Suggestions by the South African government that it will include airlines in its economy-wide carbon tax will, if they become reality, lead to further costs for passengers.
If a carbon tax is levied on flights in and from South Africa by the government, there will be an effective double taxing of emissions, because the EU has already proposed sweeping emission levies on all aircraft flying into Europe.
The EU’s emissions trading scheme (ETS) will see carbon taxes levied on the distance and duration of flights into Europe – regardless of the time those flights spend in European airspace.
The International Civil Aviation Organisation (ICAO) is leading the opposition to these measures, which it describes as unfair and a violation of international sovereignty law.
ICAO calculations on a typical SAA flight from OR Tambo International Airport in Joburg to London Heathrow show that of the total flying time of 10.5 hours, just 2.5 hours are in EU airspace.
However, the EU ETS determines that carbon charges will be levied against the entire flight, from point of departure to point of arrival and based on a calculation which considers the distance and duration of the flight.
Each airline has to collect the charges (without compensation for administrative costs) associated with each flight and pay them to the EU.
The EU intends to plough this into its central coffers. ICAO is concerned that none of this money will go back to any of the non-EU countries en route and whether the EU will spend any of it on initiatives to further reduce carbon emissions. It could make a major contribution to this by reforming EU air traffic and airspace management, which is archaic and inefficient.
South Africa was one of the signatories to a recent protest to the EU about the proposed taxes.
However, if the government then introduces a carbon tax here, passengers flying to Europe (and the costs will undoubtedly be passed on to them) will be punished twice.
This issue was raised recently by Tony Tyler, director general and CEO of the International Air Transport Association (IATA) at the annual conference of the Airlines Association of Southern Africa (AASA).
Tyler said: “We support and need positive economic measures to achieve our emissions reduction commitments. But a unilateral regional scheme implemented extra-territorially is not the way to go. We will need Africa’s support to stop Europe’s misguided approach to bringing aviation into the EU emissions trading scheme.”
He said IATA was concerned about South Africa’s plans to include aviation in its economy-wide carbon tax. “This will be a competitive disadvantage for South African carriers and add to double-counting of emissions under conflicting measures including the EU ETS proposals as well as the environment-related departure taxes that we see in the UK, Germany, Austria and elsewhere. This is yet another reminder of why a global approach through ICAO is the way forward,” said Tyler.
Carbon emissions by the airline industry is one of the topics at the United Nations Framework Convention on Climate Change COP17 talks in Durban.
Tyler urged South Africa’s support for the aviation industry’s “ambitious commitments”: to improve fuel efficiency by 1.5 percent annually to 2020, cap net emissions from 2020 and cut net emissions in half by 2050 compared to 2005.
“Aviation is responsible for 2 percent of global manmade carbon emissions. And we are a global industry with a global strategy to achieve serious emissions reductions in the coming decades.”
At the AASA conference, IATA unveiled a new study highlighting the importance of the aviation industry to the economy of South Africa.
“Last year 21 million people and 240 000 tons of freight travelled to, from and within South Africa. Aviation is a critical strategic component of the South African economy and indeed the economies of all states in southern Africa. But this cannot be taken for granted. Positive policies are needed to drive aviation’s significant economic benefits,” said Tyler.
IATA partnered with Oxford Economics to assess the benefits of aviation with a goal of informing policymakers what can be achieved in the broader economy with policies that support aviation’s critical mission to deliver global connectivity. Aviation directly contributes 2.1 percent to South Africa’s GDP (R51 billion) and 270 000 high-productivity jobs. Including the benefits of tourism in the calculation adds a further R21bn in economic activity and 116 000 jobs.
IATA’s outlook for aviation in Africa is aligned with a global outlook showing declining profitability.
“Global airline profits will fall to $4.9bn in 2012, which is a margin of just 0.8 percent. African airlines will be the only region in the red, with a loss of $100 million,” said Tyler.
“A strong partnership between government and industry across southern Africa is needed to provide a solid foundation for success.”
He said safety remained a challenge in Africa.
“Last year, the continent’s safety record was 12 times worse than the global average. World-class safety is possible in Africa. Twenty-four sub-Saharan African airlines are on the IATA operational safety audit registry. Eighty percent of African accidents between 2008 and 2010 involved carriers not on the registry.”
Tyler acknowledged that, in the Airports Company South Africa (Acsa) and Air Traffic and Navigation Services (ATNS), South Africa has world class infrastructure.
“But the 161 percent increase in Acsa charges allowed over the next five years is a clear indication that there is much that must be reformed. If charges are increased in line with this allowance, South Africa could have the most expensive airports in the world. That is not sustainable and I am eager to engage in a positive dialogue on how we can move forward to make the air transport infrastructure more competitive.” – Saturday Star