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Designing air ticket taxes for climate change mitigation: insights from a Swedish valuation study

Jonas Sonnenschein and Nora Smedby

Climate Policy, 2019, vol. 19, issue 5, 651-663

Abstract: Research on air travellers’ willingness to pay (WTP) for climate change mitigation has focussed on voluntary emissions offsetting so far. This approach overlooks policy relevant knowledge as it does not consider that people may value public goods higher if they are certain that others also contribute. To account for potential differences, this study investigates Swedish adults’ WTP for a mandatory air ticket surcharge both for short- and long-distance flights. Additionally, policy relevant factors influencing WTP for air travel emissions reductions were investigated. The results suggest that mean WTP is higher in the low-cost setting associated with short-distance flights (495 SEK/ tCO2; 50 EUR/ tCO2) than for long-distance flights (295 SEK/ tCO2; 30 EUR/t CO2). The respondents were more likely to be willing to pay the air ticket tax if they were not frequent flyers, if they were women, had a left political view, if they had a sense of responsibility for their emissions and if they preferred earmarking revenues from the tax for climate change mitigation and sustainable transport projects.Key policy insights A mandatory air ticket tax is a viable policy option that might receive majority support among the population.While a carbon-based air ticket tax promises to be an effective tool to generate revenues, its potential steering effect appears to be lower for low cost contexts (short-distance flights) than for high cost contexts (long-distance flights).Policy consistency regarding the tax base and its revenue use may increase public acceptability of (higher) air ticket taxes. Earmarking revenues is clearly preferred to tax recycling or general budget use.Insights about the personal drivers behind WTP for emissions reductions from air travel can help to inform targeting and segmentation of policy interventions.

Date: 2019
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