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EU can make airlines pay for carbon emissions

by | 21st, December 2011

EU can make airlines pay for carbon emissions. That’s the headline from Reuters this morning. That the European Court of Justice has ruled that the EU can indeed make airlines pay for the carbon emissions of their flights.

And of course the answer is that “Oh no they can’t ” (It is, after all, panto season).

The court can certainly insist that payments are made for the carbon emissions but they cannot insist that the airlines pay it. In fact, it’s impossible for them to make the airlines pay it.

The reason is that companies, corporations, do not pay taxes. Ever. Sure, they might hand over the cheque but it’s not them really paying the money. For a tax always means that the wallet of some live human being is made lighter. And companies aren’t human beings so they don’t pay it.

What’ll happen here is that the new charge will turn up in the prices of our airline tickers. So those of us who fly will pay it, the customers. But some of us won’t fly as a result of the tax…..or fly less often perhaps. So some of the people who work for the airline won’t work for it because there will be fewer flights. So the workers will pay some of the tax in lost wages. Finally, because fewer flights at higher prices means fewer profits, the shareholders will get smaller profits.

Now, whether we ought to tax carbon emissions or not (I think we should but so what) is an entirely different matter. What absolutely will not happen is that airlines will pay tax on carbon emissions. Whatever the ECJ insists.



Posted: 21st, December 2011 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink