Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 540 - 559)

WEDNESDAY 24 MAY 2006

MR DONAL DOWDS, MR JOE IRVIN, DR TIM WALMSLEY AND MR CHRIS PALING

  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 sites?

  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 to airlines.

  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.[5] 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 Rail.

  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 60:40.

  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 fly?

  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 be.

  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 them—one can go through the list—is 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 different problems.

  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 and cost.

  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


 
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