A Proposal for a Mile-tax on Commercial Aviation in Spain

Abstract

The following communication uses Spain as a case study to survey how a mile-tax on short-distance flights could reduce CO$_2$ emissions in the commercial aviation sector by encouraging individuals to use alternative methods of transportation. The first part of the paper makes a case for action based on the foreseeable impact of climate change on Spain and evaluates the policies that have already been implemented. In doing so, the paper argues that there is room to increase taxation in the aviation sector because international agreements such as CORSIA and European Union Emission Trading Scheme (EU ETS) struggle to drive down the growing demand. The article then outlines the main aspects of the proposal and considers its potential impact along three dimensions: the environment, the economy and society. The paper therefore does not rigorously estimate the costs and benefits of the tax at an aggregate level but aims at showing how the tax could be applied and why could it be beneficial. Whilst Spain is used as a case study throughout the communication, the conclusions are not only relevant to this country but are valuable elsewhere.