Tribune Julien Etchanchu (Advito) – For business trips, the CO2 tax is not a problem but a solution

The idea of ​​the CO2 tax is not new, but it is still relatively little used, both in the economy in general and within companies. However, some specialists see it as an important weapon to reduce greenhouse gas emissions: in collaboration with MIT, the organization Climate Interactive has created a climate simulation called EN-ROADS, which makes it possible to virtually activate different levers to curb rising temperatures. . It turns out that the most effective leverage is a (very) high carbon price. So, what might a carbon tax on business travel look like?

Why a CO2 tax?

As NASA climatologist Peter Kalmus writes, “Global warming is a failure of the market economy. Fossil fuels come at an additional cost to society (global warming, respiratory diseases, etc.), excluding in the price of fuel.” More generally, negative externalities are never taken into account in the price of a good or in the calculation of GDP. Flattening a forest, burning coal, emptying the oceans… all of this great ways to increase GDP Even an oil spill is beneficial as the precious cleanup will contribute to the rise of the sacred indicator.

Many economists are therefore now exploring the creation of more global indicators that take social and environmental aspects into account when defining wealth. And as far as the environment is concerned, a price on carbon seems to be one of the preferred avenues.

In addition, a carbon tax on business travel would (in part) correct a situation that is now grotesque, given that, let’s not forget, in a time of climate emergency, kerosene is still not taxed…

What would it look like for business travel?

Today, the predominant logic is that of price and the famous “lowest logical rate”. On a Paris-Shanghai flight we sometimes take a connecting flight to pay less. But if the direct flight emits 2 tons less CO2, is that not a figure to appreciate? Assuming that direct is €150 more expensive, and set a CO2 price of €100 per tonne, we can estimate that the “environmental costs” are €200 higher with online flights. The “real” total cost (conventional price + environmental impact) of the journey is therefore €50 more expensive for the connecting flight. Establishing an internal carbon price is therefore an excellent way to arbitrate between costs and carbon emissions.

This is why LinkedIn just introduced an internal carbon price of $60 per trip (which should soon evolve to a price per tonne of around $100). As his travel manager Leslie Hadden points out: “ it is time to stop looking at price as the only tangible indicator, but to take environmental externalities into account “. She also believes that this tax” an excellent way to educate travelers so that they realize the impact of their journey and ultimately travel less. It is also a good way to raise funds to finance sustainable development projects, inside or outside our value chain. “.

Finally, by setting an internal carbon price, we may be preparing for the future. It is possible (probably?) that companies will have to pay for their CO2 emissions in the near future. This is already the case for energy companies in Europe (ETS system), and the system could soon be extended to the transport sector. And what if the next step were to generalize this tax to all companies?

A sometimes complex implementation

While the potential of the carbon tax is beyond doubt, its implementation can face some pitfalls:

First, to be useful, the price of carbon must be high, about $100 per tonne. If it is too low, it can give the wrong impression that with a few euros we can be “neutral” and that our environmental impact is ridiculous. Moreover, this price must be fully correlated with the CO2 offset, the market price, which is often much too low today. So two carbon prices must coexist, one for compensation and one for domestic taxation.

Then collecting this tax can prove to be complex as the usual booking tools cannot necessarily represent it correctly, especially as the calculations of emissions are generally very approximate. Therefore, it is sometimes better to retrieve it a posteriori, after the emissions have been accurately calculated (especially taking into account the type of aircraft).

Finally, and this is probably the most important point: we need to create a collective momentum, generate internal support so that the importance of this tax is understood and adopted. The funds raised should be clearly marked so that everyone understands what this money will be used for – and besides, it is certainly better to forget the term “tax” and give preference to the concept of “contribution”.

To quote Leslie Hadden in closing: We really want to create support for this project. This tax should not be seen as a punishment, but as a contribution. This positive side is absolutely crucial to the success of this project and to the fight against climate change. “.

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