Tuesday, November 1, 2011

Greenhouse gas tax and airlines

There's an interesting argument place between the US and the UK related to emissions from airlines.

Read about it here and here.


Lee Parton said...

This is an interesting Cap and trade scenario that applies a market solution in order to internalize, for argument sake - a perceived - externality. Unfortunately I feel the debate turns into a shouting match over the validity of "global warming" as opposed to a discussion of economic solutions. In this instance it is completely a matter of legalities - does a sovereign state have the legal authority to charge an aviation tax to airlines using its facilities? If the answer is yes then the cause for debate is lost on me and I applaud Europe for its forward thinking on greenhouse emissions.

Andrew Webber said...

As we look at the debate over whether or not global warming exists, I don't think that there are many people who would deny that pollution is bad for the planet. The initiative set by Europe to offset some of the costs associated with the negative externalities of greenhouse gas emission from aviation is a positive. I agree with Europe's frustration over how the US will not take any part in either creating their own legislation limiting aviation emissions, or in taking part in Europe's policy. If the major complain about putting this added cost to flights then it would be important to look at who is actually flying. A majority of all frequent flyers, the ones who fly more than anyone else, are either business men, or people with large amounts of expendable income. A price increase, within a certain limitation, would likely not have a huge effect on the aviation industry.