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Aviation Industry Calls On Governments To Abandon 'Punitive' Environmental Taxes

by Ulrika Lomas, Tax-News.com, Brussels

04 August 2008


The International Air Transport Association (IATA) has called on governments to abandon 'punitive' environment taxes and instead support global environment solutions that will reduce aviation’s share of carbon emissions, which is put at 2% of the global total.

“Taxes don’t reduce emissions. Only better operations and technology can do that,” said Giovanni Bisignani, IATA’s Director General and CEO, addressing last month's Farnborough International 2008 Sustainable Aviation Briefing.

“The airline industry is in crisis. With a fuel bill of USD190bn - one third of its costs - saving fuel is a matter of survival. Still Europe is fixated on punitive measures supposedly designed to reduce emissions. There is a rush to implement taxes, taxes and more taxes. They all have an environment label, but do nothing to reduce emissions,” said Bisignani.

The IATA Director General took aim at two punitive measures in particular: the UK Air Passenger Duty (APD) and the European Union Emissions Trading Scheme (ETS).

He continued:

“By 2010 APD could be a GBP3.5bn pot of honey for the UK Treasury. That’s enough to offset four years of the UK’s civil aviation emissions. The UK proposal will lead to market distortions. And governments - including the UK - are double counting. On top of APD, other countries such as the Netherlands also apply taxes. If this weren’t enough, the European Union emissions trading proposal will add another layer of penalties. What will all this do for the environment? Precious little. It’s time for some political honesty about where the billions are going and what they will achieve.

“We support emissions trading, but Europe’s unilateral approach is wrong. Instead of cleaning up the environment, this will create an international legal mess. States outside Europe are already threatening legal action. Why should a US carrier have to pay Europe for emissions over US territory?

"Going global is the only way to success. The drafters of the Kyoto Protocol understood this and tasked the International Civil Aviation Organization (ICAO) to deal with aviation and the environment. But this wisdom did not make it to the European Parliament. Even as France, Germany, Italy, the UK and the EU signed a G8 declaration reconfirming ICAO’s role in delivering a global solution, the European Parliament moved in the opposite direction by voting for a regional ETS. Good sense has been hijacked by uncoordinated green policies.

Bisignani went on to argue that:

“States - including Europe - will make or break the ICAO process. ICAO strengthened its political leadership on the issue with a high level Group on International Aviation and Climate Change (GIACC). Europe, which can take the credit for placing climate change on the international aviation agenda, must now take responsibility to ensure that ICAO is successful."

IATA’s four-pillar strategy to address climate change focuses on technology investment, effective operations, efficient infrastructure and positive economic measures. This is now an industry commitment supported by airlines, manufacturers, airports, air navigation service providers and industry partners.

“Now governments must play their role responsibly by taking the reality of USD140 oil into account, stopping their green grand-standing, and joining the industry’s global and comprehensive approach,” concluded Bisignani.


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