Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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OP 2019: Global Transportation Tax (GTT) enacted as climate panic spreads
Steen Jakobsen
Chief Investment Officer
Summary: The golden age of cheap travel and transportation fades into history as adverse weather changes forces the world into action.
For the full list of Saxo's 2019 Outrageous Predictions, click here.
The world suffers another year of wild weather with Europe again experiencing an
extremely hot summer, setting off panic alarms in capitals around the world. With the
international aviation and shipping industries enjoying substantial tax privileges, they
become the targets of a new Global Transportation Tax (GTT) that introduces a global
ticket tax on aviation and a capital “tonnage” tax on shipping with the price linked to
carbon emission footprints.
The new tax charge is set to $50/ton of CO2 emissions which is twice previous
proposed levels and significantly above the 2018 average of €15/ ton under the
European Union’s Emissions Trading System. The new GTT pushes up air travel ticket
prices and maritime freight, increasing the general price level as the new tax is passed
on to consumers.
In October 2016, the International Civil Aviation Organization agreed on a resolution
for a global market-based measure to address carbon emissions from aviation.
In April 2018, the International Maritime Organization announced a target to cut
maritime carbon emissions by 50% by 2050. With alarm bells going off everywhere
over climate change, politicians enforce GTT in a drastic move that bypasses voluntary
carbon trading schemes and industry initiatives in order to move more quickly.
The US and China have previously contested fuel taxes on aviation, citing the 1944
Chicago Convention on International Civil Aviation, but China changes its stance as a
natural progression of its fight against pollution. This forces the US to reluctantly join
forces in a global transportation tax on aviation and shipping.
Stocks in the tourism, airline and shipping industries plunge on increased uncertainty
and lower growth.
Quarterly Outlook
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Quarterly Outlook
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Quarterly Outlook
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Ole Hansen
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