Non-CO2 aviation climate effects in cost-benefit analysis

Results
From the perspective of climate and atmospheric science related to aviation, there is no unique and objectively correct emissions weighting factor. A metric applying a shorter time horizon will yield a higher non-CO2 to CO2 ratio, and hence gives greater weight to non-CO2. For aviation-related non-CO2 emissions in particular, the chemical processes and the interaction with other aerosols and gases is very complex to measure, leading to parametric uncertainty.

In the Dutch policy context, the efficient price is based on the abatement cost approach applying integrated climate assessment models. Using the efficient price in SCBA implies using CO2 equivalents, the need for weighting factors and the use of a single price for the climate-related greenhouse gas emissions. Although different climate metrics can be applied with different time horizons, we advise to align the time horizon of the climate metric with the applied time horizon in SCBAs. This implies a time horizon of 100 years. Sensitivity analyses applying a lower and upper limit of the weighting factor are appropriate to address parametric uncertainty. However, this bandwidth should not reflect variation in weighting factors due to the choice of climate metric, time horizon or other observed factors. Furthermore, when differentiated factors become available, a single lower and upper limit will most likely not be sufficient. Differentiated factors, hence, should come with differentiated lower and upper limits to reflect the underlying parametric uncertainty.

Study and methodology
Given the evolving aviation climate research on the impact of non-CO2 emissions and the importance of climate effects in SCBA, the question can be raised whether the Dutch guideline for aviation-specific SCBA should be specifically adjusted regarding this topic. The main considerations here are whether the (recent) insights from aviation climate research require us to reconsider applying a (constant) non-CO2 to CO2 emissions ratio, whether to use a different value for such a weighting factor, to use separate monetary valuations for CO2 and non-CO2 impacts and how to address the (scientific) uncertainties around measuring these impacts in a SCBA.

To answer the research questions, we combine desk research and economic theory. In a series of interviews, we have discussed and exchanged the results of our initial analysis and answers with various experts in the field of climate science, aviation, and welfare economics.