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International Air Passenger Adaptation Levy (IAPAL) research and development

Project Reference: AAGL-0016

CDKN is supporting research into the options for the development and potential impacts of the International Air Passenger Adaptation Levy (IAPAL). The research is being conducted by IIED, VividEconimics and Oxford Climate Policy, supported by the Legal Response Initiative, and will take place from October 2012 until April 2013.

The International Air Passenger Adaptation Levy (IAPAL) is a proposal to introduce a levy on international air passenger travel. It represents an innovative financing mechanism based on the UNFCCC principle of Common but Differentiated Responsibilities and Capabilities and would raise resources that would be additional to existing climate funds. The IAPAL could generate $8-10 billion per year to fund adaptation in developing countries. This would mean a large injection of adaptation funding and a diversification away from traditional adaptation finance sources dominated by grants from developed countries. However, depending on how the IAPAL is applied, questions have been raised about the potential impact of IAPAL on the economies of LDC countries because of the potential impact on the tourism sector.

This research has been commissioned on behalf of the Least Developed Country Group of negotiators and is intended to help the group understand the economic impact of an international air passenger adaptation levy, in particular on the tourism industry in small island states and least developed countries.  By undertaking rigorous, objective research it is hoped that the group can understand the impact of and options for IAPAL and determine their negotiating position. The research should also provide other stakeholders with an understanding of the potential of an international aviation tax as an innovative form of climate finance.

An important element of this process will be engagement with stakeholders, both negotiators from the LDC group, technical experts from LDC countries and the aviation industry. It is expected that LDC country negotiators will provide continued input to the research in order to ensure that the outcomes take account of the information they will need in the negotiating process.

The research study will include a review of existing literature and work to date on IAPAL as well as case studies in a select number of least developed countries, working with locals to build capacity through the project. The research will be carried out from mid October 2012 to the first quarter of 2013. The study team will aim to make preliminary findings available at the COP meeting in Doha in November 2012.

The findings of the final report will also be written into an academic journal article and submitted for peer-review.

Project Manager: Nick Moss

CDKN funding: £52,000

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