The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. April, 2007 The Impact of the UK Aviation Tax on Carbon Dioxide Terms of use: Documents in EconStor mayEmissions and Visitor Numbers Karen Mayor and Richard S.J. TolAbstract: We use a model of domestic and international tourist numbers and flows to estimate the impact of the recent and proposed changes in the Air Passenger Duty (APD) of the United Kingdom. We find that the recent doubling of the APD has the perverse effect of increasing carbon dioxide emissions, albeit only slightly, because it reduces the relative price difference between near and far holidays. Tourist arrivals in the UK would fall slightly. Tourist arrivals from the UK would fall in the countries near to the UK, and this drop would be only partly offset by displaced tourists from the UK. Tourist numbers in countries far from the UK would increase. The proposal of the Conservative Party to exempt the first 2,000 miles (for UK residents) would decrease emissions by roughly the same amount as abolishing the APD altogether -but tourist arrivals in the UK would not rise. These results are reversed if we assume that domestic holidays and foreign holidays are close substitutes. If the same revenue were raised with a carbon tax rather than a boarding tax, emissions would fall with higher taxes. Key wordsInternational tourism, carbon dioxide emissions, boarding tax, United Kingdom ESRI working papers represent un-refereed work-in-progress by members who are solely responsible for the content and any views expressed therein. Any comments on these papers will be welcome and should be sent to the author(s) by email. Papers may be downloaded for personal use only.The Impact of the UK Aviation Tax on Carbon Dioxide Emissions and Visitor Numbers IntroductionThe contribution of aviation to global greenhouse gas emissions is small but fast- This paper only considers international aviation demand by tourists. Domestic air travel is excluded, as is travel for business purposes. There is a global database of reasonable quality on international tourist travel -but there is nothing of the sort for domestic tourist travel or for business travel. As such, a choice has to be made between geographic comprehensiveness, and comprehensiveness in a travel sense.The current paper opts for the former, which of course does not make the latter less relevant. Note that business travellers are less likely to respond to price changes than tourists.The paper only considers shifts in demand induced by an increase in the ...

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