The Airports Commission Report: Carbon Emissions, Air Quality and Noise Contents

2Carbon Emissions

The Policy Framework

6.The UK Government has a legally binding target under the Climate Change Act 2008 (“the 2008 Act”) to reduce greenhouse gas emissions by at least 80% by 2050 compared to 1990 levels. The Act requires the Government to set legally binding “carbon budgets” - a cap on the amount of greenhouse gases emitted in the UK over a five-year period.

7.The Committee on Climate Change (CCC) provides advice to the Government on the appropriate level of each carbon budget. These budgets seek a cost effective path to achieving the target. The first four carbon budgets have been put into legislation. The CCC recently provided advice to the Government on the fifth carbon budget.

8.The 2008 Act did not initially require the inclusion of international aviation emissions within either carbon budgets or the 2050 target. In 2009 the then-Government set a target that UK gross aviation emissions will be no more than 2005 levels - 37.5 MtCO2 - in 2050. The CCC set out a range of options to meet this target and built a “planning assumption” into carbon budgets to cover aviation emissions.3 The CCC has built an assumption of meeting the planning assumption alongside 60% passenger growth into the reductions it recommends for other sectors of the economy. Professor Dame Julia King, a former Member of the Airports Commission who also sits on the CCC, told us that, as a result, “by 2050 the rest of the economy will be looking at reductions above 80%, approaching 90%.”4 The CCC has said, in a letter to the Commission, that this is “at the limit of what is feasible”.5

The Impact of Expansion

9.Sir Howard told us that, without mitigation, the construction of a third runway would increase the projected carbon dioxide (CO2) emissions of UK aviation by a little under 10%. He observed that, at present, aviation comprised around 6% of emissions, but that over time the proportion would increase because of specific challenges involved in converting jet engines to low carbon fuels. By 2040 the Commission estimated aviation would comprise around 24% of national emissions.6

10.The Commission’s final report focused primarily on the “Assessment of Need” demand scenario. Some witnesses questioned whether the Commission’s final report took sufficient account of the range of possible carbon policies and air quality outcomes that would result under different demand scenarios.7 There has also been criticism that the scenario “project[s] the present into the future with essentially linear trends, even predicting which routes will be flown from where. The modellers’ future world is much like it is now, only busier.”8 The Government, when making a decision, will need to consider its carbon emissions mitigation against the full range of demand scenarios modelled by the Commission.

The Commission’s Approach

11. The Commission modelled demand for aviation against two carbon policy scenarios. The first was a carbon-capped scenario which assumed no international action to limit aviation emissions and UK policy action to limit emissions to the CCC’s planning assumption. Under this scenario, the Commission modelled a theoretical national carbon price of £334 per tonne of CO2 by 2050 to limit aviation demand such that the CCC’s planning assumption could be met with no expansion (the current UK carbon price floor is £18.50).9 The Commission also modelled a number of additional measures - use of biofuels, operational improvements and larger, more efficient aircraft.10 The combined effect of these measures allowed the Commission to meet the planning assumption by 2050 under its central “Assessment of Need” scenario for aviation demand with a third runway at Heathrow.

12.The second carbon policy was a carbon-traded scenario which assumed the operation of the European Emissions Trading System in respect of aviation until 2030. After that it assumed a “complete liberalised global market” for carbon emissions which would allow aviation to “buy in” credits from other sectors of the economy. Here, the carbon price assumed was just under £200 per tonne by 2050, in line with forecasts made by the Department for Energy and Climate Change and those used by the CCC in their 2009 review of aviation (the current EU Emissions Trading Scheme Phase III price is €8.54).11

13.The former Commissioners told us that the two policy scenarios were extremes, and that the reality was likely to be somewhere between the two.12 They also stressed that they had not made concrete policy proposals; preferring to leave that to the CCC.13

14.The former Airports Commissioners told us they relied heavily on the work of the Committee on Climate Change when undertaking their work. They denied that their modelled carbon prices and policies were policy recommendations - feeling that the CCC were better placed to take on this role. Governments have in the past been reluctant to accept CCC policy recommendations on aviation. The Government cannot credibly rely on the Commission’s analysis as evidence that Heathrow expansion can be delivered within the limits set by the 2008 Act if this continues to be the case. We recommend that the Government give the CCC the opportunity to comment on the Commission’s forecasting of aviation emissions and the feasibility of its possible carbon policy scenarios. The Government should act on any recommendations they make.

Views on the Commission’s Approach

15.A significant theme that emerged in the evidence we received were doubts about whether the theoretical policies underpinning the Commission’s analysis could be achieved in practice. Cait Hewitt of the Aviation Environment Federation (AEF) summarised two key points that were made to us by a number of organisations:

What comes through from the Committee on Climate Change work, from the Government’s own forecasts and even from the Airports Commission’s forecast—which is significantly lower in CO2, in fact, than the Government’s—is that they anticipate, even with the baseline before you add capacity, that emissions are going to overshoot the level recommended of 37.5 million tonnes. Very briefly, the second challenge is that in adding new capacity the Airports Commission has admitted that you are going to increase the scale of that challenge, yet they have made no recommendations in terms of concrete policy proposals for how the Government should mitigate that. In fact it quite openly put the challenge back to Government in terms of tackling the climate change impact.14

16.The evidence we received from the industry was more positive. Virgin Atlantic, Rolls Royce and others pointed to work that has already been done to reduce carbon emissions from flights.15 John Holland-Kaye, CEO of Heathrow Ltd., told us that, since the Commission’s report, the international industry had signed up to “no growth in net carbon emissions from 2020.” He believed that Heathrow and the industry could prosper even under the carbon-capped scenario.16 Dr Andy Jefferson, Director of Sustainable Aviation, told us:

Using the DfT’s forecast of 2013 and the aviation forecast of 2015, [our carbon] roadmap shows that, based on what we could see being achievable through improved airspace efficiencies; through improved operating techniques; significantly, through new aerospace technology developments and the integration of those new technologies in new aircraft being purchased by UK airlines; and, finally, through sustainable fuels for aviation, you can, effectively, achieve growth in aviation without any significant increase in absolute CO2 emissions.17

17.The Commission’s indicative carbon prices and policies were not intended as recommendations. Nonetheless, they give an indication of the scale of intervention likely to be required to bring aviation emissions within 2005 levels by 2050. Before making any decision on Heathrow expansion, the Government should publish an assessment of the likely impact on the aviation industry - particularly regional airports - and wider economy of measures to mitigate the likely level of additional emissions from Heathrow.

Biofuels

18.The Commission’s analysis used biofuel use as a key policy measure to reduce emissions.18 Biofuels also play a key (and much larger, according to Dame Julia) role in Sustainable Aviation’s “roadmap” for lower aviation emissions.19 Industry witnesses urged the Government to support the development of biofuels, whilst evidence from Rolls Royce and Virgin Atlantic stressed their progress on sustainable fuels to date.20 Dr Jefferson urged the Government to invest in a “relatively modest grant scheme that would be less than £2 million” to demonstrate it was serious about these fuels.21 He also anticipated some of the criticisms from environmental groups set out below, by telling us they were researching “advanced fuels” that did not incur land use change or impact on the sustainability of food supplies - for example by using waste products.22

19.Environmental groups were cautious about the potential take-up and effectiveness of moving to biofuels. WWF argued that it should be encouraged, but that the life-cycle impact of the fuels needed to be taken into account, including the impact of changes in direct and indirect land use.23 More widely, the use of some biofuels has to be integrated with food security concerns to limit potential negative impacts.24 Fellow Travellers noted that biofuel use had increased overall emissions from road transport in Europe. They argued the CCC’s 2009 estimate of biofuel penetration now seemed “improbably high.”25 Finally, AEF noted that the Department for Transport currently envisages a very small role for biofuels by 2020 and questioned whether the Government and industry would accept the level of intervention to support biofuels envisaged by the Commission in the carbon-capped scenario.26

20.The Government should consider developing a policy framework to advise industry about how to prioritise trade-offs between noise and carbon pollution when adopting biofuels thus giving guidance on priorities.

21.The Commission, industry and Committee on Climate Change envisage biofuels playing a limited role in controlling aviation emissions. However, the use of biofuels is not without its own risks and uncertainties. The Government must either examine the options to encourage aviation to move to advanced fuels that are sustainable across their entire life cycle (including indirect land use change and impacts on food supplies) or identify ways in which corresponding emissions reductions will be achieved.

Market-based Emissions Mechanisms

22.A particular cause of contention was the role of emissions trading or mandatory off-set schemes. There was a degree of agreement that aviation emissions were best addressed within an effective international framework. The Government has held off accepting some CCC recommendations on aviation in anticipation of such a framework.27 Whilst the European Union Emissions Trading System (EUTS) applies to aviation, much of it is “paused” ahead of agreement by the International Civil Aviation Organisation of international measures next year.28

23.Sustainable Aviation told us that a market-based scheme would be a necessary part of their “road map” towards a net reduction of 50% in UK aviation emissions by 2050.29 Heathrow advocated integrating a carbon price into the cost of air travel through a market-based mechanism involving other sectors. Matt Gorman told us:

People pay more to travel; that gets invested in stimulating the low-carbon economy we need in the UK and more broadly.30

24.However, there was scepticism among other witnesses that the measures currently proposed were sufficient. AEF submitted detailed written evidence suggesting that the currently discussed proposals at the International Civil Aviation Organisation would result in weaker measures than those modelled by the Commission. They also observed that the Commission’s carbon traded scenario did not - in itself - lead to the planning assumption being met.31 Fellow Travellers pointed to weaknesses in the operation of the EUETS.32 The Commission had also assumed that carbon “credits” from other sectors would be “fully available”, something that Richmond Heathrow Campaign questioned.33

25.The Government should set out its approach to the International Civil Aviation Organisation negotiations as the previous Government did ahead of the COP 21 negotiations in Paris. It will need to demonstrate either that the agreement it is seeking can incentivise the absolute carbon emission reductions required to meet the planning assumption or what measures it is prepared to take and to what timescale in order to make up the shortfall.

Operational and Fleet Improvements

26.Dr Jefferson observed that fuel was the second largest cost involved in aviation and that there was a strong market incentive on airlines to pursue fuel efficiency.34 Evidence from the industry pointed to improvements they had made - whether through fleet design, reductions to taxing and standing time or reducing the amount of weight carried on aircraft. Virgin Atlantic, for example, said they had reduced their CO2 per Revenue Tonne Kilometre by 10% since 2007.35 Heathrow argued that expansion would allow them to eliminate the routine “stacking” of planes.36 Several witnesses noted that the Commission’s assumptions around operational improvements had been praised for “uncommon reasonableness”.37

27.Whilst AEF acknowledged the Commission’s analysis had been sceptical about fuel efficiency through direct routing, they raised some concerns about the scale of improvements envisaged by the Commission. They argued some of the improvements mandated by the Commission in the carbon-capped scenario would be likely to meet industry opposition. They also queried a 15% reduction in the level of forecast emissions for 2050 relative to the last Department for Transport (DfT) forecast in 2013. 38 The Commission argued this had emerged out of a substantial piece of work they had done on the use of larger, more efficient aircraft.39

28.There are some areas of the Commission’s work on operational and technological improvements that are still the subject of significant disagreement. We urge the Government to produce and publish its own thorough evaluation of the forecasts, including its assessment of whether take-up is likely to be sufficient without Government intervention.

Carbon Emissions - Overall Conclusions

29.We draw four conclusions from the evidence we heard on carbon emissions. Firstly, because the planning assumption requires additional decarbonisation from other sectors, passenger growth in aviation cannot be seen in isolation from the progress on emissions reduction made by the rest of the economy. Secondly, the industry has taken steps to reduce its carbon emissions and, in areas such as fuel efficiency, market incentives are likely to ensure further progress. Thirdly, these measures in themselves are highly unlikely to achieve the planning assumption and further measures, including demand management, will be required. Finally, there is a significant gap between the theoretical models of how a mixture of these measures might allow the planning assumption to be met and the proposals currently on the domestic and international policy tables.

30.We recommend that any Government decision on airport expansion should be accompanied by a package of measures to demonstrate a commitment to bringing emissions from international aviation within the economy-wide target set by the 2008 Act. They should also, as a minimum, commit to accepting the Committee on Climate Change’s advice on aviation in relation to the fifth carbon budget, introducing an effective policy framework to bring aviation emissions to 2005 levels by 2050 no later than autumn 2016 and pressing for the strongest possible international measures at the International Civil Aviation Organisation next year.

3 Aviation Factsheet, Committee on Climate Change, accessed November 2011

4 Oral evidence, 4 November 2015, Q 142

5 Letter from Lord Deben, Chair of the Committee on Climate Change, to Sir Howard Davies, July 2013

6 Oral evidence, 4 November, 2015, Q 166

7 Written evidence, Fellow Travellers

8 John Kay, Heathrow versus Gatwick, the Flawed Case for Expansion, Financial Times, November 3 2015

9 Carbon Price Floor, Standard Note, House of Commons Library

10 Carbon Policy Sensitivity Test, Airports Commission, July 2015, Table 3.9 sets out the contribution of each measure towards meeting the planning assumption; the technological improvements are incorporated within the level of emissions assumed by the Commission, Oral Evidence, 4 November, Q 158, Sir Howard Davies

11 Airports Commission, Final Report, para. 3.50

12 Oral evidence, 4 November 2015, Q 164, Phillip Graham

13 Oral evidence, 4 November 2015, Q 140, Sir Howard Davies

14 Oral evidence, 14 October 2015, Q 1; see also written evidence from Friends of the Earth: England, Wales and Northern Ireland, WWF, RSPB

15 Written evidence, Virgin Atlantic, Rolls Royce

16 Oral evidence, 4 November 2015, Q 73

17 Oral evidence, 14 October 2015, 2015, Q 2

18 Oral evidence, Professor Dame Julia King, 4 November 2015, Q 156

19 Sustainable Aviation, CO2 Roadmap, pg 1

20 Written evidence, Rolls Royce; Virgin Atlantic; Manchester Airport Group

21 Oral evidence, Dr Andy Jefferson, 14 October 2015, Q 32

22 Oral evidence, 14 October 2015, Q 8

23 Written evidence, WWF, para. 17-18

24 High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security, Rome 2013

25 Written evidence, Fellow Travellers, para. 18

26 Oral evidence, 14 October 2015, Cait Hewitt, Q 24; Written evidence, AEF

27 John Holland-Kaye, Heathrow Ltd., Oral Evidence, 4 November 2015, Q 86; Government Response to the Seventh Annual Report of the Committee on Climate Change: Mitigation, Department for Energy and Climate Change, paras. 5.26 - 5.28

28 Airports Commission Final Report, para. 2.66

29 Oral evidence, 14 October 2015, Q 4

30 Oral evidence, 4 November 2015, Q 80

31 AEF, supplementary written evidence

32 Supplementary written evidence, Aviation Environment Federation; written evidence, Fellow Travellers

33 Oral evidence, 4 November 2015, Q 163; Written evidence, Richmond Heathrow Campaign

34 Oral evidence, 14 October 2015, Q 24

35 Written evidence, Virgin Atlantic

36 Oral evidence, 4 November 2015, Q 90

37 For example, Written Evidence, Amec Foster Wheeler Environment & Infrastructure UK Limited

38 Written evidence, AEF, para. 15

39 Oral evidence, 4 November 2015, Sir Howard Davies, Q 158




© Parliamentary copyright 2015

Prepared 30 November 2015