Adopting a holistic approach to a just transition: lessons from the aviation industry

In addressing the critical challenges of climate change, a holistic approach is essential for designing strategies and policies that ensure a fair and equitable transition. By integrating environmental sustainability with an awareness of socio-economic impacts on diverse communities, we can create effective solutions that benefit both the planet and its people. 

Climate change is widely considered a “wicked problem,” a term introduced by Rittel and Webber (1973) to describe complex multifaceted issues that are difficult to define and inherently unsolvable using traditional methods. The issue of climate change embodies many characteristics of “wicked problems,” among others: no definitive or unique formulation, no exhaustive list of solutions, and a need for cross-disciplinary collaboration to solve it. These attributes require comprehensive, adaptive, and collaborative strategies to manage its complexities and uncertainties.

Many international policies aim to mitigate the causes of climate change by targeting the most polluting industries. The challenge is that some policies on climate change prioritise desirable long-term environmental benefits—like the reduction of CO₂ concentration in the atmosphere—but do not fully consider the short- and mid-term social impacts like the consequences on employment or wealth creation. We could say that they take the inter-generational justice perspective, emphasising fairness between present and future generations, but do not fully incorporate the intra-generational justice perspective, which focuses on fairness and equity among people within the same generation.

The implications of reducing air travel on vulnerable economies are multifaceted and complex. The intended decrease in connectivity can have a range of economic, social, and environmental impacts, particularly on vulnerable economies.

Decarbonising aviation: addressing scepticism and regulatory pressures

The aviation industry has presented a decarbonisation strategy towards net zero by 2050. This roadmap leans heavily on the switch to Sustainable Aviation Fuels and hydrogen in addition to technology improvements such as more fuel-efficient aircraft and electric aircraft. There is considerable scepticism regarding the feasibility of this roadmap. As a result, there is increasing pressure to introduce policy measures that directly or indirectly reduce demand (growth). In addition to policy measures, there are calls for behavioural change. “Flygskam” (Swedish for “flight shame”) is a social movement, originating in the spring of 2018, that captures the growing awareness and guilt associated with the environmental impact of air travel. As a result of these movements, regulatory action is arising from various countries to promote the reduction of commercial flights.

In recent years, various countries and regions have implemented or proposed regulations and measures to limit aviation flights and reduce their environmental impact.  For example, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), adopted by the International Civil Aviation Organization (ICAO), is a scheme that aims to stabilise international aviation emissions at 2020 levels, ensuring that any growth in emissions beyond that point is offset. The scheme is voluntary from 2021 to 2026 but it will become mandatory for most countries as from 2027. Airlines will need to purchase carbon offsets for emissions that exceed 2020 levels.

Integrating environmental and social impacts in aviation policy for dependent economies

A major challenge then is considering all environmental and social impacts that condition the development of dependent economies and designing policies integrating these factors. Some of the questions that should be answered are: What are the socio-economic implications of environmental policies taken in Europe in these regions that are dependent on European trade and tourism? To what extent can these regions diversify to other sectors? And how feasible and beneficial is it for tourism-outbound markets to accommodate more tourism demand locally?

Among the intra-generational issues, the reduction of global inequality is of utmost importance for nations across the globe, regardless of their level of development. However, some countries and regions at early and medium stages of the economic integration process seem to be trapped by the combination of these four factors:

• Geographical isolation: these islands and archipelagos are generally far away from the mainland or the metropolis, with limited connectivity mainly ensured by air.
• Economic dependence: they rely on increased trade and tourism because of historical reasons (colonisation processes and dependence on the metropolis or a bigger economy) or geographical reasons (beauty of the natural landscape, isolation and peace to escape from urban contexts)
• Exposure to environmental hazards: they are expected to be disproportionally affected by climate change (exposure to natural catastrophes, limited mitigation and adaptation reactivity)
• Economic vulnerability: they have limited resources due to their insularity and they can be negatively impacted by key mitigation measures adopted by their bigger commercial partners (which could reverse the trend of reducing inequality).

In essence, a transition is just when the positive and negative impacts are shared in an equitable way.

Balancing act: the complex implications of air travel reductions on vulnerable economies

The implications of reducing air travel on vulnerable economies are multifaceted and complex. The intended decrease in connectivity can have a range of economic, social, and environmental impacts, particularly on vulnerable economies. Different measures aim to limit growth or even reduce air travel. The prevailing practices are: (i) introducing/increasing aviation-related taxes or noise/emission-based airport charges, (ii) including aviation emissions in carbon emissions markets, or (iii) applying caps.

The objective of reducing air travel is mainly driven by the environmental desired effect (a reduction of CO2 emissions) and acting on different levers as illustrated in Table 1.

Table 1: Intended and unintended effects of climate change and other environmental impact measures

Policy measures and behavioural change, resulting in reduced (growth of) leisure air travel demand will impact both vulnerable tourism-inbound countries as well as tourism-outbound markets (see Figure 1).

Figure 1:  Dynamics resulting from a strong reduction of international leisure air travel

Source: Broekema Aviation Advisory Services (2023)

The economic realities of regions that significantly rely on aviation must be carefully balanced with the requirements of environmental protection by policymakers. The issue is that certain measures, such as increasing taxes or imposing flight caps, which are intended to mitigate the environmental impact of aviation, may have unintended adverse consequences for countries whose economies are reliant on international connectivity.

Defining a just transition: equitable strategies for sustainable development

A just transition is broadly defined by the United Nations as ensuring that no one is left or pushed behind in the transition to low-carbon and environmentally sustainable economies and societies. This approach can also enable more ambitious climate action, and provide an impetus to attaining the Sustainable Development Goals (SDGs). In essence, a transition is just when the positive and negative impacts are shared in an equitable way.

In the end, the just transition is addressing this wicked problem with a holistic approach that considers different stakeholders and the impacts that emerge in all its dimensions: economic, social, and environmental; intended primary effects and unintended secondary effects; and short-, mid-, and long-term impacts to account for inter- and intra-generational dimensions.

The global economic system is highly vulnerable to shock changes in both volume and price of international transport, as witnessed during the COVID-19 pandemic. Over time, rapidly expanding air networks and lower airfares have played a role in reducing inequality and enabling developing nations to experience significant improvements in their standard of living.

Exploring solutions that combine the reduction of environmental impacts with the creation of opportunities is essential for a just transition.

Achieving a just transition for aviation and beyond

Exploring solutions that combine the reduction of environmental impacts with the creation of opportunities is essential for a just transition. Measures need to be found that achieve the same or even more carbon reduction on a global scale while at the same time reducing inequality and contributing to other SDGs. Such options do exist.

One solution is to introduce a carbon solidarity contribution levied by airlines at the point of sale, as an alternative to high national aviation taxes. Such a levy can discriminate by point of sale, making it possible to avoid burdening travellers from less-developed countries with the same fees as those from richer nations. The proceeds of such a fee could be contributed to a fund specifically targeted to finance the energy transition in the most vulnerable countries, reducing energy costs for citizens and increasing business competitiveness.

Another potential solution is to accelerate fleet renewal and aircraft innovation. New-generation aircraft have a 10% to 15% lower fuel burn, emit less particulate matter, and cause less noise. Allowing airlines to accelerate the depreciation of aircraft, linked to a commitment on average fleet age, will help speed this process up. Additionally, embracing international cooperation in carbon reduction (Article 6 in Paris Agreement) by approving Gold Standard-carbon projects as offsets for emissions not covered by CORSIA on flights to non-EU destinations could also contribute to global climate goals without disproportionately affecting developing nations.

The achievement of a just transition in aviation climate policies will require more research. We need to frame, in an accurate way, the cause-and-effect mechanisms of aviation policies; to understand the whole set of implications in economic, environmental, and social dimensions; and to better design the strategies to address this multi-faceted wicked problem. By taking a holistic perspective and focusing on equity, industries and governments can work together towards a more sustainable and just future.

Gerben Broekmena is an aviation strategist with 25+-years’ experience in the aviation sector both in consulting roles at McKinsey & Company and Broekema Aviation Advisory Services as well as in corporate roles at Royal Schiphol Group where he held the position of Head of Group Strategy & International Development until 2017. He holds a Master’s degree in Human and Economic Geography from the University of Groningen with a specialization in transport geography & economics. Gerben has a passion for researching and shaping the role of aviation in society and developing a perspective on how to achieve a cost-effective and ‘just’-transition. He is a leading expert in (future) electric Regional Air Mobility. Based near Amsterdam, the Netherlands.

Vishal Babajee is a seasoned executive with 20+ years of experience across diverse corporate roles in Aviation, complemented by a background in economic and financial research within Banking and as Economist in the Ministry of Economic Development & Financial Services in Mauritius. He holds a Specialised Master degree in Strategy & Organisation Consulting from ESCP Business School and a BSc (Hons) in Economics from the University of Hertfordshire. Vishal has been a guest speaker at ESCP Business School for the Masters programmes in Hospitality & Tourism Management, Strategy & Organisation Consulting, and Big Data & Business Analytics. He is passionate about bridging the practitioner-academic gap in the areas of Strategy, Transformation, Neuroscience, Customer Experience, Technology, Sustainability and Economic Development.

Ramón Fisac García holds a MSc in Industrial Engineering (2007) and a PhD in Management Engineering (2014) from Universidad Politecnica de Madrid (UPM). Business School, where he teaches sustainability, entrepreneurship, and innovation. He is Executive Director of the Master in Hospitality and Tourism Management. His fields of research are innovative business models for sustainable tourism, behavioural transformation in the tourism industry and the socio-economic impacts of tourism in destinations. For three years he worked as a sustainability analyst at ACCIONA, where he designed and implemented the Corporate Training Program on Sustainability. During the last decade, he has been lecturing for postgraduate programs in different national Universities and international business schools (Mexico, Indonesia).

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