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Kiplinger
Kiplinger
Business
Kelley R. Taylor

Frequent Flyer Tax Could Raise Billions for Climate

depiction of people in an airport terminal for frequent flyer tax story

Frequent flyers contribute more carbon pollution than other people on the planet. That’s a takeaway from researcher Sola Zheng, who focuses on the environmental impacts of commercial aviation. In a piece written for TIME magazine, Zheng points out that frequent flyers (i.e., people who took more than six flights in 2019) “flew more than 98% of the world population.”

That air travel — Zheng and some climate scientists argue — presents an opportunity for people who log many more air miles than others to help lower carbon emissions by paying a mandatory tax.

Taxing frequent flyers to combat climate change isn’t a new idea. For years, data have shown that a small percentage of travelers take a large proportion of flights. For example, a 2021 UK climate action report found that: 

  • In the U.S., 12% of people took 66% of the flights, while in France, just 2% of the population took 50% of the flights. 
  • Similar data applied to travelers in other countries including Canada, China, the Netherlands, the UK, and India, according to the study. 

Since frequent flyers take most of the flights, the logic is that they are partly responsible for increasing CO2 aviation emissions that contribute to global warming. And, because data show that frequent flyers tend to have higher incomes, the argument from some is that those travelers should (and can afford to) pay a mandatory “frequent flyer tax.” Revenues from that tax would be used to help combat aviation-related global pollution. 

Frequent Flyers: Should They Pay a Climate Tax? 

Some aviation technologies on the horizon could potentially help reduce global carbon emissions. However, as Zheng notes, the adoption of needed greener technologies will be expensive ($4 trillion) and likely slow. Meanwhile, the International Civil Aviation Organization (ICAO) advocates net-zero carbon emissions by 2050.

Additionally, since already high emissions from air travel are expected to increase, some climate change groups say that consumers may need to help bear costs. Enter a mandatory climate tax for frequent flyers that could generate more than $120 billion in tax revenue. (That’s according to 2019 data from an International Council on Clean Transportation study).

The idea behind the frequent flyer tax proposal is that flat, across-the-board, carbon taxes could adversely impact airline passengers who rarely fly or who have lower incomes. On the other hand, frequent flyers are reportedly more likely to be wealthier (i.e., have higher incomes). Some proponents of frequent flyer taxes have also suggested that the additional levy wouldn't deter wealthier travelers from flying.

  • A modeled frequent flyer climate tax would include one tax-free flight each year, with climate taxes increasing for each subsequent flight. 
  • So, for example, according to Zheng, a climate tax on a flyer’s second flight could be as little as $9, while the climate tax on that person’s 20th flight could be as high as $177.

Is a Frequent Flyer Tax Fair?  

If an escalating per-flight climate tax weren’t feasible or desirable, Zheng suggests that a tax tied to air miles might be worth considering. Although in any case, many climate advocates acknowledge that implementing a climate tax based on air travel frequency could be challenging for consumers and the aviation industry.

That’s partially because of concerns about the fairness of a frequent flyer tax. Should frequent flyers pay more just because they choose to fly more and can likely afford the tax because they tend to have higher incomes? Also, since airplanes reportedly account for only about 2.5% of global CO2 emissions, some wonder whether a frequent flyer levy would be effective for combating global pollution.

There are also practical challenges associated with a frequent flyer tax. How would airlines implement the tax, and how would governments ensure the tax revenue was used to fund aviation-related climate change initiatives?

Other Climate Taxes and Tax Credits 

The push for mandatory climate taxes for frequent flyers comes alongside other efforts worldwide to raise revenue to combat climate change.  

  • A United Nations-backed climate change report says the world could reach a critical warming threshold by the early 2030s. 
  • A key point from the report is that, without urgent action, the world is running out of time to mitigate the effects of global warming.

With those impacts in mind, some states and countries are considering taxes to fund climate change. Those initiatives, proposed in Washington state and Canada, focus on increasing property taxes to help meet emissions goals in addition to existing carbon taxes. (Carbon taxes are taxes on fossil fuels designed to discourage harmful CO2 emissions.)

Meanwhile, survey data show that Americans are expected to travel more in 2023 and that wealthy Americans will take about a million more international trips than in 2019 — before the COVID-19 pandemic. (Increased travel won’t likely bode well for decreasing aviation emissions.)

It should also be noted that the federal government is offering billions in tax incentives designed to help combat climate change. Some of those credits in the Inflation Reduction Act include tax incentives for energy-efficient home improvements (with a tax credit for home solar panel installation), and a new EV tax credit for 2023.

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