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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