Solidarity levy on premium class air travel: an impact analysis on tourism in selected SIDS and LDC economies

This study assesses the potential of a Premium Flyers Solidarity Levy as an equitable and predictable source of climate finance, in particular for Small Island Developing States (SIDS) and Least Developed Countries (LDCs). Building on the principles of “polluter pays” and “ability to pay,” the proposed levy targets first- and business-class passengers, representing high-emission, high-income travel segments, to generate dedicated adaptation revenues without significantly affecting demand.

The analysis covers ten climate-vulnerable countries: Antigua and Barbuda, Barbados, Colombia, Fiji, Kenya, Mauritius, Mozambique, Sierra Leone, Senegal, and Zambia, representing diverse geographic and economic contexts. These countries already experience massive losses due to climate change, for Fiji for example the equivalent of 5.8% of GDP. The tourism sector is particularly vulnerable. In Fiji, tourism contributes 30-40% of GDP.

Three policy scenarios were modeled for both short-haul (<1,500 km) and long-haul (>1,500 km) routes for commercial flights, with moderate to high rates (from 20$ to 90$ for premium classes).