That’s what I had in mind, it would basically be the same as flying the plane to Dublin to fuel up, except you would have all the passengers on board that are going to NZ. Effectively airlines could just schedule all their long haul flights via other airports so it doesn’t count as long haul flight when it leaves the UK.

I guess a key thing here is how long a flight we are talking to Dublin etc…? is the extra flight time really worth saving the extra £85?

Very interesting figures John.

You may find the following working paper from the IMF of interest: http://www.imf.org/external/pubs/ft/wp/2006/wp06124.pdf (see pp10-11).

Could we:
– take the distance and emissions of CO2 for a one-way London-Auckland economy flight from the International Civil Aviation Organization (ICAO) carbon emissions calculator at: http://www2.icao.int/public/cfmapps/carbonoffset/carbon_calculator.cfm which gives an answer of 18,335 Km generating about 1,341.73 Kg of CO2
– take the price of carbon emissions today from Point Carbon at: http://www.pointcarbon.com/ which today gives a value of €15.70 per tonne
– do a conversion from Euros to Pounds giving £13.36 per tonne and multiple that by 1.342 tonnes
– and come up with £17.93 compared with the current Air Passenger Duty (APD) of £40, the proposed APD of £55 from 1 November 2009 and the proposed APD of £85 from 2010 (see: http://www.hmrc.gov.uk/pbr2008/pbrn20.pdf ) or do I misunderstand the basis of how HM Treasury arrived at the appropriate value of this “green” tax?

Do you have any idea why there is an agreement that states it cannot be taxed?

The EU is, however, planning to unilaterally include international aviation in its emissions trading scheme from 2012. See: http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/misc/103533.pdf The legality of this move is being questioned by some countries, notably the USA.

I saw that point raised on the Standard.

http://www.thestandard.org.nz/the-departed/

Steve rightly said that the cost of flying to Dublin will probably exceed the charge.

However, airlines might have the incentive to make “tailored deals” if they think they can increase demand by effectively lowering the tax that is paid.

An intersting point nobody has raised is that while the planes might fuel up in Dublin to avoid the fuel tax, passengers could equally have their long haul flight depart from outside the UK to avoid the long haul departure fee, i.e fly to dublin and then to NZ.

I completely agree with the signaling argument surrounding the wish to “get hard on climate change”.

However, even so – the way to get hard is to directly reduce Britain’s carbon emissions, as they can put any carbon leakage down to the fact that other countries are slagging off.

I am also not convinced that a tax on fuel is a particularly high cost way of doing this – and it definitely provides a better price signal that a tiered departure charge as it attacks something that more closely resembles marginal carbon emissions.

First, the UK is involved in a complex, dynamic, set of international negotiations, both in the EU and in the UNFCCC on climate change. The logic is that because climate change is a global issue (all molecules are created equal), the end goal is to have the issue addressed by all the major emitters and potential emitters – countries to which emitting activity might relocate.

This is definitely not a one-shot negotiation, nor is it a zero sum game.

So it is all about building trust and trustworthiness on all sides. It is also about maximising the gains from trade that can then be shared (the hackneyed “win-win situation”).

This means that the high-income countries (and that includes us as well) have to demonstrate a willingness to incur costs as a way of building trust on the part of the low-income but high actual or potential emitting countries, who will also have to incur costs if a truly effective international solution is to be found.

(BTW, this is why the NZ Institute’s idea of NZ being a “fast follower” got up the nose of some politicians: it was exactly the wrong signal to send to the international negotiations.)

On the EU side, the EU has made an in-principle decision to bring aviation into their emissions trading scheme. So again, the UK is showing “leadership” (building trust) as a way of getting the rest of the EU into the mood to address the issue.

While difficult to quantify, I can see a lot in this line of argument. The rich countries are going to have to put on their hair shirts for a while. The trick is to only have to do so for long enough to make the international negotiations work.

The other reasons are far less convincing and smack of pretty bad government failure to me. They include:

a) The UK has just passed a Climate Change Bill that imposes binding, unilateral, emissions reduction targets on the UK (again, partly as a major signalling point to the international negotiations). During the parliamentary processes, the Labour back-bench wanted to include international aviation and shipping, even though they are, as of now, outside the UNFCCC’s scope. Partly about level playing fields (if domestic activity is going to be subject to restrictions, need to try and the international stuff in), partly about influencing negotiations and partly about addressing domestic political concerns (long-haul international travellers, especially of the high-income type, are getting some stick in the UK for being environmentally irresponsible).

So given that international travel is no included within the total UK emissions cap, a measure is needed to apply a price signal.

Now, as others have pointed out, there are other ways to do this, but since the political goal was to show that the parliament was listening to community concerns about rich pricks (to coin a term).

b) there is a strong push in the UK to apply instruments at the individual level, as a way of building “community” (this is the point were we start singing Vera Lynn songs and tell stories about the good old days of the Blitz). One particularly silly idea was that each person would get an individual “carbon credit card” that would include their portion of the UK’s Kyoto allowance and who have to use it whenever they purchased anything with a carbon footprint. If you used up your allowance, you would have to go and purchase a “top up”. The compliance costs were horrendous.

So putting the price of carbon on in a very transparent, but high cost and potentially ineffective manner is part of this trend.