Don't believe airline whinging over air passenger duty


Has any industry claimed to care more for their customers than the airlines? The past few weeks have seen pundits from any company with the slightest interest in aviation fronting up at the BBC's studios to defend hard working families from proposed rises in air passenger duty. Those rises are: a staggering £1 extra for short haul, £5 extra to fly a little further, £10 extra on a flight to Thailand or Brazil and a whopping... £15 on a flight to Singapore.

Now far be it from me to say that those rises hardly break the bank, or to accuse the airlines from being self-interested: I'm sure that their efforts to pay even less tax than they already do are motivated purely by altruism. After all, it's not like this is an industry which invented charges for bringing bags with you on holiday, or for paying with a credit card, or for not paying with a credit card, or for the fuel used in the plane, or to sit by the window... I could go on, but I'm sure you get my point.

The industry claims it already covers the cost of its environmental impact, so the 'hard working family holiday tax' doesn't need to go up anymore. This is one of the problems with monetising things like climate change: while you can work out the cost of a something tangible, asigning a figure to the range of outcomes from a human-induced temperature rise (which may or may not happen, depending on whether we stop climate change) is almost impossible.

This is all a bit complex. Firstly the cost of climate change is directly related to whether we manage to keep our emissions in check. If we do, then the cost of a tonne of carbon is quite low; if we fail then the cost is exorbitant. That's the problem: if carbon is cheap we'll keep emitting it but if it's expensive then we'll cut down, so whatever outcome we think will happen prices carbon emissions so that we actually get the opposite effect. Instead of assuming we'll stop climate change we should assume that we won't and price emissions accordingly; this would make the cost of CO2 high enough that we'd have an incentive to change our behaviour and thus avert disaster.

It's not like air passenger duty is spent tackling the problem; like most taxes it disappears into the black morass of Government spending. No matter what it says, the industry is not paying for the damage it causes: it's not like Michael O'Leary will turn up in Gloucester to pay for the flood damage, or Willie Walsh will help Africa cope with drought caused by second home owners topping up their tans too frequently.

Luckily this whole economic credit crunch means that taxes on flights will keep rising so we can bail out more and more bankers, so the industry won't get its way no matter how many minor celebs it wheels out in support. On second thoughts, I'm not so sure that's a good thing. God, the intricacies of fiscal policy are more complicated than I first though...