1. There is widespread concern about the environmental
effects of the growth in aviation - in particular the likely impact
on global warming. Recent figures suggest that aviation could
become the most significant source of greenhouse gas emissions
in the next few decades.
2. Following the outline consultation document issued
in December 2000, The Future of Aviation, the Department
for Transport (DfT) issued in July 2002 a series of regional consultations
on proposals for expanding airport capacity.
Various organisations expressed concerns that this consultation
did not adequately address the environmental impacts of the proposed
growth in air transport.
In the latest Pre-Budget Report, the Treasury made a specific
"discuss with stakeholders the most effective
economic instruments for ensuring that the industry is encouraged
to take account of, and where appropriate reduce, its contribution
to global warming, local air and noise pollution. The Government
will set out its plans in its Air Transport White Paper next year".
3. In March 2003, the Treasury and the DfT released
a 'discussion document' entitled Aviation and the Environment:
Using Economic Instruments. This set out the Government's
objectives for aviation, and its approach to using economic instruments.
It also included estimates of aviation's environmental costs,
including its impacts on climate change, local air quality and
4. We regularly review the Treasury's progress in
placing environmental objectives at the heart of its fiscal strategy.
In our most recent report on this topic, we focused on the Treasury's
environmental tax strategy and the related document Tax and
the Environment. We were critical of the strategy itself,
and in particular the considerable reliance the Treasury is now
placing on monetary valuation of environmental costs. By contrast,
we advocated using economic instruments flexibly to support environmental
policy objectives, targets, and standards.
5. When the Treasury and the DfT released the discussion
document Aviation and the Environment, we therefore agreed
to a particular focus on aviation as part of our inquiry on Budget
2003. The principle
aims of the inquiry were to:
- explore whether the full environmental
costs can realistically be identified, and assess how comprehensive
and accurate are those included in Treasury and DfT consultation
- review the extent to which the DfT has taken
adequate account of environmental factors in its proposals for
a future expansion of aviation; and
- assess whether the incorporation of environmental
costs would be sufficient to achieve sustainability in the air
transport sector, and explore what policy instruments might be
6. We took evidence from John Healey MP, the Economic
Secretary to the Treasury, on 30 March, and from Alastair Darling
MP, the Secretary of State for Transport, on 1 July. We also
took evidence from a number of other organisations and individuals.
In addition, some 24 organisations submitted memoranda to our
inquiry. All the oral and written evidence we received is printed
with this report.
7. Our inquiry was undertaken to complement that
of the Transport Select Committee. Their wide-ranging inquiry
was launched in November 2002, and was due to be published on
17 July 2003. For our part, we were concerned that environmental
issues should receive adequate weight, and as our inquiry progressed
we found that it raised issues which went beyond the relatively
narrow scope of the HMT/DfT document Aviation and the Environment.
1 Ev03. See also the recent report, The Sky's the
Limit, Institute of Public Policy Research, 2003. Back
The Future Development of Air Transport in the United Kingdom,
July 2002. This consultation was released as a series of documents
for different regions of the UK. The consultation for the South-East
was revised and republished in February 2003, and is hereafter
referred to as 'DfT South-East consultation'. Back
eg The Sustainable Development Commission, and the Royal Commission
on Environmental Pollution. Their consultation responses are available
on their web-sites. Back
Pre-Budget Report, Steering a steady course: delivering stability,
enterprise and fairness in an uncertain world, HM Treasury,
November 2002, Cm 5664, paragraph 7.47. Back
Aviation and the Environment, HM Treasury and the Department
for Transport, March 2003. Back
Fourth Report of Session 2002-03 from the Environmental Audit
Committee, Pre-Budget Report 2002, March 2003, HC 167,
paragraphs 44-62. References to the Committee are hereafter
abbreviated to 'EAC.'. Back
EAC press release, Budget 2003 and Aviation, 1 April 2003. Back