Proposed new environmental taxes in Europe have brought in new challenges to the aviation sector, which is already decimated by the Covid-19 pandemic.
Carbon taxes are among a series of measures proposed to curb aviation emissions, including an eco-tax on tickets, which obviously will jack up airfares at a time when the pandemic caused commercial air travel to come to a standstill and now at only a fraction of 2019 demand!
For example in France, the Convention Citoyenne pour le Climat (CCC) – a citizens’ body created under President Emmanuel Macron – is proposing a series of measures to curb aviation emissions, including an eco-tax on tickets issued in France, to raise 4.2bn euros annually.
The French Civil Aviation Authority (DGAC) estimates that if implemented the CCC proposal would lead to 150,000 job losses and cost the French economy 5-6bn euros in lost GDP.
Against those economic costs, the measures would reduce emissions by 3.5mn tonnes a year, which is less than 1% of France’s total emissions.
Similar proposal to levy air passenger taxes has been made in Germany, the Netherlands and Switzerland.
The onset of Covid-19 has seen passenger numbers in France plunge 80% since March, while airline revenues have fallen an estimated 15bn euros, putting about 466,000 jobs at risk, according to IATA analysis. France will this year lose its position as the world’s ninth biggest travel market.
An aviation tax pushes up costs and has a marginal effect on reducing emissions. IATA analysis shows that if the tax is introduced, for each tonne of CO2 avoided, passengers will be paying nearly $2,470.
To achieve the same environmental outcome with an offsetting mechanism or an emissions trading scheme, the cost would be 100 times less, industry analysts say. Similarly, achieving the same CO2 mitigation using sustainable aviation fuels would be 10 times cheaper.
This is why governments in the UN ruled against a tax and supported a global offsetting mechanism to deal with emissions from international aviation – the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The world’s first global carbon offset scheme for an economic sector – CORSIA was agreed by governments through the International Civil Aviation Organisation (ICAO) and applies to all international flights.
It is estimated CORSIA will reduce emissions by around 2.5bn tonnes over the lifetime of the scheme.
The aviation industry says it has global commitments to decarbonise. From 2021 the sector is committed to carbon-neutral growth, and airlines globally are working to cut the sector’s net carbon footprint to half of 2005 levels by 2050.
IATA warned that a unilateral approach to reducing aviation’s emissions could compromise the progress that is being made globally.
“Taxation aimed at stopping people from exercising their freedom to fly will make travel more expensive but do very little to reduce emissions. It is a politician’s feel-good solution, without taking responsibility for the negative impact it has on the economy or the mobility restrictions it imposes on people with lower incomes,” said Alexandre de Juniac, IATA director general.
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