Taxes like Air Passenger Duty are a fair way to reduce carbon emissions

Governments use taxes to discourage certain activities and behaviours – while encouraging others.

Cigarettes are a good example. The government tries to discourage people from smoking with high taxes on tobacco. They raise significant revenues in the process (£10.4 billion was raised from tobacco duty in 2024).

Similarly, road tax on more polluting cars is generally higher – in order to encourage people to buy less polluting vehicles.

Tax is a way to incentivise people to make healthier choices, or live less polluting lives, while raising useful revenues in the process.

These revenues can be used to tackle the effects of the activity being taxed. Money from tobacco duty can be used by the NHS to treat lung disease, for example; or money from road tax can be used to tackle pollution caused by combustion engines.

Jetting away with it

It doesn’t always work this way, however. Especially when big business is involved.

The UK aviation industry makes significant carbon dioxide emissions every year, contributing to climate change.

You might think, by the logic set out above, the government would use tax to discourage flying; or at least make a revenue from it, in order to mitigate the polluting effects.

And yet, broadly, the opposite is true. UK airlines benefit from extremely generous tax breaks from the UK government.

They pay no tax at all on aviation fuel, for example.

For too long the government has under-taxed the aviation industry. But I have some good news.

Increase tax on private jets and premium tickets

Taxes on wealthier flyers were increased by the chancellor in the recent Budget.

Air Passenger Duty (APD) is a tax paid by airlines for every passenger who flies from the UK. It raises £3 billion a year.

APD is a progressive tax. Passengers taking longer flights, traveling in business or first class, or by private jet pay more.

The good news is the chancellor announced that he will increase air passenger duty from this year for passengers in premium economy, business and first class.

We fully support APD and think the chancellor should go further – and raise the rates on business, first class and private jets much more. It’s the direction we must go in to avert climate catastrophe.

Those with the broadest shoulders

To make real headway in decarbonising and making the green transition, the government will have to raise and spend significantly more.

This cost must fall firmly on those with the broadest shoulders. It must be a just transition.

Airline Passenger Duty is a great example of this: it takes the lion’s share of its revenue from richer people – and discourages polluting activity.

We could also introduce a frequent flyer levy. This would be a tax that increases the more flights you take each year. So those who fly more would pay more. Our friends at the New Economics Foundation set out how a frequent flyer levy could work.

The rich pollute the most

Research from Oxfam shows that richer people on average produce far more emissions than the less well off.

The top 1% cause the same amount of planet-heating emissions as the bottom two-thirds of humanity, according to Oxfam’s research.

We were proud last year to team up with Oxfam when they came out in favour of taxing the richest – and biggest polluters – more.