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IATAL — an outline proposal for an International Air Travel Adaptation Levy

Publication date:
B. Müller
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A well-designed levy on air travel dedicated to funding climate change adaptation in developing countries would not only reduce emissions, but also raise the necessary 10 billion euros required for only 5 euros per flight on average. Furthermore, this paper argues, it could do so in a way that is equitable, efficient and politically acceptable.The merits of such a levy are described in this paper and contrasted against the relative disadvantages of existing mechanisms.The authors suggest that a levy on flights where demand is responsive to price would serve to reduce the contribution of air travel to climate change through:reducing the demand for air travel and thus of emissionsproviding a stimulus to airline companies to develop cleaner technologiesWhere prices are less responsive to demand, such as in long-haul business travel, the levy would serve as an effective revenue-raising mechanism, with the following benefits:the levy would be equitable, because regular or long-haul business travellers would pay the highest amounts. The levy would therefore tax most heavily those who contributed most to airline emissions reductions and who could most afford it. Further, the levy would serve to redistribute income from the wealthiest to the poorest: the populations in developing countries who are most vulnerable to climate changethe tax would be efficient as it would combine emissions reduction and revenue collection in a single mechanismFinally, as the levy would provide an international, rather than national, mechanism for collecting revenue for adaptation, it would avoid the political difficulties inherent in imposing new taxes or mandatory caps at the national level.