Planes vs. Trains
Which offers a more sustainable future?
The following piece is based on notes that I took at a session during the Chatham House Sustainability Accelerator UnConference 2023.
This is by no means an exhaustive discussion of this topic, it is simply a record of the particular conversation that took place. To that end, I would be fascinated to hear from readers about any follow-ups, corrections, or further reading related to this theme.
The questions that the group explored were:
Do trains or planes have a greater environmental impact?
Why are train journeys more expensive than plane journeys?
Can we price negative externalities into transportation costs?
There were seven participants who shared in the discussion who came from a range of backgrounds including aerospace, arts & culture, financial services, and software engineering.
Do trains or planes have a greater environmental impact?
Discussion points:
In general, trains are the mode of transport with the lowest environmental impact and are far less carbon intensive than equivalent plane journeys.
Nevertheless, every journey is unique. The degree to which a given mode of transport generates harmful environmental externalities will vary depending on a broad range of factors ranging from the length of journey, to the occupancy levels, and source of the energy that powers the mode of transport.
If we consider emissions intensity, using domestic journeys within the United Kingdom as an example, plane journeys are significantly worse than train journeys. This is because flights emit very high levels of emissions per passenger, require passengers to make additional journeys to and from the airport, and have uncertain climatic effects beyond this (for example, the reflection of sunlight on contrails), so typically produce greater emissions than other forms of transport.
By comparison, over very long-distance journeys, such as inter-continental travel, a plane may have relatively lower carbon intensity versus other modes of transport available. Other factors that can affect the relative environmental impact of transport over different journeys include: the weight of the luggage transported; the type of fuel; the density of passenger occupancy.
Impact reductions may come with more efficient aircraft designs and the increasing use of electrification in aircraft.
Takeaways:
There was no clear consensus. Some participants reflected that rail networks with higher occupancy rates would continue to offer better opportunities lower carbon travel.
Taking a longer term view, it was not clear to the group whether investment in rail network infrastructure or investment in aircraft design innovation and lower carbon fuel research would be a more effective strategy to reduce overall emissions.
Participants also reflected on trends in consumer demand for air travel, for instance, rapid increases in demand from the Indian market. The question of whether it would be possible to offer de-carbonised air transportation to such a vast consumer base was considered.
It seemed intuitively unlikely to the majority of participants that air travel could be the most environmentally positive path for investment and innovation. The group remained split between those that felt air travel needed to be reduced and those that felt it could innovate away from its externalities through growth and investment.
Why are train journeys more expensive than plane journeys?
Discussion points:
Invariably, rail networks are natural monopolies. Between any two given locations, there is typically only one set of rail tracks. Moreover, train networks require enormous capital expenditure outlays to develop the underlying infrastructure. Likewise, train operators incur vast operating expenditures to buy or lease the trains themselves and to cover staff costs. These factors prohibit, or deter, the entry of any competitors, contributing to higher prices.
By contrast, a plane operator faces far lower barriers to entry. The plane route itself only requires infrastructure at either end of the journey (the airports), whereas, a train requires maintenance capital expenditure for infrastructure laid along the whole length of the track from start to end. Planes can also take any route between the two locations. Similarly, staff costs are lower on planes (staff are only required during the time that the flight is in progress (typically far shorter periods than train journeys). These factors enable operators to enter the market with far lower costs . This helps stimulate a competitive market and lower costs for consumers.
The competitive nature of plane travel has forced operators to find cost efficiencies to increase market share, such as: using peripheral airports located farther from the city for lower landing fees; eliminating on-board services like free meals; using crew for multiple purposes (both boarding agents and air crew); flying for at off-peak runway times to increase equipment utilisation; and running a single model of plane to simplify maintenance. On the other hand, variable costs, like fuel costs, can be higher for plane operators. The lower variable cost of train travel disincentivises monopoly operators to fill trains, resulting in extremely low occupancy rates on trains versus planes.
Consumers rarely consider the all-in cost of plane travel, only accounting for the journey itself, but failing to include the cost of transport to the airport, ancillary purchases from aggressive on-board sales marketing, or hidden fees. Similarly, after accounting for the time taken getting to the airport, checking in, queuing at security and waiting for baggage, trains can often offer travellers shorter inter-city travel times than equivalent short-haul flights.
In a number of jurisdictions, strong labour unionisation amongst rail network employees has reduced technological innovation that would have otherwise lowered costs for consumers. Aerospace unions have historically had less bargaining power.
Takeaways:
The group agreed that policymakers in the United Kingdom have so far failed to deliver a model for rail transportation that incentivises train operators to increase occupancy rates, reduce cost for consumers, and innovate.
Although costs are the primary consideration for most travellers, the relative quality of the travel experience can also be an important factor.
While air travel is frequently cheaper than equivalent rail journeys, marketing tactics used by airline operators and the opacity of all-in costs of plane travel mislead consumers into over-estimating the cost savings of travel by air.
Can we price negative externalities into transportation costs?
Discussion points:
Taxation and subsidisation were the key approaches considered in relation to pricing negative externalities into the cost of travel.
One point of debate concerned whether we should actively subsidise less carbon intensive modes of transport improve outcomes (which might misalign incentives for competition and innovation) or whether all forms of transport be treated equally and taxed according to their relative carbon emissions.
At present in the UK, airlines receive significant subsidies and lower tax treatment than other forms of transport. Airline operators do not pay no fuel tax or VAT, and receive significant subsidies, such as the recent reduction in Air Passenger Duty. By contrast, train operators typically pay energy taxes, VAT and high rail tolls in most European countries – although no VAT in the UK.
Most users of planes are amongst the wealthiest percentile of the global population. In particular, the dramatic growth of private jet travel, the most carbon intensity form of flying, is driven by a tiny fraction of the globe’s wealthiest individuals.
Takeaways:
Taxing consumers for the externalities generated by their air travel with VAT, Air Passenger Duty and other levies is arguably a regressive approach. By contrast, if governments were to tax the producers of aircrafts themselves, this would arguably incentivise manufacturers to innovate and create aircraft that generate fewer negative externalities.
One point of consensus was that the use of private jets should be limited through more aggressive taxation.