Select Committee on Environmental Audit Seventh Report


Appendix 1

Government Response to the Environmental Audit Committee's Pre-Budget Report 2003 - Aviation Follow-up

INTRODUCTION

1. The Environmental Audit Committee's report Pre-Budget Report 2003: Aviation Follow-up (HC 233) records the Committee's findings and recommendations following further evidence taken after last year's report on Budget 2003 and Aviation and the Government's Response thereto.

2. The Department for Transport recognises the importance of tackling climate change and shares with the rest of Government the Energy White Paper commitment to set the UK on a path to reduce CO2 by 60% by 2050. The Department is also committed to taking action to limit or reduce emissions from international aviation. However, the Department considers that the Committee's criticisms are largely unfounded.

RESPONSE TO THE FOLLOW-UP REPORT

THE FUTURE OF AIR TRANSPORT WHITE PAPER (recommendations 1-10)

3. The Department accepts that more needs to be done to reduce the environmental impacts of air travel but does not accept the Committee's conclusion (rec 2) that the White Paper adopts a "predict and provide" approach. The Future of Air Transport White Paper sets out a balanced and measured approach, which ensures that aviation takes its share of responsibility for tackling the problem of climate change. In particular, the White Paper:

The whole underlying principle and strategic theme of the Future of Air Transport is that the economic and social benefits of air travel should be balanced against its environmental impacts.

4. The Committee (rec. 1) criticizes the Department for publishing supporting material after the White Paper and questions whether the underlying analyses were available when the key decisions were taken. They were. Collating the data and analyses into publishable form took time and the Department's first priority was to honour its commitment to the House and to the country at large, to publish the White Paper itself by the end of the year. The supporting material was published in line with open government principles and all documents are now available on the Department's web site at http://www.dft.gov.uk/aviation/whitepaper/supporting/index.htm. The publication of Aviation and Global Warming as part of this material in no way implies that the issue had been previously overlooked in determining the policies set out in the White Paper, as the Committee alleges (rec. 8). Paragraphs 3.35ff and the graph on page 25 of The Future of Air Transport, plus Annex B on emissions trading, as well as other material in our earlier consultation documents, show clearly that it was not.

5. Growth in the air transport sector (rec. 3) will be a combination of more frequent trips by existing travellers and journeys by those who haven't previously flown. Many of these travellers will not be UK citizens. Making international travel accessible to a wider range of people is desirable provided that there are appropriate environmental safeguards. The Department's demand forecasts used best available models based on CAA survey data for UK and foreign residents. They are broadly consistent with forecasts produced by ICAO and commercial organisations. The Department has no immediate plans to commission further studies, but accepts that its projections are sensitive to change in underlying costs [and resulting changes in prices], and are based on assumptions which may change. The Department therefore recognises that there is a need to keep the forecasts under review, to monitor the effects of policies on demand and revise the forecasts as necessary.

6. The Department has never suggested that achievement of the UK domestic carbon reduction targets would be easy, neither has it neglected the need for aviation to contribute to the UK's efforts to limit greenhouse gas emissions. The modelling in Aviation and Global Warming demonstrates that the projected increase in CO2 emissions from future growth in air travel was fully considered during the development of The Future of Air Transport. Following one of the commitments of the Energy White Paper, the Government is developing guidelines for carbon impact assessment, which will in future form an integral part of assessing environmental impacts of proposed policies and regulations. Meanwhile, Government departments including DfT will continue to cover CO2 and other greenhouse gas emissions in appraisals according to standard guidance in the Green Book and elsewhere. Illustrative estimates for the social cost of carbon (the marginal social cost of carbon emissions) form part of this toolkit. An interdepartmental group reviewing the Government estimates for the social cost of carbon (SCC) is expected to report later in the year. Pending the outcome of this review, the interdepartmental group has suggested that an approach that emphasises sensitivity analysis should be adopted when making use of SCC values in policy assessment (recs. 4-7).

7. The Department is ready to assist the Committee, Members of Parliament and others if they have queries about the information in Aviation and Global Warming or other documentation. Although it has described this as "opaque and poorly documented", the Committee has not set out which parts of the report it finds unclear. The Department has no plans to publish any new or revised appraisal at the current time.

8. As explained in the supporting documentation underlying the consultation exercise preceding the White Paper, there would be a very substantial increase in fare premia— reflecting large economic costs—if growth of aviation were to have been stopped in its tracks with airport capacity limited to accommodating traffic at its 2000 level of 180Mppa (recs. 9-10).

EMISSIONS TRADING AND GLOBAL WARMING (recommendations 11-15)

9. The Government has consistently shown leadership on environmental matters in aviation—most recently at the 6th meeting of the ICAO Committee on Aviation Environmental Protection (CAEP), where the UK helped to secure further work on international trading regimes that are either linked to existing structures under the United Nations Framework Convention on Climate Change or pursued voluntarily but avoiding new ICAO bureaucracy. The Environmental Audit Committee seems to have appreciated the hurdles to be overcome in securing agreement on incorporating aviation into the EU emissions trading scheme (ETS), but not the greater difficulties in securing international agreement to emissions charges (recs. 11-12).

10. On the specific issue of the EU ETS, while we do not underrate the difficulties, we believe there will be more support from other States and the Commission than the Committee assumes. Our commitment to press for aviation joining the EU ETS in 2008 or as soon as possible thereafter is one which we shall pursue vigorously during the UK Presidency next year and beyond (recs. 13-14). Work on this has started. If the EU can lead by example and demonstrate through successful inclusion of intra-EU aviation emissions in the EU emissions trading scheme that this is a practicable and effective way forward to tackle aviation emissions, it should help advance similar action at international level. The Committee at rec. 15 has, we think, misunderstood the Department's evidence. Our reference to "ploughing a pretty lonely furrow" (response to Q309) was in the context of the European CAEP members' position in respect of the possible use of charges to limit or reduce emissions from international aviation, a position which is isolated within ICAO due to the resistance to such policies from the rest of the world.

11. The Department will be working with colleagues in other government departments over the next few months to persuade EU member states and the European Commission that inclusion of intra-EU air services in the EU ETS is the most cost-effective and viable way to address aviation's climate change impacts. This will build on existing contacts and discussions, as well as the support for emissions trading already embodied in ICAO Assembly Resolution A33-7 (which all EU member states are committed to support). We will also be working to resolve the problems that we have already identified, such as how aviation-related emissions are allocated, who will be the trading entities, how aviation emission will be capped, how to deal with non-EU carriers operating intra-EU services, and how to address non-CO2 emissions from aircraft (given that the EU ETS is a CO2-based system).

12. The Government will also continue to explore the use of other economic instruments building on discussions held with stakeholders following publication in March 2003 of the paper Aviation and the Environment, Using Economic Instruments.

AVIATION AND THE 60% CARBON TARGET (recommendations 16-19)

13. The Department is committed to the goal set out in the Energy White Paper Our energy future—creating a low carbon economy, of setting the UK on a path towards a 60% reduction in CO2 emissions by 2050 compared with 1990, equating to a domestic CO2 emissions total of around 65 MtC. Domestic transport is a significant contributor to UK CO2 emissions, and Chapter 5 of the Energy White Paper sets out the Government's strategy for delivering clean low carbon transport. However, although the UK's commitment to reduce emissions is economy wide, in drawing up the Energy White Paper it was recognised that the targets could not apply equally to each individual sector and that circumstances would differ depending on factors such as the underlying growth in demand, trends in technology and the potential for using alternative fuels (rec 17).

14. The Energy White Paper focuses on domestic emissions, and domestic emissions reductions. This is because emissions from international flights do not currently count in the national inventories of greenhouse gas emissions, there being no international agreement yet on ways of allocating such emissions. The extent to which our 60% goal might apply to a revised national account including a share of international aviation emissions would have to be decided if such a revision were made (rec 18). However it is clear that we remain committed to achieving the 60% goal. In paragraph 3.36 of The Future of Air Transport the Government re-iterates its commitment to taking a lead in tackling the problem of climate change. This paragraph goes on to state:

"International flights from the UK do not currently count in the national inventories of greenhouse gas emissions as there is no international agreement yet on ways of allocating such emissions. However, the Government's Energy White Paper makes it clear that we should ensure that the aviation industry is encouraged to take account of, and where appropriate reduce, its contribution to global warming. The aviation sector needs to take its share of responsibility for tackling this problem."

15. Specifically, the Department does not accept the Committee's implication, at rec. 16, that there is any difference between DfT and HM Treasury on the relative impact of aviation emissions compared with the UK domestic emissions. The table shown at paragraph 42 of the Committee's report is misleading and inappropriate, as it expresses aviation's radiative forcing effect as a percentage of a denominator which includes neither international aviation (or other international sectors) nor non-CO2 greenhouse gases from other domestic sources. There is an additional minor inaccuracy in that it includes a double counting of domestic aviation emissions. The table appended to this memorandum shows the Department's reconciliation of the forecasts, and is consistent with the figures used in the Future of Air Transport White Paper and in the Pre-Budget Report 2003. The footnote to the table identifies the key assumptions used for these calculations.

16. The Department does not underestimate the difficulties (rec. 19) of making real progress in this area, and our commitment to press for the inclusion of aviation in the EU ETS is one illustration that we are not relying solely on technological advances, though Government support for research is also an important part of our response to the challenge.

17. We are committed to a comprehensive approach, consistent with sustainable development principles, using economic instruments to ensure that growth is compatible with our broad environmental objectives and that growing industries—such as aviation—are catered for within an overall reducing total.

CONCLUSIONS

18. For the reasons set out above, the Department does not accept the Committee's criticism of the Government's policies on aviation and the environment as set out in The Future of Air Transport White Paper and in the Department's evidence, and previous response, to the Committee.

Department for Transport

May 2004

TABLE

AVIATION AND UK TOTAL DOMESTIC EMISSIONS

This is the illustrative tabulation referred to in the response above. It does not purport to represent a definitive set of forecasts, but is intended to help explain the Department's calculations.
Aviation and UK total emissions (MtC)
Year
Aviation

(domestic + international)

actual/central forecast
UK total as in Energy White Paper

(including domestic aviation but excluding international aviation)

actual/60% goal
Combined total emissions

(EWP + international aviation)
Aviation as % of combined total
(1) CO2 as carbon  
20008.8152.2 160.25.5%
203017.7100.4 116.815.2%
205017.465.8 81.621.3%
(2) radiative forcing, applying factor of 2.5 to aviation*
200022.0182.0 202.010.9%
203044.3128.1 169.126.2%
205043.594.0 133.532.6%

* The UK total including radiative forcing comprises CO2 from the EWP target envelope plus GHGs put conservatively at 25.8 MtC equivalent in 2030 and 2050.

The aviation column is the central case forecast, as in Aviation and Global Warming para 3.56; it excludes benefits from potential economic instruments like the EU emissions trading scheme, whereas in other sectors the impact of policies to reduce CO2 is taken into account. The radiative forcing factor for aviation is scientifically uncertain but is currently believed to lie in the range 2-4. Radiative forcing in other sectors is not taken into account (estimates range from 1.1-1.5 times the impact of CO2)




 
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