WHAT IS A WELL DESIGNED EMISISONS TRADING SYSTEM?
ü A well designed ETS is non-discriminatory and whatever the geographical scope of the ETS, should include all operators and should treat them equally regardless of nationality. This imposes a lot of problems as international airspace is governed by international laws and thus causes political clashes in the global airspace
ü It should also be an open system where all aircraft operators have reach to exchange and trade permits seamlessly. This might be achieved with the establishment of an effective exchange mechanism
ü Other market based policy tools should be renounced. Research already indicates that environmental taxes and subsidies are inefficient and create deadweight losses to society
ü Administration costs should be kept at minimum and verification processes should be transparent. A central administration authority should be established and monitoring costs should be kept in check
