How should airports be regulated to contain market power? This round table proceedings first
examines whether they need to be regulated at all. It concludes that because regulation
is inevitably imperfect and costly, policy makers should establish conditions for
competition to emerge between airports in preference to comprehensive regulation,
Economic regulation is sometimes necessary, such as when airports are heavily
congested. The proceedings determines which approaches are likely to work best and
also assesses strategies for managing greenhouse gas emissions. It finds that although
including aviation in an open emission trading scheme could help mitigate emissions
efficiently across the economy, it should not be expected to produce major cuts in
CO2-emissions in aviation itself.
Finally the proceedings identifies the economic conditions under which high-speed
rail can provide a competitive substitute for aviation, revealing the limited relevance
of rail to reducing greenhouse gas emissions from this part of the transport market.