Air-travel taxes increasing emissions?
A study by Ireland’s Economic and Social Reseach Institute argues that the February increase in the UK’s air passenger duty — a tax on flights aimed at discouraging travel — is likely to cause people to take more long-distance flights, and thus increase overall carbon emissions arising from air-travel. One would have expected the UK Treasury to have used sophisticated micro-economic models before deciding on the increase, but this incident seems to argue otherwise.
“Since its doubling in February, air passenger duty has been levied at a rate of £10 on economy class departures from the UK to countries in the European Economic Area and £40 for travel outside the EEA. The duty is doubled for travellers in other classes.
The doubling of tax could make flying from Britain to Bucharest relatively more attractive than hopping over to Amsterdam because the increase in ticket prices of the longer journey will be proportionately lower.
Outside Europe, the increase in the cost of flying to Australia will be relatively low compared with the rise for a trip to North Africa, even though emissions on flights half-way around the world are much greater.
Coming so soon after the chancellor has been accused of failing to listen to his officials’ advice on the taxation of pensions, this research will add a new hurdle for Mr Brown on his way to Number 10. It suggests that the Treasury’s advice and modelling of air passenger duty was itself deficient.
The research also suggests that income rather than price best explains demand for flying. Treasury estimates only took into account the number of passengers flying, but not the destinations they were likely to choose.”