Tiny flight tax could raise billions to protect people from climate change

News, 31 March 2011

A small tax on international airline tickets could raise US$10 billion a year to help people to adapt to the impacts of climate change, say economists at the International Institute for Environment and Development.

Tom Birch and Muyeye Chambwera make the case for such a tax in a briefing paper to be published online on Monday 4 April, as the latest round of intergovernmental negotiations on how to tackle climate change get under way in Bangkok, Thailand.

Southern Thailand is in the grip of major floods that have affected close to a million people. This is exactly the kind of impact that scientists say countries and communities will need to adapt to as climate change takes hold.

Birch and Chambwera say that a tax on airline tickets would be an ideal way to generate funds to help people to adapt to such impacts, as it would be fair, fast, predictable, cheap to implement and would not harm the aviation industry or tourism-dependent developing nations.

"The beauty of such a tax is that it would follow the 'polluter pays' principle and transfer resources from those who cause the problem to those who need to adapt to its effects," says Muyeye Chambwera. "Passengers would barely notice a small tax of just US$6 per economy-class ticket and US$62 for business class tickets but this would generate billions of dollars."

Between now and 2050 the costs of adapting to climate change could reach US$100 billion per year, according to some estimates.

At the United Nations negotiations, which run from 3-8 April, 193 governments will discuss how to generate this money. The UN climate change convention already has a fund – the Adaptation Fund – but so far it has little money to disburse.

"The Adaptation Fund can only be credible if it is supplied with ongoing financing streams of sufficient quantity and quality," says Tom Birch. "Financing is currently both insufficient and irregular because it is dependent on national political and economic cycles."

"A tax on international airline tickets is an innovative solution to this political barrier and would mobilise a significant and stable source of finance. It should be implemented as soon as possible."

Download the briefing paper

Contact

For interviews
Tom Birch (tom.birch@iied.org) +44 (0)2073882117

For the briefing paper, contact:

mike.shanahan@iied.org

For more information on adaptation to climate change, see videos, blogs and more on website of the 5th International Conference on Community Based Adaptation to Climate Change which ended today (31 March)


 

Notes to editors

The briefing paper by Birch and Chambwera comes ahead of a more detailed, peer-reviewed research paper in IIED’s new Shaping Sustainable Markets research paper series.

It analyses the use of similar schemes such as the French Solidarity Levy and Air Passenger Duty to provide lessons on the implementation and impact on demand for air travel. (Countries such as Chile, France, Madagascar, Mauritius, Niger and South Korea already use a similar air-ticket tax to raise funds to combat HIV/AIDS, malaria and tuberculosis).

It updates the key assumptions made in a paper by Hepburn and Muller paper, such as the amount of adaptation revenue needed, potential sources and how IAPAL could be a key contribution to adaptation funding needs.
 

The International Institute for Environment and Development (IIED) is an independent, non-profit research institute. Set up in 1971 and based in London, IIED provides expertise and leadership in researching and achieving sustainable development (see: www.iied.org).

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