Examination of Witnesses (Questions 540
WEDNESDAY 24 MAY 2006
Q540 Emily Thornberry: While we are
waiting for the European trading scheme to be established can
you not introduce some sort of climate change levy on fuel on
a voluntary basis which is clearly being used by aircraft on your
Mr Dowds: We do have levies against
noisy aircraft and against NOx. We simply do not believe that
compared with emissions trading that is the appropriate way to
move forward. By the way, we also apply a fuel handling charge
Q541 Emily Thornberry: Members of
the public who hear that you apply a handling charge but do not
have any type of climate levy may think that this is a crazy world
in which we live.
Mr Dowds: It is about where one
thinks the difference can be made. We are very clearly of the
view that the difference has to be made in the overall level of
emissions that are generated. All industries in all countries
collectively have to reduce that burden on the planet. We believe
that an emissions trading scheme is the best scheme by far to
bring that commercial and financial pressure and incentive through
technology and other methods to reduce the amount of emissions
that all industries, including aviation, generate. That is why
we are very focused on making progress with the Government and
the EU in getting the scheme up and running as soon as possible.
Q542 Emily Thornberry: Conveniently,
therefore, you have no responsibility; you can sit back and wait
for the ETS to be established?
Mr Dowds: On the contrary, we
have a major programme on the ground at our airports to deal with
emissions and the use of carbon. We have major programmes for
converting our fleets from diesel and petrol to battery-charged
vehicles. We have a whole series of efficiency measures to burn
less electricity. We are buying our energy from renewable sources.
We have major programmes in place to change that year on year
and have set ourselves the target of a 15% reduction by 2010 from
1990 levels, and we are well on track to achieve that. It is wrong
to suggest that we are sitting on our hands and waiting for emissions
trading to solve it all for us; we are not. What we are saying
is that management of local emissions is only part of the equation
and we are all kidding ourselves if we believe that by doing things
locally we will somehow or other guarantee downward pressure on
global emissions, which is the only thing that matters.
Q543 Dr Turner: In the UK sustainable
aviation strategy the industry states as its goal: "Full
industry commitment to sustainable development, and a broader
understanding of the role of aviation in a sustainable society."
What does that actually mean?
Mr Dowds: It means that we are
committed to working with other members of the industry and our
government to understand better exactly what the climatic impacts
of aviation are and to work within a network to reduce those.
It means we believe that BAA as a large airport operator should
take a leading role, along with our larger airline customers,
in making sure that government understands that it is committed
to solving the problem. We are not arguing about whether or not
there is a problem or that aviation is contributing to it; we
are simply arguing sometimes about the most effective mechanism
to achieve the goal that we all want.
Q544 Dr Turner: To you which is the
most important strand of sustainable development? Is it environmental,
social or economic?
Mr Dowds: If only it were that
simple. Of course, it means that we have to carry all three of
them forward. What worries us sometimes is that we often hear
suggestions that clearly put environmental impact well ahead of
anything else, and indeed sometimes are prepared to ignore the
social and economic impacts of certain solutions. I am afraid
that the job facing all of us, including this Committee, is tougher
than that. We cannot turn this country and Europe back into one
large forest. We have to concentrate on how we can solve this
problem while we share the economic benefits of a modern society
and make sure that all citizens are able to partake of it. I am
afraid that means some of the solutions sometimes put forward
as environmentally beneficial completely disregard that aspect.
Q545 Dr Turner: Do you agree with
the preliminary findings emerging from the Government's Stern
Review into the economics of climate change that if there were
dangerous levels of climate change they would have massive economic
and social consequences especially for the poorest communities?
Mr Dowds: We certainly agree that
this is an issue we cannot duck. It has long-term consequences
and collectively we have to find a way to change the current trends
and reduce the ultimate burden on the planet. There is no doubt
about the objective but there are differences of opinion about
the way to move forward.
Q546 Dr Turner: The airports that
you operate are significant CO2 emitters, and you referred
to your plan to reduce them by 15%, which is laudable, but surface
transport into and out of airports is a part of this. There are
vehicles buzzing around airports the whole time. Do you have any
plans to reduce emissions from them, especially given that you
are apparently able to run them on red diesel, which means they
are very cheap so you have no great incentive to replace them
with alternative fuels?
Mr Dowds: Perhaps our colleagues
from Manchester should have an opportunity to provide some specifics,
but I will tackle some of the general points. I have already indicated
that as part of our airport-by-airport scheme we have a fast-moving
programme of change to get away from fossil fuel-based vehicle
fleets to renewable energy fleets. That is having a significant
impact. The issue of red diesel arises from the fact that the
majority of our vehicles on the airport are not permitted to operate
on the public road and, therefore, they can operate on red diesel.
That is just a matter of law. Where we have vehicles that go onto
the main road they cannot operate on red diesel, but even there
we are working with our vehicle suppliers to move to other sources
of energy to fuel those types of buses. We obviously see surface
access as a huge issue for airports in the future, as does the
Government. For example, we are working very hard with government
and transport operators to get a modal shift away from the car
towards the train and to have more public transport. We have a
very significant programme around our airports to do that and
we are making good progress.
Dr Walmsley: Manchester Airport
at the moment produces about 430,000 tonnes of carbon dioxide
a year. Of that, 60% is generated by passengers and staff who
use their own vehicles to access the airport.
We see this as a key area in which to seek significant reductions
or to manage likely increases in the future.
Joan Walley: Speaking now as a constituency
MP, I have been campaigning for something like 10 years to get
a direct link from Manchester Airport to Stoke-on-Trent. Having
got the service laid on, for it to have been taken off so there
is no longer a direct rail link strikes me as an absence of joined-up
thinking to deliver what you say you are about. Whatever you may
say, it does not work like that because these direct rail links
do not exist.
Q547 Emily Thornberry: I have a similar
question. Your bus station used to be right next to the airport
but now it has been moved 350 metres away. Guess what has replaced
the bus depot? From what I understand, it is a short-term car
park. How can you encourage people to take public transport when
you do this? The people who arrive by public transport not only
have to go another 350 metres; they have to change levels. When
you are making your assessment of the number of journeys made
by people coming to your airport on public transport you include
courtesy buses. You drive to an airport and get on a courtesy
bus. It is distorting the figures a bit.
Dr Walmsley: Dealing first with
the bus station that has been moved, that is being built next
to the railway station. The reason for doing that is to have a
new coach station so we have a multi-modal interchange. For the
first time people who now use our facilities are not even flying.
For example, people from Wythenshawe come in to use our services.
As to the Stoke service, we try to work very closely with Network
Q548 Joan Walley: So much so that
the direct service has been taken away from us!
Dr Walmsley: There is capacity
at the station. We have just agreed to build a longer third rail
platform which will increase capacity. There are existing bottlenecks
in the system around the North West which very much dictate what
services we can offer.
Mr Paling: The new station and
bus interchange is 350 metres further from terminal 1 but by the
same amount it is closer to terminal 2, so it sits more central
to the site of the two terminals than previously.
Q549 Emily Thornberry: What is the
difference between terminals 1 and 2 in terms of flights?
Dr Walmsley: It is approximately
Mr Dowds: BAA has invested in
the Heathrow Express and supports the Gatwick-Stansted Express
services. We are absolutely clear that train services to our airports
are not only important but fundamental to the future growth of
those airports. That requires substantial investment from us.
We are incentivising further transfer from other modes of transport,
particularly car, to these types of services. It is a key plank
of our future development strategy.
Q550 Joan Walley: Perhaps I may press
Manchester Airport in terms of its submissions. Do you also support
high-speed rail links? Do you see that as being in competition
with the services that you provide?
Dr Walmsley: On any journey of
between two and three hours we would expect rail to compete strongly
with air transport.
Q551 Joan Walley: Do you support
the building of high-speed rail links in the UK?
Dr Walmsley: We have seen a recent
reduction of about 6% in our Heathrow service. We see that as
a natural course of events.
Q552 Mr Hurd: One way to reduce the
carbon imprint of your industry is to try to manage demand by
putting brakes on the expansion of ground capacity, which is your
business. The argument is always made that if you do that people
will fly somewhere else. What do you see in terms of airport expansion
around the world in terms of your European competitors and China?
I come back to Mr Dowd's point that this is a global issue.
Mr Dowds: There is no doubt that
the provision of capacity in the UK over many years has never
kept up with demand, particularly in the South East. We have a
surfeit of demand over current capacity. That is one of the reasons
why Heathrow in particular is growing by only between 1 and 2%
compared with other airports where periodically capacity has been
provided. In Europe the position is that governments have supported
them and provided many more runways because they are all publicly-owned
airports. As Dr Sentance of British Airways has indicated, they
are now benefiting by being able to accommodate more services.
They now have more international destinations than Heathrow. We
have five runways in Amsterdam and four in Paris. We have two,
which will go up to four, in Madrid and five in Frankfurt. There
is lots of alternative choice available to international airlines
if the capacity is not provided in the UK. One of the key facts
in the Government's White Paper published in December 2003 is
recognition that while there are environmental implications associated
with the growth of aviation there are also huge economic and social
benefits which have to be recognised in formulating the policy
for the next 30 years. We obviously welcome that. The White Paper
envisages two more runways within 30 years, the first probably
being provided at Stansted and the second at either Heathrow or
Gatwick, depending on its timing, but in the same timeframe we
will see additional capacity in Europe.
Q553 Mr Hurd: Where and how much?
Mr Dowds: It is quite difficult
to know precisely which airport will do it ahead of the other
because obviously government has a role to play in those decisions.
We need to get on with providing capacity that is required to
meet demand, but that is not to say we do not need to face up
to the climatic impact of aviation. All we are saying is that
the best way to do that is through an emissions trading scheme
while growing the business and accepting the need for growth but
being able to afford it globally by making savings elsewhere.
Q554 Mr Hurd: Is there any evidence
that the UK economy has been disadvantaged by this expansion of
capacity in the European Union?
Mr Dowds: The only evidence is
the movement of traffic and the fact that other airports are making
faster progress in growing than some of ours, in particular in
London, have been able to do, but I do not have a wider economic
measure of that.
Q555 Mr Hurd: I see how that can
disadvantage the economy of BAA, but I am not entirely convinced
how it disadvantages the British economy?
Mr Dowds: It has been demonstrated
quite clearly by the multiplier effects of aviation throughout
the economy in terms of jobs and the support required. There is
a lot of evidence to suggest that aviation has a big multiplier
effect for the whole of the UK economy, and I think that the Government's
work before formulating the aviation policy proved that there
was such a benefit.
Q556 Mr Caton: The sustainable aviation
strategy committed the industry to sustainable development, including
the goal of enabling people "to enjoy a better quality of
life without compromising the quality of life of future generations".
But if aviation depends on a finite resource, which is oil, by
increasing flights in the short term and using oil up more quickly
are you not depriving future generations of the opportunity to
Mr Dowds: Obviously, we believe
that one does not necessarily have to lead to the other. I noted
the debate about oil and when it would run out. I have been an
active listener to that debate in Aberdeen over many years. When
I was first up there 20 years ago we were supposed to run out
last year. The fact of the matter is that I do not think anybody
knows precisely when oil will end. We know that it is a finite
resource and there are different forecasts available, many of
which rely on an assumption about how technology will develop
and the economics will work out. What we do know is that aviation
will grow, obviously if it is permitted to, and that oil in the
foreseeable future will be a key element to enable that to happen.
I noted what the airlines said and understand that research is
going on into other types of fuel and that may or may not become
a major factor at some point in future, but quite frankly none
of us really knows for sure exactly what the timing of that may
Q557 Mr Caton: As to aviation growth,
the Department says that it will continue to update its projections
for future demand in the light of trends. What if the Government
started to project much lower demand, perhaps in response to sustained
oil price rises? Would you scrap plans for new runways?
Mr Dowds: Let there be no doubt
that we as a commercial company will provide capacity and invest
in it only if we get permission and we can see commercial sense
in so doing. We will not build capacity if it will lose us lots
of money, and we are not in the business of expanding our business
just for its own sake; it has to make commercial sense. That test
will always apply. But we are also clear that that commercial
test through an emissions trading scheme will become more difficult
and challenging because ultimately it will bring with it costs
to our business, and also to the airline business, and we will
have to internalise those external costs of aviation. One of the
beauties of an emissions trading scheme is that it will bring
that cost pressure to bear and we can either find ways of affording
it or curtail what we do in terms of how we expand our business.
The beauty of the emissions trading scheme is that it brings to
bear that commercial pressure while solving the only problem which
matters, which is the total impact on the planet.
Q558 Mr Caton: Moving on to the non-CO2
global warming effects of aviation, the sustainable aviation strategy
also says that the UK aviation industry is committed to "Propos[ing]
appropriate mechanisms by 2012 for mitigating non-CO2
effects based on a consensus of scientific understanding."
What do you have in mind when you say that?
Mr Irvin: First, if one goes back
to the IPCC report in 1999 on aviation and look at the estimates
of the non-CO2 impacts, the state of science on each
of themone can go through the listis rated poor
to fair. Second, there can be trade-offs between or certainly
different solutions to each of those problems. For example, if
one deals only with CO2 and not NOx in technology terms
there may be a trade-off between them. We believe that the best
way to deal with that is to have a separate regime for each effect
so we are sure we are dealing with each of them and one is not
at the expense of the other. The third type of impact is water
vapour at very high altitudes where the science is the least complete.
We propose that scientific research needs to be undertaken and
that has now begun. Research into these effects is now being undertaken
at, for example, at Manchester Metropolitan University, but to
solve a lot of these questions will require the involvement of
big international players. It may be that if it is true that water
vapour is a problem at certain altitudes it can be solved by different
air traffic movements, perhaps lower flying or the avoidance of
certain areas. There will be different solutions for each of the
Q559 Mr Caton: Recognising what you
say about the weakness of the science in some of these areas,
is it right to be expanding UK's airports with all the financial,
environmental and cultural costs before you know the full impact
of the non-CO2 effects?
Mr Irvin: We want to try to deal
with the CO2 effects through an effective emissions
trading scheme which will improve fuel efficiency. That will have
beneficial impacts in all those areas. It is very difficult to
conclude that because there is very uncertain science in non-CO2
impacts we will take a leap to try to decide in advance what it
will be. In the IPCC report we have seen factors of between two
and four and Dr Sentance referred to more recent evidence showing
a lower figure, but what is rarely taken into account is that
the rest of the economy also has non-CO2 impacts. They
must also be taken into account. When one starts to compare them
it is perhaps a lesser difference than may appear. We want to
try to work through to 2012, which is the next Kyoto period, to
try to address these questions. From our point of view, for it
to be really effective it must be an international solution; one
cannot do this in one small country. Emissions trading is the
most effective way to do that in terms of both the environment
Mr Paling: Manchester Airports
Group has over five years funded the post of chair of sustainable
aviation in an organisation called CATE at Manchester Metropolitan
University. Only in the past couple of days it has been awarded
a significant sum of money to undertake research under a project
called Omega to look at this issue among others which is concerned
with the impact of aviation on climate change. We are supportive
of research, and we have funded that post for a number of years.
Mr Dowds: We are absolutely clear
that it is part of the impact and has to be addressed, just as
CO2 has to be addressed. What we need is further understanding
of exactly what its impact is and the appropriate measures and
targets for reduction. It is not a case of trying to avoid it
in any sense; it is a matter of wanting to understand a bit more
about how it is generated before we commit to a particular solution.
5 Footnote inserted by witness 05.06.06: In response
to Q546 from Dr Desmond Turner, Dr Tim Walmsley said that 60%
of emissions are generated by passengers and staff who use their
own vehicles to access the airport. This is incorrect. The 60%
figure is for all passenger and staff journeys to and from the
airport. It includes private vehicles and public transport. Back