University of St.Gallen Researches How Tax Reform Could Cut Aviation Emissions

University of St.Gallen Researches How Tax Reform Could Cut Aviation Emissions

(IN BRIEF) A new research project at the University of St.Gallen, funded by the Swiss National Science Foundation, will investigate how changes in aviation taxation could help reduce greenhouse gas emissions in Switzerland. Running from 2025 to 2028, the study will assess the constitutional and international legal frameworks around aviation taxes, such as Pigouvian taxes and Article 8 of the OECD Model Tax Convention. With aviation responsible for up to 27% of Switzerland’s emissions, the project seeks to offer practical policy recommendations and contribute to global conversations on sustainable tax reform. It marks the first comprehensive interdisciplinary study of its kind, led by HSG experts in law and aviation.

(PRESS RELEASE) ST. GALLEN, 17-Apr-2025 — /EuropaWire/ — In an ambitious effort to align fiscal policy with climate goals, the University of St.Gallen (HSG) has launched a pioneering research initiative to explore how revised taxation frameworks could help curb greenhouse gas emissions from aviation. Backed by 513,443 Swiss francs from the Swiss National Science Foundation (SNSF), the project will take a comprehensive, interdisciplinary look at aviation taxation over a 3.5-year period running from 2025 to 2028.

Titled “Taxation of the Aviation Industry – A Holistic Approach,” the study responds to the growing recognition that Switzerland’s aviation sector significantly contributes to national emissions—estimated between 11% and 27% depending on the methodology, compared to a global average of around 2–3%. Despite its environmental impact, the aviation industry remains relatively under-taxed, with widespread exemptions such as those on fuel. This research aims to challenge that status quo by offering viable, constitutionally sound pathways for reform.

The project consists of two main components. The first investigates the legal and economic foundations for introducing Pigouvian taxes—levies intended to address environmental harms by internalizing the cost of negative externalities. The second examines how international tax law, including Article 8 of the OECD Model Tax Convention, currently affects the aviation industry and what changes could be feasible.

This is the first major study to assess aviation taxation through legal, economic, and environmental lenses. The findings are expected to inform not just Swiss policymakers, but also contribute to the wider global discourse on using tax instruments to support climate action.

The research team is led by Professor Dr Peter Huber and Assistant Professor Dr Giedre Lideikyte Huber from the HSG Law School, in collaboration with Dr Andreas Wittmer of the HSG Center for Aviation and Space Competence, who brings vital industry knowledge and data to the project.

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SOURCE: University of St. Gallen