Climate change isn't the only costly result of aviation pollution. Heathrow alone contributes about 10% of the England and Wales total of volatile organic compounds (VOC)s, which are harmful to health. Heathrow's NOx levels are predicted to rise by 110% by 2015. Ref NRDC 1996: see Whitelegg & Fitz-Gibbon, Aviation's Economic Downside, op cit, note 11.
6. It has been estimated that fuel accounts for about 10% of airline costs. Therefore even if aviation fuel were taxed at 100%, this could be expected to translate into a mere 10% increase in ticket prices: ref Department of Transport study, . This study assumes an environmental tax of 10% introduced in 2006 and increased by 10 percentage points every year for the next nine years until the tax were 100% of fuel costs in 2015. A number of simplifying assumptions were necessary:
The fuel tax was introduced globally, in a way that did not affect the existing fuel price differentials between countries, thereby eliminating the scope for ‘leakage’ through increased tankering.
All the increase in fuel prices was passed through to fares. In practice airlines might absorb some of the increase through lower margins, or increase business fares more than leisure fares due to the generally lower fare elasticities for business passengers.
The price elasticity of demand for air travel used in this study was -1.0, reflecting a lower elasticity for business markets and a higher elasticity for leisure markets. The effect of supply side responses such as the introduction of more fuel efficient aircraft on the contribution of fuel costs to total costs were assumed to be limited between 2006 and 2020 because of the long operational lives of aircraft.
7. See Whitelegg & Fitz-Gibbon, Aviation's Economic Downside, (2002).
8. All other things being equal, 22.75% of £9.2 billion = £2,093,000,000.
10. Ref .
11. £1,976,371.08 CHF4.5m @ 0.43919.