Select Committee on Environmental Audit Ninth Report


1.We regard the proposed growth in emissions into the atmosphere by the aviation industry as unsustainable and unacceptable. Were such growth to occur, it could totally destroy the Government's recent commitment to a 60% cut in carbon dioxide emissions by 2050. (Paragraph 17)
2.In emphasising economic and social objectives for airports, the Department for Transport is placing a lower priority on environmental objectives and is focussed more on mitigating the environmental impacts rather than avoiding them where possible. (Paragraph 19)
3.We are concerned that the Department should have released a major consultation which assumes that passenger numbers will increase by 4% every year for thirty years and that fares will decrease by up to 40% over the same period without a far more extensive discussion of the underlying implications of such assumptions. (Paragraph 24)
4.In the case of roads, the Government does seem finally to have accepted the need for some form of congestion charging or road pricing framework. Yet the Secretary of State for Transport entirely refused to accept that, in the case of aviation, congestion may need to be dealt with in a similar way. We were astonished that he denied there was any parallel in this respect between road transport and aviation. He re-iterated his opposition to "pricing people off planes" and the frequency with which he used this phrase reinforced our perception that the Department for Transport is little interested in sustainability. (Paragraph 27)
5.In our view the Government should aim to decouple growth in air travel from economic growth—as it has been attempting to do for roads. To achieve this, it must be willing to use a range of fiscal and other policy instruments to manage behaviour. This might go well beyond the need to incorporate cost externalities—as indeed the Government has accepted in the case of waste. (Paragraph 28)
6.We regard the absence of concise, transparent, and strategic integrated appraisals as a major weakness in the consultation documents. The Department's failure in this respect conflicts with its own guidance. As a result, it is impossible to assess the overall benefits of different degrees of expansion—or the relative benefits and disbenefits of regional expansion vis-à-vis expansion in the South-East. (Paragraph 33)
7.It is disappointing that neither the Treasury nor the Department for Transport have conducted any recent analyses of the overall economic impact on the UK of the aviation sector, and in particular an analysis of the growth in aviation which is proposed. (Paragraph 38)
8.In the absence of a robust evaluation, we are astonished at the overt bias the Department for Transport has displayed by emphasising so consistently the economic benefits of aviation. It is disturbing, for example, that the consultation document quotes figures for the positive economic benefits of tourism but entirely fails to mention that there is an overall substantial negative balance of £15 billion. (Paragraph 39)
9.The Department for Transport has failed to follow guidance issued by the Treasury by including in its economic appraisal the benefits accruing to foreign travellers. In doing so, it has significantly distorted and overstated the economic benefits of different expansion options. (Paragraph 42)
10.The net present value associated with the increase in the cost of aviation emissions amounts to minus £18 billion. Including this amount would entirely wipe out the economic case for an expansion in runways and result in substantial net deficits for almost all options the Department for Transport has put forward. Expansion could therefore only be justified if the Department could demonstrate substantial wider economic benefits—which it has not attempted to do. (Paragraph 49)
11.The Department should voluntarily comply with the EU Strategic Environmental Assessment directive immediately, following the example of the Department of Trade and Industry which is already doing so. (Paragraph 52)
12.If it is to be consistent with its approach in other policy areas, the Treasury should carry out thorough valuations of all the environmental impacts of an expansion in aviation—including impacts on landscape, biodiversity, tranquillity and heritage. (Paragraph 56)
13.The Treasury discussion document, Aviation and the Environment, seriously underestimates the impact of noise by quoting a figure of £25 million for the UK. The cost for Heathrow alone might range from £27 million to £66 million on the basis of up to date figures from the same source. (Paragraph 60)
14.Current valuations of carbon make no attempt to take account of significant or catastrophic changes to the atmosphere. Indeed, in practice it is impossible to calculate the total value of our climate. If climate change bites deeper, the preferences and valuations people express—whether directly or indirectly—could change dramatically, with large increases in the associated environmental costs. (Paragraph 65)
15.The HM Treasury/Department for Transport document Aviation and the Environment tries to calculate the totality of environmental costs arising from aviation. The attempt to do so may be fundamentally flawed and the exercise could ultimately prove a waste of time—especially if there is a move towards emissions trading systems. At the very least we have little doubt that the level of costs identified by the Treasury is unlikely to be sufficient to stimulate significant behavioural change. (Paragraph 67)
16.Environmentalists argue that, by comparison with road transport, aviation is receiving subsidies of more than £9 billion through the absence of a fuel tax and VAT on tickets, and that this unfairly penalises competing forms of transport and in particular rail. (Paragraph 69)
17.The Treasury should set out clearly what principles underpin the different tax treatment which different forms of transport attract. (Paragraph 71)
18.We see no reason why aviation should be treated differently to motoring in terms of fiscal policy, and why it should not be taxed to earn revenue. We do not consider that it is possible to justify the favourable treatment it currently receives on grounds of social equity. (Paragraph 73)
19.We recommend that the Government replaces the current Air Passenger Duty with an emissions charge levied on flights and which is clearly displayed on travel documentation. This should be set initially at a level which will raise £1.5 billion a year, but be subject to an annual escalator so that revenue will increase over time. In addition, it should consider the case for introducing VAT on ticket sales for domestic flights within the UK and set out the results in the next Pre-Budget Report. (Paragraph 77)
20.With regard to the introduction of duty on aviation fuel or alternatively an emissions charge or trading system, the Government should take a leadership role within the EU and the International Civil Aviation Organisation and commit itself to bring forward specific proposals in the next two years. It should also state whether it favours the introduction of an emissions charge at an EU level as an interim measure pending the inclusion of aviation in international trading schemes. (Paragraph 81)
21.  The Government should re-examine the scope for introducing a dual-till system to ensure that airlines pay a greater share of the infrastructure costs. It should also work within the EU to enable slots to be auctioned on a regular basis so that demand is reflected in the price. (Paragraph 86)

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