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Carbon tax will increase travel costs

29 Jul 2019 - by Tessa Reed
Comments | 0

THE aviation industry

has urged government to

exclude domestic carriers

from the Carbon Tax Bill,

which has already been

passed by the National

Assembly and is expected

to take effect from June.

The Bill is sitting with

the National Council

of Provinces, where

the Select Committee

on Finance heard

objections from a range

of organisations to the

proposed law.

Although the carbon

tax is to be applied to

airlines and will not be an

additional tax added to

tickets, it is likely that it

will hurt the consumer.

Chris Zweigenthal,

ceo of the Airlines

Association of Southern

Africa, said whether

airlines would absorb the

cost or increase their

nett fares remained to be

seen, but administrating

the collection would come

at a cost that would likely

be passed on to the

consumer.

Chris made an appeal

against the tax in public

hearings on the Bill on

March 12, arguing that,

while greenhouse gas

emissions had to be

reduced, carbon offsets

were preferable to carbon

taxes, which would hurt

the broader economy.

“We understand a system

where the polluter pays,

but we feel that a tax will

not solve the problem or

change behaviour,” Chris

told TNW.

In addition to hurting

the economy, there

is further criticism of

the carbon tax. The

money collected will

not be ring-fenced and

put toward reducing

carbon emissions and,

furthermore, the tax

duplicates some of

the work already being

done by the Carbon

Offsetting and Reduction

Scheme for International

Aviation (Corsia), an

initiative driven by the

International Civil Aviation

Organisation.

“We agree with the

Airlines Association that

the carbon tax will place

additional cost pressure

on a sector where the

margins are already razor

thin,” said Comair ceo,

Erik Venter. “Another

consideration is that

government is not using

this tax toward measures

to reduce pollution, but

that it is going directly

to Treasury as a further

indirect tax on the

public.”

Kirby Gordon, head of

Sales and Distribution at

FlySafair, said that while

FlySafair would support

the tax, provided it was

applied equally and used

toward counteractive

measures, the cost

would more than likely be

applied to the consumer

in the end.

Chris told TNW that

the local industry would

prefer a similar system

to Corsia and that

airlines had made a lot

of effort to reduce their

emissions, including

obtaining more fuelefficient aircraft and

improving procedures.

Moreover, he said,

while the airline industry

accounted for roughly 2%

to 3% of total emissions,

together with Iata, the

industry had set goals

from 2010 to reduce

carbon emissions by

1,5% every year until

2020; have carbon-neutral

growth from 2020; and

reduce nett emissions

by 50% based on 2005

levels by 2050.

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