30 November 2008

Is the proposed UK ADP increase protectionism?

Okay, so how would we work out to what extent the proposed increase in the Air Passenger Duty (APD) is a “tax grab” and/or protectionism as some have alleged or could have environmental legitimacy (see previous post)?

Could we:
- take the distance and emissions of CO2 for a passenger travelling one-way London-Auckland in economy class from the International Civil Aviation Organization (ICAO) carbon emissions calculator at: http://www2.icao.int/public/cfmapps/carbonoffset/carbon_calculator.cfm which gives an answer of 18,335 Km generating about 1,341.73 Kg of CO2
- take the price of carbon emissions on 26 November 2008 from Point Carbon at: http://www.pointcarbon.com/ which gave a value of €15.70 per tonne
- do a conversion from Euros to Pounds giving £13.36 per tonne and multiple that by 1.342 tonnes
- and come up with £17.93 compared with the current Air Passenger Duty (APD) of £40, the proposed APD of £55 from 1 November 2009 and the proposed APD of £85 from 2010 (see: http://www.hmrc.gov.uk/pbr2008/pbrn20.pdf ) or do I misunderstand the basis of how HM Treasury arrived at the rates for this “green” tax?

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