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The Impact Of The Uk Aviation Tax On Carbon Dioxide Emissions And Visitor Numbers

  • Karen Mayor
  • Richard S.J. Tol

    ()

    (Economic and Social Research Institute, Dublin)

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.

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File URL: https://www.fnu.zmaw.de/fileadmin/fnu-files/publication/working-papers/htm13taxukwp.pdf
File Function: First version, 2007
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Paper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number FNU-131.

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Length: 16 pages
Date of creation: Apr 2007
Date of revision: Apr 2007
Publication status: Published, Transport Policy, 14 (6), 407-513
Handle: RePEc:sgc:wpaper:131
Contact details of provider: Postal: Bundesstrasse 55, 20146 Hamburg
Phone: +49 40 42838 6593
Fax: +49 40 42838 7009
Web page: http://www.fnu.zmaw.de/

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  1. 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.
  2. 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.
  3. Dieter Helm, 2005. "Economic Instruments and Environmental Policy," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 205-228.
  4. 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.
  5. Richard S.J. Tol, 2006. "The Impact of a Carbon Tax on International Tourism," Papers WP177, Economic and Social Research Institute (ESRI).
  6. M. L. Weitzman, 1973. "Prices vs. Quantities," Working papers 106, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. 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.
  8. repec:dgr:uvatin:20010047 is not listed on IDEAS
  9. 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.
  10. 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.
  11. Wohlgemuth, Norbert, 1997. "World transport energy demand modelling : Methodology and elasticities," Energy Policy, Elsevier, vol. 25(14-15), pages 1109-1119, December.
  12. 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.
  13. 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, vol. 7(4), pages 233-250, October.
  14. 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.
  15. 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.
  16. 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.
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