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New Plane Tax: Good or Bad for Sustainable Tourism?
Wednesday, 15 May, 2010
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Easyjet – set to be a winner with load factors of 80% -90% unveiling a ‘green’ jet in 2008
Three years ago we forecast that a whole plane tax was the way to go. The new UK government has taken the plunge, we now forecast that first the EU will follow suit and then the rest of the world.
Britain’s new coalition government has announced it is getting rid of the controversial Air Passenger Duty (APD) which was passionately campaigned against by the UNWTO, PATA and all those long haul destinations that regard the UK as a major source market, in particular the Caribbean.
The APD is to be replaced with a tax on planes, not passengers, according to agreements made between Conservative Prime Minister David Cameron and his deputy Nick Clegg of the Liberal Democrats.
The British government’s plan to replace the APD with a per flight duty, in keeping with the manifesto promises of both the Conservative and Liberal Democratic parties which now form the new administration, was among the list of agreements made to reach a coalition deal on Tuesday. The agreements were made public yesterday.
The agreements gave no further details on the rates of the tax replacing the APD, but it will generally mean that full flights will be cheaper, while flights with fewer passengers will be more expensive.
The APD, which was imposed by the Labour government of former prime minister Gordon Brown, saw passengers paying tax depending on the distance between London and the capital of their destination. The duty on long-haul economy fares to the Caribbean rose from £40 ($60) to £50 ($75 in November 2009 and was to increase further this November.
Tourism stakeholders from all over the world, particularly long haul destinations such as the Caribbean and Thailand and major organizations like UNWTO and PATA had complained bitterly that the APD was discriminatory and had lobbied the UK government to review it.
The fact is that individual APD, purported to be a ‘Green Tax’ was never anything of the sort, merely a transparent effort to use airlines’ bad emissions reputations to collect money from travellers to swell the UK exchequer.
The new method of assessing charges may not be perfect, but at least it is logical and understandable. If one uses the principle of ‘Let the Polluter Pay’ it has the right target in sight – after all it isn’t the passenger that pollutes, it’s the mechanism that the traveler uses that actually creates the emission and releases it into the atmosphere.
It favours the most efficient airlines and harms consumers and the industry least. Above all, it’s reasonably honest.
Where tourism is a fundamental method of development and poverty-alleviation, as it is in many countries, any tax on long haul travel is punitive and mitigates against the least powerful.
The best result in this current economic situation would be to scrap the tax entirely, second best to replace it with a true green tax with actual benefits for poor destinations. The UK government has chosen the third best, and most efficient route, which may well be nuanced in future. It is very likely that cash-hungry governments will follow suit.
BA has argued that emissions trading schemes – such as the EU – ETS – are by far the best way of taxing emissions. Of course they are quite right, until carbon has a real financial value it won’t be considered at all.
Currently both the US and Australia are vacillating – bring on Cap and Trade, Mr Obama!
Valere Tjolle
Valere Tjolle is editor of the Sustainable Tourism Report Suite, special offer at: www.travelmole.com/stories/1142003.php
Valere
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