Taxation is a blunt instrument, IATA chief Willie Walsh says: ‘The carrot is far more effective than the stick’

The aviation industry requires more carrot and less stick going forward to become more sustainable, according to the director general of the IATA. Willie Walsh was asked Friday if subsidies and tax breaks to encourage investments into cleaner energy were more effective than firms or consumers being taxed for emitting higher levels of carbon. “Quite honestly, all of the evidence that we have available shows that the carrot is far more effective than the stick,” Walsh replied. Expanding on his point, Walsh went on to describe taxation as being “a very blunt instrument — in many cases, actually, it would make our industry less efficient.” “I don’t think it would stop the number of planes flying, it would definitely reduce the number of people flying on the planes,” he added. “And that would be a silly thing to do. What we need to do is to ensure that our planes are more full rather than less full, and to provide incentives to produce sustainable aviation fuels which will make a genuine impact on the environmental footprint of aviation.” The European Union is currently looking to revise its energy taxation directive. Among other things, this would see both maritime and aviation fuels taxed. In Oct. 2021, IATA member airlines passed a resolution “committing them to achieving net-zero carbon emissions from their operations by 2050.” Given the fact it’s a crucial cog in the global economy, conversations about aviation and its effect on the environment will undoubtedly take place at the COP27 climate change conference being held in Sharm el-Sheikh, Egypt. This is because despite its importance, aviation has been described by the World Wildlife Fund as “one of the fastest-growing sources of the greenhouse gas emissions driving global climate change.”<br/>