Willie Walsh’s airline emissions

When an important member of a highly polluting industry suggests that the industry should be taxed on its carbon emissions it is not usually because that there has been a conversion, similar to that on the road to Damascus. It is usually about damage limitation or spin.

Last week Mr Walsh, Chief Executive of British Airways, suggested that there is a global tax on emissions payable by all airline passengers. Does this mean that Mr Walsh has seen the light and that he intends to ensure that the airline he runs will become environmentally friendly and will start reducing its emissions? I doubt it.

Mr Walsh has form for attention catching gestures. He has decided, having regard to the present financial position of the airline that he runs, that he will forego his salary during the month of July. Mr Walsh earns around £735,000 a year and his airline made a loss of £401 million in its last financial year.

One month’s salary even for Mr Walsh is not a lot in the grand scheme of BA’s losses. Mr Walsh did forgo a bonus of over £700,000 due to the shambolic opening of Terminal 5 last year and that is perhaps not a gesture but recognition that it is wrong to award bonuses for poor performance. I do not think that we can pay too much attention or shower folk with praise when one does the right thing. You deserve no praise for doing what is right.

Airlines, with their creation of pollution in the upper reaches of the atmosphere where they do most harm, and associated greenhouse gas emissions, are the largest single source of growth in greenhouse gas emissions. By convention, their fuel is not taxed.

This makes Mr Walsh’s recommendation very odd. There is no universal agreement on taxing airplane fuel and there is no universal agreement on taxing shipping fuel. Consequently these forms of transport can emit as much greenhouse gas as they want, without having to pay for the consequences of their emissions. In the United Kingdom gas, electricity, coal, oil, petrol and diesel is taxed, every time we turn on a light or have a shower (assuming that we are not using our own solar energy) we pay a tax. If we jump in a taxi or ride a bus one way or another we pay a tax, but if we climb aboard any airline, not matter whether we fly in the front of the plane or the back our emissions from the flight are all tax free.

Mr Walsh’s call for a global tax is a clever piece of spin. There are over one hundred and eighty nations in the world that have airlines. Most nations have several airlines. There are many countries that have dozens of airlines when you include charter companies and companies that run air routes that are national. In addition there are many private planes. It would take dozens of years to secure any agreement with all of the major countries that have airlines about taxing their emissions.

Even if Mr Walsh’s idea that the airlines’ would act against their own self interest and make an aviation emission tax available (thus making aviation more expensive and limiting demand for it by price), his idea also involves hypothecating that tax to certain good environment projects such as fighting deforestation. That would bring his concept of an emissions tax in direct conflict with the way in which governments raise taxes in general – with the consent of their electorate, which involves their electorate knowing that their elected representatives are spending the money.

In other words, as an idea it seems to be, in the words of a well known London expression “all mouth and no trousers”.

Would I be too cynical if I dismissed Mr Walsh’s idea as gimmick? It shows the public who are becoming increasing climate conscious that British Airways are doing something, even if the ambition is set so impossibly high as to require the co-operation of hundreds of airlines and over a hundred government first to tax, and secondly to lose control of the money obtained in taxing.

Mr Walsh’s desire to slow down climate change without affecting the business he runs illustrates the conundrum that those who want to fight climate change must one day solve. Mr Walsh is running a business that affects the life and the future of the whole planet. He is not alone in this neither is his industry the only one that affects us so badly, but it does have an undeserved tax free status for fuel. Mr Walsh knows that his business ought to drastically reduce their emissions, but to do so without all his competitors doing so would mean commercial suicide for British Airways.

Mr Walsh knows that the only way to stop rapid climate change is by specifically binding international agreement on climate change legislation, enacted in every country in the world. That will not happen, the way the world is now. What may happen, if our grand children are very lucky in the leadership of the nations of the world today, is that the world may agree a very modest package of measures which limits temperature rises to two or three degrees.

I would guess right now we are on course for a temperature rise of five degrees, which will spell disaster of much of humanity but for the foreseeable future “business as usual” will unfortunately prevail.