A Merrill Lynch report says that a proposed new E.U. emissions trading scheme — which requires airlines in Europe to pay for their carbon emissions, and is expected to be approved later this year — will drive greater efficiency in the industry, finchannel.com reports.
The research shows that under the new scheme the bloc’s 27 member states would be forced to pay an estimated €3 billion a year from 2015, for their CO2 emissions.
The move is expected to drive demand for more fuel-efficient aircraft and increase the focus on the most profitable routes.
But new research presented at a climate change conference in U.K. says carbon trading will not solve the problems of soaring emissions from the aviation and shipping industries.
Manchester University climate scientist Alice Bows told the Guardian, that future carbon cuts needed will be so severe that both sectors will need to reduce their own emissions as well.
Both industries are taking initiatives to curb their CO2 emissions.
Just recently, the Air Transport Association revealed that U.S. airlines reduced 2.5 billion metric tons of CO2 from 1978 to 2007. Shipping companies are also building bigger to curb emissions.