Taxation is a blunt instrument, says IATA chief Willie Walsh: 'The carrot is much more effective than the stick'

Taxation is a blunt instrument, says IATA chief Willie Walsh: ‘The carrot is much more effective than the stick’

IATA: environmental taxes are a

The aviation industry needs more carrots and less sticks to become more sustainable, according to the director general of the International Air Transport Association.

Speaking at CNBC’s Sustainable Futures Forum on Friday, Willie Walsh was asked whether subsidies and tax breaks to encourage investment in cleaner energy were more efficient than businesses or consumers. taxed for emitting higher levels of carbon.

“Quite honestly, all the evidence we have shows that the carrot is much more effective than the stick,” Walsh replied.

Expanding on his point, Walsh went on to describe taxation as “a very brutal instrument – in many cases, in fact, it would make our industry less efficient.”

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“I don’t think it would stop the number of planes flying, it would certainly reduce the number of people flying in planes,” he added. “And that would be a stupid thing to do.”

“What we need to do is ensure our planes are fuller rather than less full, and provide incentives to produce sustainable aviation fuels that will have a real impact on aviation’s environmental footprint. .”

The European Union is currently considering revising its directive on energy taxation. Among other things, this would lead to taxation of marine and aviation fuels.

Net zero goals

In October 2021, IATA member airlines passed a resolution “committing them to achieve net zero carbon emissions from their operations by 2050”.

As a crucial cog in the global economy, conversations about aviation and its effects on the environment will no doubt take place at the COP27 climate change conference in Sharm el-Sheikh, Egypt.

Indeed, despite its importance, aviation has been described by the World Wide Fund for Nature as “one of the fastest growing sources of greenhouse gas emissions driving global climate change. “.

The WWF also claims that air travel is “currently the most carbon-intensive activity an individual can do”.

During his appearance at the Sustainable Future Forum, IATA’s Walsh was asked how difficult it is for the airline industry to decarbonize compared to others.

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“It’s very difficult…we’re about 2.4% of man-made CO2 today,” he said.

“We recognize, however, that as other industries decarbonise – and for many of them there are relatively simple routes to decarbonisation – our contribution will increase, as we will continue to rely on jet fuel to power our planes” , he added.

“Now technology will provide solutions but…we are not ready to depend on something being developed in the future, we recognize that we have to do something now.”

“So for us, key to our goal is using sustainable aviation fuels – the science is proven there.”

“What we need to do is turn what are very low levels of sustainable fuel production into widespread availability.”

This, Walsh argued, represented a real opportunity not just for the industry, but “for countries around the world to start producing sustainable jet fuel.”

Such a decision “would solve environmental problems but… would also create jobs”.

Gatherings like COP27

The general idea behind sustainable aviation fuels is that they can be used to reduce an aircraft’s emissions.

In terms of content, the aircraft manufacturer Airbus described SAF as being “made from renewable raw materials”. It is stated that the most common raw materials “are cultured or utilized cooking oils and animal fats”.

There are strong concerns among some that an increase in SAF use could, among other things, lead to significant deforestation and create pressure on crops essential for food production, an issue Walsh addressed earlier this year.

Back at the Sustainable Future Forum, Walsh struck an optimistic tone about the future prospects for his sector, while acknowledging that there was still work to be done.

“I think the fact that we’ve committed to net zero by 2050 is important, but demonstrating that we have a credible path to … net zero is just as important,” he said.

“And people are starting to recognize that through sustainable aviation fuels and other initiatives…we can achieve that clear goal.”

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