EU Carbon Tax To Make Cheap Air Tickets From Asia Costlier

Everyone would agree that there is a need to prevent the damage to environment. Precisely how it shall be done is the point of disagreement and contention among the countries. Any change will have its own costs and the burden of these costs needs to be apportioned justifiably and reasonably. The European Union has decided last year to levy a tax on all the flight carriers using the EU airports and airspace which it calls the carbon emission tax. The levy of the tax on the flight operations is likely to make the hitherto cheap air tickets to Europe more costly and is likely to help the EU meet its target of cutting emissions by 20 percent by 2020.

While the EU is not going to foot the bills of this levy during this year, it will begin to figure the levy in the bill. For this purpose, it requires the carbon emission data from the airlines. The countries such as India and China have opposed this unilateral levy and called for total rollback since they view this tax as a trade levy. The Government of India has asked its domestic airlines not to furnish the emissions data to EU. However, the 27 member EU remains committed on not backing down. Considering the hardened stance of the governments, the India-based airlines are in quandary as to whether these shall begin to hike the cheap air tickets in preparation of a situation where they might have to give more tax to EU in future. As of now, the airlines are likely to go by the order of the government which prohibits them from giving the emission data to EU.

The opposition to the move is essentially because it has been taken unilaterally without building a consensus on the issue. The move is likely to break down the climate change talks besides making international flights to Europe more costly. And, this might even lead to beginning of the trade wars and retaliatory measures being taken by the other countries by similar levies. But, finding a solution to the problem in an amicable way is not likely since the there is a divergence of opinion between the developing and developed countries on how the climate change issue shall be resolved globally. However, if the tax measure does fructify and is not rolled back, the ultimate sufferer will be the budget customer who is looking for the cheap international flights for Europe since the rich can always afford to spend more.

Assuming that the travelling to Europe might not stop and, in the worst case scenario, the international flights might cost more to the customer, who is it that is most likely to feel the pinch of this raise? Though the EU is of the considered opinion that the hike in the prices of cheap air tickets is not likely to be prohibitively costly, it is likely to affect the business customers of the airlines who fly frequently to Europe or USA.