How Will Tourism be Taxed Next?

Tony Hayward of BP – who’s next for the Hot Seat?

In his article in last week’s Financial Times (‘Is Oil the New Tobacco” link: ), Paul Gapper suggests that, in their desperate need for liquid funds, the US may well target cash-rich trading companies who slip out of public favour, like BP, for much-needed big bucks. What challenges does this pose for the travel and tourism industry?

Interestingly enough, in his latest call to action supporters’ email, President Obama says:
“But our work will not end with this crisis. That’s one of the reasons why last week I invited lawmakers from both parties to join me at the White House to discuss what it will take to move forward on legislation to promote a new economy powered by green jobs, combat climate change, and end our dependence on foreign oil.”

“Today, we consume more than 20 percent of the world’s oil, but have less than two percent of the world’s oil reserves. Beyond the risks inherent in drilling four miles beneath the surface of the Earth, our dependence on oil means that we will continue to send billions of dollars of our hard-earned wealth to other countries every month — including many in dangerous and unstable regions.”

“In other words, our continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk. We cannot delay any longer.”

So Obama will use the BP environmental disaster to promote, and possibly finance the move to a green economy with its implicit carbon-valuing ‘Cap and Trade’ markets.

“Let the polluter pay” has never been more graphically illustrated – with BP handing over a cool $20bn with probably much, much more to follow.

Although extremely newsworthy, this is not an isolated incident. The European Union is seeking to capture every member state’s energy taxes and roll them into one massive trillion Euro account to fund movement to a European green economy.

Moves are already being made by the UK government and others to monitor and quantify medium/large energy user’s emissions as a prelude to capping and taxing them. Hotels are particularly affected.

And the EU-ETS (European Union Emissions Trading Scheme) – the world’s largest and most established Cap and Trade system – is shortly to bring in ALL world airlines who fly via Europe. OK this is being resisted fiercely, but what have ex-European carriers got to bargain with? Their own flying rights and European slots? They can huff and puff all they like but, at the end of the day, the EU-ETS, with public sentiment on its side, is bound to prevail.

So, watch out for big taxes on polluters big and small. It is certain that Obama will not waste the anger created by ‘British Petroleum’ – it will be diverted to the next cash-rich big company polluter.
And who’s going to pay the $20bn? BP’s shareholders? Fat chance – look for another hike in fuel prices.

Talking of which, by global agreement aviation fuel is tax free. How long can that last?

And stand by for a big cold blast from the UK budget to be announced Tuesday – a Double Whammy for outbound tourism – massive increases in the notorious APD Greenwash air tax plus a drop in available holiday spending.

Valere Tjolle
Valere Tjolle is editor of the Sustainable Tourism Report Suite, special offer at: www.travelmole.com/stories/1142003.php