How socially just are taxes on air travel and ‘frequent flyer levies’?

Abstract

Policies to reduce air travel demand, including in the tourism sector, are urgently required as air travel’s climate impact keeps growing while low-carbon aviation remains a distant perspective. Policy options include flat rate taxes per flight, taxes on flight miles or emissions, or frequent flyer levies, yet little is known about how their distributional impacts compare. This paper examines the distributional effects of various air travel tax options for the UK, informed by an analysis of the distribution of (frequent) flights and associated emissions over income and other social characteristics. We find that ‘frequent flights’ are even more unequally distributed than all flights and that all taxes on air travel are distributionally neutral or progressive. The most progressive option is a ‘frequent air miles tax’ based on both the number of flights and emissions. At the same time, some social groups like recent migrants are relatively likely to be ‘frequent flyers’ even on lower incomes. Overall however, our results show that taxing air travel is far less regressive than taxing home energy or motor fuels. Taxes on air travel, while often portrayed as unfair in public discourses, therefore raise fewer fairness concerns than other types of carbon taxes.