Climate Change and Tourism - UNEP - Division of Technology ...

156 Climate Change and Tourism – Responding to Global Challenges
country’s emissions up to 10%. 701 Instead, Article 2, paragraph 2 of the Kyoto Protocol states that the
responsibility for limiting or reducing GHG emissions from aviation falls to the Annex I Parties, working
through the International Civil Aviation Organization (ICAO). ICAO’s geographic and policy ambit
reflects its membership of 190 states, well beyond the 37 ratifying Annex I countries or even the 167
which have ratified the Protocol. While focusing on airframe/engine technology, air traffic management
and operational practices, ICAO has also investigated the use of ‘market-based’ measures such as taxes,
charges and emissions trading. Such economic instruments would have effects beyond aviation and
tourism. ICAO has effectively ruled out taxes and charges, as well as ‘closed’ (intra-aviation) emissions
trading, and is now grappling with issues of scope in ‘open’ emissions trading, on which discussion at
ICAO’s Assembly Session in September 2007 was expected to be seminal.
At present, the most likely market instrument to be implemented is emission trading. This approach is
supported in principle by a number of airlines and aviation organisations. Emission trading is generally
seen as an option that is more flexible than that of taxation. The EU proposal (see Box 32) is an important
step towards a worldwide cap and trade scheme that is likely to reduce demand through higher ticket
prices and encourage airlines to press the aircraft and engine manufactures to develop more efficient
aircraft.
Table 12.2 Comparison of market-based instruments to reduce greenhouse gas emissions from
aviation
Type of levy Operational issues Financing (in the EU) Effect on emissions Legal aspects
Charge on
ticket
UNWTO, 9 July 2008
Simple and possible
to introduce in the
short-term; airlines
could be responsible
for collecting the
charge.
Fuel tax A tax could be added
as a fixed amount per
l of fuel sold or as a
percentage of current
fuel price; petroleum
companies could
collect the tax.
Emission tax Complicated, given
the many factors that
determine overall
radiative forcing.
Estimates of
emissions possible
when considering
aircraft type, engines,
LTOs, and routings.
Emission
trading
Integration with
existing trading
schemes, for example
EU ETS.
Source: Becken, S. and Hay, J. (2007) 703
Assuming a charge of
5% on the airfare, this
charge could raise
about € 10–16 billion
annually.
Assuming a tax of €
0.32 per l of kerosene
a total of about € 14
billion could be
expected.
Assuming emission
charges per l of
kerosene of € 0.12 for
CO 2 , € 0.12 for water
vapour and € 0.6 for
NOx, the total amount
would be around € 14
billion.
Depending on market
price for CO 2
Probably little effect
on demand given
estimated price
elasticities; no
incentive for airlines
to reduce emissions.
Incentive for emission
reductions; research
into fuel-efficient
technologies and
operations.
An emission tax
would have the
greatest impact on
emission reductions
and provides an
incentive for
technological and
operational
improvements for
airlines.
Directly controlled
through the cap in
the case of a cap-and-
trade scheme.
Legally feasible.
Problematic,
especially concerning
the many bilateral
agreements including
tax exemption for
fuel.
Likely to be legally
feasible unless the tax
is closely correlated to
fuel usage, because
this could be seen as
a hidden tax on
kerosene.
Likely to be legally
feasible.
Other market-based instruments include policies to establish additional charges on tickets, fuel taxes
and emission taxes. A charge on tickets is the most straightforward and simplest option to internalise the
climate-change costs of aviation (see Table 12.2). However, if the charge is low to moderate, demand
will possibly continue to grow, and a ticket charge would also not provide an incentive for airlines to
reduce their emissions. If the tax is clearly coupled to the emissions of the flight, long-haul flights will