This study assesses the potential of a Premium Flyers Solidarity Levy as an equitable and predictable source of climate finance, in particular for Small Island Developing States (SIDS) and Least Developed Countries (LDCs). Building on the principles of “polluter pays” and “ability to pay,” the proposed levy targets first- and business-class passengers, representing high-emission, high-income travel segments, to generate dedicated adaptation revenues without significantly affecting demand.
The analysis covers ten climate-vulnerable countries: Antigua and Barbuda, Barbados, Colombia, Fiji, Kenya, Mauritius, Mozambique, Sierra Leone, Senegal, and Zambia, representing diverse geographic and economic contexts. These countries already experience massive losses due to climate change, for Fiji for example the equivalent of 5.8% of GDP. The tourism sector is particularly vulnerable. In Fiji, tourism contributes 30-40% of GDP.
Three policy scenarios were modeled for both short-haul (<1,500 km) and long-haul (>1,500 km) routes for commercial flights, with moderate to high rates (from 20$ to 90$ for premium classes).
Results demonstrate that the Solidarity Levy can generate significant and stable adaptation finance in an equitable way, without very limited market distortion:
Estimated revenues range from US$25 million in Antigua and Barbuda to over US$645 million in Colombia – all direct resources, particularly critical in debt-ridden countries.
Coverage of annual adaptation requirements varies widely, based on the size of the economy, the extent of the vulnerability and travel volumes, going from 0.09% in Mozambique to 428% in Barbados.
The proceeds could offset tourism-related climate losses; in Fiji, Mozambique, Mauritius, Senegal, and Colombia, even 100% of tourism-related climate losses, while also providing surplus revenues for adaptation efforts.
Moderate levy rates have minimal impact on passenger demand, averaging less than a 0.05% decline across countries.
The study has been undertaken by Prof. Mizan Khan, Ayesha Noor & Ekhtekharul Islam on behalf of the secretariat of the GSLTF. The full publication is forthcoming (‘Solidarity levy on premier classes air travel: An impact analysis on tourism in selected SIDS and LDC economies’, forthcoming, 2025).
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