Taxing the Skies

August 9th, 2010 by Andrea Bennett

Germany proposes an environmental tax on flying.

Brought to you by Liberty Mutual's
The Responsibility Project

You may have become accustomed to airline fees for everything from checking your bags to booking over the phone, but how about an extra fee for… choosing to fly?

Germany has announced a plan to tax airline passengers as much as €26 ($33) per flight as part of a plan to reduce carbon dioxide emissions and other environmental impacts of the aviation industry. The tax is part of a larger European Union plan to cut carbon emissions by 20 to 30 percent by 2020.

The country is calling the taxes, which would be implemented on Jan. 1, 2011, and would charge fliers going in and out of Germany (but not traveling within it), “incentives for environmentally friendly behavior.” In other words, it’s an incentive to think about traveling by bus or train rather than by air.

But many don’t see it that way. A recent report from German airline Lufthansa argues that the tax has the opposite effect: “Passengers have even more incentives to use foreign airlines and airports, which operate often highly subsidized route networks. Those routes frequently entail significant detours with negative environmental impacts…Both the environment and the economy suffer.”

And Giovanni Bisignani, director general of the International Air Transport Association, called the plan a “cash-grab by a cash-strapped government,” and added, “Painting it green adds insult to injury.” Seeking solutions to climate change, he said, shouldn’t come from “uncoordinated regional taxes.”

Lufthansa has already said that it will likely have to absorb the cost for now. But other airlines may have to add the levy to ticket prices. What’s your view? Do taxes like these make people more likely to consider greener travel options?