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

Mayor, Karen and Tol, Richard S J (2007) The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers. Transport Policy, 14 (6). pp. 507-513. ISSN 0967-070X

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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 2000 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. © 2007 Elsevier Ltd. All rights reserved.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences > GE300 Environmental management
G Geography. Anthropology. Recreation > GV Recreation. Leisure
H Social Sciences > HB Economic theory. Demography
H Social Sciences > HE Transportation and communications > HE9761 Air transportation. Airlines
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Depositing User: Richard Tol
Date Deposited: 17 Apr 2012 14:08
Last Modified: 30 Nov 2012 17:11
URI: http://sro.sussex.ac.uk/id/eprint/38307
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