APPENDIX 7
Memorandum from Gatwick Area Conservation
Campaign (GACC)
1. We are writing to support and wholeheartedly
endorse the submission made to you by the Stop Stansted Expansion
group.
2. Like Stansted we face proposals for new
runways which would make Gatwick the biggest airport in the world.
As at Stansted this would cause devastation to the local community
and environment. As at Stansted we have overwhelming local support
in opposing the proposals.
3. Like Stansted we believe that the rapid
growth in air travel is in large measure due to its favourable
tax treatment. On national issues such as taxation and climate
change we have worked though national organisations such as CPRE
and the Aviation Environment Federation.
4. Indeed in my personal capacity I wrote
a booklet for AEF recently called "The Hidden Cost of Flying",
and I believe copies have been made available to the Committee[21]
I am enclosing a copy of the supplement which comments on the
new Treasury document "Aviation and the Environment: Using
Economic Instruments" (see Annex).
5. My conclusion is that the true external
costs of aviation are around £5 billion rather than the £1.4
billion indicated in the Treasury document.
May 2003
Annex
The Hidden Cost of Flying-Supplement:
April 2003
Aviation and the Environment; Using Economic
Instruments was issued by the Treasury and the Department
for Transport in March 2003. It is a welcome step in the right
direction. At last the Treasury is turning its alpha mind to the
issue of how much tax the airlines should pay. So far as it goes,
which is not far, the new document confirms the calculations in
the Hidden Cost of Flying.
The Treasury calculate the external costs of
climate change caused by aviation as £1.4 billion in 2000,
rising to £4.8 billion in 2030. The increase is mainly due
to the fact that air travel is forecast to treble, and partly
due to the fact that the cost of climate change is assumed to
rise over time. Other external costs such as noise, local pollution
and damage to countryside and heritage are said to be small by
comparison.
The hidden costs included in this calculation
are the impacts of global warming on agriculture, increased mortality,
sea level rise, species loss, and health effects such as increased
likelihood of malaria. Details are given in Estimating the
Social Cost of Carbon Emissions by Richard Clarkson and Kathryn
Deyes (DEFRA January 2002).
Clarkson and Deyes point out, however, that
these figures are only sufficient to meet the UK's international
obligations under Kyoto to reduce emissions by 5.2% (paragraph
9.13). If the Treasury wishes to meet the more ambitious target
of a 20% reduction (let alone the IPPC target of a 60% reduction)
a higher price needs to be put on carbon. One study suggests it
would need to be £100/tC instead of £70/tC, ie 43% higher.
Taking into account also the annual increase
since 2000, this would suggest that the figure of £1.4 billion
should be increased to £2.5 billion in 2003.
PREVENTING CATASTROPHE
The Treasury admit that the calculation "takes
no account of uncertainties including the probability of: so-called
`climate catastrophe' (eg melting of the West Atlantic ice sheet,
Gulf Stream suppression etc)". Nor does it include "the
`socially contingent impacts' of climate change (eg famine, mass
migration etc)."
According to Tony Blair we should take these
dangers seriously: "There are alarming changes in our atmosphere,
in global temperatures, in weather patterns, in sea levels and
in the protective ozone level. As a result, across the world millions
face drought, flooding, disease." (Speech to the CBI. 24
October 2000).
These hidden costs are left out because the
Treasury cannot measure them. Crossing a railway line in front
of an oncoming train because you cannot exactly measure its speed
may appeal to alpha minds but is generally not to be recommended.
If the danger is probable or even possible, then according to
the precautionary principle, we should take action to prevent
it.
DEFRA suggest doubling the figure to provide
a sensitivity range but admits that even this "does not cover
the full uncertainty." They point out that "Existing
studies (of climate change costs) give little consideration to
the possibility of climate catastrophes." Also that, because
some climate change events tend to become self re-inforcing, some
studies show a "higher possibility of an extremely disastrous
outcome than of a much more minor one."
Therefore it would seem fair to suggest that
the figure of £2.5 billion should at least be doubled. This
would suggest for the year 2003 a cost of climate change damage
due to aviation of around £5.0 billion. This does not take
into account other external costs such as noise or local pollution.
When fiscal equity is taken into account that
would seem fully to justify taxing aviation fuel at the same rate
as motor vehicle fuel (tax yield £5.7 billion).
FISCAL EQUITY
IGNORED
In the Hidden Cost of Flying it was argued
that there is a need to ensure that aviation pays the same rate
of tax as other industries (fiscal equity) as well as covering
its external costs. But the new Treasury document makes no reference
to fiscal equity.
The case for imposing tax on aviation fuel at
the same rate as on petrol for cars depends partly on external
costs and partly on fiscal equity. The case for applying VAT to
air travel depends entirely on fiscal equity.
The Treasury document is full of invitations
to suggest "instruments" to reduce aircraft emissions.
The alpha mind seems reluctant to recognise that the Treasury
has the best instrument to hand: to remove the tax concessions
which are fuelling the artificial growth in air travel. When a
market is distorted, it is normally best to remove distortions
rather than to try to control the results by regulation.
21 Not printed here. Back
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