You are here
'Flight shame' will make carbon big business: Citi
"FLIGHT shame" - flyers feeling guilty about their carbon footprint - is a real phenomenon and will raise costs for airlines, consumers and companies, while catapulting emission offsetting into a big business, Citigroup Inc predicts.
The cost of offsetting planes' carbon emissions could become as much as 10 times higher than the airline industry currently estimates, Citi analysts said in a note on Wednesday. For economy seats alone, the cost could balloon to US$3.8 billion a year by 2025, hurting airlines' earnings, they said.
Groups such as Greenpeace and Extinction Rebellion and activists like 16-year-old Swedish environmentalist Greta Thunberg are fuelling the flight-shame movement by highlighting aviation's role in global warming. People shunning planes in favour of more climate-friendly alternatives or abstaining from travelling altogether has already had an impact on passenger numbers in parts of Europe.
"The so-called winners of this generational shift will likely be the rail operators, governments, forest owners and carbon schemes," the Citi analysts said. "If the flight shaming gathers pace, carbon is likely to become a 'big business' in its own right." While the vehicle industry has made strides in using cleaner fuel, the aviation industry continues to warn that reducing carbon emissions will take years, if not decades, given technological limitations and expansion of air travel. Meanwhile, regulators around the world are mulling levying taxes on carriers to offset the environmental impact, and high-speed rail systems are emerging as rivals to airlines. Every 1 per cent increase in average fares due to higher aviation taxes could curb airline passenger volumes by 0.65 per cent, the analysts wrote. BLOOMBERG