Select Committee on Environmental Audit Written Evidence


Memorandum submitted by the Aviation Environment Federation

  "The Government should set itself a target for reductions on carbon dioxide emissions in the transport sector", said Sir John Harman, chairman of the Environment Agency. "There is a mismatch in government policy between its aviation and carbon dioxide policies."

The Observer Newspaper Business Section, 19 February 2006

  "Aviation will remain dependent for the foreseeable future on fossil fuel. As such, there is a powerful case for aviation to take up some of the world's capacity to absorb greenhouse gases, after key human development needs such as clean water, food and sanitation in both developed and developing countries have been met. Importantly, this would only be permissible by aviation minimising its impacts through technology and operational improvements, and meeting the external costs of its remaining emissions. Discussion has centred on emissions trading as the policy most likely to yield most environmental benefits at least cost."

  "A strategy towards sustainable development of UK aviation", Sustainable Aviation umbrella pamphlet Society of British Aerospace Companies, Airport Operators Association, et al, June 2005.

  "Everyone's carbon dioxide emissions must go to zero to allow for aviation pollution reveals major analysis of UK climate change targets."

  Tyndall Centre for Climate Change Research Press Release headline, September 2005

The Aviation Environment Federation is the UK's specialist environmental NGO working exclusively on developing control & reduction strategies for aviation's negative impacts. For full details of what we do please go to www.aef.org.uk

  We are pleased to be able to contribute to the EAC's present Inquiry, "Reducing Carbon Emissions from Transport" and will try to answer the Committee's questions as they relate to our area of interest and expertise.

SECTION 1

The present

    —  What progress the DfT is making against key carbon reduction targets or forecasts included in the Ten Year Plan (2000), the Climate Change Strategy (2000), the 2004 Transport White Paper, the 2004 PSA, Powering Future Vehicles (2004), and other documents.

  We can identify no specific carbon reduction targets for air transport across the entire range of relevant Government documents, although the problem of growing carbon emissions from air transport is acknowledged and analysed. In fact quite the opposite—the underlying documentation[1] to the Future of Air Transport White Paper, December 2003, forecasts CO2 emissions from the sector rising from around 5 Mt C in the late 1980's to 16-21 Mt C by 2030 and 16-29 Mt C by 2050.

  The figures quoted above are CO2 only (as C). But the particular difficulty with aviation greenhouse gas emissions is that other pollutants including NOx, plus other effects such as condensation trails and cirrus cloud formation, all increase the radiative forcing impact from aircraft engine exhaust emissions. These additional impacts are accounted for by a UN IPCC-derived simple multiplier commonly expressed thus: total climate change impacts are a factor of 2-4 times greater than those from aviation's CO2 emissions alone. This range is interpreted as a straightforward 2.7 multiplier on aviation's CO2 forcing which has become a widely accepted rule-of -thumb.

  We should point out that work continues on reaching a better scientific understanding of these issues. Below is a short overview of where "the science" is right now:

    —  The EU-funded "TRADEOFF" project is a model-based project investigating the atmospheric impact of aviation. Its final 2005 report suggested that the RF contribution from condensation trails is somewhat less (10 mW m-2) than the IPCC 1992 estimate (20 mW m-2) but is greater for cirrus cloud formation. Only a wide range could be given for cirrus RF (10 to 80 mW m-2, cf 0 to 40 mW m-2 from IPCC, 1999) but the underlying analyses showed more certainty of a positive linkage between air traffic and enhanced cirrus over the IPCC analysis.[2] The total "TRADEOFF" radiative forcing for aviation in 2000 is approximately equal to the IPCC 1992 estimates since some forcings increased with traffic (CO2), while others were reduced from improved modelling and underlying assumptions.[3] This resulted in an overall RFI of 1.9. However some key scientists involved in these issues believe that the RFI does not reveal aviation's full environmental response, which could, measured in terms of a temperature response (non-equivalent) be approx. 3.5 times greater than the impact of aviation CO2.

    Key Fact: TRADEOFF report shows slightly reduced RFI contribution from aviation emissions excluding cirrus but:

    —  The TRADEOFF project attributed a potential RF multiplier for 2000 of 1.9 times greater than CO2 alone: however, if the additional impacts of cirrus cloud formation are included, the range is 2.3 to 5.1 with a mean estimate of 3.1.  This compares with the IPCC best estimate for 1992 of 2.7 with a range from 1.9 to 4.0.  The TRADEOFF project team decided that the uncertainty range for cirrus was large and that further work was needed on this topic.

    Key Fact: TRADEOFF report indicates cirrus cloud formation impacts potentially severe but more work needed

    —  The five-year QUANTIFY project, 35 members from 16 states with a budget of €8-12 million over the 2005-10 period, is looking at Quantifying the Climate Impact of Global and European Transport Systems from road, air and maritime sources. This project is carrying out a parcel of work to take the TRADEOFF analysis on aviation emission-induced condensation trails/cirrus cloud formation forward. There are some early indications that this investigation will attribute a significant positive RF factor to cirrus cloud formation confirming that there is a serious problem with these impacts. It is unlikely to produce definitive results for another 18-24 months, however.

    Key Fact: QUANTIFY is an important and hopefully definitive research project especially with regard to aviation emissions induced cirrus impacts—its work should be monitored closely.

    —  There is also a move by climate scientists, including those associated with the authoritative CICERO (Centre for International Climate and Environmental Research) institute, and others, that the Global Temperature Potential (GTP) metric is a strong candidate for replacing Global Warming Potential (GWP). An enhanced GWP ie GTP could provide better opportunities for policies that cover a larger part of man-made radiative forcing (RF), improving comprehensiveness and cost-efficiency. This metric would tend to increase the resultant surface temperature effects of aviation's total contribution to climate change.

    Key Fact: GTP believed to be better metric than GWP, scientific opinion and research must be clearly identified, tracked and communicated to policy makers.

  A crucial issue is what can conventionally be done to reduce and control greenhouse gas emissions from the sector. There are limited but relevant discussions in the Air Transport White Paper concerning the role technology and operational improvements could play in generating important efficiency savings, the "mitigation" options, thus making the growth in carbon emissions "less than it otherwise would be".

  The ATWP does include a section in Chapter 3, pages 39-41, on climate change and explains emission trading as a concept at Annex B. Measures discussed include:

    —  air traffic control measures to minimise the impact of these activities on climate change;

    —  more R&D to reduce the climate change impact of future fleets;

    —  voluntary action including emissions reporting and targets at company level;

    —  emissions trading, either an open system developed internationally through ICAO or participation in the EU scheme from 2008; and

    —  hint of possible emissions charge in paragraph 3.42, page 41, with a commitment to move forward if progress at international level proves towards ETS "too slow".

  What these pages show, however, is a superficially reasonable but understated grasp of the problem and a less than in-depth examination of any outcomes resulting from the policy measures being considered. It is this almost total lack of any targets as to how to reduce and control the sector's climate change impacts, coupled with a very limited and short-term analysis of the reductions needed from other sectors in the economy that would be needed to "feed" air transport's growth under any emissions trading scheme scenario, clearly making the running as the Government and industry favoured solution, that is most worrying.

  This seems to us to be an unacceptably lightweight area of the White Paper. In our previous submissions to the Committee we have made the point that emission trading is a potentially flawed concept as a total solution to aviation's climate change impacts. Firstly, no agreement has yet been found on how to include aviation's non-CO2 impacts and secondly, no analysis has been undertaken to establish what fraction of CO2 emissions aviation will use in long term scenarios targeted at climate stabilisation, which underpins UK policy through the Energy White Paper and the EU "2 degrees" policy. We have made and will continue to make this point directly to Government and the EC as well. We simply don't agree either with the Government's statement in paragraph 3.43 of Chapter 3 of the ATWP that "because of its blunt nature, Air Passenger Duty is not the ideal measure for tackling the environmental impacts of aviation."

  APD is an effective proxy for the lack of fuel duty and VAT on tickets and set at the right level, with perhaps a distance related component, to achieve effective pollution reduction targets through demand management would work well. However, we understand that such a policy doesn't fit the Government's thinly disguised "business as usual" predict and provide scenario set out so uncompromisingly on every page of the ATWP.

  It is generally accepted by most commentators that the UN IPCC 1999 analysis published in the Special Report on Aviation and the Global Atmosphere still holds true, that is to say that improved aircraft engine and airframe design could contribute around a 1% per annum fuel efficiency gain through to 2020.  Better load factors, ATM, satellite GPS routeing and other operational gains could add a similar 1% system efficiency gain over the same period. We welcome all aerospace R&D programmes, both here in Europe and the USA that help move towards ensuring these ambitious mitigation goals are met. But the IPCC analysis concluded that CO2 emissions are likely to increase at 3-4% per annum over the same period—thus the growth in CO2 emissions continues to outpace the efficiency gains better technology and improved operations can reasonably be expected to bring. Our later evidence will try and identify solutions that could help to close this gap.

  The DTI Energy White Paper, February 2003, stated:

    "We need to reduce the emissions from aviation . . .

    5.22  Demand is rising in the aviation sector internationally at about 4% per year. We will all benefit from the growth in business, services and our ability to travel. International aviation emissions currently do not count in the national inventories of greenhouse gas emissions. There is no international agreement yet on ways of allocating such emissions. The UK's international emissions currently amount to some 8MtC ((MtC including domestic). They are expected to rise to some 14-16 MtC by 2020.

    5.23  We are committed to ensuring that the long-term development of aviation is sustainable and that it meets its external costs. We are discussing with stakeholders the most economic instruments for ensuring that the industry is encouraged to take account of, and where appropriate reduce, its contribution to global warming. We will set out our plans in an Air Transport White Paper. Potential instruments to address CO2 emissions from international aviation being considered include an en route emissions charge and participation in an en route emissions permit trading scheme. For domestic flights British Airways has joined the UK emissions trading scheme. There may be opportunities for future participation in this scheme for other carriers who operate UK-based routes."

    (Note: the bold emphasis above is the White Paper's)

  None of the background papers to the DTI EWP calculating how and where sectoral savings through to 2020 might be made contain any reference to the air transport sector. There are some references to extending the ETS but again no mention of air transport's inclusion, although to be fair, this work does precede the ATWP.

  The Government's First annual report on implementation of the Energy White Paper, April 2004, said this about aviation emissions:

    "2.9 Carbon savings from the transport sector remain challenging and are relatively expensive when compared to other sectors. We are, however, developing policies to improve the carbon efficiency of transport which will have an impact over the nest decade. This work includes promoting the development and take-up of new technologies and fuels. We shall set out our strategy for increasing the amount of biofuels used by road transport in the UK later this year. The Air Transport White paper has committed the Government to press for the aviation sector to be included in the EU ETS as soon as possible. And we are pressing the European Commission to finalise a further round of Voluntary Agreements on new car fuel efficiency with the automotive industry."

  The most recent DTI review Reducing Carbon Emissions, July 2005, also features the ETS commitment:

    "2.17  International aviation emissions do not count in the national inventories of greenhouse gas emissions, as there is no international agreement yet on ways of allocating such emissions. However, we are committed to ensuring that the long-term development of aviation is sustainable and that it meets its external costs. The Future of Air Transport White Paper set out our aim of including aviation in the EU ETS from 2008 or as soon as possible thereafter. The European Commission has work in hand, looking at how best to address the climate change impacts of aviation, including emissions trading. A Communication by the Commission suggesting a way forward is due in July. We expect to debate the options and agree a way forward during our EU Presidency."

  And the DFT's Autumn Performance Report 2005 repeated this policy in Chapter 7, "Reduce greenhouse gas emissions":

    "Most transport emissions count towards targets under the Kyoto Protocol, including emissions from domestic aviation. Emissions from international aviation and international shipping, however, do not count and there is no agreement on how, or whether, to allocate emissions from these sources to individual countries.

    We believe that the best way of making aviation contribute towards stabilisation is through a well-designed emissions trading regime and this has been a key focus of the UK Presidency of the European Union. This is why we are backing the inclusion of aviation in the EU Emissions Trading Scheme and are also continuing to press for the development and implementation, through the International Civil Aviation Organisation, of an international emissions trading scheme."

  The front page of this submission features a small extract from the Government-endorsed, in the shape of the Prime Minster, industry-produced Sustainable Aviation strategy pamphlet. The climate change section of this document contains a Commitment number 6, page 21, stating that:

    "Airline and airport signatories to build support and assist policymakers in developing practical solutions for inclusion of aircraftCO2 emissions in the EU Emissions Trading Scheme by 2008, or as soon as possible thereafter, as a first step towards a global approach."

  Unsurprisingly there is a neat symmetry between this air transport industry commitment and Government policy. This would be fine if it could achieve absolute reductions in greenhouse gas emissions from this sector. But paragraph 3.37 of the ATWP tells us the Government's true position:

    "Reduction in greenhouse gas emissions across the economy does not, however, mean that every sector is expected to follow the same path. The Government is committed to a comprehensive approach, using economic instruments to ensure that growing industries are catered within a reducing total. The use of emissions trading allows coverage of environmental costs through a mixture of emissions reduction within the sector and purchase of reductions that can be produced more cheaply by other sectors."

  The ATWP therefore clearly sees growing greenhouse gas emissions from this sector as an acceptable price to pay for the linked economic activity. But its central policy outcome, that air transport emissions will be offset by reductions elsewhere, is unproven.

  But what if the industry's greenhouse gas emissions with or without the additional NOx, contrail and cirrus burdens cannot be managed by the preferred policy combination of efficiency gains, mitigation, and emissions trading?

  The much vaunted technology and operational efficiency gains need to be identified much more accurately than at present and measured and reported on annually to monitor mitigation progress. We need to see:

    —  what international R&D programmes are underway with what targets and at what cost in the fields of engine and airframe technology; what results are forthcoming against the targets and when; how and when these programmes will become aircraft production reality; accurate forecasts of in-service dates and fleet wide replacement and performance gains

    Key requirement: mandatory Government-led annual reporting of air transport technology greenhouse gas mitigation progress not industry-led voluntary efforts;

    —  similar identification of ATM programmes and other airline-focused operational measures including emissions inventory reporting and efficiency parameters, such as emissions per revenue kilometre. with progress towards targets audited on an identical annual basis;

    Key requirement: mandatory Government-led annual reporting of air transport ATM & operational greenhouse gas mitigation programmes again, not industry self-reporting.

  We have a gut feeling that if and when aviation emissions are part of any ETS all these supply-side efficiency gains will be smartly attributed to an "ETS effect". We believe that the technology and operational gains identified as possible by ACARE, Eurocontrol and the other actors capable of implementing such supply-side gains, would in all likelihood, happen anyway. We know this because they have already been identified pre-ETS—they are a welcome part of the industry's correct, albeit with an increasing degree of difficulty given the distinct possibility of costly diminishing returns, and admirable drive to reduce operating costs. However, identifying and bringing technology to the market place is one thing. Encouraging the uptake of that technology, especially where it involves early re-engining or fleet replacement will still require a substantial incentive or price signal. Forecast ETS prices alone are unlikely to drive market uptake, so even if the manufacturers can deliver, who is going to buy it?

  It is very, very difficult to analyze additional drivers for supply-side gains in this sector. This is because the industry is already pretty savvy at R&D and programme implementation, both aircraft and operations led. The long lead time from idea through to implementation is an inevitable part of an industry that has complex multi-faceted, multi-partnered operational systems. Similarly aircraft are bought and operated on 30 year cycles, from initial R&D concepts through production and in-service to end-of-life cycles. This why we need a clear, mandatory Government-led reporting initiative not voluntary industry self-reporting.

  Only then would we be able to monitor exactly what progress the DfT is making towards this first key element, the technology and operational efficiency/mitigation improvements, of its carbon reduction strategy for the air transport sector. These efficiency gains may well be overtaken by growth—we still need to know whether they've been achieved. If Government wants to rely on technology to contribute to the delivery of its policy goals, then it—not the industry—must be the one to audit and verify progress.

  The second policy element, to work towards the inclusion of aviation emissions in the European ETS and at the same time press for an international variant of the same, could fairly be said to be a strategic goal that might show some progress against carbon reduction targets. At the moment, however the scheme is, as they say in Hollywood, under development.

  We will move on to discuss the elements needed to get this latter policy off the ground; if it would make any difference to further reducing carbon targets over and above what would have happened anyway, both within and outside the air transport sector; and what alternatives may be needed to begin to actually significantly to stabilise & reduce emissions from the sector.

  To conclude this section:

    —  For the air transport sector, the DfT has no clear carbon reduction targets in place, only carbon growth targets. There are some loose aspirational technology-led mitigation claims that might make emissions from the air transport sector somewhat "less worse than they otherwise would be". There needs to clear cross-cutting Government-led policy initiatives to drive and develop emissions reduction programmes in the key areas, aerospace technology, ATM and operational efficiency gains that could make a readily identifiable mitigating contribution, even if subsequently outpaced by the sector's growth. There are no mandatory reporting or auditing programmes to measure any progress in these areas and there urgently needs to be.

    —  The growth in air transport emissions could well blow the joint DfT/DEFRA/DTI PSA Kyoto and UK 2010 greenhouse gas reduction targets out of the water. We say this because it is unclear if emissions from international aviation are included in the PSA target. We have assumed they aren't. The DfT might claim that as these emissions are not Kyoto-linked as such, and ICAO are working on but hasn't any agreed global policy (and frankly is never likely to agree on one!) to deal with them, they somehow don't count. But finding a solution, be it the European ETS or whathaveyou, clearly is an integral part of the ATWP and the DfT have allocated resources to their preferred policy options. Surely then all UK-derived aviation emissions should at least be part of the PSA? Abrogating such responsibility is clearly irresponsible and unacceptable.

    There is little evidence of any carbon reduction target for aviation emissions.

SECTION 2

The future

    —  Whether the DfT's carbon reduction target is underpinned by a coherent strategy stretching across the department's entire of activities?

    —  What realistically the DfT could achieve by 2010 and 2020 in terms of reducing transport-related carbon emissions, and the role that demand management should play in doing so?

  We have discussed in the previous section why we feel the DfT's ATWP climate policies, such as they are, lack clarity and need direction. There is in reality a clear 4-track strategy for unrestrained growth:

    1.  Expand the air transport sector's passenger numbers, consequent infrastructure demands and all its environmental impacts including greenhouse gas emissions through "predict and provide" methodology.

    2.  Justify this increase by citing the alleged economic benefits based on one analytical study jointly financed by the DfT and the aviation industry.

    3.  Discuss aspirational technology and operational efficiency targets that might make greenhouse gas emissions "less than they otherwise would be", the industry's mitigation contribution, but with no central oversight of any such programmes and no reporting or audit capability regarding their progress other than voluntary industry self-reporting.

    4.  Develop a policy that might include aviation emissions in the European ETS at an unclear future date as your cornerstone CO2/greenhouse gas containment policy but stress the sector's pre-determined special case status that growth must be facilitated by purchasing cheap credits generated by other industrial sectors and ETS-linked special market measures.

  Time for another quote.

  On the 16 December 2003, the RCEP had this to say about the White Paper in a tough, uncompromising, press release:

    "The release of today's Aviation White Paper reveals a serious fracture between the government's policies on energy and aviation",

    said Sir Tom Blundell, Chairman of the Royal Commission on Environmental Pollution.

  Sir Tom expressed the Royal Commission's disappointment in the White Paper published today by the Department for Transport. Sir Tom explained:

    "The White Paper fails to take account of the serious impacts that the projected increase in air travel will have on the environment. Earlier this year the government published an Energy White Paper setting out its strategy for tackling global climate change, and set challenging but necessary targets for greenhouse gas emissions. Today's Aviation White Paper undermines those targets and continues to favour commerce over vital carbon dioxide reduction measures."

  Last year the Royal Commission's report on air transport pointed out that uncontrolled growth in aviation, to the extent predicted by the government, would mean it would become the major source of global warming emissions in the future, contributing more than half the UK's share of greenhouse gases and their equivalents by 2050.  The Royal Commission made a number of recommendations to government on how to avoid this situation.

  The Aviation White Paper acknowledges this danger and the consequent need to take steps to make the cost of air transport reflect its environmental damage. It even recognises the role that emissions charges might play in this, as recommended by the Royal Commission. But it makes no clear commitment to action, and at the same time it announces a huge expansion in airport capacity. This leaves a major question mark over the extent to which the government is serious about the carbon dioxide reduction targets set out in its Energy White Paper. Aircraft emissions have between two and three times the global warming effect of carbon dioxide emitted at ground level.

  Sir Tom added:

    "The Royal Commission is not opposed to cheap air travel, and has no intention of suggesting that people should not have affordable access to their holiday destinations. However, the levels of growth predicted in the Aviation White Paper are simply not environmentally sustainable, and the government needs now to start moderating demand, both by increasing the cost of air transport to a fair and equitable level, and by encouraging affordable and environmentally more benign forms of transport."

  The Commission advises that the debate should not be about where to expand air travel capacity but how to resist this expansion.

  In its report last year, the Royal Commission made five recommendations to government:

    —  impose climate protection charges for aircraft taking off and landing within the EU;

    —  restrict airport development to encourage greater competition for available take off and landing slots in order to optimise their use;

    —  develop major airports into land-air hubs integrated with an enhanced rail network;

    —  support technological development to lessen the damage done by air travel;

    —  include international aviation in the emissions trading scheme under the Kyoto Protocol.

  The Royal Commission calls upon the government to explain how it reconciles the rift between aviation policy and energy policy, and what measures, such as those proposed by the Royal Commission, it will adopt to manage demand for air travel."

  Unfortunately, the Government ignored this response at the time and has continued to do so since. Other important Government advisory bodies, such as the Sustainable Development Commission, and the UK's executive environmental protection agency, the Environment Agency, have made similar comments pointing out the policy dissonance between the UK's greenhouse gas reduction efforts and the expansion proposed in the ATWP.

  The scale of this problem has been investigated by the well-respected Tyndall Centre for Climate Change Research.

  According to the Tyndall Centre's most recent report "Decarbonising the UK":

    "All householders, motorists and businesses will have to reduce their carbon dioxide pollution to zero if the growing aviation industry is to be incorporated into Government climate change targets for 2050"

  We present below a short graphical extract from their findings, which we endorse as a careful and accurate account of the how the ATWP emissions forecast will wreck the UK's climate change policies. The first two profiles are what recent scientific views, 550 ppmv compliance, and the very latest, a 450 ppmv stabilisation level, regard as necessary to stabilise CO2 in the atmosphere at levels which could prevent dangerous or catastrophic climate change impacts.

  A further two profiles show what happens when you add aviation emissions both with and without the toal climate change multiplier to the contraction and convergence scenario required for UK emissions stabilisation under both 550 ppmv and 450 ppmv regimes.


  Representation of what a 550 ppmv compliant profile looks like for the UK under a contraction and convergence regime. This profile is for carbon dioxide emissions (measured in million tonnes of carbon (MtC)) only.


  Representation of what a 450 ppmv compliant profile looks like for the UK under a contraction and convergence regime. This profile is for carbon dioxide emissions (measured in million tonnes of carbon (MtC)) only.


  Both the 550 ppmv and 450 ppmv profiles as well as the carbon dioxide emissions generated by the UK's aviation industry. This scenario is outlined in the Tyndall Centre/Friends of the Earth report "Growth Scenarios for UK Aviation". Key point: aviation exceeds the 450 ppmv carbon budget by 2050.


  Source: all graphs: Tyndall Centre report "Growth Scenarios for EU and UK Aviation: contradictions with climate policy". The previous graph includes uplifted carbon emissions from aviation. The uplift factor used is 2.7.

  However, the point is that there are additional and as yet unquantified emissions from the aviation industry that are likely to significantly increase its impact on climate change, and this is broadly illustrated in the final graph above.[4]

  To view the Tyndall Centre for Climate Change Research reports on aviation and climate change go to:

  "Growth Scenarios for EU and UK Aviation: contradictions with climate policy"

  http://www.foe.co.uk/resource/reports/aviation_tyndall_summary.pdf

  "Decarbonising the UK"

http://www.tyndall.ac.uk/media/press_releases/tyndallpr21sep.pdf

  The AEF and other environmental NGOs have a clear policy imperative in respect of controlling and reducing air transport's growing and worrying contribution to climate change. We want EU-wide policies that ensure:

    —  urgent action is taken to control and reduce greenhouse gas emissions from air transport wherever they occur, given the sector's growing contribution to dangerous climate change;

    —  regional action soon as there is little or no prospect for agreement on global measures to tackle this problem in the short- to-medium term, if ever;

    —  the broadest package of fiscal measures to tackle aviation's total climate change impact, including taxes, charges and trading.

  We therefore strongly welcome the recent, September 2005, European Commission Communication "Reducing the climate impact of aviation" and its clear and unequivocal acknowledgment of these three issues.

  We also welcome, as an essential first step, the Commission's announcement to establish a working group to develop proposals as to how aviation could best be included in the EU ETS. Environmental NGO's are participating in this programme which is due to report by the end of April 2006 with a legislative proposal due by the end of 2006.

  We are pleased to see this policy development process in place but in our view the actual start date for including aviation emissions in the European ETS would be 2010 at the earliest, and in all probability, given the political processes and negotiations still to take place, is more likely to be 2013.  This is a worrying delay and strengthens our case for demand management measures now.

  However, including aviation in the ETS must not become an end in itself. Our support for the final policy proposals will be heavily dependent on defining effective environmental criteria to be applied to aviation's inclusion. We have seven critical benchmarks we will apply as the policy development process goes ahead. They are as follows:

    1.  The overall environmental objective and starting point must be to bring the sectors' emission reduction targets and any baseline calculations in line with current and future EU climate targets in particular the EU "2 degrees" policy and the frequently stated and accepted figures necessary to move towards stabilizing CO2 greenhouse gas emissions at around 550 ppmv by 2050, of which the path to 2020 is given below:

    -8% below 1990 levels by 2012 (Kyoto)

    -30% below 1990 levels by 2020

    A weak ETS that does not achieve the above objectives will increase the pressure for other regulatory and fiscal instruments. And emissions from international aviation must be included in any post-2012 international climate treaty framework despite moves already underway from oil-producing states and their political and industrial sector allies to prevent this happening.

    2.  Well-designed instruments with the widest geographical coverage that do not discriminate between carriers on the same routes guarantee there will be no significant economic distortions that might alter the competitiveness of EU airlines. Stringent climate policies can be applied to air transport when compared to the so-called "exposed sectors" which might be sensitive to cheaper imports and/or production plant relocation.

    3.  An ETS/air transport policy must address the full climate impact of aviation. Notwithstanding some degree of scientific uncertainty, we believe other fiscal policy instruments should address non-CO2 impacts such as NOx, contrails and cirrus cloud formation, invoking the "precautionary principle". Such measures must be introduced in parallel to the ETS.

    If such a package cannot be delivered in parallel, and in order to ensure environmental integrity and the complete coverage of all impacts via the ETS, we are confident this can be achieved by using multipliers on CO2 emissions in a relatively straightforward manner.

    4.  The policy should have the widest geographical scope possible, to include emissions from all flights to and from all EU airports because of the current absence of any global controls on emissions from international aviation. Our research and that of others, shows there are no legal barriers in this specific policy area.

    5.  An ETS/air transport policy should aim to achieve the full internalisation of climate costs, invoking the "polluter-pays" principle. This should provide airlines with an incentive to invest in cleaner more fuel-efficient technology thereby helping reduce emissions.

    This is why our clear preference is for the auctioning of permits. If, however, grandfathering and/or benchmarking are eventually favoured, the parallel use of other economic instruments, as the rationale in point 3 above, is an absolute necessity.

    6.  The development of future climate change policies presents policymakers with an unmissable opportunity to contribute to ending the historic and long obsolete tax privileges enjoyed by the air transport industry. To this end, an ETS/air transport policy must be part of a package of measures and we again welcome the Communication's reiteration of its preference, as a matter of principle, to see aircraft fuel subject to energy taxes. We welcome all and any initiatives to make this possible including the consideration of domestic aviation fuel taxes and VAT on air travel now.

    7.  Climate change policies should generally aim to reduce the EU's oil dependency and this includes air transport, which across Europe consumes 1 million barrels of oil per day. Skilfully designed ETS/air transport policy instruments should aim to maximise both demand and supply-side opportunities to improve efficiency and reduce emissions within the sector. We feel strongly that it would be a grave miscalculation to rely solely on other sectors to generate the reductions required by air transport which must surely be encouraged to reduce its own emissions in some way.

    Source: Tyndall Centre report "Growth Scenarios for EU and UK Aviation: contradictions with climate policy"

  This last graph shows the dramatic forecast growth in uncontrolled aviation emissions from a selection of European member states. It requires only a small leap of imagination to understand the impact this growth would have on the EU "2 degrees" policy.

  We have commented earlier in this submission about the difficulties of identifying the supply-side contribution that so-called "mitigation" measures could make— at the risk of ad nauseam repetition, at the levels envisaged they simply make the air transport sector's emissions "less worse than they otherwise would be".

  As our 7 point-menu above shows, there are some gaping holes in the way aviation policy makers, and to some extent, environmental regulators, want this scheme to proceed. Not least is the startling omission that the essential carbon reducing performance driver of any ETS, a tough cap that reduces over time, seems to be missing from all discussions!

  A very recent report commissioned by DEFRA and the DfT "Including aviation in the EU ETS: Impact on EU allowance prices", ICF Consulting, February 2006, is highly critical of the assessment of supply-side contributions in the background appraisal work (CE Delft "Giving wings to emissions trading", July 2005) to the EC's current EU ETS/aviation policy development process. It goes on to conclude, after an impact analysis, that:

    —  Adding aviation to the EU ETS using an assumed allocation base year of 2008, "will not have a discernible impact on average annual prices of carbon instruments".

    —  Time period for EU ETS Phase II is only 2008-12—there will be only relatively small increases in aviation emissions in that short timeframe.

    —  Trio of carbon market scenarios lead to prices in a range 5.30, 11.40 & 21.20 per tonne CO2 equivalent.

    —  These scenarios are "Worst case" as ICF assume zero absolute reduction in aviation emissions with very small cost implications due to a low emissions cap.

    —  Very difficult to assume/model supply side implications over and above already forecast targets of 1-2% pa from technology and operations —ICF stress much more work needed in this area.

    —  Demand beyond 2008-12 and consequent aviation emissions growth needs to be set in an EU ETS context—if the sector's growth continues at around 5% pa, the price implications for carbon market "have the potential to become more significant"—but no analysis undertaken.

    —  Main source of supply of carbon market place emissions expected to come from power sector abatement.

    —  Allocation base-year assumed to be 2008 emission levels but ICF critical of this "finger-in-the-wind" approach.

    —  ICF modeling reveals that at least an additional 150 MtCO2 equivalents would be required to "induce a noticeable increase in price(s)".

This report has, it seems to us, been produced to explain and reassure the air transport and other EU ETS participants that there will be minimum cost implications whatever the sector.

  This is exactly why we seek to promote our comprehensive 7-point plan, reluctantly accepting that, however imperfect, including aviation in the ETS is the policy status quo in the UK.

  It remains to be seen if such reassurance works to calm fears in other energy-intensive sectors. Contrary to the ICF findings, such sectors are worried, albeit in self-interested fashion, about aviation's potential future demand for carbon to reduce liquidity in the ETS market and raise prices as reported by Andrew Warren, the Director of the Association for the Conservation of Energy, in an article for the Nov/Dec 2005 publication Energy in Buildings and Industry, "Is the brave new world of emissions trading imploding?".

  Andrew Warren noted that at the formal launch in Brussels late last year of the second phase of the second European Climate Change Programme, the European-wide trade bodies representing the alloys, cement, ceramics, glass, iron and steel, lime, non-ferrous materials, and paper-making industries articulated their fears that aviation companies, given huge free allocations of existing emissions will be in a position to afford carbon prices far beyond the reach of energy-intensive industries, causing a massive market imbalance. Such claims, whether justified or not, only add to the political pressure to agree a weak cap for aviation's inclusion.

  We have, however, managed to find one part of the Government that seems to believe air transport should be subject to some form of demand management as the extract below from the No 10 PIU Energy Review report shows:

    "The Energy Review—A Performance and Innovation Unit Report—February 2002

Increased vehicle efficiency and investment in new options for transport fuels is required in the longer-term.

    The transport sector is likely to remain primarily oil-based until at least 2020. Access to oil supplies is not a current concern. Nevertheless, the economy's dependence on transport, coupled with increased imports as UKCS production declines, reinforces the need to improve the energy efficiency of oil-driven vehicles. Prospective advances in vehicle technology hold out the possibility of significant reductions in fuel use.

    The potential long-term requirement for significant CO2 emissions reductions from the transport sector combined with the possibility that oil will become scarcer, raise the need to develop alternative fuels. There is the long-term prospect that the technology for powering vehicles by fuel cells fed on hydrogen will fulfil its current promise, and so ultimately provide a substitute for oil. Other options, such as liquid biofuels may also have a role. International efforts are needed to develop these technologies.

    Handling the projected growth in aviation energy use and CO2 emissions must become a priority. Taxation and other measures to manage aviation demand should be prioritised for discussion in EU and other international forums."

  Of course, it may well be the case that including aviation emissions in the EU ETS is seen by the UK Government as a demand management policy tool. It doesn't seem to have any impact on demand or speed up any supply-side efficiency gains above and beyond those already forecast, as we have covered previously—so, reluctantly we must inform the Committee that as far as we are concerned, there is no coherent DfT strategy for the stabilisation and reduction of air transport's carbon-related emissions.

  We have a more straightforward view of how demand management should be applied to reduce air transport's climate change-inducing emissions by adding, as various EU legislation and polices already indicate should happen, the presently unaccounted for external costs of air transport's social and environmental impacts directly to ticket prices.

  The range of aviation's environmental impacts can be identified. These are: climate change; local air quality and noise; health impacts; safety (accidents/third party risk); land take; habitat (bio-diversity), heritage and tranquillity losses; property devaluation; congestion; and an element of up/downstream processes. It is possible to arrive at reasonable cost estimates of these impacts. The best study we have found that tries to comprehensively assess these factors and apportion costs accordingly is the INFRAS/IWW study "External Costs of Transport", Update study, October 2004.  This can be located at http://www.cer.be/files/INFRAS%20Study—EN-144344A.pdf

  The INFRAS/IWW estimate for the external costs of UK air transport presently unaccounted for and unpaid, is about 52.5 euros (£36) per 1,000 passenger kilometres or 3.6 pence per kilometre. So, for instance, on a return flight from Luton to Glasgow each passenger should pay an additional £36 for the external costs of their environmental impacts. We believe these figures may be on the low side.

  The AEF published in June 2005, a comprehensive commentary on air transport's impacts and market-based demand management options in a pamphlet, "Fly now, grieve later" by Brendon Sewill, at:

  http://www.aef.org.uk/downloads/FlyNowFull.pdf

  Whether externalities are internalised or aviation is taxed just like any other business, the most important starting point is to set environmental limits within which the air transport sector must operate and develop a menu of policy options to achieve those targets. Large decreases in aviation's impacts can only be achieved by a combination of methods including increases in ticket prices to dampen demand.

  Brendon Sewill's analysis pointed to a figure of £9 billion as a fair and equitable figure for the air transport industry to pay in line with the "polluter pays" principle. This figure is arrived at from assessing the broad range of external costs that could reasonably be attributed to UK flights as being between £6-£12.5 billion annually. £9 billion is the figure that should be paid if air transport was taxed at the same rate as car travel.

  Adding an environmental tax at this level would mean demand cut in half from 4% to 2% annually, leading to around 315 million passengers in 2030 instead of 500 million, a growth rate that just might be within the scope of technological and operational improvements. It would also mean, contrary to the ATWP that no new runways were needed in the UK. A detailed analysis of the way the final aviation ETS impacts on carbon reduction policies will be necessary. The AEF intends to take this work forward and update it once the EC aviation and the EU ETS policy is outlined later this year.

  There is scope for air transport's climate change impacts to be reduced by implementing the AEF's plausible taxation policy over say a 5-10 year period. Starting soon would mean that a slowdown in growth could be underway by 2010 and well on course by 2020.  This is our response to the "what could the DfT realistically do" question the Committee posed.

March 2006



  (a)  Although today, non-carbon dioxide emissions are thought to increase the total climate warming impact of aviation by between two and four times that of the carbon dioxide alone, this factor will change over time—most likely reducing. The reason is that the carbon dioxide proportion of the emissions will become more and more dominant as it lasts for over 100 years, whereas contrails and cirrus produced today will be gone by tomorrow. Therefore, if one were to imagine theoretically that aviation growth fell to zero tomorrow, then although there will be the same number of contrails and cirrus clouds produced tomorrow as there were today, the CO2 in the atmosphere generated by the aviation industry will be higher, despite zero growth, as it adds to the CO2 that is already there. Therefore the proportion of the total warming impact of aviation generated by CO2 has increased, and that follows that the proportion from non-CO2 emissions has decreased, ie the uplift factor would be smaller tomorrow than it is today.

  (b)  The plot above does not take the basket of six greenhouse gases into account, therefore uplifting the aviation emissions in this way requires that all other sector's emissions should also be uplifted to account for their other gaseous emissions.




1   DfT 2004: Aviation and Global Warming, Department for Transport, London. Back

2   See: Stordal F, Myhre G, Arlander D W, Svendby T, Stordal E J G, Rossow W B and Lee, D S, 2005: Is there a trend in cirrus cloud cover due to aircraft traffic? Atmospheric Chemistry and Physics 5, 2155-2162. and Zerefos, CS, Eleftheratos, K, Balis, DS, Zanis, P, Tselioudis, G, and Meleti, C, 2003: Evidence of impact of aviation on cirrus cloud formation. Atmospheric Chemistry and Physics 3, 1633-1644. Back

3   Sausen R, Isaksen I, Grewe V, Hauglustaine D, Lee D S, Myhre G, Khler M O, Pitari G, Schumann U, Stordal F and Zerefos C, 2005: Aviation radiative forcing in 2000: and update on IPCC (1999). Meteorologische Zeitschrift 114, 555-561. Back

4   This may not be strictly scientific for the following two key reasons: Back


 
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