Impacts on personal domestic aviation passengers, relative to the counterfactual. Personal air passengers in the busiest Melbourne-Sydney route reduced by 63%, with less effect on the longer Melbourne-Brisbane route. Overnight robotaxis are most used when N=4 for distances between 600 and 1000 km.

Aggregate impacts on personal domestic aviation from comparative static scenarios. Scenarios: EV=Electric vehicle, AV=Autonomous vehicles, ON=Overnight robotaxis, Cspd=Increased car speed, Tax=Carbon tax on aviation.

Elasticities vary with travel distance.

This is the main data and a simple fitted model (excludes individual route price data) for solo travellers (N=1) and groups (N>1). Marker size reflects the number of air trips. We estimate a discrete choice disutility model with car and air travel modes using Bayesian priors.

...and increase gradually as more segments electrify, while optimal battery adoption is "all-or-nothing" in the on-ship approach. The chart shows future scenarios with a US$200 carbon price. But how feasible is powering a large vessel en route through a cable?...

Key figure from the paper

If research subsidies are unavailable, both a carbon tax and clean production subsidies (which encourage investment in clean technology) apply.

Optimal policy leads to the lowest warming levels and earlier peak. Using only clean research subsidies leads to much higher warming than using either (clean or dirty) production instrument (the paper does not consider climate tipping risks).

If research subsidies are unavailable, both a carbon tax and clean production subsidies (which encourage investment in clean technology) apply.

If only one instrument is available permanently, a carbon tax wins in most calibrations. But if optimal policy occurs after 2050, a clean research subsidy wins some, a clean production subsidy or even a dirty research tax (a proxy for stopping fossil fuel exploration or new extraction) can win.

How does a carbon (dirty production) tax compare against clean research and production subsidies? I use a three-sector (services, clean and dirty) IAM model with endogenous technology. Optimal policy uses a carbon tax and a clean research subsidy...
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