Consultant Scott Gillespie of tClara has spent a lot of time examining high- and low-value trips, and advocating for travel policies that account for that distinction. It’s not just about cutting down on wasteful spending; he also implores companies to consider business travel’s environmental impact. In his latest contribution, Gillespie does some math to depict how corporate airfares, if based on a flight’s carbon emissions, can help purchasers and airlines meet climate goals.
The business travel industry talks a good game about the importance of sustainable travel. Yet, it has no clear way to judge its progress toward timely decarbonization.
Because business travel will always be in demand, the question is, how much will be acceptable in a climate-focused world?
Roughly 90 percent of business travel’s carbon emissions come from airline travel, yet few, if any, major airlines are on pace to reach their Net Zero targets by 2050. By on pace, I mean projecting an 8 percent annual reduction in carbon emissions from their 2019 baselines. That’s what’s needed to eliminate 92 percent of aviation’s forecasted emissions by 2050 absent notable decarbonization across the industry.

There are two main sets of levers for reducing airline emissions. The first depends on breakthroughs in chemistry and engineering. Think sustainable aviation fuel, batteries and hydrogen fuel. Airlines are placing immense hope on these levers. They will require huge amounts of capital, electricity and many long years to work their magic. Pulling these levers is a necessary but high-risk bet that will not pay off anytime soon.
The second set of levers is based on economics and politics. Think price, demand, profits, taxes and policy. These levers are comparatively simple, powerful and immediately effective.
Applying price-based economic principles is by far the most practical short-term solution for balancing business travel demand with our climate constraints. This is the lever the business travel industry must pull now.
Making Price Proportional To Carbon
All flights have a price at which their carbon emissions are acceptable to a climate-focused society. The socially acceptable price depends on the ticket’s carbon intensity. Here’s how it works.
Imagine a world with a $1 million airfare budget and a socially acceptable CO2 budget of 800,000 kilograms. Therefore, this world’s acceptable carbon intensity is a maximum of 0.80 kilograms of CO2 per dollar spent on air travel. Buying a ticket with a higher carbon intensity means using too much of the carbon budget.
Divide any ticket’s CO2 by the acceptable carbon intensity ratio to find the ticket’s carbon-acceptable airfare. For example, if a ticket’s journey emits 300 kilograms of CO2, the ticket’s carbon-acceptable price must be at least $375 in this world.
Here’s what some carbon-acceptable airfares would be when using 2024’s carbon intensity target of 0.78 CO2 kg per dollar (based on those annual 8 percent reductions since 2019).
Carbon-Acceptable Airfares Roundtrip, excluding taxes and fees, at 0.78 CO2 kilograms per dollar, rounded to nearest $100 |
Route |
Economy cabin |
Premium economy, short-haul |
First class, short-haul |
Premium economy, long-haul |
Business class, long-haul |
First class, long-haul |
Private jet |
New York-Chicago |
$300 |
$300 |
$400 |
|
|
|
$3,200 |
Chicago-Los Angeles |
$500 |
$500 |
$800 |
|
|
|
$6,400 |
Atlanta-Seattle |
$800 |
$800 |
$1,200 |
|
|
|
$9,600 |
New York-London |
$1,200 |
|
|
$1,700 |
$4,600 |
$5,800 |
$14,400 |
San Francisco-Paris |
$1,900 |
|
|
$2,900 |
$7,700 |
$9,600 |
$24,000 |
Seattle-Shanghai |
$2,400 |
|
|
$3,700 |
$9,700 |
$12,200 |
$30,400 |
Source: tClara analysis of Google Flights data on average CO2 per citypair; private jet fares are based on publicly available private jet fuel consumption data adjusted for passenger capacity and assumed load factor. |
Companies are guaranteed to meet their carbon budgets if they buy airfares at or over their tickets’ carbon-acceptable prices and stay within their travel budgets. The climate is indifferent between 10 $500 economy tickets and one $5,000 business class ticket if they have the same carbon intensities.
The annual 8 percent reduction in the full-service airlines’ 2019 carbon intensity value gives us these milestone intensity targets (“well-to-wake” CO2 kg per air spend dollar).
The carbon intensity metric is a bright line for judging whether any airfare is carbon-acceptable. Collectively, it is the gauge by which we can best judge the business travel industry’s progress toward decarbonizing its travel. Simply compare the industry’s actual carbon intensity to its ever-declining annual carbon intensity target.
The business travel industry’s degree of decarbonization progress or lack thereof will be remarkably clear.
Higher Airfares Ahead
Organizations must accept the premise of paying more to pollute less. This paradigm shift is essential for making business travel acceptable to a climate-focused world.
Because each year’s carbon intensity target must decrease by 8 percent, the price of carbon-acceptable airfares must increase annually by nearly 9 percent, absent any other carbon reductions.
Airlines can mitigate these steep annual price increases by decarbonizing their operations. The more they decarbonize, the lower the carbon-acceptable airfares.
The chart below shows how airfares would change over time across four scenarios, based on tClara’s analysis of data from the International Air Transport Association and the International Council on Clean Transportation.
The red line uses the “business as usual” projections — minimal improvement in carbon emissions. This is a worst-case scenario that highlights how high acceptable airfares would need to be without decarbonization. The other three lines incorporate ICCT’s projected carbon reductions applying different levels of optimism about the airline industry’s ability to decarbonize itself. Those assumptions rely heavily on technological advances and commercial acceptability.
As airlines decarbonize their flights over time, the carbon-acceptable prices will fall proportionally. This approach strongly incentivizes the airline industry to decarbonize itself to avoid punitively high carbon-acceptable airfares.
What if a traveler can’t justify their trip at the cost of a carbon-acceptable airfare? They simply choose a different itinerary with a lower price and acceptable carbon intensity, or don’t travel by air. Getting the cheapest price is no longer the goal; getting a carbon-acceptable fare is.
Taking Action Toward A Better World
By adopting carbon-acceptable airfares for business travel, organizations will make travelers keenly aware of their travel-related carbon emissions, and that reducing a trip’s carbon-acceptable price means taking lower-carbon trips.
Companies will weed out low-value business trips as they make increasingly disciplined decisions about each trip’s expected costs and benefits. As carbon-acceptable airfares rise, companies will invest more time and money in making virtual and in-person meetings more effective. Meeting science will emerge as an essential factor.
Perhaps most importantly, society will see business travel as a climate-responsible activity, one used by organizations making justifiable uses of their ever-shrinking carbon budgets.
Companies committed to traveling responsibly should:
- Model the carbon-acceptable airfares for your top city pairs. Then, brief your chief sustainability officer, CFO and travel budget owners on this approach and its merits, namely that they can expect fewer low-value trips, higher return on travel and less traveler friction, all while achieving their goals for reducing travel emissions.
- Establish carbon budgets and carbon intensity goals for the next five years. Use these two factors to derive the corresponding annual air spend budgets. Implement invisible carbon budgets for all travel.
- Encourage your online booking tool provider to display carbon-acceptable fares to travelers and trip approvers.
- Contract with airlines based on their carbon intensity trends. Lower is always better for the climate. Rewrite airline contracts to reward your business and travelers for reducing your organization’s carbon intensity. Because the practical outcome is higher fares, airlines would get higher profit margins on lower volumes. They should replace market share goals with ever-decreasing carbon-intensity goals — it is in their financial interest to do so — and reward buyers who meet these goals with benefits that improve the traveler experience.
- Educate your travelers about the merits of using carbon-acceptable fares, then make it a “must” plank in your travel policy.
Carbon-acceptable airfares offer a quick, clear and effective method for de-risking the airline industry’s decarbonization bet. Businesses need not wait for policymakers to solve this problem. Help make business travel strategically sustainable by adopting this paradigm now.
This Op Ed was created in collaboration with The Company Dime‘s Editorial Board of travel managers.