Will Aviation Expansion Allow the UK to Achieve Economic Growth and Meet Climate Commitments Simultaneously?

 The aviation industry provides 1 million jobs, contributes £22 billion to the UK’s GDP [Sustainable Aviation, 2025], and facilitated nearly 300 million passenger journeys annually pre-COVID [CAA, 2025]. However, it accounts for 7% of the UK’s environmental emissions [Tyers et al., 2025], a number expected to increase as other sectors decarbonise. The UK’s net-zero 2050 target under the Climate Change Act, along with its 6^th carbon budget, mandates the immediate adoption of alternatives to reduce carbon emissions generated from the aviation industry [UK Government, 2021]. 

The multiplier effect stipulates that initial rounds of spending will lead to greater-than-proportionate increases in GDP. Framing the concept around Heathrow’s proposed third runway, the £49 billion investment will increase passenger capacity from 84 to 150 million and create 100,000 jobs [Cook et al., 2025]. These new opportunities will provide workers with secure incomes, supporting higher consumption of goods and services. The resulting increase in demand leads to more retained profits for firms that can be re-invested to raise productivity and lower long-run operational costs. Furthermore, the third runway will boost international connectivity, opening the door for export-led growth where UK net trade (exports minus imports) could rise. Economic growth is likely, but whether climate commitments can be met simultaneously remains uncertain. One plausible explanation is that as workers and firms earn more, rising income and corporation tax paid to the government can contribute to cutting carbon emissions through sustainable aviation fuel (SAF) investment. 

SAF, however, does face significant challenges that restrict its effectiveness. It can reduce lifecycle carbon emissions by up to 70% [Yip, 2025], but its production is still very limited. The Climate Change Committee’s (CCC) 2050 mandates require it to make up 22% of fuel by 2040; the CCC reports it is currently at just 2%. Even with higher adoption, limited sustainable feedstocks and high production costs will still significantly cap how much SAF can be produced. Even with SAF, we still might not be able to meet our climate commitments and reach growth simultaneously because of carbon budget constraints (a legally binding limit of how much carbon can be emitted). In 2024, UK aviation emissions hit 38.4Mt of CO₂e rising 9% from the previous year [CCC, 2025]. Yet the CCC set a 2025 cap for aviation at 23Mt. Put simply, the carbon budget constraints act as a fixed ceiling on emissions and mean that even with improvements like SAF, we would still need an almost implausible reduction in CO₂ in other areas to compensate.  

The Environmental Kuznets Curve (EKC) illustrates the relationship between economic growth and environmental degradation. This model suggests that early growth in low-income countries amplifies carbon emissions until a certain national income is reached. Beyond this point, further expansion should align with sustainable development, as wealthier nations channel capital into cleaner energy grids to mitigate climate risks. The UK, a post-industrial high-income economy with a GDP per capita of £37,000 [World Bank, 2025], is therefore positioned on the downward slope of the EKC, where growth ought to support investment in environmental protection. However, aviation expansion threatens to slow this trajectory: while it stimulates growth, the sector is highly carbon-intensive, accounting for 7% of UK greenhouse gas emissions in 2022 [Tyers et al., 2025]. Thus, additional capacity risks locking in decades of emissions through path dependency. Therefore, unless decarbonisation policies, such as the electrification of short-haul flights, are adopted the UK’s net-zero ambition could be grounded before take-off. 

However, the UK could incorporate Pigouvian logic to correct the social welfare losses from aviation emissions. The absence of carbon taxation means that the social costs of pollution are not reflected in market transactions, leading to the overconsumption of fossil fuels [Pigou, 1920]. Taxes would therefore incentivise firms to adopt low-carbon capital, while the government could use the increased tax revenue to further offset emissions. A revenue-neutral system, using excess revenue to decrease other taxes, could be implemented in the UK, already demonstrating potential in British Columbia, where per-capita emissions fell by 5–15%, while the economy grew in line with the rest of Canada [Durning, 2014]. However, taxation alone is insufficient to deliver net zero. Although the market equilibrium operates closer to the socially optimum level, ultimately aviation emissions are still set to exceed the UK’s 2025 target. 

To summarise, the UK government will likely not achieve economic growth and meet its climate commitment targets simultaneously. The multiplier effect confirms that growth is inevitable, but this growth will most certainly drive environmental degradation, as displayed by the Kuznets Curve. Carbon budget constraints and Pigouvian taxation are inadequate to close this gap, and even with potential electrification, sustainable aviation fuels, and afforestation, the reductions required are simply too far beyond reach in the short term. Further aviation expansion almost certainly ensures that net-zero by 2050 is wholly unattainable. The conclusion is thus clear: the UK must choose between growth and climate commitments, because it cannot deliver both.  

The King's Economists are a group of five students from King's College School, consisting of Sen Patel, George Champion, Lucas Day, Deni Darenberg and Joseph Brannigan. The team was announced as one of our two 2025 competition winners.

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