Bridging adaptation finance gap through an international air passenger solidarity levy

Adaptation finance continues to remain utterly inadequate compared to the needs estimated by different agencies. As a result, the low-income vulnerable countries and communities are condemned to keep suffering from adaptation deficits, compounded by recurrent climate disasters in recent years. The International Air Passenger Adaptation Solidarity Levy (IAPASL) presents an innovative source of adaptation finance to address the rapidly escalating needs of adaptation. The IAPASL instrument evolved from the earlier International Air Passenger Adaptation Levy (IAPAL) proposal of 2008, but contextualized in the current conditions, with new data. We have proposed it as a solidarity-driven design that creates a dedicated resource pool focused singularly on ramping up global adaptation efforts. We argue that during the last 15 years, income of citizens across the globe as well as the awareness and solidarity to address adaptation have significantly increased, together with rebounding of the air travel after the COVID-19 pandemic. Our review of elasticities shows that demand reduction from modest levies is almost insignificant, underscoring the viability of the proposal. We have assumed a 3.56% annual growth in air travel for a 6-year timeframe from 2024 to 2031. Based on three scenarios of differential levies for economy and business class passengers, our calculation shows that a revenue stream ranging progressively from $52.6 billion to over $78 billion can be generated by end of 2031 to fund adaptation. We propose that the proposal can be implemented first in the EU countries and gradually spread across other regions.