IDEAS home Printed from https://ideas.repec.org/p/esr/wpaper/wp187.html
   My bibliography  Save this paper

The Impact of the UK Aviation Tax on Carbon Dioxide Emissions and Visitor Numbers

Author

Listed:
  • Karen Mayor

    (Economic and Social Research Institute (ESRI))

  • Richard S.J. Tol

    (Economic and Social Research Institute (ESRI))

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 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. Tourist arrivals in the UK would fall slightly. Tourist arrivals 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. Tourist numbers in countries far from the UK would increase. The proposal of the Conservative Party to exempt the first 2,000 miles (for UK residents) would decrease emissions by roughly the same amount as abolishing the APD altogether ? but tourist arrivals in 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 with higher taxes.

Suggested Citation

  • Karen Mayor & Richard S.J. Tol, 2007. "The Impact of the UK Aviation Tax on Carbon Dioxide Emissions and Visitor Numbers," Papers WP187, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp187
    as

    Download full text from publisher

    File URL: https://www.esri.ie/pubs/WP187.pdf
    File Function: First version, 2007
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Martin L. Weitzman, 1974. "Prices vs. Quantities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 477-491.
    2. Tol, Richard S. J., 2005. "The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties," Energy Policy, Elsevier, vol. 33(16), pages 2064-2074, November.
    3. Pizer, William A., 1999. "The optimal choice of climate change policy in the presence of uncertainty," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 255-287, August.
    4. Tae H. Oum & Waters, W.G. & Jong Say Yong, 1990. "A survey of recent estimates of price elasticities of demand for transport," Policy Research Working Paper Series 359, The World Bank.
    5. Jacqueline M. Hamilton & David J. Maddison & Richard S.J. Tol, 2003. "Climate Change And International Tourism: A Simulation Study," Working Papers FNU-31, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2003.
    6. Bows, Alice & Anderson, Kevin L., 2007. "Policy clash: Can projected aviation growth be reconciled with the UK Government's 60% carbon-reduction target?," Transport Policy, Elsevier, vol. 14(2), pages 103-110, March.
    7. Dieter Helm, 2005. "Economic Instruments and Environmental Policy," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 205-228.
    8. Richard S. J. Tol & Gary W. Yohe, 2006. "A Review of the Stern Review," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 7(4), pages 233-250, October.
    9. Richard S.J. Tol, 2006. "The Impact of a Carbon Tax on International Tourism," Papers WP177, Economic and Social Research Institute (ESRI).
    10. Andrea Bigano & Jacqueline M. Hamilton & Richard S.J. Tol, 2005. "The Impact Of Climate Change On Domestic And International Tourism: A Simulation Study," Working Papers FNU-58, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2005.
    11. Jacqueline M. Hamilton & David J. Maddison & Richard S.J. Tol, 2004. "The Effects Of Climate Change On International Tourism," Working Papers FNU-36, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2004.
    12. Witt, Stephen F. & Witt, Christine A., 1995. "Forecasting tourism demand: A review of empirical research," International Journal of Forecasting, Elsevier, vol. 11(3), pages 447-475, September.
    13. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    14. Wohlgemuth, Norbert, 1997. "World transport energy demand modelling : Methodology and elasticities," Energy Policy, Elsevier, vol. 25(14-15), pages 1109-1119, December.
    15. Pearce, David, 2006. "The political economy of an energy tax: The United Kingdom's Climate Change Levy," Energy Economics, Elsevier, vol. 28(2), pages 149-158, March.
    16. Olsthoorn, Xander, 2001. "Carbon dioxide emissions from international aviation: 1950–2050," Journal of Air Transport Management, Elsevier, vol. 7(2), pages 87-93.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karen Mayor & Richard S.J. Tol, 2007. "The Impact of the EU-US Open Skies Agreement on International Travel and Carbon Dioxide Emissions," Papers WP191, Economic and Social Research Institute (ESRI).
    2. Richard S.J. Tol, 2006. "The Impact of a Carbon Tax on International Tourism," Papers WP177, Economic and Social Research Institute (ESRI).
    3. John FitzGerald & Richard S. J. Tol, 2007. "Airline emissions of carbon dioxide in the European trading system," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(01), pages 51-54, April.
    4. Mayor, Karen & Tol, Richard S.J., 2008. "The impact of the EU–US Open Skies agreement on international travel and carbon dioxide emissions," Journal of Air Transport Management, Elsevier, vol. 14(1), pages 1-7.
    5. Karen Mayor & Richard S. J. Tol, 2008. "Scenarios of Carbon Dioxide Emissions from Aviation," Papers WP244, Economic and Social Research Institute (ESRI).
    6. Karen Mayor & Richard S. J. Tol, 2008. "European Climate Policy and Aviation Emissions," Papers WP241, Economic and Social Research Institute (ESRI).
    7. Galindo, Luis Miguel & Beltrán, Allan & Caballero, Karina, 2018. "Potential consequences of a CO2 aviation tax in Mexico on the demand for tourism," LSE Research Online Documents on Economics 90247, London School of Economics and Political Science, LSE Library.
    8. John FitzGerald & Richard S. J. Tol, 2007. "Airline emissions of carbon dioxide in the European trading system," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(1), pages 51-54, April.
    9. Karen Mayor & Richard S. J. Tol, 2008. "Aviation and the Environment in the Context of the EU-US Open Skies Agreement," Papers WP240, Economic and Social Research Institute (ESRI).
    10. 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, vol. 15(2), pages 90-95.
    11. Andrea Bigano & Francesco Bosello & Roberto Roson & Richard Tol, 2008. "Economy-wide impacts of climate change: a joint analysis for sea level rise and tourism," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(8), pages 765-791, October.
    12. Martín-Cejas, Roberto Rendeiro, 2010. "Ramsey pricing including CO2 emission cost: An application to Spanish airports," Journal of Air Transport Management, Elsevier, vol. 16(1), pages 45-47.
    13. Martín-Cejas, Roberto & del Pino, Francisco, 2017. "Welfare Gain From Carbon Tax Applied To Leisure Air Traffic," Journal of Tourism, Sustainability and Well-being, Cinturs - Research Centre for Tourism, Sustainability and Well-being, University of Algarve, vol. 5(4), pages 471-480.
    14. Andrea Bigano & Jacqueline M. Hamilton & Richard S.J. Tol, 2005. "The Impact Of Climate Change On Domestic And International Tourism: A Simulation Study," Working Papers FNU-58, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2005.
    15. Tol, Richard S.J., 2017. "The structure of the climate debate," Energy Policy, Elsevier, vol. 104(C), pages 431-438.
    16. Thomas Conefrey & John D. Fitz Gerald & Laura Malaguzzi Valeri & Richard S.J. Tol, 2013. "The impact of a carbon tax on economic growth and carbon dioxide emissions in Ireland," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 56(7), pages 934-952, September.
    17. Tang, Bao-Jun & Wang, Xiang-Yu & Wei, Yi-Ming, 2019. "Quantities versus prices for best social welfare in carbon reduction: A literature review," Applied Energy, Elsevier, vol. 233, pages 554-564.
    18. Jaume Rosselló Nadal, 2009. "The impact of the NAO index on European Airline Transit," CRE Working Papers (Documents de treball del CRE) 2009/5, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
    19. Jacqueline M. Hamilton & Richard S.J. Tol, 2004. "The Impact Of Climate Change On Tourism And Recreation," Working Papers FNU-52, Research unit Sustainability and Global Change, Hamburg University, revised Nov 2004.
    20. Bujosa Bestard, Ángel & Rosselló Nadal, Jaume, 2011. "Cambio climático y estacionalidad turística en España: un análisis del turismo doméstico de costa/Climate Change and Tourism Seasonality in Spain: An Analysis of the Domestic Coastal Tourism," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 29, pages 863-880, Diciembre.

    More about this item

    Keywords

    International tourism; carbon dioxide emissions; boarding tax; United Kingdom;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:wp187. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Burns (email available below). General contact details of provider: https://edirc.repec.org/data/esriiie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.