KEY POINTS:
John Key is right to note that Britain's planned air travel tax is "not necessarily rational". The tweaking of the air passenger duty penalises long-haul destinations, such as this country, most harshly, yet soaring carbon emissions from air travel are largely the product of the huge number of short-haul flights within Europe. The Prime Minister is wrong, however, if he believes pursuing the issue with his British counterpart, Gordon Brown, is likely to have a positive outcome.
The air travel tax is no off-the-cuff initiative. It is part of escalating moves within Europe to offset carbon emissions caused by increased travel. These can be combated only by New Zealand emphasising its own clean, green brand.
As Minister of Tourism, Mr Key is keenly aware of the tax's potential to dent travel from our second-biggest tourist market. British tourists contribute about $1 billion to the New Zealand economy annually. The duty, which is scheduled to rise to $240 by November 2010, is obviously a major disincentive. Shorter, less-polluting flights attract a far more modest levy, making European tourist destinations far more inviting. The Prime Minister is also aware of what he terms a "contagion effect". Ireland has also announced plans for an air travel tax and, with emissions from air traffic projected to rise fivefold, other European nations are bound to follow.
But the potential for damage does not end there. Pointedly, the British tax, which has its genesis in a 2006 report by a House of Commons committee, does not embrace freight flights. Presumably this is meant to provide a helping hand to exporters and importers. But it also leaves the concept of a tax on food miles up for debate. Sending 1kg of kiwifruit to Europe has been estimated to result in 5kg of carbon being discharged into the atmosphere. New Zealand, therefore, has been identified as a prime candidate for a food miles tax. Again, this is somewhat unfair, given this country's efficient farming practices. But such a tax cannot be ruled out, given its appeal to an increasingly green population.
No one should underestimate Europe's willingness to act. While this country dallied, it introduced an emissions trading scheme in 2005. There are now plans to include aviation in that scheme. The European Commission says someone flying from London to New York and back generates the same level of emissions as the annual heating of an European home. From 2012, it wants not only flights within Europe but those originating or terminating at a European airport to be bound by the cap-and-trade scheme.
No nation is more vulnerable to this trend than New Zealand. Its only viable response is to enhance its green, '100 per cent Pure' credentials. Championing sustainability will help negate the issues raised by geographic isolation. Helen Clark's notion of carbon neutrality was, however hazy, a worthwhile step in that direction. So is Air New Zealand's testing of biofuels. But precisely the wrong message has been sent by the Government's decision to put this country's emissions trading scheme on hold while a review is held.
A brisk reappraisal based on the current economic climate may have served a purpose, but an Act-induced agenda that includes a review of climate-change science smacks of unnecessary dawdling. Europe and most of the rest of the word have moved on. President-elect Barack Obama favours a cap-and-trade scheme not unlike that fashioned by the previous government. Mr Key's visit to London should have convinced him that he cannot procrastinate over modifications to this.
Any delays will diminish New Zealand's reputation in environmental matters. They will also make his tourism portfolio far more onerous.
