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The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers

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  • Mayor, Karen
  • Tol, Richard S.J.

Abstract

We use a model of domestic and international tourist numbers and flows to estimate the impact of the recent and proposed changes in the Air Passenger Duty (APD) of the United Kingdom. We look at four different scenarios (abolishing the APD, keeping the 2001 APD level, the 2007 APD and the Conservative Party's "Green Miles" proposal) using base, high and very high elasticity levels as well as assumptions about the substitutability between domestic and international holidays and the effects of a carbon tax. We find that the recent doubling of the APD has the perverse effect of increasing carbon dioxide emissions, albeit only slightly, because it reduces the relative price difference between near and far holidays. Tourists arriving into the UK would fall slightly. The number of tourists travelling from the UK would fall in the countries near to the UK, and this drop would be only partly offset by displaced tourists from the UK. Tourists leaving the UK for countries further a field would increase. The proposal of the Conservative Party to exempt the first 2000Â miles (for UK residents) would decrease emissions by roughly the same amount as abolishing the APD altogether--but the number of tourists arriving into the UK would not rise. These results are reversed if we assume that domestic holidays and foreign holidays are close substitutes. If the same revenue were raised with a carbon tax rather than a boarding tax, emissions would fall rather than rise.

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Bibliographic Info

Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 14 (2007)
Issue (Month): 6 (November)
Pages: 507-513

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Handle: RePEc:eee:trapol:v:14:y:2007:i:6:p:507-513

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References

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  2. Andrea Bigano & Jacqueline M. Hamilton & Richard S.J. Tol, 2006. "The Impact of Climate Change on Domestic and International Tourism: A Simulation Study," Working Papers, Fondazione Eni Enrico Mattei 2006.86, Fondazione Eni Enrico Mattei.
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  6. Witt, Stephen F. & Witt, Christine A., 1995. "Forecasting tourism demand: A review of empirical research," International Journal of Forecasting, Elsevier, Elsevier, vol. 11(3), pages 447-475, September.
  7. Wohlgemuth, Norbert, 1997. "World transport energy demand modelling : Methodology and elasticities," Energy Policy, Elsevier, Elsevier, vol. 25(14-15), pages 1109-1119, December.
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  11. Richard S. J. Tol & Gary W. Yohe, 2006. "A Review of the Stern Review," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 7(4), pages 233-250, October.
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Citations

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Cited by:
  1. Karen Mayor & Richard S.J. Tol, 2007. "The Impact Of The Eu-Us Open Skies Agreement On International Travel And Carbon Dioxide Emissions," Working Papers, Research unit Sustainability and Global Change, Hamburg University FNU-134, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2007.
  2. Anger, Annela, 2010. "Including aviation in the European emissions trading scheme: Impacts on the industry, CO2 emissions and macroeconomic activity in the EU," Journal of Air Transport Management, Elsevier, Elsevier, vol. 16(2), pages 100-105.
  3. Anger, Annela & Köhler, Jonathan, 2010. "Including aviation emissions in the EU ETS: Much ado about nothing? A review," Transport Policy, Elsevier, Elsevier, vol. 17(1), pages 38-46, January.
  4. Karen Mayor & Richard S. J. Tol, 2008. "Scenarios of Carbon Dioxide Emissions from Aviation," Papers, Economic and Social Research Institute (ESRI) WP244, Economic and Social Research Institute (ESRI).
  5. Karen Mayor & Richard S. J. Tol, 2008. "Aviation and the Environment in the Context of the EU-US Open Skies Agreement," Papers, Economic and Social Research Institute (ESRI) WP240, Economic and Social Research Institute (ESRI).
  6. Mayor, Karen & Tol, Richard S.J., 2009. "Aviation and the environment in the context of the EU–US Open Skies agreement," Journal of Air Transport Management, Elsevier, Elsevier, vol. 15(2), pages 90-95.
  7. Jaume Rosselló Nadal, 2009. "The impact of the NAO index on European Airline Transit," CRE Working Papers (Documents de treball del CRE), Centre de Recerca Econòmica (UIB ·"Sa Nostra") 2009/5, Centre de Recerca Econòmica (UIB ·"Sa Nostra").

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