Select Committee on Environmental Audit Minutes of Evidence

Letter to the Clerk of the Committee from Alastair McDermid, Group Planning & Environment Director, British Airports Authority

  Thank you for giving BAA the opportunity to respond to the Environmental Audit Committee's inquiry into the environmental costs of aviation and the progress being made to take account of them.

  We are encouraged to see your engagement in this debate, and hope that it will play a part in helping policy makers identify the most cost-efficient and environmentally-effective means of delivering against agreed outcomes. We believe an agenda of efficient performance delivery—rather than general raising of revenue—should be the primary policy objective.

  We will be responding in some detail to the consultation paper Aviation and the Environment: Using Economic Instruments before the consultation ends, although we are not currently a position to do so. My comments are therefore limited at this time.

  BAA naturally accepts the principle that aviation, in common with every other industry and mode of transport, has environmental impacts and should meet its external costs. We are aware that there are many ways of defining external costs and a wide range of estimates from a variety of stakeholder perspectives, some of whom believe the external costs of aviation are already met in full, as well as some who believe they are not.

  We have significant reservations about the methodology and assumptions behind the very wide range of estimates of external costs which are in current circulation. We also have some reservations with the Government's current estimates, particularly for local impacts. We would therefore welcome proposals from the Government for a substantive work programme to improve understanding and encourage a wider acceptance of the scale of external costs. While significant uncertainty exists, it is important that Government establishes a policy framework, which can be adapted in response to improved understanding of impacts and their economic value.

  Although we believe aviation should meet its environmental costs, we do not think that simply meeting the monetised value of environmental impacts should be the Government's primary objective. Instead we believe that appropriate (and suitably monitored) instruments should be adopted to ensure there is progress towards achieving specific environmental goals, in the most effective and efficient way. Measures targeted at cutting impacts directly are preferable to those, which cover costs in monetary terms but leave the impacts unaddressed. It is for this reason that BAA is committed to promoting cost-efficient and effective policy solutions to mitigate environmental impact. In particular, we are proactively supporting:

    —  Bringing aviation within an environmentally-credible, open, international, emissions trading regime, to address the issue of climate change.

    —  The introduction of congestion charging, to fund better public transport access to airports and to help address local air quality issues.

    —  The implementation of the environmental modulation of airport charges, to help address the issues of noise and local air quality.

  A key feature of such measures is that they are targeted, proportionate and effective. As a principle, aviation should not be made to pay more than once for the same impacts.

  There are many instruments, regulations and policy measures already in place to control and mitigate the local impacts of air transport. BAA believes economic instruments may have a role in helping air transport to manage most effectively the additional impacts associated with further development.

  Alongside any consideration of the use of fiscal instruments, the Government must continue to pursue improved technical standards for noise and emissions in the international context. We believe that by bringing aviation within internationally-agreed targets the industry as a whole would be given specific long-term goals to aim at. Such goals would be incentivised by national targets.

  But the Government must be conscious of the impact that new instruments could have on the competitive and financial position of the UK air transport industry. Although BAA appreciates the motivation for the Government's action in this area, major new instruments to internalise external costs would represent a significant structural change in the industry, to which airlines and airports should be given appropriate time to prepare for and implement, given the very long lead times for investment, and the very long lifespan of infrastructure and aircraft. Too-rapid change could have serious consequences for the country's air transport industry. Moreover, the competitiveness of the industry and those parts of the UK economy dependent on it would be undermined if the UK Government adopts instruments and measures unilaterally.

  I would welcome the opportunity to discuss these issues in more detail with the Committee or with its officers. In the meantime, I hope these comments are helpful.

April 2003

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