Radio New Zealand - Te Reo Irirangi o Aotearoa

Nobel Prize winning economists back airline carbon tax

Updated at 2:13 pm on 15 March 2012

Europe's controversial carbon tax for airlines has finally found some international support.

Twenty-six US economists, including five Nobel Prize winners, have written to US President Barack Obama urging him to back the emissions trading scheme

The scheme applies to all planes that take off or land in the European Union.

One of the Nobel prize winning signatories, Chris Sims, told CNN that the US should support the EU's scheme in the first instance, but still push for an international agreement.

He said the initiative will have small effects initially, but will increase over the next several years. "In the mean time it should be possible to negotiate less unilateral arrangements."

Air New Zealand chief executive Rob Fyfe told the broadcaster that that trying to minimise aviation's effects on the environment is a good thing, but he's not convinced the scheme will make a difference.

"Where does the money go? Is it actually going to ... go into R&D to make sure that engines are more efficient, that we can find alternative fuels?

"It doesn't, and so that to me is frustrating because it's an example of just window-dressing and not actually making a real difference."

The European Union's scheme has drawn fierce opposition from governments and airlines around the world, with some plane manufacturers saying billions of dollars worth of orders are in jeopardy.

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