Tesla CEO Elon Musk boards his private jet before departing from Beijing Capital International Airport on May 31, 2023.
“Billionaires and the ultra-wealthy are getting a bargain, paying less in taxes each year to fly private and contribute more pollution than millions of drivers combined on the roads below.”
U.S. Sen. Ed Markey announced legislation on Wednesday that would hike fuel taxes for private jet travel and transfer the revenue to a new federal fund aimed at bolstering clean public transportation and other climate initiatives.
The bill, titled the Fueling Alternative Transportation With a Carbon Aviation Tax (FATCAT) Act, would add a $1.73-per-gallon surcharge to the current fuel tax for private jet travel, which is around $0.22 per gallon. Markey’s new surcharge would amount to the equivalent of roughly $200 per metric ton of a private jet’s carbon emissions, according to the senator’s office.
Private jet flights—a significantly more polluting form of travel than commercial flights or trains—surged during the coronavirus pandemic. One recent study by the Institute for Policy Studies (IPS) and the Patriotic Millionaires estimated that private jets’ planet-warming emissions jumped by more than 23% during the Covid-19 crisis.
Elon Musk, Tesla’s billionaire CEO, is the most frequent private jet flyer in the U.S., helping produce more than 2,100 tons of carbon emissions last year while paying minimal taxes, according to IPS and the Patriotic Millionaires. The groups pointed to research showing that just 1% of the world’s population is responsible for half of all aviation emissions.
“The 1 percent can’t free ride on our environment and our infrastructure at a discount,” Markey (D-Mass.) said in a statement. “Billionaires and the ultra-wealthy are getting a bargain, paying less in taxes each year to fly private and contribute more pollution than millions of drivers combined on the roads below. It’s time to ground these fat cats and make them pay their fair share so that we can invest in building public transportation that communities across the country and our economy desperately need.”
Rep. Nydia Velázquez (D-N.Y.) introduced companion legislation in the House.
“Working families shouldn’t subsidize the ultra-wealthy to fly private and destroy our environment,” said Velázquez. “If billionaires want to travel on private jets, they should pay similar taxes to those flying commercial. It’s time for the rich to pay for their pollution so we can fund environmental justice initiatives and affordable public transportation across the country.”
Climate campaigners have been targeting private jets with growing frequency in recent years as research has more closely examined their impacts on the planet. The European group Transport & Environment found that private jets are five to 14 times more polluting than commercial planes and 50 times more polluting than trains.
In May, dozens of climate activists and scientists disrupted Europe’s largest private jet sales fair to demand a total ban on the planes. IPS and the Patriotic Millionaires estimated that the median net worth of a full private jet owner is $190 million.
“Sales of private jets are skyrocketing, and with them the one percent’s hugely unfair contribution to the climate crisis—while the most vulnerable people deal with the damage,” Klara Maria Schenk of Greenpeace’s Mobility for All campaign said during the May protest. “It is high time for politicians to put a stop to this unjust and excessive pollution and ban private jets.”
This story has been updated with additional details about the bill.
Cheap airline tickets, made possible by favorable government tax treatment, “come at a high cost to the planet and its inhabitants,” the environmental group warned.
A study released Thursday by Greenpeace found that the policy decisions of European governments have made flying a significantly cheaper option than traveling by train, even though the former is far worse for the climate than the latter.
For its analysis, Greenpeace Central and Eastern Europe compared air and rail fares for nine different days on 112 European travel routes.
“In the majority (79 out of 112) of routes analyzed, flights are less expensive than rail,” the group noted in its new study. “Rail trips are on average twice as expensive as flights, despite the fact that the overall climate impact of flying can be over 80 times worse than taking a train.”
“Why would anyone take the train from London to Barcelona and pay up to €384 when air tickets are available for the ridiculously low price of €12.99?” the group asked. (That’s roughly $427 for a rail trip versus $14 to fly.)
Greenpeace attributed the often substantial differences in price to “unfair tax” policies that “favor air travel over rail.” The group pointed out that “while airlines pay neither kerosene tax nor [a value-added tax] on international flights and benefit from subsidies paid with taxpayers’ money, railways have to pay energy taxes, VAT, and high rail tolls in most countries.”
“For the planet and people’s sake, politicians must act to turn this situation around.”
Lorelei Limousin, a senior climate campaigner with Greenpeace E.U., said Thursday that “airlines benefit from outrageous fiscal advantages.”
“Planes pollute far more than trains, so why are people being encouraged to fly?” Limousin continued. “Low-cost airlines, in particular, have exploited every loophole and trick in the book. €10 [$11] airline tickets are only possible because others, like workers and taxpayers, pay the true cost. For the planet and people’s sake, politicians must act to turn this situation around and make taking the train the more affordable option, or else we’re only going to see more and more heatwaves like the one currently wreaking total havoc in Spain, Italy, Greece, and elsewhere.”
Flying has been the fastest-growing source of transport emissions in the E.U. in recent years, and Greenpeace argued that European governments and institutions are effectively subsidizing the aviation industry’s planet-warming emissions “through giveaways to airlines and airports” while simultaneously “closing down railway stations and lines.”
Low-cost airlines in particular have benefited from government subsidies and less regulation. Greenpeace’s analysis shows that “incentives for new routes from an airport are mainly designed for low-cost carriers, which are typically flying to small airports near large airports, which are considered new destinations (Paris-Beauvais, Frankfurt-Hahn…).”
“Thanks to the outrageous subsidies that airlines benefit from, they can offer unreasonably low prices—low-cost airlines are at the forefront with their aggressive pricing strategies,” Greenpeace said. “But these cheap tickets come at a high cost to the planet and its inhabitants, including their employees, airport neighbors, customers, people affected by extreme weather events.”
To promote less polluting travel, Greenpeace urged European national governments to “introduce climate tickets, affordable and simple long-term tickets valid on all means of public transport in a country or a defined region.”
“Together with the E.U. institutions, they should also cooperate for the implementation of a cross-border climate ticket,” the group said in a statement. “Windfall profit taxes, the phaseout of airline subsidies, and a fair taxation system based on CO2 emissions would make revenues available for funding climate tickets while improving public transport networks.”
… In a tense moment during the meeting, which had already been delayed for nearly an hour, security stepped in to prevent a protester from reaching chairman Sir Andrew Mackenzie and other board members on the stage.
Dozens of protesters were escorted out by members of the security team at London’s Excel conference centre.
“Obviously that last incident went a stage further than we experienced in the first part of today,” Mackenzie said, after protesters had been escorted out.
…
Early in the meeting, a group of protesters sang, “Go to hell Shell and don’t you come back no more, no more, no more, no more,” to the tune of the Ray Charles song Hit the Road Jack.
The first protester to get up shouted: “Welcome to Shell… complicit in the destruction of people’s homes, livelihoods and lives. Welcome to hell.”
…
UPDATE: Climate protesters attempt to storm the stage of Shell AGM!!!
People participate in a “march on billionaires” event on July 17, 2020 in New York City. (Photo: Spencer Platt/Getty Images)
“Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure,” said Sen. Elizabeth Warren.
The United States’ astronomical levels of economic inequality are poised to become further entrenched in the coming years as what The New York Timesdescribed Sunday as “the greatest wealth transfer in history” gets underway, with the richest members of the Baby Boomer generation set to pass trillions of dollars in assets on to their descendants—often paying little or nothing in taxes.
“Most will leave behind thousands of dollars, a home, or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets,” the Times reported. “Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade.”
The newspaper added that thanks to the loophole-ridden U.S. tax system, “heirs increasingly don’t need to wait for the passing of elders to directly benefit from family money, a result of the bursting popularity of ‘giving while living‘—including property purchases, repeated tax-free cash transfers of estate money, and more—providing millions a head start.”
“The trillions of dollars going to heirs will largely reinforce inequality,” the Times observed. “The wealthiest 10% of households will be giving and receiving a majority of the riches. Within that range, the top 1%—which holds about as much wealth as the bottom 90%, and is predominantly white—will dictate the broadest share of the money flow. The more diverse bottom 50% of households will account for only 8% of the transfers.”
1/Months in the making, here's the final cut of my story on the long-awaited wealth transfer, no longer in the future tense: We're closer to 2053 than 1992. Elites are already disbursing to heirs while alive. The masses likely need luck or a paradigm shifthttps://t.co/FDKNafpCyV
Don Moynihan, a professor at Georgetown University’s McCourt School of Public Policy, argued that the Times analysis further demonstrates that “we are not taxing the very wealthy enough.”
The Times noted that individuals in the U.S. can pass nearly $13 million in assets to heirs without paying the federal estate tax, which only applies to around two of every 1,000 American estates.
“As a result, although high-net-worth and ultrahigh-net-worth individuals could inherit more than $30 trillion by 2045, their prospective taxes on estates and transfers is $4.2 trillion,” the Times observed.
The explosion of wealth inequality in the U.S. over the past several decades has prompted growing calls for systemic reform but little substantive action from lawmakers. In 2017, congressional Republicans and then-President Donald Trump contributed to the inequality boom by ramming through tax legislation that disproportionately benefited the wealthiest Americans.
Now in control of the U.S. House, Republicans are trying to make the Trump tax cuts for individuals permanent and eliminate the estate tax altogether—a move that would give the nation’s wealthiest households another $2 trillion in tax breaks.
In April, Sen. Bernie Sanders (I-Vt.) led several of his colleagues in offering an alternative proposal: Legislation that would impose progressively higher taxes on estates worth between $3.5 million and $1 billion, as well as a 65% levy on estates worth more than $1 billion.
“At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes,” Sanders said last month. “We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks.”
Sen. Elizabeth Warren (D-Mass.), a co-sponsor of Sanders’ legislation, tweeted Monday that “Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure.”
“Congressional Republicans need to get on board,” the senator added.
Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like health care, medical research, and infrastructure. Congressional Republicans need to get on board.
Morris Pearl, a former managing director at the asset management behemoth BlackRock and the chair of the Patriotic Millionaires, stressed in an interview with the Times that structural changes to the U.S. tax code—not just a crackdown on wealthy tax cheats—are necessary to slow the rise of inequality.
“People are following the law just fine. I generally don’t pay much taxes,” said Pearl, whose group has warned that democracy “will not survive” unless the rich are taxed much more aggressively.
Stressing the ease with which rich families in U.S. are able to pass assets on to their heirs tax-free, Pearl told the Times that he currently holds stock that his wife’s father, “who died a long time ago, bought in the 1970s,” an investment that “has gone from a few thousand dollars to many hundreds of thousands of dollars”—unrealized capital gains that are not subject to taxation.
University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman have estimated that $2.7 trillion of the $4.25 trillion in wealth held by U.S. billionaires is unrealized.
“I’ve never paid a penny of taxes on all that,” Pearl said of his inherited equities, “and I may not ever, because I might not sell and then my kids are going to have millions of dollars in income that’s never taxed in any way, shape, or form.”
Campaigners say the lobbying tactics used to argue against tougher measures on emissions echo those of the 20th century tobacco industry
Airlines have been accused of using a “typical climate denialist” strategy after downplaying decades of scientific research on aviation emissions to block tougher regulations.
Campaigners said the lobbying tactics echoed those of the 20th century tobacco industry, which fought stricter measures by magnifying minor doubts on the health risks of smoking.
Documents obtained by openDemocracy show airlines and airports privately told the government there was too much uncertainty about the additional warming effects of flights to justify introducing new policies to tackle them.
But senior climate scientists contradicted the industry’s claims, saying the science is well established on what are known as aviation’s “non-CO2 effects”.
These are caused by emissions at high altitude of water, nitrous oxides, sulphur dioxide and particulate matter, with aircraft vapour trails, also known as contrails, a particular problem because they form clouds at high altitude that trap heat radiated from the Earth.
The Intergovernmental Panel on Climate Change estimated in a special report in 1999 that the total historic impact of aviation on the climate was two to four times greater than from its CO2 emissions alone.
Research in 2021 largely confirmed those findings and concluded aviation emissions were warming the climate at “approximately three times the rate of that associated with aviation CO2 emissions alone”. An EU study from 2020 also found non-CO2 emissions warm the planet about twice as much as CO2 emissions, but acknowledged there were “significant uncertainties”.
The Department for Transport considered regulating these non-CO2 impacts and asked for views on the issue in a consultation in 2021 on its proposed “Jet Zero strategy”.
Responses from airlines and airports, obtained under FOI by openDemocracy, reveal several used the same tactic of arguing the science was too uncertain to justify policies to address non-CO2 effects. Several recommended instead that the government should limit its action on the issue to funding further research into it.
‘A bit of a joke’
Airlines UK, a trade body that lobbies for airlines including British Airways (BA), easyJet and Virgin Atlantic, told the DfT that “the science around these [non-CO2 impacts] is not yet robust enough to form reduction targets”.
When asked during the Jet Zero consultation what could be done to tackle non-CO2 impacts, Ryanair said it was “too early to say until impact is better understood”.
Low-cost airline Wizz Air told the DfT: “There is too high a level of uncertainty of non-CO2 emission contribution to climate change for a policy to be formed.”
Airlines UK, Ryanair and Wizz – alongside others across the industry – called on the DfT to instead fund further research into the science of non-CO2 impacts.
The tactic appears to have worked, with the DfT announcing in the Jet Zero strategy last year that more work would be done with scientists and the industry to understand the issue.
The DfT did, however, say the government was “exploring whether and how non-CO2 impacts could be included in the scope of the UK ETS (emissions trading scheme)”.
Professor Piers Forster, an atmospheric physicist and member of the independent Climate Change Committee, told openDemocracy it was “completely wrong” for the aviation industry to claim the science on aviation’s non-CO2 effects was too uncertain to address them.
He said: “It’s a bit of a joke to say the effects are too uncertain to do anything about. We see their contrails and we’ve known for over 20 years that they are warming the planet. The industry should not hide behind uncertainty.”
He added that “the non-CO2 effects absolutely have to be accounted for in some way and action should be taken to reduce them”.
Milan Klöwer, a climate physicist at Massachusetts Institute of Technology, said airlines were adopting a “typical climate denialist strategy” by overstating the level of uncertainty about non-CO2 effects.
“Even in the best case they roughly double the effect of CO2 emissions on the climate,” he said.
He called on airlines to start accounting for their non CO2 effects and invest more in solutions, such as alternative fuels, which reduced those effects.
Rob Bryher, aviation campaigner at climate charity Possible, said: “These documents show that airlines cannot be trusted to decarbonise on their own. Demand management solutions like a frequent flyer levy, introducing fuel duty, carbon pricing, or management of airport capacity are going to be crucial.”
Matt Finch, UK policy manager of campaign group Transport & Environment, said: “Aviation’s non-CO2 impacts are somewhere between huge and absolutely massive. But the industry doesn’t want you to know that. Instead of confronting its environmental problems head-on, the industry copies the tobacco industry of the ’50s and the oil industry of the ’70s in casting doubt and disbelief around the science.”
BA said it was working with academics and experts on non-CO2 impacts of flying while Sustainable Aviation, an industry group that includes airlines, said it was committing to addressing them but reiterated more research was needed. Wizz Air said it was already addressing the impacts through a range of measures.
Some airlines ignore non-CO2 effects in schemes they support to help passengers calculate and offset the emissions of their flights.
BA’s emissions calculator states a one way flight from London Heathrow to New York emits 348kg CO2E (carbon dioxide equivalent) and charges £3.97 for offsetting.
Atmosfair, a German non-profit organisation which supports the decarbonisation of flying, calculates the same journey on a Boeing 777-200 – an aircraft type used by BA – emits 896kg and charges 21 euros (£18.37) for offsetting. Atmosfair’s emissions total comprises 308kg of CO2 emissions and 587 kg equivalent for “climate impact of contrails, ozone formation etc”.
While the DfT has so far failed to act on non-CO2 effects, they are mentioned in official advice to companies from the Department for Business Energy and Industrial Strategy on how to report their emissions.
It says: “Organisations should include the indirect effects of non-CO2 emissions when reporting air travel emissions to capture the full climate impact of their travel.”
A DfT spokesperson said: “Our Jet Zero Strategy confirmed our aim of addressing the non-CO2 impacts of aviation, by developing our understanding of their impact and possible solutions, and the UK is one of the leading countries working to address this issue.”
Sustainable Aviation Fuel
International Airlines Group (IAG), which owns BA, Vueling and Aer Lingus, told DfT’s Jet Zero consultation it could address non-CO2 emissions by supporting “sustainable aviation fuel” (SAF).
SAF is a jet fuel made from sources which the industry claims are sustainable, including cooking oil and animal fat. It performs in a similar way to kerosene but can produce up to 80% less CO2 depending on how it is made. It potentially also reduces contrails.
IAG told the Jet Zero consultation SAF was “the only viable solution for decarbonising medium and long haul flights”, which account for about 70% of global aviation emissions.
But further documents obtained by openDemocracy reveal IAG then lobbied the DfT to water down its SAF mandate.
In response to a separate consultation, IAG argued the SAF mandate should only cover flights within the UK or to the EU, and not the long haul flights on which British Airways makes most of its profits.
IAG also lobbied against a proposal to ban airlines from dodging the mandate by filling their tanks with cheap kerosene at overseas airports – a practice known as “tankering”.
A BBC Panorama investigation in 2019 revealed tankering by BA and other airlines was creating small financial savings but unnecessary carbon emissions.
IAG also argued against a proposal aimed at building demand for “power-to-liquid” jet fuel, which is produced by combining hydrogen made by renewable energy with carbon captured from the atmosphere.
Unlike other so-called sustainable jet fuels, power-to-liquid fuel does not involve a feedstock needed by other industries to decarbonise, such as used cooking oil or animal fat.
IAG called it “a very expensive pathway to directly decarbonise aviation”.
Sustainable Aviation, an industry group that includes airlines, said: “We are committed to addressing [non-CO2] impacts based on the scientific evidence, but further research is key to developing effective mitigation solutions, for example the use of sustainable aviation fuels (which contain lower contrail forming particulates), alongside steps such as optimising flight routes to avoid contrail formation.”
BA, IAG’s principal airline, said: “We are actively engaging with academics, experts within the industry and the government’s Jet Zero Council to take proactive steps to look into non-CO2 impact.”
Wizz Air said it was mitigating non-CO2 effects “through route optimisation and jet fuel improvements” and by using Airbus A321neo aircraft which reduced NOx emissions by 50%.
