Examination of Witnesses (Questions 60
- 79)
TUESDAY 23 JANUARY 2007
MR ROGER
WILTSHIRE, MR
ANDY KERSHAW,
MR ANDREW
BARKER AND
MR BARRY
HUMPHREYS
Q60 Mr Todd: But you could apply
a direct tool that imposed differential charges on airport usage
for some of the clattering old bangers that run on freight-only
activities, for example. We do not have a pure freight operator
here to defend its corner, but presumably you may have some sympathy
for that view.
Mr Wiltshire: The British Air
Transport Association represents one pure freight operator based
in the East Midlands, which is DHL. I think that it supports the
approach on emissions trading and realises that its operation
like that of any other operator would be caught up in that. Therefore,
its efficiency in terms of emissions per payload tonne would be
an important factor in whether it cost it a lot or a little to
be part of the scheme.
Q61 Mr Todd: Or you could simply
approach it through regulation by saying that no aircraft of a
certain kind would be permitted to fly into airports in this country?
Mr Humphreys: I think it is just
a question of efficiency. What is the best way to achieve the
objectives that we all have? Overall, ETS seems the best way to
do it. Undoubtedly, there are other ways, but in our view the
most efficient is ETS.
Q62 Mr Todd: You were about to outline
your thoughts on hypothecation.
Mr Humphreys: We have already
mentioned that we would be far happier with the APD if the money
collected by the Chancellor was used for environmental purposes.
The principle of hypothecation on that tax has already been accepted
by the Treasury, because 20% of the money goes to African development
funds. At the moment there is no element of incentive and the
public cannot see any environmental benefit directly from that
tax.
Q63 Mr Todd: One of the submissions
suggested that additional support should be provided for research
into more environmentally friendly aeronautic technologies. Should
you not be doing that yourselves?
Mr Barker: We are doing that,
and we invest very heavily every year. Over the past six weeks
I have spent time with Airbus at Toulouse and Boeing in Seattle,
and I am spending the rest of this week with Rolls-Royce in Derby,
effectively co-operating with them on the development of their
next technologies. Therefore, we are spending management time
on this matter and also investing capital every year to buy the
latest technology.
Q64 Mr Todd: What is the profile
of your industry on R&D in this area? After all, most of the
aircraft that you operate are, presumably, leased rather than
bought and you do not directly engage with aeronautic manufacturers
and engine suppliers, do you?
Mr Barker: We directly engage
with and buy our equipment from manufacturers.
Q65 Mr Todd: Do you fund R&D
with them?
Mr Barker: Yes.
Q66 Mr Todd: To what extent? You
mentioned one activity which involved a visit.
Mr Barker: I do not have the Airbus
number in my head, but last year Boeing spent on civil R&D
$1.3 billion.
Q67 Mr Todd: I entirely accept your
point as far as concerns manufacturers.
Mr Barker: That cost is priced
onto the planes. Therefore, if we buy the latest aircraft effectively
we are paying for their R&D.
Q68 Mr Todd: But you do not do any
yourselves?
Mr Humphreys: It is not a very
big number.
Q69 Mr Todd: Should you?
Mr Wiltshire: The matter in which
we are interested is the atmospheric research mentioned earlier.
One of the solutions to some of the non-CO2 impacts
may be an operational one which is directly where airlines would
be involved, for example avoidance of the creation of condensation
trails which is a fairly straightforward procedure. At the moment
that would cost us in fuel which in turn would mean more CO2
emissions. Until we have a much better quantification of that
impact it would be wrong to take such an operational measure.
But operational measures are important. Research and development
of the technology of the aircraft are very much at the heart of
what the manufacturer puts before us. It is important that they
get the right research and development investment and, where necessary,
support for what I may call the further out technologies, that
is, technologies that are just about on the horizon now but may
be pulled into the industry and need that incentive. I think that
is where governments across the world can be more helpful.
Q70 Mr Todd: We are familiar with
the difficulties of imposing a global tax on aviation fuel. What
steps are you aware of to address some of the issues that currently
confront its introduction?
Mr Kershaw: As we said earlier,
we believe that emissions trading is a far more effective policy
measure to address aviation emissions than taxation. At the international
level through the International Civil Aviation Organisation there
is a piece of work that looks at emissions trading at international
level. The guidance for that has just been developed and hopefully
will be adopted in the near future. UK industry is heavily involved
in supporting that work and taking forward those steps to build
the framework to be able to bring aviation into emissions trading.
Q71 Mr Todd: But we have already
heard that there are objections to that concept from major American
airlines.
Mr Kershaw: There are difficulties
in terms of climate change policy globally, aviation and other
sectors included. We believe that the appropriate approach is
to demonstrate effective policy and technology measures to the
rest of the world and in doing so hopefully those states will
accept that such measures are cost-effective, workable and sustainable.
Q72 Mr Todd: Which would be more
difficult—to introduce a global ETS or to agree amendments
to ICAO rules to create flexibility in the taxation of aviation
fuel?
Mr Kershaw: I believe that it
would be easier to implement global emissions trading purely on
the basis that that would be seen as a far more cost-effective
solution. The ICAO analysis of taxation of aviation demonstrated
that a tax focused on aviation to meet hypothetical targets related
to Kyoto would cost the industry in 1992 US$245 billion a year
in 1992 dollars, whereas open emissions trading where aviation
would be able to buy and sell outside the aviation sector was
estimated to cost between US$1 billion and US$60 billion. The
range reflects the fact that one can make different assumptions
within emissions trading, but the basic point is that taxation
at international level would be hugely more costly. Equally, it
would take away from the industry funds that it would be able
to invest in new technology. In addition, with emissions trading
the money would be flowing to where environmental improvements
could best be made globally. At international level the focus
is to bring aviation into emissions trading, and the UK and EU
have a unique opportunity to demonstrate emissions trading as
a practicable solution to address air transport climate change
impacts.
Q73 Peter Viggers: Has anyone ever
suggested emissions trading for military aircraft?
Mr Kershaw: It has been suggested.
I do not know what conclusions have been drawn, but I believe
that the current Commission proposal does not include military
aviation.
Q74 John Thurso: It has been mooted.
When I was a transport spokesman I had the pleasure of meeting
many of you in the aviation industry. It seemed that when we discussed
these issues you always expressed great concern, and it was always
followed up by stressing the market mechanisms, with which perhaps
I was broadly sympathetic, and finally the need for anything to
be done on an international basis. If one takes market mechanisms
and the international basis together it always strikes me that
it is a recipe for masterful inactivity because one is unlikely
to see anything in the short term. Given that we do need to do
something real in the short term, why should we not consider an
airplane departure tax as opposed to a passenger departure tax
which would have the benefit of pulling in freight aircraft, which
currently pay absolutely nothing, and putting that tax cost directly
onto the industry rather than the passenger and, therefore, the
more people one put in the aircraft the less tax per passenger?
Mr Wiltshire: In a way, that is
a small step towards something much more sophisticated like emissions
trading. Although it perhaps would capture a different range of
aircraft it still does not create an incentive for airlines to
invest in better technology. It is really moving around the deckchairs.
Q75 John Thurso: It would if one
based the tax on the carbon emissions of the particular aircraft,
which would be very easy to do?
Mr Wiltshire: That is a further
step towards emissions trading; one is getting closer to the fundamental
of emissions trading which is that airlines measure and report
their emissions and have the price of carbon built into them.
That is exactly what the UK airlines have done in their report
Sustainable Aviation in the past two months. That is a
way of explaining to the rest of the industry the way forward
as far as their environmental costs are concerned.
Q76 John Thurso: As an industry would
you prefer an airplane departure tax to a passenger departure
duty?
Mr Wiltshire: We prefer a mechanism
based on the emissions from the aircraft which is dealt with like
other emitters of CO2, which is the same whatever the
source.
Q77 John Thurso: I return to the
Chairman's question about radiative forcing. The Royal Commission
on Environmental Pollution estimated that radiative forcing was
about 2.7. I believe that was the multiplier it used for the impacts
of CO2. In your answer you said that you really needed
to study all the other gases, but it also pointed out the fact
that all the other gases—methane, NOx, ozone and water vapour—could
quite easily be converted to a carbon equivalent. If we in this
country are serious about something in the order of a 60% reduction
in CO2 by around 2050, excluding aviation, we are looking
at a fall from 168 to 67 metric tonnes of carbon. Over the same
period aviation is forecast to rise from 4.6% to 17.4%. If one
then puts in the multiplier of radiative forcing one goes from
4.6% to 17.4%. One has a situation where the country as a whole
is aiming for 67 metric tonnes of carbon and aviation is responsible
for the equivalent of 43.5 which is 80% of the national level
of carbon emissions. Does that not put into perspective the current
claim that you are responsible for only 0.1% of global emissions?
Mr Wiltshire: The last figure
you gave is accurate.
Q78 John Thurso: Does that imply
that the other ones are not?
Mr Wiltshire: No. In the global
sense we are 0.1% of CO2 emissions. We recognise the
non-CO2 effects of aviation but not the easy mathematical
ability to multiply those to come to some sort of carbon equivalent.
They are so different as effects that one needs to understand
each of the individual impacts. You mentioned methane. We absorb
methane; we are a good thing from a climate change point of view
when it comes to methane. Aircraft emissions reduce methane. Methane
has a certain lifespan. Ozone which is the culprit, if you like,
for Nitrogen oxides emissions, has a shorter lifespan. How are
we to compare and contrast those two effects from the Nitrogen
oxides emissions? That science needs to tell us and at the moment
it cannot do so. The science tells us that radiative forcing is
a very inappropriate and mathematically incorrect way to do that;
it is worse than adding together apples, pears and oranges.
Q79 John Thurso: In that case, why
would the Royal Commission on Environmental Pollution have made
so much of it?
Mr Wiltshire: I think they used
the IPCC diagram which implied that these things could be added
up and came up with radiative forcing. The important issue is
not radiative forcing but the climate change impact. The radiative
forcing is not the metric used to describe, for example, the effect
of CO2 on the climate or the temperature of the earth.
A different metric is used and as yet no use is made of that for
other impacts.
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