Taxing the Friendly Skies
The ubiquity of flying for business and pleasure has made the airline industry a major contributor to climate change, according to organizations such as the Environmental Protection Agency.
With an eye toward becoming more eco-friendly, some businesses and universities have responded by taxing air travel in an effort to curb the number of flights taken by employees, thereby cutting polluting jet engine emissions.
Can it work at the University of Oregon? Probably not.
That’s the conclusion of Haiming Kuang and Kathryn Sternberger, economics students who analyzed this question for a project that earned them honors distinctions when they graduated in June.
University air travel accounts for more than half of the UO’s carbon emissions, according to the Office of Sustainability. This metric inspired the office to reach out to the economics department to study the idea of a carbon tax.
To serve this “client,” Kuang (left) and Sternberger (below right) assessed whether a university-administered tax on each department’s air travel would substantially reduce trips and the release of polluting carbon dioxide.
The students developed their own way for answering this question because UO travel doesn’t fit neatly into existing studies on carbon taxes applied to business or leisure flying. While the university covers the cost of travel, departments must budget how much to allocate on this expense in light of other expenditures; faculty face the same question with the funding they receive for research.
Using university records of travel reimbursements, Kuang and Sternberger created a database of 4,000 flights taken from 2004 to 2016. They grouped flights into the most common “city pairings” between 2008 and 2016—for example, Eugene to Boston and back—and studied the flights within these 70 pairings.
Then, for each department, Sternberger determined the relationship between swings in the cost of air travel for each trip and the department’s willingness to pay to fly. She did this by running values such as miles flown and cost-per-one-mile-of-air-travel through complicated calculations called regression analyses.
Kuang made predictions of the effect that different tax rates would have on miles flown and greenhouse-gas emissions for each department.
The team based tax rates on each passenger’s responsibility for the additional pollution added to the atmosphere through air travel. This is the “social cost of carbon”; it’s an attempt to quantify the damage done to the environment and human health by carbon-dioxide emissions. The students used a social cost of carbon of $39 per ton of carbon dioxide emitted.
But the amount of carbon pollution per passenger on a cross-country commercial flight is much less than a ton, meaning that a per-flight tax would be negligible. Also, the students found that UO air travel isn’t affected significantly by swings in price. As a result of these two factors, the students said it appears that the tax would barely reduce the number of flights taken and the amount of pollution released.
Over the eight-year period, the UO would likely have cut mileage flown by less than one percent if a tax had been in place—just 368 miles—and reduced carbon emissions by only 160 pounds. Even at the highest tax rate—$39 per ton of carbon pollution released into the air—the increase in price was less than a penny per mile.
Steve Mital, director of the Office of Sustainability, said the students’ work contributes to the ongoing discussion of the UO’s carbon footprint.
“Internal carbon taxes can be designed to discourage certain behaviors by making them more expensive. Flying is essential for faculty and student-athletes—we don’t want to discourage it,” Mital said. “But it’s possible an internal carbon tax could still help pay for our impacts on the environment. That’s what we’ll evaluate next.”