Simon Upton report calls for new departure tax to pay for hydrogen planes, support Pacific islands |

A new departure tax could collect cash to decarbonise vulnerable Pacific Island nations and produce low-carbon jets, says the Parliamentary Commissioner for the Environment.

The commissioner, former National MP Simon Upton​, is recommending New Zealand and international travellers pay an extra levy on all outbound flights, as part of his just-released report.

The advice would see economy passengers charged another $6 to $25 to fly to Australia. Travellers destined for the UK would fork out an extra $60 to $155. The cash wouldn’t go to the general government coffers, but would be ring-fenced for green planes and solar panels in the Pacific.

Experts warn the tax would need to be carefully implemented to ensure travellers, particularly international visitors that pay a tourist levy when they enter the country, don’t feel ripped off.

In 2017, travellers emitted 3.3 million tonnes of carbon dioxide flying in and out of New Zealand, the report said.

The final destination would influence how much you’d pay. The world would be divided into three zones: short haul (Australia and the Pacific Islands), medium haul (east and southeast Asia) and long haul (everywhere else).

As they consume more fuel, first and business class passengers would also pay a higher rate, as under France’s aviation eco-tax system. All up, this would raise between $100 and $400 million every year, according to the report.

Upton said residents as well as visitors should stump up. “Let’s face it, New Zealanders cause just as much environmental damage travelling abroad as foreign tourists.”

The pandemic could ease the new tax’s impact, he added. “The first airfare that’s published when things restart – nobody’s going to have any idea whether it’s a price gouge or whether it’s wildly expensive. All the points of reference have been blown away.”

Thomas Lohnes/Getty Images
By charging a new departure tax, the Government could raise up to $400 million every year for lower-carbon initiatives.

Auckland University of Technology tourism researcher Michael Lueck​ backs the idea. He doesn’t think the new charges will deter international travellers.

“People that are flying, even if it’s just to Australia, are relatively wealthy. A few dollars more or less doesn’t really cost them anything,” he said. “But it adds up and is a very good source of funding for alternatives.”

University of Canterbury marketing researcher C. Michael Hall​ agreed. The UK increased its departure tax on Kiwi visitors in 2011, but it made little difference to travel between the two countries, he said.

However, Lueck worried the departure eco-tax on top of the $35 tourist levy introduced in 2019 could leave overseas travellers feeling gouged. These should be combined, he said. “Then it doesn’t look like we are literally charging at every corner we can.”

Hall said it’d be important to show passengers – whether from New Zealand or overseas – how their money was being spent.

“You could even imagine the development of some sort of humorous campaign along the lines of Kiwis loving the environment so much that we want to make sure that everyone pays for their pollution, in the same way that Tourism New Zealand is trying to encourage tourists to do something new and not just visit the same sites.”

With effective marketing, the tax could even lure environmentally conscious tourists to visit, Hall said.

“For some consumers, who likely may have green attitudes and be emissions aware – but don’t necessarily offset their travel yet still want to travel internationally – the carbon departure tax may also help allay their carbon guilt or flight shame and New Zealand will potentially move higher up their potential list of preferred destinations.”

The commissioner wants to send part of the cash raised to the Pacific Islands, which are threatened by climate change.

The cash would be partly spent on national and international research and development to create zero-carbon fuels and aircraft. But because these investments would only pay off in the future, a portion of the cash should be directed to developing countries, the commissioner concluded. This could pay for new wind and solar farms and the adoption of electric vehicles.

“Given the importance of the Pacific Islands as a tourism destination for New Zealanders… and the equity implications of introducing a departure tax on Pacific Islanders returning home, there is a strong case for focusing any additional spending it makes possible in the Pacific,” the report said.

Passengers on domestic flights are charged roughly $40 for each tonne of carbon dioxide released, through our Emissions Trading Scheme. Most international flights have no equivalent carbon price – but the proposed tax would reflect their cost to the environment, the report concluded.

Lueck said the concept could also be extended to domestic flights, with the funds put towards the switch to low-carbon planes.

“The short-haul flights are the most environmentally unfriendly per kilometre, simply because take off is the vast majority of emissions,” Lueck added. “For the smaller, regional routes, there are [hybrid and electric] options now that are possible.”

After implementing a new tax, the commissioner advised the Government to press other countries to similarly address international flight emissions.

The pollution from flights in and out of New Zealand isn’t included in our national emissions tally, but it’s equivalent to the carbon produced by all our coal and natural gas-fired power plants in 2018. And it’s growing – up 25 per cent from 2010.

Ross Giblin/Stuff
Shorter flights produce more carbon dioxide per kilometre than long-haul flights because most fuel is burned at take off.

As a far-flung island, there are only minor ways we can reduce these emissions while maintaining pre-pandemic visitor numbers, the report said. We can encourage the fuel efficiency of planes and improve air traffic management to reduce congestion around airports.

Yet the ultimate solution – planes running on zero-carbon fuels – could be decades away. We can replace fossil fuels with biofuels today, but the supply is limited. Last month, the Government announced a mandate that would require a set amount of biofuels to be mixed in to petrol and diesel, to boost the fledgling industry. Even so, airlines will have to compete with other transport providers, the report warned.

Aircraft could one day be powered by hydrogen gas, created using electricity from wind and solar farms. But the first long-distance planes may not be ready until 2035. The report noted it can take up to 65 years for new technology to filter though the entire aviation fleet. That takes us to 2100 – though under the Zero Carbon Act, we’ve pledged to be net zero by 2050.

The new tax would be in addition to the other taxes and levies charged by our government and the airports, which add roughly $60 to the cost of an overseas flight. Like these, it would be built into the cost of the ticket, the report suggested.

From the start of this year, an international aviation agreement is asking airlines to purchase carbon offsets for international flights – but only for the proportion of emissions that exceed their 2019 baseline. Flights aren’t expected to rebound to pre-pandemic levels until 2024, so few airlines will be buying carbon credits in the near future.

By the numbers

Here’s how much extra departure tax you might pay, according to initial estimates:

Australia and the Pacific

Economy: $6 to $25. Business/first class: $9 to $50.

East and southeast Asia

Economy: $25 to $90. Business/first class: $75 to $195.

Africa, the Americas, most of Asia, Europe

Economy: $60 to $155. Business/first class: $170 to $340.

The lower estimates are based on a cost of $35 per tonne of carbon dioxide and the upper estimates are based on the equivalent of the UK Air Passenger Duty.

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This content was originally published here.

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