinations will lose revenue from tourist expenditures.
Fig. 2 illustrates the region-wide visitor expenditures lost under the
three scenarios, based on average tourist spending estimates from
the Caribbean Tourism Organization (2004).
While annual lost visitor expenditures in the region under
Scenario A would not be signicant ($384 million 2020) if
circumstances arise closer to Scenario B ($1290 million in the same
year) or the Scenario (C) ($7144 million, again in 2020), the
economic implications for some of these developing countries
becomes salient.
In contrast to the modeled climate change mitigation policy
scenarios, there are also adaptation policies which integrate aviation and that aim, not to cut emissions, but to accumulate funds to
support developing countries and vulnerable peoples to cope with

L. Pentelow, D.J. Scott / Journal of Air Transport Management 17 (2011) 199e205

203

Table 3
Destination Specic Model Results.
Destination

Arrivals in 2020 (BAU)

Anguilla
Antigua and Barbuda
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Puerto Rico
St. Lucia
St. Vincent and the Grenadines
Suriname
Trinidad and Tobago
Turks and Caicos

186,164
381,562
1,815,505
565,450
420,988
152,172
664,891
53,128
5,370,324
119,150
7,334,006
117,042
170,294
69,210
2,087,811
5,191,358
533,961
219,440
4,744,193
737,139
469,532

Scenario A

Scenario C serious climate

policy

Scenario B

Arrivals in 2020

% Change

Arrivals in 2020

% Change

Arrivals in 2020

% Change

184,009
377,082
1,779,329
555,561
414,537
150,266
657,520
52,344
5,323,645
118,520
7,239,095
116,019
168,103
68,337
2,061,194
5,109,553
528,088
217,766
4,690,308
727,009
463,856

1.2%
1.2%
2%
1.8%
1.5%
1.3%
1.1%
1.5%
0.9%
0.5%
1.3%
0.9%
1.3%
1.3%
1.3%
1.6%
1.1%
0.8%
1.1%
1.4%
1.2%

180,022
366,772
1,690,947
530,088
398,064
146,909
643,151
50,581
5,218,754
117,258
7,006,938
113,670
163,405
66,591
2,009,960
4,927,857
515,448
214,166
4,540,422
700,965
454,679

3.3%
3.9%
6.9%
6.3%
5.5%
3.5%
3.3%
4.8%
2.8%
1.6%
4.5%
2.9%
4.1%
3.8%
3.7%
5.1%
3.5%
2.4%
4.3%
4.9%
3.2%

153,212
305,651
1,036,856
338,742
274,644
124,823
548,430
37,856
4,609,235
109,448
5,528,714
98,481
130,015
54,493
1,660,019
3,621,670
437,274
191,810
3,689,098
518,534
396,709

17.7%
19.9%
42.9%
40.1%
34.8%
18%
17.5%
28.8%
14.2%
8.1%
24.6%
15.9%
23.7%
21.3%
20.5%
30.2%
18.1%
12.76%
22.2%
29.7%
15.5%

the impacts of climate change. IAPAL is an example of such a policy

that proposes to use air travel to raise funds for adaptation. Concern
has been raised by airlines that such a policy would negatively
impact destinations reliant on air travel, so here we provide
a comparison of the impacts of IAPAL versus the ETS-type mitigation proposals for aviation illustrated above.
The mitigation policy scenarios (A,B,C) project that the impact
on arrival numbers in 2020, versus BAU projections, will be
minimal (a reduction of 1.3%e4.3%) unless more serious climate
policy is adopted (a 24% reduction versus BAU). Because emission
caps are set at 5% below the baseline for the majority of the
modeled timeframe (2013e2020) they are approximately equal

with projected growth in the aviation industry (to 2027) (Boeing,

2008) and therefore the current mitigation policy is unlikely to
induce a signicant reduction in aviations contribution to climate
change. The ETS would mean lost revenue from tourism expenditures (in 2020 between $384 (288) and $1290 (967) million,
versus a BAU scenario) for the Caribbean region. Funds received by
the auctioning of emission allowances or penalties for exceeding
emission allowances would be controlled by the EU or NA
governments or airlines regardless of the nationality of the air
carriers involved.
The IAPAL proposal on the other hand, while not aiming to
reduce emissions from aviation, will have some impact on arrival

Fig. 2. Projected visitor expenditures in 2020 under market scenarios.

204

L. Pentelow, D.J. Scott / Journal of Air Transport Management 17 (2011) 199e205

Table 4
Comparison of Additional Cost on a Roundtrip Flight Under Different Policies.
Market-Origin

USA to Bahamas
USA to Barbados
UK to British
Virgin Islands
Spain to Cuba
Canada to
Dominican Republic
USA to Bermuda

Additional Cost in 2009

rules, and continuously re-evaluate their vulnerability to these

changes.

Carbon (ETS)
Scenario A

Carbon (ETS)
Scenario B

IAPAL

References

3.04
4.35
5.94

11.58
16.52
22.64

8
8
8

6.49
3.37

24.73
12.83

8
8

1.54

5.86

Airticketsdirect.com. (accessed November 2008).

Boeing, 2008. Current Market Outlook 2008e2027 (accessed. http://www.boeing.
com/commercial/cmo/pdf/Boeing_Current_Market_Outlook_2008_to_2027.pdf
15.03.09).
Bows, A., Anderson, B., Peeters, P., 2009. Air transport, climate change and tourism.
Tourism and Hospitality: Planning and Development 6, 7e20.
Caribbean Hotels Association & Caribbean Tourism Organization, 2007. CHA-CTO
Position Paper on Global Climate Change and the Caribbean Tourism Industry.
CHA-CTO, St. Martin, Barbados.
Caribbean Tourism Organization, 2004. Visitor Expenditures (accessed 27.04.10).
CTO. http://www.onecaribbean.org/content/les/2004visitorexptables.pdf.
Clark, P., 2009. Airlines Concerns Grow of Global Tax Support (accessed 10.05.10).
Financial Times. FT.com. http://www.ft.com/cms/s/0/2f8b0bee-e27e%E2%80%
9311de-b028-00144feab49a.html?SID%3D;google.
Crouch, G., 1995. A Meta-analysis of tourism Demand. Annals of Tourism Research
22, 103e118.
Dyck, T., 2010. Climate for Cooperation (accessed 10.05.10). Torontostar.com. http://
www.thestar.com/opinion/editorialopinion/article/806555%E2%80%93climatefor-cooperation.
EurActiv, 2008. Aviation and Emissions Trading (accessed 20.05.09). EU News,
Policy Positions & EU Actors. http://www.euractiv.com/en/climate-change/
aviation-emissionstrading/article-139728.
Europa, 2009. Emission Trading System (EU ETS) - Auctioning (accessed 20.04.09).
European
Commission.
http://ec.europa.eu/environment/climat/emission/
auctioning_en.htm.
European Climate Exchange, 2009. ECX Historical Data - Historical Data (accessed
15.03.09). European Climate Exchange. http://www.ecx.eu/index.php/ECXHistorical-Data.
www.un.org/esa/sustdev/natlinfo/indicators/idsd/themes/
tourism.htm for Sustainable Development.
Forsyth, P., Dwyer, L., Spurr, R., 2007. Climate Change Policies and Australian
Tourism e Scoping Study of the Economic Aspects. Sustainable Tourism
Cooperative Research Centre, Southport.
Fortis., 2008. Corrected - Update 1- Fortis Raises CO2 Forecast, Prices Surge
(Retrieved 20.03.09). Reuters. http://www.reuters.com/article/rbssFinancial
ServicesAndRealEstateNews/idUSL2564255920080125.
Gssling, S, Hall, C, 2006. Uncertainties in predicting tourist ows under scenarios
of climate change. Climatic Change 79 (3e4), 163e173.
Gossling, S., Peeters, P., Scott, D., 2008. Consequences of climate policy for international
tourist arrivals in developing countries. Third World Quarterly 29, 873e901.
Gillen, D.W., Morrison, W.G., Stewart, C., 2004. Air Travel Demand Elasticities:
Concepts, Issues, Measurement. Department of Finance, Government of Canada,
Ottawa.
Greenaironline, 2009. ATA Calls on US Government to Resist Growing Demands for
an International Air Tax to Fund Adaptation (accessed 15.07.2010). http://www.
greenaironline.com/news.php?viewStory648.
Intergovernmental Panel on Climate Change, 1999. Assessment Report: Aviation
and the Global Atmosphere. Cambridge University Press, Cambridge.
International Air Transportation Association, 2008. IATA Economic Brieng Medium-Term Outlook for Oil and Jet Fuel Prices. IATA, Geneva.
International Civil Aviation Organisation, 2009. Carbon Emissions Calculator
(accessed November 2008). International Civil Aviation Orientation. http://
www2.icao.int/en/carbonoffset/Pages/default.aspx.
InterVISTAS Consulting Inc, 2007. Estimating Air Travel Demand Elasticities (Rep.
No. Final). InterVISTAS.
Kahn, R.S., Kobayashi, S., Beuthe, M., Gasca, J., Greene, D., Lee, D.S., Muromachi, Y.,
Newton, P.J., Plotkin, S., Sperling, D., Wit, R., Zhou, P.J., 2007. Transport and its
Infrastructure. In: Metz, B., Davidson, O.R., Bosch, P.R., Dave, R., Meyer, L.A.
(Eds.), Climate Change 2007: Mitigation. Contribution of Working Group III to
the 4th Assessment Report of the Intergovernmental Panel on Climate Change,
Cambridge.
Lee, D.S., Fahey, D.W., Forster, P.M., Newton, P.J., Wit, R.C.N., Lim, L.L., Oenm, B.,
Sausen, R., 2009. Aviation and global climate change in the 21st century.
Atmospheric Environment 43, 3520e3537.
Mimura, N., Nurse, L., McLean, R., Agard, J., Briguglio, L., LefalePayet, R., Sem, G.,
2007. Small islands. In: Parry, M.L., Canziani, O.F., Palutikof, J.P., van der
Linden, P.J., Hanson, C.E. (Eds.), Climate Change 2007: Impacts, Adaptation and
Vulnerability. Contributions of Working Group II to the 4th Assessment Report
of the Intergovernmental Panel on Climate Change. Cambridge University Press,
Cambridge.
National Round Table on the Environment and the Economy, 2007. Getting to 2050Canadas Transition to a Low-emission Future: Advice for Long-term Reductions
of Greenhouse Gases and Air Pollutants. Government of Canada, Ottawa.
Njegovan, N., 2006. Elasticities of Demand for Leisure air travel: a system Modelling
approach. Journal of Air Transport Management 12, 33e39.
Papatheodorou, A., 1999. The demand for international tourism in the Mediterranean region. Applied Economics 31, 619e630.
Peeters, P.M., Middel, J., 2007. Historical and future development of air transport
fuel efciency, In: Sausen, R., Blum, A., Lee, D.S., Brning, C. (Eds.), Proceedings

numbers and therefore aviation emissions. The additional cost to

a ticket at 8/person on each roundtrip economy class ight (the
higher 40/person cost on business class would reduce visitor
numbers more but would also provide additional funds) is more
signicant than the additional costs for each of the market-destination pairings in scenario A of the modeled ETS (the scenario with
the lowest additional cost associated with the mitigation policy)
but below the additional costs in all but 0.1% of market-destination
pairings under scenario B. See Table 4 for selected examples.
Because this means that given additional costs associated with
scenario B, 99.3% of market-destination pairings would be less
impacted by IAPAL, the regional impact on arrivals would most
likely be smaller than the 4.3% reduction versus BAU in 2020 under
scenario B. It can therefore be concluded that the reduction in
visitor arrivals from an additional 8/roundtrip would also be
insignicant. This is consistent with claims made in the original
IAPAL proposal that such a levy would have no meaningful impact
on tourism in developing countries.
Importantly, unlike an ETS-type mitigation policy emanating in
the EU or NA, the money collected from the levy on the tickets
could return to the Caribbean as the majority of nations in this
region are countries who receive money from the Kyoto Protocols
Adaptation Fund. As the region is highly vulnerable to the impacts
of climate change, Caribbean nations could rightly request access to
the approximately 2.0 to 2.15 billion annually raised by the IAPAL
levy system on travellers to and from the Caribbean by2020.

4. Conclusions
The major ndings of this study are twofold. First, the results
indicate that until deeper emission cuts and higher carbon costs are
implemented in mitigation policy, as was demonstrated in Scenario
C, there will be no meaningful impact on the growth of arrival
numbers to the Caribbean. This result is consistent with work done
by Gssling et al. (2008) and other studies that have examined the
impact of mitigation policy on air travel (Rothengutter, 2009). Even
still, any reduction in arrivals reduces visitor expenditures and is
not economically advantageous to the region.
Second, after analysing the IAPAL proposal and its potential
impacts and benets for the region, it is reasonable that Caribbean
nations may want to support IAPAL or subsequent similar proposals
as there is no evidence to suggest they would signicantly affect
tourism arrivals in a negative way, with the potential bonus of
providing signicant adaptation funding to the region. This policy
approach would seem more in the spirit of Article 4.8 of the UNFCCC.
Therefore, we conclude that the tourism industry and governments of Caribbean nations should not be concerned by the
inclusion of aviation in the ETS as currently proposed, but should
remain vigilant as to how these emission regulation frameworks
evolve overtime, including emission caps and emission trading

L. Pentelow, D.J. Scott / Journal of Air Transport Management 17 (2011) 199e205

of an International Conference on Transport, Atmosphere and Climate (TAC),
June 26e29, 2006, Oxford, United Kingdom. DLR Institut fr Physic der
Atmosphre, Oberpfaffenhoven, Germany, pp. 42e47.
Rothengatter, W., 2009. Climate change and the contribution of transport: basic
facts and the role of aviation. Transportation Research Part D 15 (1), 5e13.
Scott, D., Amelung, B., Becken, S., Ceron, J.P., Dubois, G., Gssling, S., et al., 2008.
Climate Change and Tourism: Responding to Global Challenges. United Nations
World Tourism Organization, Madrid (United Nations Environment Program,
Paris; World Meteorological Organization, Geneva).
Syriopoulos, T., Sinclair, M.T., 1993. An Econometric study of tourism Demand: the
AIDS model of US and European tourism in Mediterranean countries. Applied
Economics 25, 1541e1552.
UN Department of Economic and Social Affairs, 2010. Information for Decisionmaking. UN, New York.

205

UN World Tourism Organisation, 2007. Compendium of Tourism Statistics. UNWTO,

Madrid.
United Nations, 1992. United Nations Framework Convention on Climate Change.
FCCC/INFORMAL/84. UNFCCC, Bonn.
U.S. Bill H.R. 2454., 2009. American Clean Energy and Security Act of 2009, 111th
Congress, 2009.
US Energy Information Administration, 2008. International Energy Outlook 2008.
US Department of Energy, Washington DC.
World Travel and Tourism Council, 2004. The Caribbean - The Impact of Travel and
Tourism on Jobs and the Economy. WTTC, London.
World Travel and Tourism Council, 2007. Breaking Barriers and Managing Growth
d Summit Highlights 2007. WTTC, London.
World Travel and Tourism Council, 2008. Progress and Priorities 2008/2009. WTTC,
London.