Can a frequent flyer tax could solve aviation’s carbon challenge?

World News

Decarbonisation may be a priority for all businesses at the moment, but for the aviation sector the issue is particularly acute. The global aviation industry is responsible for about 2.5 per cent of the world’s carbon emissions – a bigger contribution than Australia – and if the aviation industry was a country, it would be one of the world’s 10 worst polluters.

Before the COVID-19 pandemic, airlines were scrambling to adopt various measures to combat emissions and soothe growing guilt among passengers about travelling, including voluntary carbon offset schemes and investing in sustainable jet fuel.

But now, with travellers again flocking to the skies after two years of on and off lockdowns, sustainability experts believe the best way for the sector to meaningfully cut emissions is by taxing frequent flyers. That could be good news for carbon-conscious travellers, but also a problem for Australian airlines and passengers.

Aviation accounts for about 2 per cent of global CO₂ emissions, but its share will rise if pre-pandemic growth trends resume.Credit:AP

A white paper released by the International Council on Clean Transportation published last month argues a levy on the most frequent of frequent flyers would be a more equitable way to decarbonise aviation than a widespread carbon tax on all flights, which would send ticket prices soaring.

The richest 20 per cent of the world’s population is responsible for 80 per cent of the world’s flights, with the top 2 per cent of that accounting for 40 per cent of all flights. As such, a global frequent flyer levy would shift the tax burden from occasional flyers to frequent flyers and would not unfairly burden countries with low historical emissions. In fact, the study presents the top 10 per cent of earners worldwide would account for 90 per cent of the tax revenue.

According to the paper, an individual would be taxed $US9 ($14) for their second flight in one year, and face a steadily increasing tax which grows to $US177 ($279) for the 20th flight. The paper says this tax would fully fund the costly transition from fossil fuels to sustainable aviation fuel if implemented globally.

“We’re saying ‘If you want to fly more, that’s fine,’” Sola Zheng, a researcher at the International Council on Clean Transportation and the lead author of the report told The Washington Post this week. “You’ve just got to pay a bit more.”

One of the ways airlines can reduce emissions is simple: fly less.

The richest 20 per cent of the world’s population is responsible for 80 per cent of the world’s flights, with the top 2 per cent of that accounting for 40 per cent of all flights.

France banned all domestic flights on routes that can be covered by train in less than two-and-a-half hours in 2021, unless passengers are connecting to an international flight.

Germany’s Lufthansa, Air France and Dutch carrier KLM have partnered with rail operators to sell code-share tickets across sky and land. KLM launched a “fly responsibly” campaign in 2019 encouraging passengers to save time and the environment by taking the rail link between Amsterdam and Brussels rather than flying, while Lufthansa axed its short-haul Frankfurt-Cologne flights due to the success of its alliance with Deutsche Bahn.

But these solutions gaining traction in Europe and the US are not available in Australia, which lacks fast rail connections between major capital cities. On top of this, Australia’s airlines make the bulk of their profits from connections between Sydney, Melbourne and Brisbane.

Globally, about 80 per cent of the industry’s CO2 emissions come from flights of more than 1500 kilometres. That is roughly the distance from Brisbane to Melbourne – which is not a particularly long flight in this country.

Globally, airlines have talked up other initiatives to reduce emissions, including voluntary offset schemes which involve paying more to offset the carbon emission of your travel, and investment in sustainable aviation fuels.

EY sustainability partner Adam Carrel said that while voluntary emissions schemes are well intended, they’re ineffective. “Offsetting your seat is not decarbonising aviation,” Carrel said, adding very few flyers actually use the schemes.

“Notionally progressive people who like to sink the boot into other high-emissions sectors in coal and gas do not reflect the sentiment in their own travel and behaviour, which is why they should be subject to levies such as the one outlined in this paper,” Carrel said.

In the US last year, United Airlines boss Scott Kirby said most offset credits “aren’t even real” and pledged his carrier would reach zero emissions without them. More recently, Qantas chief Alan Joyce acknowledged there were a “lot of bad ones” calling for better regulation to weed out the dud schemes.

The UN’s aviation body estimates the aviation sector will need to invest $4 trillion in offsets and sustainable fuel through to 2050 to achieve emissions reductions compatible with a 1.75 degree carbon cap, which works out to an annual investment of $192 billion.

Some airlines have scrapped offset schemes altogether, including British budget carrier EasyJet, which is now promoting a plan to use hydrogen-powered jet engines and sustainable aviation fuel to curb emissions.

The aviation industry is betting heavily on sustainable aviation fuel as its carbon saviour, but many experts are concerned about the scarcity of supply of such products.

Made from crops, household waste, animal fat and other biomass, sustainable aviation fuel produces about one-fifth the emissions of conventional jet fuel. Qantas says it wants SAF to account for one-10th of its fuel use by 2030, and 60 per cent by 2050, but there’s a global supply issue.

Currently, there’s only enough sustainable aviation fuel being produced to replace less than one per cent of the global industry, and it’s about double the price. And Australia doesn’t make any at all. The International Air Transport Association has called on all governments to support sustainable fuel investment as it’s expected to deliver some 65 per cent of carbon mitigation by 2050.

All of this is why taxing the most frequent flyers may be the best option for the aviation industry to deal with its carbon reduction challenge.

Zheng argued those who fly one or two times year deserve to be able to fly cheaply but those with private jets, which weren’t included in the study, should be similarly taxed.

“Aviation is the highest emitter that’s overwhelmingly used by disproportionately privileged people. Airlines cannot use the excuse decarbonisation will burden the poor the way other big emitters can, so they should focus on unilateral mechanisms before it’s too late” Carrel said.

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