Time for a frequent flyer levy
A few months ago, I floated the idea of a citizens’ assembly on road pricing.
Citizens’ assemblies have been used to defuse some of the world’s knottiest problems. Ireland used one to resolve its’ position on abortion, while President Macron used one to find solutions to climate change that didn’t inflame “Yellow Vest” protestors.
They consist of a ‘jury’ of around 100 citizens who work together with experts to develop policy solutions to specific problems. The idea is that they address the problem of voters typically wanting tax cuts and spending rises (as one example) or seeking total victory of their position, even if their fellow citizens are enraged.
The idea is that a citizens’ assembly will force compromise and so land in the optimal policy outcome for the population as a whole.
So it’s worth listening to what they’ve got to say when they happen.
Well, last year a citizens’ assembly met to come up with its view on what Britain’s approach to addressing climate change should be.
And one recommendation makes immediate sense.
Frequent Fliers Levy
Aviation is one of the few areas of the economy in which global emissions are growing.
And it’s one of the few areas without any clear pathway to getting emissions under control. While tiny electric planes may be available in a few years time for short journeys, there is no credible alternative to burning kerosene for journeys above about 50 miles.
Aviation generates around 2.5% of global emissions; so a lot less than ground transportation. Nevertheless, if we’re to hit net zero, every sector of the economy needs to make a contribution.
If flights can’t be made lower carbon, then we need fewer flights.
When it looked at these issues, the citizens’ assembly noted that 15% of the population take 70% of all flights. (57% of people don’t fly at all). People in that 15% typically earn more than £115k.
A frequent flier levy would replace Air Passenger Duty (which applies to every flight) with a tax based on the person flying. Your first return flight would be free, then your second return flight taxable, with the rate ramping up on each subsequent flight.
The idea is that flying out for an annual holiday in the sun becomes cheaper (because fixing climate change shouldn’t mean killing off life’s pleasures) but the more trips you make, the more you’re disincentivised to make the next one. The cost for business travel will soar, but we have Zoom. The cost for second homeowners in Italy will rise but if the tax incentivises 8 annual trips for 10 days as opposed to a monthly trip for a week, then it’s doing its job. The London cabbie I met who lives in Spain and drives his black cab for three intensive days every week (sleeping in his cab) might need to adjust - but, again, that’s the point.
Making the annual foreign holiday cheaper doesn’t feel like impossible politics, either.
Vive la différence
It’s interesting to note the difference between the UK citizens’ assembly and Macron’s parallel (and higher profile) assembly; both of which were addressing the same question.
In France, the citizens’ assembly’s solution to aviation carbon emissions was to ban domestic flights where the same journey could be undertaken by train in less than four hours. This was watered down by legislators to 2 1/2 hours and implemented. They also recommended aviation tax rises, including a per-km tax.
I much prefer the British solution. Partly because the French solution is eye-catching and dramatic, but also won’t have that much effect unless the tax increase is very high - in which case it will disproportionately affect infrequent users. There aren’t many domestic flights with train alternatives of less than either 2 1/2 or four hours. Applied in the UK, the French law would kill off the last few Manchester to London flights but most British domestic flights are either to/from Belfast, or making connections that are dramatically out-of-scope of the time cut-off (e.g. Newcastle - Southampton or Liverpool to Newquay).
But I also prefer the British solution because I prefer solutions that create incentives as opposed to implement outright bans.
Obviously, it’s impossible to predict precisely what impact a frequent flier levy would have. Worst case, it has no effect at all on frequent fliers while making foreign holidays cheaper. But that would mean a huge tax windfall for the Treasury, which can then be invested in other climate mitigations. Best case, however, it provides a way in which frequent fliers can be incentivised to switch some of their flights to Zoom, to trains or to make that second holiday in Tenby not Tenerife.
And that can only be a good thing.
