The new emissions tax will hike airfares while doing little to help the environment according to a new report.
The EU Emissions Trading System (ETS) expanded to include airlines from 1 January which will cost airlines £1 billion annually.
Airlines are now required to buy a ‘permit to pollute’ to cover the cost of their carbon emissions – with extra fees for those who exceed their emissions limit.
But a report from social policy think-tank Civitas claims the scheme only offers marginal emission reductions.
In addition the extra charges will be passed on to businesses and consumers through higher prices.
It estimates a British family of four will be paying up to £130 extra for return trans-Atlantic flights by 2020.
The scheme only applies to EU airports which means Geneva, for example, could receive Europe-bound travellers from the rest of the world more cheaply than its EU competitors.
Civitas researcher David Merlin-Jones said: “Perversely, the EU ETS will encourage flight paths to deviate from the shortest, most fuel-efficient, routes in order to avoid the EU's unilateral price hikes.
“Ironically, the overall result could be more CO2 emissions produced, not less.”
The report states: “The EU ETS is not the cheapest way to reduce emissions, nor the method to reduce them sustainably.
“After the carbon traders have taken their profits, the British government is expected to receive in the region of £5 billion annually from the sale of carbon credits.
“However, the Government has explicitly refused to channel any of these funds towards environmental ends and lowering the cost of low-carbon energy production, even in the face of being asked to by the EU.
“This means that consumers face higher prices but with little prospect of the economy adapting to be less reliant on fossil fuels.”
By Diane Evans
