Levy on international air travel could fund climate change fight

8.6.2009   (Guardian)

• Idea put forward by 50 least developed countries

• Move could be matched by shipping fuel surcharge

by John Vidal, environment editor

Britain and other rich countries will be asked to accept a compulsory levy on
international flight tickets and shipping fuel to raise billions of dollars to
help the world’s poorest countries adapt to combat
climate change.

The suggestions come at the start of the second week in the latest round of UN
climate talks in Bonn, where 192 countries are starting to negotiate a global
agreement to limit and then reduce greenhouse gas emissions. The issue of funding
for adaptation is critical to success but the hardest to agree.

The aviation levy, which is expected to increase the price of long-haul fares
by less than 1%, would raise $10bn ( £6.25bn) a year, it is said.

It has been proposed by the world’s 50 least developed countries.     It could
be matched by a compulsory surcharge on all international shipping fuel, said
Connie Hedegaard, the Danish environment and energy minister who will host the
final UN climate summit in December.

“People are beginning to understand that innovative ideas could generate a lot
of money.   The Danish shipping industry, which is one of the world’s largest,
has said a that truly global system would work well. Denmark would endorse it,”
said Hedegaard.

In Bonn last week, a separate Mexican proposal to raise billions of dollars was
gaining ground. The idea, known as the “green fund” plan, would oblige all countries
to pay amounts according to a formula reflecting the size of their economy, their
greenhouse gas emissions and the country’s population.   That could ensure that
rich countries, which have the longest history of using of fossil fuels, pay the
most to the fund.

Recently, the proposal won praise from 17 major-economy countries meeting in
Paris as a possible mechanism to help finance a UN pact.   The US special envoy
for climate change, Todd Stern, called it “highly constructive”.

The Bonn meeting is the first climate meeting at which countries are discussing
texts.   These cover greenhouse gas reduction and financing developing countries’
efforts to combat climate change.

Analysts said last night that the talks were most likely to stall over money.  
Developing countries, backed by the UN, argue that they will need hundreds of
billions of dollars a year to adapt themselves to climate-related disasters, loss
of crops and water supplies, which they are already experiencing as temperatures
around the world rise.     Yet so far, as a Guardian investigation revealed back
in February, rich countries have pledged only a few billion dollars and have provided
only a few hundred million.

“Developing countries will no longer let themselves be sidelined.     In the past,
they have been brought on board [climate negotiations] by promises of financial
support.     But all they got was the creation of a couple of funds that stayed
empty.     Developing countries will not settle for more ‘placebo funds’,” said
Benito Müller, director of Oxford University’s institute for energy studies.

Saleemul Huq, of the International Institute for Environment and Development,
said that until rich countries made serious pledges, the rest of the negotiations
would suffer because it would be impossible to agree actions without knowing how
they would be funded.

Last week, a US negotiator, Jonathan Pershing, said that the US had budgeted
$400m to help poor countries adapt to climate change as an interim measure.    
But that amount was dismissed as inadequate by Bernarditas Muller of the Philippines,
who is the co-ordinator of the G77 and China group of countries.

This is important.  
We have long argued that the rapid expansion of aviation is partly due to the
absence of tax on aviation fuel.   But for practical reasons it is difficult to
tax aviation fuel except as an international tax applied by all countries.  
The  airlines have resisted that idea by claiming that it would damage poor countries
by reducing the tourist trade.   Now the 50 least developed nations are actually
proposing a levy on air tickets.  
WWF – among others – is arguing strongly for such a levy.