Case Study: Travel Levy
In what ways can the government take leadership on climate change?
Target 3 of the Northern Territory Climate Change Policy aims to halve the greenhouse gas emissions from the Northern Territory Public Sector staff, through installing technology to reduce the reliance on air and road travel of intergovernmental meetings, and through implementing a Travel Levy.
Funds collected by the Travel Levy are to be distributed through a grants program aimed at assisting community-based climate change groups.
The objectives of the Levy are to:
- To reduce greenhouse gas emissions by reducing the amount of air travel by NT Government public sector staff,
- To change governments reliance on air travel for all forms of service delivery,
- To promote the use of other forms of communication such as teleconferencing and video conferencing,
- To reduce travel costs across government,
- To increase assistance and the capacity of NT community-based climate change groups to develop and implement
community based programs that help to understand and adapt to climate change.
Consideration of the Issues
The Department of the Chief Minister is currently in the process of implementing the travel levy for official travel across all agencies. The levy will be collected from the 10/11 financial year. The Department of the Chief Minister will write to agencies informing them that 1% travel levy will be levied this financial year. It is anticipated that the levy will raise just some $200000 in the 10/11 financial year. The fund will supplement NTRETAS’s EnvironmeNT grants scheme and be administered through the Department of the Chief Minister.
The travel levy will be implemented in a way that ensures there is no unintended burden placed on agencies who deliver services to remote areas.
The application of the levy to government businesses is still under negotiation.
Implementing a 1% levy on all official government travel is a simple concept however when the specific nature of each agency is taken into account the process becomes more difficult. Almost 50% of annual travel expenses are associated with client travel. The Department of Health and Families was responsible for $17 million of $19.2 Million spent on client travel. Including client travel in the travel levy would place a heavy burden on the Department of Health and Families and could impact on their ability to deliver health services to some regions. Client travel is to be excluded from the levy as the Climate Change Policy is targeted primarily towards reducing air travel by public sector staff.
Determining a travel levy that will offset travel emissions poses some difficulty due to the variations in the ways that emissions can be calculated. For example, a 0.5% travel levy is roughly equivalent to the rate used by Qantas. However comparisons with other online offsetting organisations such as TreeSmart, Carbon Planet and Greenfleet show the way that Qantas calculates its greenhouse emissions differs to some other organisations. This is due to the fact that there is no standard way of accounting for all greenhouse gasses (Not just CO2). In the UK airlines are required to use a different and somewhat higher factor for calculating greenhouse gas contributions.
The levy is designed to deter non-essential public sector staff travel and encourage alternatives such as teleconferencing. It has been suggested that an initial levy of 1% would be sufficient enough to affect the levels of government travel. The 1% levy is a starting point, and may change over time to reflect improved emissions calculations and changing global attitudes towards pricing carbon and cutting greenhouse gas emissions. It has also been recommended that a threshold exist to ensure that collection costs for agencies with a small travel budget do not exceed the amount raised.
In summary the travel levy will reduce the reliance and costs associated with air travel of Northern Territory public sector staff. This will in turn cut the resulting greenhouse gas emissions and increase the capacity of NT community-based climate change groups to develop grass roots approaches to adapting to climate change
A simple concept can be defined in more than one way, so establishing a baseline and considering additional aspects of the situation for later inclusion helps to refine a system and move close to your objective.
The long term success of the levy will rely upon other targets and actions within the climate change policy, like investing in travel alternatives such as teleconferencing facilities. The travel levy will highlight the Northern Territory Governments leadership commitments to action on climate change.
Prior to collecting the levy from government departments work need s to be done in developing the criteria to be used for assessing applications for community based projects that could be supported by the Travel Levy Grant Scheme.
If you are a member of a community based organisation that could apply some funding to improving the environment and increasing our ability to adapt to climate change then please get involved in this grants program as it becomes available.