Cameron Hepburn

6 December 2006

The Guardian – Flying to new green heights

Cameron Hepburn

The pre-budget report is likely to tax low-cost flights, but only international cooperation can solve climate change.

Today’s pre-budget report is likely to feature a remarkable event. Gordon Brown may raise the air passenger levy, hitting budget flights to Benidorm and shopping hops to New York. The Daily Mail probably has angry headlines already written. But the paper will doubtless find that the Conservatives take little advantage of what, just a few years ago, would have been a golden opportunity to go on the attack. The major British parties are fighting for the green moral high ground, so the new tax will be not be too much of a vote-loser.

The numbers behind this idea add up nicely, as Oxford University’s Benito Müller and Cameron Hepburn have argued. Overseas aid budgets can’t hope to help developing nations adapt to climate change. The World Bank estimates that developing countries will need between $10bn and $40bn annually. Adding just $5 to an average airline ticket would raise $10bn a year.

Müller and Hepburn also make a good political case. Western nations have little interest in boosting aid budgets. But an international tax would be collected and distributed by an international body, so there would be limited domestic political penalties for supporting it. It would also apply to anyone rich enough to travel, whether they come from Switzerland or Eritrea. A major objection of the United States to the Kyoto protocol – that developing nations do not have to pay for emissions – would thus not apply.