Sustainable air travel - A study of the effects an environmental tax on air fuel might bring.

Abstract: The aviation industry has since its beginning had an accelerating growth. Simultaneously the emissions have increased, representing today 4.5 percent of the total anthropogenic greenhouse gas emissions. These emissions are not accounted for in the Kyoto protocol reduction targets. Present inventory estimations would be greatly affected if this sectors emissions where to be included and the set target values would be hard to achieve within the given time period. The environmental cost of air travel is not reflected in the market mechanism, causing an externality problem. This results in, from a social perspective, low market price and high demand. Aviation is relieved from tax on fuel. Therefore this paper has considered taxation as an alternative mean to adjust the market and the possibility to reduce the greenhouse gas emissions. It is imperative to analyze the effects a tax on air fuel might bring if such a policy be realized.. This paper analyzes the consequences a tax introduction could bring socially, economically and from an environmental point of view.