Over on Free Exchange, one of the anonymous bloggers discusses carbon taxes on airlines:
In response, Mr Hall does an excellent job examining price elasticities in arguing that airlines would probably not suffer "massive dislocations" if faced with carbon pricing. To this I would add that so politicised an industry as air travel need not fear dislocations in any case; governments would react incredibly quickly to pull back on any part of an agreed-upon energy bill that appeared to cause significant damage to airlines or aeroplane manufacturers. This, in fact, is one of the arguments made by carbon pricing sceptics--that governments will not allow the necessary pain to be felt.
I'm with the sceptics on this one: flying is, all in all, the most wasteful consumer of carbon on the planet. Anything that doesn't touch airlines will do a poor job of addressing carbon consumption. And I also agree with the Economist blogger: governments will not allow anything to harm the airline industry.
What I don't quite understand is why this is so. Why is everyone obsessed with having protected domestic airlines, and indeed, airplane manufacturing capacity? The minimum efficient scale of airframe manufacture is so large that the efficient number of airframe manufacturers for the current global market seems to be one; nonetheless, Europe has plowed fantastic sums of money into Airbus. I believe the original rationale was quasi-military, but it's hard to take this seriously from a group of nations who have ratcheted down their military spending to the point that not one of them could project enough force to storm the World Cricket Cup without an American airlift. Now China, too, wants its own airframe manufacturer. And everyone wants to protect their national airlines.
Why is flying so emotional? And so heavily, heavily protected by the heavy hand of the state?