CDKN supported research into the options for the development and potential impacts of the International Air Passenger Adaptation Levy (IAPAL). The research was conducted by IIED, VividEconimics and Oxford Climate Policy, supported by the Legal Response Initiative, and took 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 was commissioned on behalf of the Least Developed Country Group of negotiators and was 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 the group has been able to better understand the impact of and options for IAPAL and determine their negotiating position. The research has also provided 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 was engagement with stakeholders, both negotiators from the LDC group, technical experts from LDC countries and the aviation industry. LDC country negotiators provided 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 included 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 was carried out from mid October 2012 to the first quarter of 2013. The study team made preliminary findings available at the COP meeting in Doha in November 2012.

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

CDKN funding: £52,000