The environmental case for retaining (and not scrapping) Air Departure Tax

Borbely, Daniel (2019) The environmental case for retaining (and not scrapping) Air Departure Tax. Fraser of Allander Economic Commentary, 43 (2). ISSN 2046-5378

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Air Departure Tax (ADT)1 is the devolved, Scottish, version of the UK’s Air Passenger Duty (APD), a tax charged on passengers departing from UK airports. In recent years, the Scottish Government was planning to cut ADT by 50%, and abolish it in the long run, in order to boost the competiveness and connectivity of Scottish airports. During the Scottish Government’s consultation on halving ADT, concerns were raised that the tax cut would act to increase greenhouse gas emissions from air travel by increasing aviation activity at Scottish airports. In the consultation2, which took place between June and September of 2017, the majority (70%) of respondents rejected the proposed ADT cut, highlighting, among other things, the adverse environmental impact of the policy and its inconsistency with the Government’s climate targets. In response to these concerns and to its announcement of a 'Climate Emergency', the Scottish Government has recently scrapped the policy to cut ADT, claiming it was no longer compatible with its climate targets. The announcement was heavily criticised by industry participants who cited the benefits the ADT cut would have delivered to the Scottish economy.