Climate damage tax eyed for premium air travel

A recent air industry development that could affect the Philippines if it gains more support and traction from other countries was recently protested by the International Air Transport Association (IATA), as a coalition of eight nations, with support from the European Union and the Global Solidarity Levies Task Force (GSLTF), is proposing a levy on premium air travel — specifically on first class and business class air tickets, and private jet operations.

- MARIANNE GO

The IATA represents some 350 airlines comprising over 80 percent of global air traffic.

The proposed tax stems from concern over climate damage caused by aircraft emissions. The eight countries that are spearheading the move for a climate damage tax are France, Kenya, Barbados, Spain, Somalia, Benin, Sierra Leone and Antigua and Barbuda.

The proposed tax on premium air travel aims to increase the aviation sector's contribution in mitigating the impacts of climate change, particularly on developing nations.

GSLTF consists of co-chair countries Barbados, France and Kenya. It was launched at the COP28 in November 2023 and is supported by a Coalition for Solidarity Levies, members of which include Antigua and Barbuda, Colombia, Denmark, Djibouti, Fiji, Marshall Islands, Senegal, Sierra Leone, Somalia, Spain and Zambia.

Key partner organizations include the IMF, World Bank, UN, UNCTAD, OECD, G20, G24, European Commission, African Union and Coalition of Finance Ministers.

The task force's secretariat is hosted by the European Climate Foundation and co-led by ECF chief executive Laurence Tubiana and former acting director-general of South Africa's National Treasury Ismail Momoniat.

According to the IATA's press statement, the GSLTF's proposals reveals severe deficiencies.

It disagrees with the task force's assessment that the airline industry generates excessive profits. It particularly noted the GSLTF announcement quotes a Netherlands-based environmental consultancy firm, CE Delft, estimation that a premium flyer levy could generate EUR 78 billion (over $90 billion) per year, which is approximately three times the airline industry's global estimated profit of $32.4 billion in 2024.