Cameron Hepburn

IATAL — an outline proposal for an International Air Travel Adaptation Levy

Müller, B., Oxford Institute for Energy Studies, October, 2006

The world has reached a stage where even a rapid stabilisation and significant reduction of global greenhouse gas emissions could no longer prevent significant climate change. While all countries will experience impacts, the developing world is most vulnerable. Significant financial assistance for adaptation is needed (and would be cost-effective), but current proposals are inadequate. At the same time, aviation emissions are increasing rapidly and are likely to continue to do so in the absence of major policy changes. Solutions to the challenges of adaptation finance and aviation emissions are both urgently required. This paper highlights political advantages and moral reasons to link the problems together (and absence of reasons in economic theory not to). Solving both problems by an International Air Travel Adaptation Levy (IATAL) – or an emissions trading scheme with auction revenues hypothecated for adaptation – is ethically, economically and politically attractive.