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France's New Flying Tax Gets It Backwards

Illustration for article titled Frances New Flying Tax Gets It Backwards
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Starting in 2020, flying out of France—both domestic and international, but not for connecting passengers—will incur an additional surcharge dubbed an Ecotax, because the revenue raised will go towards “eco-friendly transport infrastructure” such as trains.

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The tax, which will be levied by the French government, is expected to raise 180 million Euros per year (or about $200 million at current exchange rates), according to the AP. NPR has a few more details, which outlines the expected fee structure:

For example, the price for a domestic flight would rise by as little as 1.50 euros — about $1.70. Under the tax, a business-class ticket for a flight bound out of the European Union would cost 18 euros more — about $20.

Similar airfare taxes already exist in other countries. In Germany, a green tax adds between 8 and 45 euros ($9-$50) to ticket prices, according to Deutsche Welle. Sweden announced a comparable flight tax in the spring of 2018.

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Indeed, emissions from airplanes are a big problem that is only getting bigger. Bloomberg ran an informative article on this back in March, but the low down is the global airline industry has been growing for decades and shows no signs of abating. According to Bloomberg, if expected cuts in other sectors materialize and air travel continues on its current pace, airlines will be “the single biggest emitter of carbon dioxide within three decades.”

The problem is particularly acute in Europe, which is making great strides in many other energy sectors. But nobody has any good ideas for how to clean up airplanes. Improvements in fuel efficiency will be offset by the expected rise in the overall number of flights, while electrification needs major technological breakthroughs in battery capacity and propulsion to be useful for planes. Meanwhile, carbon offset programs have their own host of seemingly intractable problems.

Pretty much every expert agrees the only solution for the foreseeable future is for us, as a society, to fly less, which brings us back to the taxes. In theory, taxes make sense as a way to discourage behavior and use the proceeds to pay for improvements in the behavior we want to encourage, like cleaner travel.

The problem, though, is it’s hard to see how this tax will do either in any meaningful way, mostly because the structure of the tax is completely backwards. The highest tax of about $20 is for longer flights or premium class tickets, while the relatively paltry $1.70 tax is for shorter economy tickets. While fliers are often quite price-sensitive when choosing between different airlines, it’s hard to imagine anyone is going to opt not to fly altogether because every flight for that route costs $2 more.

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Likewise, the higher tax on longer flights is not an attempt to change behavior, because there is no reasonable alternative to long flights. My modest prediction is that nobody, not a single person, is going to take a train for multiple days or a boat for two and a half weeks instead of an intercontinental flight because of a $20 tax. For these flights, the tax is simply a revenue generation tool.

And to pay for what? Clean transportation within France (since the tax is being levied by the French government) is all well and good, but it doesn’t have an awful lot to do with air travel. Assuming a good chunk of it goes to high-speed rail, the best case scenario is, in the long run, the ecotax might help improve travel alternatives within Western Europe.

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Which is why the tax structure should be inverted in order to make the biggest impact. The highest tax should be on the shortest flights, since they are the ones that can be relatively easily replaced by train (or bus) today and stand to benefit the most from any transportation improvements the tax brings. And there are meaningful gains to be had there: of the passenger flights that departed the EU in 2017, nearly half of them landed within the EU.

The “problem” with targeting that half of airline trips is it might actually lead to people flying less, and boy, would airlines not appreciate that (except for KLM, perhaps). Air France has already taken a stock hit and complained about this new tax, which will disproportionately affect the country’s flagship airline. They have a point, but I imagine they would complain even more if the new tax was structured to actually result in less flying. But, if that was the case, they would hardly be the only airline taking a stock hit.

Former Senior Reporter, Investigations & Technology, Jalopnik

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DISCUSSION

The tax isn’t going to change anything, it’s clearly an easy money grab from the government. Nobody is going to change behavior because of it:
The majority of intra-EU flights are either business travels(so the flyers themselves don’t pay) or holiday travels from Germany/UK to Spain&Italy, and half a beer isn’t going to stop anyone from flying to Mallorca.

The cheapest flight out of the EU I had was 380€ FRA-ORD and back, 5% or less increase on the ticket isn’t going to stop anyone from flying abroad.

If they actually wanted to get people into trains, they’d need to build additional routes as shown by Munich-Berlin. When they opened the new high-speed track last year they doubled ticket sales(4.4 million mow), with the majority coming in from air travel. It’s easy to see why, as the train usually stops in the city centre, is more comfortable, and you don’t spend one or two hours at the airport before setting off. With a good network and well run trains, rail travel can easily be competitive with air travel into the 4-digit(km) distances. If they were to run a train from Cologne/Düsseldorf to Barcelona with minimal stops it would only be 2-3 hours slower than a plane, which would make it attractive as holiday transportation, and there is a lot of shorter routes where high-speed rail is underdeveloped, so there is a serious case to be had for actually reinvesting the tax money into the railway system(I doubt he government is seriously planning to do so)