Gordon Brown will raise air passenger duty but aim to avoid penalising airline passengers with stiffer taxes in his imminent Pre-Budget Report, despite the Government's proposed offensive on climate change by targeting the aviation industry.

The Chancellor has previously backed the idea that ticket prices should be a reflection of the airlines' impact on the environment through CO2 emissions, but baulked at the option of using taxes to price passengers off planes.

Ryanair CEO Michael O'Leary panned the idea of raising taxes to combat climate change when the airline industry reacted to the possible clampdown.

Treasury sources stated that the PBR will outline measures designed to reduce carbon emissions, including raising air passenger duty from its present level, which range from £5 for 'no-frills' flights to European countries to £40 for long-haul trips, The Guardian reported.

Carbon trading has been floated as another method of tackling C02 production; the practice allows the Government to regulate the amount of CO2 emissions produced in aggregate by setting an overall cap, but gives companies the flexibility to buy or sell an extra allowance from other market participants depending whether their CO2 are higher or lower than their agreed level.

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