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Flying to the Netherlands Just Got Cheaper Thanks to Scrapped Eco Tax

Environmentalists aren’t going to be happy to hear that the so-called “eco tax” imposed by the Dutch government is going away. Why? It’s all about the numbers.

The tax ranged from 11 euros to 45 euros depending upon the length of your flight. It was supposed to Netherlands Mapraise about 300 million euros a year, but an official report says it will end up costing the economy more than 1.3 billion euros. At a time when economies around the world are scrambling to find revenues, ditching the tax was a pretty obvious result.

So did people really just stop traveling over a few euros? Nah. I’m sure there was some of that, but the problem was that people could easily hop a border into Belgium or Germany where there was no tax. In an area where distances are short, trains are fast, and there are no controlled border crossings, this tax is just a really dumb idea. Instead of saving the environment, the Dutch hurt their own economy and shifted traffic elsewhere. Brilliant.

So is this the end of the eco tax? I doubt it. My guess is that in the short haul, while the world is trying to claw out of a recession, there won’t be a ton of interest in increasing taxes that will end up hurting the economy, but that’s a short term issue. In the long run, all this does is make it clear that at least an EU-wide solution and potentially a global one is necessary instead of an individual country-sponsored one.

There are still taxes in the UK and Ireland, but those may survive since it’s a lot harder to cross a border to avoid flying from there. Italy has one too, but well, that’s Italy. I can never figure out what they’re going to do over there, and it’s usually the opposite of what I would do.

You should probably consider this a temporary reprieve. One of these days, we’ll see an EU-wide or global scheme to try to address this issue (beyond the EU ETS proposal scheduled for 2012), but that will be at least a couple years away.

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