Swedish tax is a ticket tax and aims to prompt a behavioural change in the demand for air transport, thus achieving the desired environmental objective: combating climate change, ScienceNordic reported.
The aviation industry faces another problem because of the emissions from it. According to the researchers, emissions account for two per cent of global greenhouse gas emissions, so they are forecasted to grow uncontrollably with an estimated 300 per cent by 2050 due to rising air travel demand.
According to the recent studies, an aviation’s total impact on the climate at least doubles thanks to the multiple types of emissions, the formation of condensation trails, and the enhancement of cirrus clouds. ICAO officials noted that the emissions from aviation have remained largely unregulated.
In 2016, ICAO adopted a Carbon Offsetting and Reduction Scheme for International Aviation. The scheme requires airlines operating in the routes covered (exceptions are granted to certain states) to buy carbon offsets to compensate for their growth in CO2 emissions above 2020 levels. However, the scheme is still under development, and has been largely criticized for its lack of ambition in relation to the Paris Climate Agreement goals.
Will Swedish tax raise the ticket price significantly?
Meanwhile, the Swedish Aviation Tax is silent when it is about the pricing. Instead, the tax will aim to address the climate impact of aviation on the demand side alone. People suggest that the new tax will definitely raise the ticket price but how much high?
Yes, the tax rate will raise the price of the flight ticket, in a similar fashion that other excises taxes on fuel or tickets do already. They hope such a move will prompt behavioural changes in the demand for air transport, and, thus, achieve the desired environmental objective. Therefore, environmental effectiveness here depends on setting the right price.