The flight is valuable regardless of the carbon tax scheme: A case study of Norwegian leisure air travelers

Abstract

Various countries have introduced a carbon tax on air travel. Carbon taxation is controversial in that it may negatively influence tourism demand. Still, research investigating travelers’ willingness to pay (WTP) such taxes is limited. This study explores Norwegian leisure air travelers’ willingness to pay higher carbon taxes than that already included in their ticket price, applying the contingent valuation (CV) method in an experimental design. The impact of eight hypothetical taxation schemes are tested to provide insight into how regulatory policies can be developed so as to improve acceptance for carbon taxes. Results show that Norwegian outbound tourists are ready to accept higher carbon taxes and that WTP is not strongly related to the taxation scheme. This suggests that there exists a scope for policymakers to implement more stringent taxation regimes on air travel than seen today.