Report on the Proposed Aviation Solidarity Levy and its Implications for Sustainable Development Goals

1. Introduction

The International Air Transport Association (IATA) has issued a critical response to the recommendation by the Global Solidarity Levies Task Force (GSLTF) to impose a new tax on air transportation. The GSLTF’s stated aim is to enhance revenue for developing nations to address challenges related to climate change, pandemics, and other development issues, which aligns with the broad objectives of the United Nations Sustainable Development Goals (SDGs). However, an initial assessment by IATA suggests the proposed levy is fundamentally flawed and could actively undermine progress on several key SDGs.

2. Economic Viability and Contribution to Global Goals

Alignment with SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure)

The proposed levy poses a significant threat to the aviation sector’s role as a global economic catalyst, directly impacting SDG 8 and SDG 9. The industry is a critical component of global infrastructure and a driver of economic growth.

• Economic Contribution: The aviation industry is a vital economic engine, contributing 3.9% of global GDP and supporting 86.5 million jobs worldwide, which is central to achieving SDG 8.
• Disproportionate Financial Burden: The GSLTF’s estimated annual revenue from the levy (EUR 78 billion) is approximately three times the airline industry’s projected global profit for 2024 (USD 32.4 billion). The industry’s thin net profit margin, estimated at 3.4%, cannot absorb such a tax without severe consequences.
• Impact on Connectivity: Taxing the sector, particularly premium travel, threatens the viability of route networks that are essential for global connectivity. This would weaken the infrastructure (SDG 9) that connects communities, invigorates tourism, and links global markets, ultimately impeding economic growth.

3. Impact on Climate Action and International Cooperation

Challenges to SDG 13 (Climate Action) and SDG 17 (Partnerships for the Goals)

While the levy is proposed in the name of climate action, its implementation could paradoxically hinder the aviation industry’s tangible efforts to decarbonize and would undermine established international agreements.

• Commitment to SDG 13: The airline industry has a firm commitment to achieving net-zero carbon emissions by 2050, a goal that directly supports SDG 13. This effort requires an estimated investment of USD 4.7 trillion between 2024 and 2050.
• Diversion of Funds: Extracting tens of billions of dollars from the industry would cripple its ability to invest in critical decarbonization solutions, such as Sustainable Aviation Fuels (SAF) and new technologies, thereby slowing progress towards climate goals.
• Undermining SDG 17: The proposal disregards the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), a globally agreed-upon mechanism developed through the International Civil Aviation Organization (ICAO). CORSIA represents a key multi-stakeholder partnership (SDG 17) to manage aviation’s carbon emissions. An overlapping solidarity tax would fragment global policy and undermine this established framework.

4. Socio-Economic Consequences and Public Trust

Concerns Regarding SDG 10 (Reduced Inequalities)

The GSLTF has not published an assessment of the levy’s impact on developing economies or travelers, raising concerns that it could exacerbate inequalities rather than reduce them.

• Increased Costs: The levy would inevitably increase the cost of travel for all passengers and raise the price of goods shipped by air. This would reduce the affordability of a service that is an indispensable economic catalyst.
• Negative Impact on Developing Nations: Reduced air connectivity and higher transport costs could disproportionately harm the economies of the very states the levy aims to assist, working against the objective of SDG 10.

Public Skepticism on Aviation Taxation

Independent global research highlights significant public distrust regarding the effectiveness and purpose of aviation taxes, suggesting a lack of social license for such measures.

1. 73% of respondents believe green taxes are a form of government greenwashing.
2. 78% state that taxation is not the appropriate method to make aviation sustainable.
3. 74% do not trust governments to spend tax revenue wisely.
4. Support for taxation as a climate solution is low (9%), with the public strongly preferring investment in SAF (25%), emissions-reducing technology (23%), and research (18%).

5. Conclusion and Recommendations

The proposed solidarity levy, while intended to support development goals, is counterproductive. It threatens to weaken the aviation industry’s financial stability, its capacity for climate action, and its role as a driver of economic growth and connectivity. A more effective strategy to achieve shared sustainability objectives would involve:

• Strengthening Existing Partnerships: Focusing efforts and resources on making established mechanisms like CORSIA successful, in line with SDG 17.
• Promoting Sustainable Innovation: Directing policy and investment towards the production and scalability of Sustainable Aviation Fuels (SAF) and other technologies to accelerate progress on SDG 7 and SDG 13.
• Protecting Economic Catalysts: Recognizing the role of aviation in achieving SDG 8 and SDG 9, and ensuring that policies support, rather than hinder, the connectivity that underpins global economic prosperity.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 8: Decent Work and Economic Growth

• The article directly connects the aviation industry to economic growth, stating it is an “economic catalyst” responsible for a “direct contribution of 3.9% of global GDP and 86.5 million jobs globally.” It argues that the proposed tax would lead to “weaker economic growth” and negatively impact tourism markets.

SDG 9: Industry, Innovation, and Infrastructure

• The article discusses the airline industry as a critical infrastructure, a “lifeline for remote communities” that enables connectivity for “nearly five billion travelers.” It also highlights the industry’s commitment to innovation for sustainability, such as investing in “Sustainable Aviation Fuels (SAF), more efficient operations, and better technology.”

SDG 13: Climate Action

• This is a central theme. The article addresses climate change mitigation through the airline industry’s commitment to “achieving net zero carbon emissions by 2050” and its participation in the “Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).” The proposed solidarity levy is explicitly aimed at raising funds for “climate change mitigation and adaptation.”

SDG 17: Partnerships for the Goals

• The article discusses global partnerships and policy coherence. It references the Global Solidarity Levies Task Force (GSLTF) and the International Civil Aviation Organization (ICAO) as bodies for international cooperation. It argues that the proposed levy would undermine the existing global agreement, CORSIA, leading to a “fragmented, inefficient and inconsistent global policy framework,” which speaks directly to the need for coherent international policies.

2. What specific targets under those SDGs can be identified based on the article’s content?

SDG 8: Decent Work and Economic Growth

• Target 8.1: Sustain per capita economic growth. The article warns that the proposed levy would have the “unintended consequence of weaker economic growth,” directly opposing this target.
• Target 8.9: Promote sustainable tourism. The article highlights that the airline industry “invigorates tourism markets” and “links local products to global markets,” and that taxing it heavily could harm this sector.

SDG 9: Industry, Innovation, and Infrastructure

• Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure. The article frames air transport as indispensable infrastructure for global connectivity and economic activity. It argues the proposed tax would make this infrastructure less affordable and efficient.
• Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable. The article details the airline industry’s plan to become sustainable through a “USD 4.7 trillion” investment in solutions like SAF and new technology to achieve “net zero carbon emissions by 2050.”

SDG 13: Climate Action

• Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article discusses CORSIA as the “single harmonized market-based measure” for international aviation’s emissions, representing an integrated global policy. It argues against the proposed levy as an “overlapping measure” that would disrupt this integration.
• Target 13.a: Implement the commitment to mobilize finance for climate action in developing countries. The GSLTF’s stated goal to “support international solidarity (in particular with regards to climate change mitigation and adaptation)” directly relates to this target of mobilizing funds for climate action.

SDG 17: Partnerships for the Goals

• Target 17.1: Strengthen domestic resource mobilization, including through international support. The GSLTF’s aim to “improve domestic revenue mobilization of developing countries” through a solidarity levy is a direct reference to this target.
• Target 17.14: Enhance policy coherence for sustainable development. IATA’s core argument is that the proposed levy would “undermine CORSIA and lead towards a fragmented, inefficient and inconsistent global policy framework,” which is a call for maintaining policy coherence.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Contribution to Global GDP: The article states that aviation provides a “direct contribution of 3.9% of global GDP.” This can be used as an indicator to measure the economic impact of the industry (SDG 8).
• Jobs Supported: The figure of “86.5 million jobs globally” supported by aviation is a direct indicator for SDG 8 (Decent Work and Economic Growth).
• Share of Global Carbon Emissions: The article mentions aviation’s “estimated 2.5% share of global carbon emissions” and the goal of “net zero carbon emissions by 2050.” Tracking this percentage over time is a key indicator for SDG 13 (Climate Action).
• Financial Mobilization for Climate Action: The article provides two financial figures that serve as indicators: the proposed levy’s potential to generate “EUR 78 billion (over USD 90 billion) per year” and the airline industry’s own commitment of “USD 4.7 trillion over the period 2024-2050” for sustainability efforts (SDG 13, SDG 9).
• Industry Profitability: The “estimated at an average of 3.4% industrywide” net profit margin for airlines is presented as an indicator of the industry’s financial health and its capacity to absorb new taxes and invest in sustainability (SDG 8, SDG 9).
• Existence of Harmonized Policies: The article implicitly uses the existence of CORSIA as an indicator of a “single harmonized market-based measure.” The proposal of a new levy is presented as a negative indicator, creating “overlapping measures” and policy fragmentation (SDG 17).

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article. In this table, list the Sustainable Development Goals (SDGs), their corresponding targets, and the specific indicators identified in the article.

Source: iata.org