Tax The Hell Out Of Frequent Flyers

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Flying, as I have written before, is one of the more vexing climate-related problems facing transportation. There are no good answers for cleaning up aviation except to fly a whole lot less, reversing the massive growth in the aviation industry over the last several decades that is projected to continue for several decades more. So, those who are taking the climate crisis seriously are thinking about ways to get people to fly less.

Which brings us to a new report filed to the United Kingdom’s Committee on Climate Change that calls for taxing frequent flyers. The report, authored by Richard Carmichael of University College London, specifically proposes an “Air Miles Levy” which:

...escalates with the air miles travelled by an individual within a three-year accounting period could provide strong price signals to curb some demand by less price-sensitive frequent flyers, encourage shifting from long-haul to short-haul destinations and fund research into low-carbon aviation technology, while sparing the large majority of travellers any extra cost.

The logic here is that a small percentage of the population account for the majority of air travel, so those people should be taxed progressively the more they travel, similarly to how rich people are taxed at a higher rate for every additional dollar they earn (well, in theory).

According to Carmichael, 70 per cent of flights in the UK are made by 15 per cent of the population. Similar figures hold for many U.S. airlines as well.

These frequent flyers tend to be wealthier, so unlike, say, a fuel tax — which is also needed because jet fuel is barely taxed — which would affect all passengers more or less equally, a frequent flyer tax would only kick in after a certain amount of travel, sparing those who fly only once or twice a year for a family holiday or whatnot.

The "Air Miles Levy" is not a terrible idea, and it’s certainly grounded in well-trodden economic theory, but it misses some key elements to the aviation emissions issue.

For one, it is true that the longer one travels the greater the emissions from that flight, but takeoff and landing are the most energy-intensive, so the emissions impact of even a short flight is still quite large, and any journey that requires a connecting flight also multiplies one’s carbon footprint.

On top of that, there’s the question of what this tax is supposed to accomplish. Should it be a tool to change behaviour or a revenue generator to fund clean emissions research and more robust high speed rail networks? The paper argues it can do both, but it’s unlikely to do both well. Either the tax is so high it successfully cuts a lot of trips but doesn’t raise much money as a result, or most people keep flying, pay the tax and generate a bunch of money to build more and faster trains.

If the goal is to generate revenue, I say this is a good policy. Tax the hell out of the frequent flyers — especially folks in business and first class, which the report recommends — who are probably expensing the trip anyways.

But if the goal is to get people to fly less, as it ought to be, then I fear it won’t work very well. Yes, flights will be more expensive, but there is no good substitute for long flights. Few are going to completely forgo a flight from London to Singapore or San Francisco — already expensive flights — because it’s several hundred dollars more.

This is why I think taxing shorter flights more heavily is the better policy if countries are actually interested in reducing emissions from flying. There are viable alternatives to those flights, whether it’s rail, car, or, yes, even the humble bus depending on the distance.

In Europe, 64 per cent of flights in 2017 were within the EU, including flights within a single country.

Further, of the top ten airport pairs within the EU, nearly all of them could easily be replaced by relatively short train journeys (the main exceptions are ones that cross bodies of water, like Dublin to London and Madrid/Barcelona to Mallorca).

With the right tax structure, a lot of people might think twice about flying those short hops, opting for the train or bus instead.

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