Welfare and environmental effects of short-haul flights bans

Abstract

This paper explores the efficacy of short-haul flights bans in reducing environmental external costs and its effects on welfare. Recently implemented by several European countries, the ban policy assumes that the air traffic lost will be diverted to rail giving environmental gains. A model where users are also allowed to use private car and account for all transport external costs is proposed to check this measure. The ban will provoke a shift in the modal split and affect total traffic levels. Rail prices will rise, users surplus and net welfare will fall. External costs are not necessarily reduced. Finally, an ex-ante assessment is done finding that environmental costs only decrease in the Madrid-Barcelona corridor, increasing in the Madrid-Valencia one. Social welfare net of all external costs decreases by 19.6% and 3.1% respectively. Thus, a case-by-case approach for implementing short-haul flights bans would be advisable.