Economic Instruments for a Low-carbon Future
Edited by Theodoros Zachariadis, Janet E. Milne, Mikael Skou Andersen and Hope Ashiabor
Abstract
The transport sector accounts for about a fifth of all C02 emissions. Most emissions derive from road transport (17 %), while aviation contributes about 3 % of C02 emissions. However, due to aeroplanes emitting greenhouse gases in high altitudes, the effect aviation has on climate change is proportionally larger than its share on emissions. The need for reductions of greenhouse gas emissions in the transport sector – road transport and aviation – is apparent. This chapter looks at the current situation regarding the taxation of passenger travel by air and train in the EU. It discusses the possibility of abolishing tax exemptions the airline industry currently enjoys as well as possible restrictions due to international law and the VAT directive.
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