Examination of Witnesses (Questions 24
- 39)
TUESDAY 23 JANUARY 2007
MR ROGER
WILTSHIRE, MR
ANDY KERSHAW,
MR ANDREW
BARKER AND
MR BARRY
HUMPHREYS
Q24 Chairman: Good morning, and welcome
to this evidence session. Starting with Mr Humphreys, perhaps
you would introduce yourselves for the record.
Mr Humphreys: I am Barry Humphreys,
director of external affairs and route development at Virgin Atlantic
Airways.
Mr Wiltshire: I am Roger Wiltshire,
secretary general of the British Air Transport Association.
Mr Kershaw: I am Andy Kershaw,
manager of environmental issues at British Airways.
Mr Barker: I am Andrew Barker,
director of planning at easyJet.
Q25 Chairman: We sent out invitations
to everyone. We are glad that easyJet has come along. Mr Michael
O'Leary of Ryanair decided that he did not want to appear with
the rest of you. I do not know the reason for that. I sent him
a nice letter explaining to him that House of Commons committees
had the power to call any witnesses it wished, but considering
that easyJet has been keen to come we are delighted to see its
representative here. Maybe we will have Michael O'Leary here at
another time. This inquiry is about the Stern Review and environmental
factors. I know that a number of you have been and are exercised
about the passenger duty, but this session is not concerned with
that; it is to do with environmental taxes. You will know that
in our Pre-Budget Report we questioned the Chancellor on that
matter. We shall be releasing that report and our comments on
that issue in the next day or two, but it is forward-looking.
This matter started with Sir Nicholas Stern's review on climate
change. You probably heard from the previous witness that the
issue of climate change on the political agenda is one that has
to be yet developed. There are pro and anti camps in terms of
that review. If I may quote Mr O'Leary, he said recently of Sir
Nicholas Stern's review that a lot of lies and misinformation
had been put about by eco-nuts on the back of a report by an idiot
economist. Do you consider Sir Nicholas Stern to be an idiot economist?
Mr Wiltshire: I will not respond
directly to that.
Q26 Chairman: I am asking you to
respond to it because it is very important to our debate.
Mr Wiltshire: If you do not mind
my introducing our position, that would automatically deal with
it.
Q27 Chairman: I am asking you to
respond to my question, and then you can put your position.
Mr Wiltshire: The UK aviation
industry has a very responsible attitude to environmental matters.
We have been leading in that field.
Q28 Chairman: I understand that.
I am asking you about Sir Nicholas Stern. If you answer that you
can come on to your position.
Mr Wiltshire: We welcome the Stern
Review; we think that it is a very considered view.
Q29 Chairman: Do you think it is
a measured report?
Mr Wiltshire: Yes. A very important
point to make is that we are predominantly an international industry.
Nine out of every 10 air journeys from the UK are international.
We compete in the international industry. The Stern Review put
the spotlight on the fact that to address a global issue like
climate change one needed to consider economically efficient international
measures.
Q30 Chairman: So, it is a measured
report by a well-respected economist?
Mr Barker: Chairman, perhaps I
may say that in your introduction you referred to easyJet relative
to Ryanair. We endorse that fully. When Sir Nicholas Stern announced
and presented his report to the Royal Society before Christmas
our chief executive, Andy Harrison, made a presentation alongside
him and had a very good discussion with him afterwards. We think
that it is an excellent report.
Q31 Chairman: That is a good start.
Do you believe that the Stern Review makes a strong enough case
for the UK Government to adopt a system of taxation and incentives
to combat climate change? If not, what are the major weaknesses
of Stern?
Mr Wiltshire: I believe that the
Stern Review addresses the issue and the way it should be dealt
with structurally, internationally and in an economically efficient
way, which means fairly sophisticated instruments. It does not
ignore taxation but it does not necessarily recommend it as a
way forward internationally. It points to emissions trading as
the most efficient way to deal with international issues. As we
are an international industry, we believe that this is the right
way forward. As the Government are taking a lead internationally
in trying to persuade other countries that aviation should be
part of an emissions trading scheme, we in the UK industry are
taking the lead in persuading our colleagues in the rest of the
industry that this is the right way forward.
Q32 Mr Breed: The Stern Review suggests
that while aviation CO2 emissions account for 1.6%
of global greenhouse gas emissions the impact of that activity
is two to four times higher than the impact of CO2
emissions alone. First, do you agree with that analysis? Second,
it is undoubtedly true that aviation is a growth industry and
therefore Stern's projections suggest that aviation's contributions
to global greenhouse gas emissions will be 2.5% by 2050. Have
the airlines funded or undertaken any research at all into the
non-CO2 impacts of aviation?
Mr Kershaw: There is no doubt
that there are other effects in addition to CO2 emissions.
Those effects are different in nature. They are, for example,
over a much shorter lifetime. Equally, the scientific understanding
of those impacts is far less than we have for CO2 emissions.
In addition, the metric used to generate multiples of CO2
has recently been questioned by the scientific community as an
appropriate way to quantify those non-CO2 effects.
While undoubtedly there are other effects and the industry takes
the view that it needs to address them appropriately, there is
a lot of uncertainty surrounding them. What is of prime importance
for those effects is to improve the scientific understanding.
The industry is involved in programmes to take forward that understanding.
For example, there is an EU-funded programme called IAGOS in which
British Airways and Airbus look to improve the way we collect
information about the atmospheric chemistry and some of the processes
that occur in the atmosphere. These issues could be important.
We need to understand them better. Once we have understood them
better we can assess the most appropriate mechanisms to manage
those effects. As to the growth projections you mentioned, certainly
aviation is expected to grow in future to meet the demand for
international air transport. I do not think we disagree with the
projections outlined by Stern, apart from saying that any assumptions
about growth in the distant future must have uncertainties associated
with them. We will not know precisely what levels of emissions
from various sources will be in the future, and I think that does
depend hugely on the policy measures put in place and the way
the international community deals with the issue of climate change.
Q33 Mr Breed: But it is not an unreasonable
assessment at the present time?
Mr Kershaw: I do not think it
is unreasonable.
Mr Humphreys: Even if one accepts
that there is a double multiplier effect taking it from 2.5% to
5% one is still left with a relatively small proportion of total
emissions accounted for by aviation, which is a very different
impression that one often gets from press reports in which, to
be honest, aviation has become a bit of a whipping boy. We are
delighted to see that in the Stern Review there is a more considered
approach to that.
Mr Barker: The Stern Review mentions
the targets of the Advisory Council for Aeronautics Research in
Europe (ACARE) for aviation in 2020 to which we have all signed
up. We intend to participate in the development of aircraft that
will reduce CO2 emissions by 50% and NOx emissions
by 80%, so we are all fully participating in the developments
of the new technologies and we are glad that Stern highlights
the potential for them.
Q34 Chairman: The UK aviation sector
currently accounts for about 5.5% of the UK's total CO2
output, and it could rise to about 15% by 2030, according to Stern.
He also goes on to say—the Government accept this—that
the effect of all aviation emissions is at least two to four times
greater than the effect of CO2 emissions alone. How
seriously does the aviation industry take the problem of climate
change given the fact that aviation emissions are at least two
to four times greater than others?
Mr Wiltshire: I think the specific
response to that is the answer given by my colleague Mr Kershaw
when he was referring to multipliers. The industry in this country,
the airlines, airports, manufacturers and air traffic control,
produced a sustainability strategy in the middle of 2005 called
Sustainable Aviation which clearly accepts and describes
those effects. Clearly, they are very different from the effects
of CO2. We need to understand the science and issues
better. We also need to understand the way in which those effects
have an impact on the climate. The current metric is not robust
enough to enable us to do that.
Q35 Chairman: But the science is
that aircraft are responsible for high altitude emissions of NOx
and the formation of water vapour, clouds and other things. Therefore,
it is that which contributes to the two to four times, so there
is in a sense a uniqueness about the aviation industry compared
with other industries that emit CO2.
Mr Wiltshire: I think that other
land-based industries also have what are called non-CO2
effects. The same metric of radiative forcing that is used to
develop the multiplier in aviation is used for land-based industries.
Q36 Chairman: But do you accept that
point?
Mr Wiltshire: What we do not accept
is that the science points to multiplying the carbon. The nature
of the impacts is so different that one cannot readily multiply.
I understand that various reports have mentioned the multiplier.
We feel that the impacts other than carbon are so different as
to require their own specific and appropriate measures.
Q37 Mr Mudie In its paper British
Airways mentions Sustainable Aviation. Can you say something
about that?
Mr Kershaw: The group that produced
Sustainable Aviation is a collection of aviation industries
in the UK, so it includes the major airlines, airports, manufacturers
and the air traffic control provider (NATS). The strategy was
produced in June 2005. It aims to outline steps that the industry
can take, together with government, with a view to aviation contributing
fully to sustainable development objectives. It outlines action
that we believe the industry and government should take in the
key areas of sustainability as it relates to aviation, so it includes
the climate change impacts, noise and air quality, and it also
speaks about the social and economic contributions of aviation.
Q38 Mr Mudie: You mention Sustainable
Aviation in paragraph 7, but in paragraph 6 you spell out
the key objective of climate change policy. That seems to be straightforward.
You mention climate change. Tell us in detail how that aspect
of Sustainable Aviation meets paragraph 6?
Mr Kershaw: First, it is important
to point out that the industry takes climate change extremely
seriously as a key issue that needs to be managed. The aviation
industry accepts that it must be part of efforts to manage climate
change in the long term and needs to find effective mechanisms
to allow aviation to play its part. Specifically in relation to
the paragraph to which you referred, the text comes from the United
Nations Framework Convention on Climate Change (UNFCCC) and refers
to the objective that globally we need to stabilise concentrations
of greenhouse gases at safe levels. The safe levels are those
determined by the scientific community, with stabilisation requiring
global effort to limit CO2 emissions and other greenhouse
gases. The Sustainable Aviation strategy is that aviation
should be incorporated into a framework to achieve that objective.
One of the ways that we need to move it forward is to include
aviation and the air transport sector in post-Kyoto frameworks
to deal with climate change. Currently, aviation is excluded from
the Kyoto process and that is not helpful in terms of allowing
aviation to play its full part in addressing climate change. One
of the principles within Sustainable Aviation is that air
transport should be included in a global framework to address
climate change. It goes on to point out that emissions trading
is by far the most environmentally effective and economically
efficient mechanism to deal with air transport CO2
emissions.
Q39 Mr Mudie: A lot of that was words
and projecting the future. To be fair, what it comes down to is
that you should join with the international body and do emissions
trading not within the industry, so the growth of the industry
will continue but you will offset it by trading with other industries.
Is that a fair reflection? I am sorry to pick on you but your
paper was before me. It is the view of the industry that at the
moment generally it is doing very little but when it is pushed
it will join internationally, not limit its behaviour but trade
with other industries globally?
Mr Kershaw: That is the objective
of the industry. The UK is leading in bringing aviation into emissions
trading and a good solid first step is the inclusion of aviation
in the EU emissions trading scheme.
Mr Wiltshire: Referring to our
track record, the industry is not doing nothing. It has improved
its fuel efficiency over the past 30 years by 50%. As mentioned
earlier, it wants to continue that progress in future.
Mr Humphreys: Sustainable Aviation
has firm commitments to make substantial further improvements.
The report produced in December indicated that the industry as
a whole is well on the way to achieving those commitments. They
will result in significant improvements.
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