Keen, MichaelParry, IanStrand, Jon2012-03-192012-03-192012-01-01https://hdl.handle.net/10986/3235The international aviation and maritime sectors today enjoy relatively favorable tax treatment, as their fuels are not taxed and the sectors are not subject to any value-added tax or turnover tax. Nor are these fuel uses subject to any global measures to reduce their associated CO2 emissions, even though they represent at least 5 percent of the global greenhouse gas emissions. A carbon charge on fuels for international aviation and shipping equal to $25 per tonne of emitted CO2 could raise about $12 billion from aviation and about $26 billion from shipping by 2020. Market-based instruments ought to be used to raise such revenue, preferably charges based on the carbon contents of fuels. Such charges would also scale back emissions by at least 5-10 percent. Developing countries ought to be able to keep their own tax revenue, and additional compensation to them for the economic burdens of these carbon charges may be warranted. Such compensation would constitute at most 40 percent of the raised global revenue. Implementing these charges can be a challenge, especially for aviation, where a large number of bilateral air-service agreements would need to be rewritten.CC BY 3.0 IGOAIRAIR CARGOAIR NAVIGATIONAIR POLLUTIONAIR SERVICEAIR TICKETSAIR TRAFFICAIR TRAFFIC CONTROLAIR TRANSPORTAIRCRAFTAIRLINE COMPANIESAIRLINE TICKETAIRPORTAIRPORT CONGESTIONAIRPORT SECURITYAIRPORT TAXESAIRPORTSALLOCATIONALLOWANCEALTERNATIVE FUELSALTITUDEANNUAL EMISSIONANNUAL EMISSION REDUCTIONSAPPROACHAUTOMOBILEAVERAGE COSTSAVIATION EMISSIONSAVIATION FUELAVIATION INDUSTRYAVIATION SECTORBASELINE EMISSIONSBASELINE LEVELSBASESBIO-DIESELCALORIFIC VALUECAPITAL GAINSCARBONCARBON CONTENTCARBON EMISSIONSCARBON LEAKAGECARBON PRICECARBON TAXESCARRIERSCARSCIRRUS CLOUDSCLEAN TECHNOLOGYCLIMATECLIMATE CHANGECLIMATE STABILIZATIONCOCO2COATINGSCOMBUSTIONCOMPLETE LISTINGCONGESTIONCONGESTION PROBLEMSCONSUMER PRICECONSUMER SURPLUSCRUDE OILCRUDE OIL PRICEDEMAND CURVEDEMAND ELASTICITYDEMAND FOR TRANSPORTATIONDEMAND FOR TRAVELDEVELOPED COUNTRIESDIESELDIESEL ENGINESDIESEL FUELDOMESTIC AIR TRAVELDOMESTIC AVIATIONDOMESTIC FLIGHTSECONOMIC ANALYSISECONOMIC WELFAREEFFICIENCY IMPROVEMENTSELASTICITIESELASTICITIES OF DEMANDELASTICITY OF DEMANDEMISSIONEMISSION REDUCTIONSEMISSION TRADINGEMISSIONSEMISSIONS ALLOWANCESEMISSIONS FROM AVIATIONEMISSIONS FROM SOURCESEMISSIONS GROWTHEMISSIONS INTENSITYEMISSIONS MITIGATIONEMISSIONS PER TONNEEMISSIONS PRICESEMISSIONS REDUCTIONEMISSIONS REDUCTIONSEMISSIONS STANDARDSEMISSIONS TARGETSEMISSIONS TAXESEMISSIONS TRADING SCHEMESEMPIRICAL EVIDENCEENERGY EFFICIENCYENVIRONMENTALENVIRONMENTAL BENEFITSENVIRONMENTAL DAMAGESENVIRONMENTAL IMPACTSEQUILIBRIUMEQUITY OBJECTIVESEXCISE TAXESEXTERNALITIESFEASIBILITYFISHINGFLAGS OF CONVENIENCEFLEETSFLIGHT PATHSFOSSIL FUELFREE ALLOWANCESFREIGHTFREIGHT COSTSFREIGHT SERVICESFUELFUEL CHARGESFUEL CONSUMPTIONFUEL COSTSFUEL ECONOMYFUEL EFFICIENCYFUEL EFFICIENCY IMPROVEMENTFUEL OILFUEL PRICEFUEL PRICESFUEL PRODUCTIONFUEL TAXFUEL TAX RATESFUEL TAXATIONFUEL TAXESFUEL USEFUELSGASOLINEGHGGLOBAL EMISSIONSGLOBAL EMISSIONS REDUCTIONGLOBAL GREENHOUSE GASGLOBAL GREENHOUSE GAS EMISSIONSGREENHOUSEGREENHOUSE GASGREENHOUSE GAS EMISSIONSGREENHOUSE GASESGROSS RECEIPTSHEAVY FUEL OILHYDROGENIMPORT PRICESIMPORTSINCOMEINPUT PRICESINTERNATIONAL AIR TRAVELINTERNATIONAL AVIATIONINTERNATIONAL FLIGHTSINTERNATIONAL TRANSPORTIPCCJOURNEYLAND USELIGHT TRUCKSLIQUEFIED NATURAL GASLOCAL AIR POLLUTIONLOCAL AIR QUALITYLOW-SULFURMARGINAL COSTMARITIME TRANSPORTMARKET DISTORTIONSMARKET FAILUREMARKET FAILURESMINIMUM PRICEMOBILITYMONETARY FUNDMOTOR FUELMOTOR FUEL TAXESNATURAL GASNOISEOIL PRICESOIL PRODUCTIONOIL PRODUCTSOILSOZONEPASSENGER NUMBERSPASSENGER REVENUEPASSENGER TRAVELPASSENGERSPER CAPITA INCOMEPOLICY IMPLICATIONSPOLICY SCENARIOPOLICY SCENARIOSPOLLUTIONPOWERPOWER STATIONSPPPRICE CHANGEPRICE ELASTICITYPRICE ELASTICITY OF DEMANDPRICE FLOORPRICE IMPACTSPRICE INCREASEPRODUCERSPUBLIC GOODSPUBLIC SPENDINGREDUCING EMISSIONSREDUCTION IN FUEL USEREDUCTION IN TRAVELROUTEROUTESRUNWAYSSAFETYSOCIAL COSTSSPEEDSSUBSTITUTIONSULFURSULFUR EMISSIONSSULPHURSULPHUR CONTENTSUNLIGHTSUPPLY CURVESUPPLY CURVESSURCHARGESTAXTAX DESIGNTAX EXEMPTTAX EXEMPTIONSTAX RATETAX REVENUETAX SYSTEMSTAXATION OF FUELTOTAL COSTSTOTAL EMISSIONSTRADING PATTERNSTRAFFIC MANAGEMENTTRANSITTRANSPORT COSTSTRANSPORT MARKETTRANSPORT MODESTRANSPORTATIONTRANSPORTATION ACTIVITIESTRANSPORTATION COSTSTRAVEL COSTSTRAVEL DEMANDTRAVELERSTRIPTRIPSVEHICLEVEHICLE EMISSIONSWAGESWELFARE EFFECTSWINDFALL PROFITSWorld Bank10.1596/1813-9450-5950