29 MARCH 2021
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Dr Deborah Ancell researches the economics of the airline industry. Her book "Clipped wings – corporate social and environmental responsibility in the airline industry" challenged many of the uneconomic pressures which push airlines beyond economically-responsible behaviours into the philanthropic social or environmental domains. She obtained her PhD and MSc(Dist) with the support of British Airways and now lectures in economics at the University of Westminster in London.
CORSIA – the hidden airline tax
The discussion about Air Passenger Duty (APD) (paid by customers to the UK Exchequer) did not mention the other tax – the one paid by airlines. The UN’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) measures current aircraft emissions yet it is intended to mitigate the harms purportedly caused by historical carbon dioxide (CO2) emitted during industrialisation. (CO2 is now known as “carbon”).
The suggested harms include chronic economic under-development and global warming, despite rising CO2 levels lagging temperature increases by 800 years. CORSIA is a “global-market-based measure” (GMBM) under which airlines are mandated to purchase units of offsets in the “carbon marketplace”. The offset monies, minus transaction costs, are applied to UN environmental projects in mainly developing countries. By definition these include China, India and the Russian Federation.
CORSIA operates under the mandatory Standards and Recognised Practices of the UN’s International Civil Aviation Organisation (ICAO). Unless exempt, participation is required by airlines whose States have committed them to CORSIA.
In 2001 and 2008, the UN rejected global tax proposals because it acknowledged it lacked tax raising powers. Disingenuously CORSIA is not considered to be a tax since funds do not pass directly to a government and furthermore, as a GMBM, it circumvents the UN’s tax raising restrictions. However, irrespective of the governing body, or the route the offsets take, compulsory removal of revenues is taxation. CORSIA is therefore the UN’s first global market-based tax (GMBT) applied to offset unspecified harms which apparently occurred before aviation was a viable industry. It appears that sovereign nations have surrendered tax raising powers to the supranational UN enabling it to direct funds without referendum.
Claims that historical CO2 emissions are the cause of economic underdevelopment are unevidenced. Even the UN is unsure whether atmospheric CO2 stays for one, 100 or even 1,000 years. Aviation is barely 100 years old and yet it is being asked to make reparations for generalised, historical harms often demonstrably caused by corruption and misgovernment in the developing nations and the UN itself.
Furthermore, there are no guarantees that the offset monies will match any harms because many projects (such as forests) lack measurable offsetting metrics (eg no-one knows how long a tree takes to absorb offset CO2 and it could die before the purported harms are offset). The UN also plans to stretch GMBMs to include emissions from shipping and information technology and communications. They too will provide reparations for unspecified historical harms. GMBMs could eventually affect current international competitiveness and possibly enable the UN to obtain a level of independent funding.
In summary: the UN is taxing current aviation emissions to offset unidentified harms which might not have resulted from disputed historical causes.
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Barry Humphreys, UK
"Unevidenced"!! Really? (I object to the English, not necessarily the argument.)