46.In our interim report, we examined the Airports Commission’s analysis of the potential impact of differing carbon policies on the viability of expanding airport capacity in the South East of England. By far the largest climate change impacts come from additional international flights, we have therefore focused on these rather than the mitigation measures proposed in relation to construction and operation. We found a significant policy gap between aviation emissions policy as it stood and the measures modelled by the Commission. We noted that, whilst the Airports Commission had modelled various carbon policy scenarios, it had not made recommendations on how emissions should be managed. The former Commissioners argued this was for the Committee on Climate Change. We recommended that the Government’s 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 Climate Change Act 2008.
47.Since our interim report, the Government has legislated for the Fifth Carbon Budget, which starts in 2028, but is yet to publish its plan for meeting the Budget. The International Civil Aviation Organisation’s (ICAO) has also agreed a Global Carbon Offsetting and Reduction Scheme (CORSIA). The UK has indicated it will participate from the beginning of the scheme in 2021.
48.In announcing the Government’s decision, the Secretary of State for Transport said “it [Heathrow expansion] can be delivered within carbon [...] limits”. The draft National Policy Statement document repeats this claim–acknowledging that the Heathrow additional runway scheme generates the most additional CO2, but stating this was not considered a differentiating factor between schemes because “The Airports Commission concluded that any one of the three shortlisted schemes could be delivered within the UK’s climate change obligations, as well as showing that a mix of policy measures and technologies could be employed to meet the Committee of [sic.] Climate Change’s planning assumption”. The Government has said it will update its aviation strategy—including on carbon emissions—later this year.
49.As set out in our interim report, the Committee on Climate Change and Government are required by the Climate Change Act 2008 to take international aviation emissions into account when setting carbon budgets. To do this, the Committee on Climate Change includes “an appropriate planning assumption” into carbon budgets for the purposes of setting contributions from other sectors. This assumes that UK gross international aviation emissions will be no more than 2005 levels—37.5 MtCO2—in 2050. This is in line with a target set by the then-Government in 2009 and has been described by the CCC as consistent with passenger growth of around 60% over the 2005–2050 period. This is less than the carbon reduction targets set for other sectors, such as energy or industry, reflecting the technical challenges of developing non-fossil fuel alternatives for aviation fuel.
50.The status of the planning assumption in relation to Government policy has been the source of some confusion during our inquiry. The Secretary of State told us “there is no law of the land that requires us to meet any particular [international aviation emissions reduction] target” and pointed out that the Climate Change Act 2008 does not require international aviation to be included in the carbon budgets. However, the planning assumption played a key role in the Airports Commission’s report and was perceived by some of our witnesses, including Heathrow Ltd. itself, to be a Government target.
51.The aviation industry also has its own emissions reductions targets, although they are less ambitious than the CCC’s planning assumption which was used by the Government when legislating for the Fifth Carbon Budget. The ICAO agreement aims at a “global aspirational goal of keeping the global net CO2 emissions from international aviation from 2020 at the same level”. The Aviation Environment Federation (AEF) have set out a number of ways in which it falls short of meeting the planning assumption and, as we set out below, it assumes carbon prices lower than those assumed under the Airports Commission’s carbon-traded model. Sustainable Aviation published a “CO2 Road Map” in 2012 which aimed to show how the UK aviation industry could “accommodate significant growth to 2050 without a substantial increase in absolute CO2 emissions” and reduce net levels to 50% of 2005 levels through internationally agreed carbon trading. The planning assumption requires reductions in actual emissions to 2005 levels, as opposed to calculating net emissions after the operation of a carbon trading system, which both the ICAO and Sustainable Aviation focus on.
52.Whilst international aviation is not yet included in carbon budgets, other sectors’ contributions have been calculated assuming that the planning assumption for international aviation will be met by 2050. This point was made in a letter from the Chairman of the CCC, Lord Deben, to the Secretary of State for BEIS, Rt Hon Greg Clark MP, following the Government’s announcement on Heathrow. Lord Deben noted that the Government’s headline analysis of the costs and benefits of expansion in its announcement on expansion was based on modelling which assumed the planning assumption would be exceeded by 15% in 2050. Lord Deben observed that exceeding the planning assumption would result in other sectors having to make deeper reductions in their emissions. He said the CCC has “limited confidence” that such reductions could be achieved. We also note that the modelling used by the Airports Commission in this scenario assumes the UK’s continued participation in the European Emissions Trading Scheme up to 2030.
53.The Government intends to set out further details about its approach to aviation emissions in a series of documents to be published later this year. Caroline Low said the Government would be looking to put “flesh on the bones” of the Airports Commission’s carbon sensitivity model. The Government argued this analysis demonstrates it is possible to meet the planning assumption with a higher rate of passenger growth—80% between 2005 and 2050—than the CCC believes is compatible. The Secretary of State said that three elements would make this possible: improvements in aircraft efficiency, biofuels (which the Government has just launched a consultation on) and the ICAO agreement on offsetting. In our interim report we noted that current Government policy fell short of meeting some of the assumptions modelled by the Commission in these areas alongside concerns that some of these may not be achievable practically or politically.
54.Although the Secretary of State argued that the Airports Commission Report showed it was possible to deliver Heathrow expansion and additional passenger growth whilst still meeting the planning assumption, he did not say that this was necessarily the Government’s intention. He told us that the Government had not decided whether it intended to work towards the planning assumption. Nor had the Government decided whether to work towards a target of reducing actual aviation emissions (as recommended by the CCC) or one of reducing net emissions (which would count offset emissions as a reduction). We asked whether he had consulted other Ministers or sectors over the higher emissions reductions that they might be required to make if the planning assumption was not met. He said he had not yet done so.
55.In its draft National Policy Statement, the Government states that the Airports Commission Report showed “that a mix of policy measures and technologies could be employed to meet the Committee of Climate Change’s [sic.] planning assumption”. In our interim report, we identified a “policy gap” between the theoretical measures modelled by the Airports Commission to control aviation emissions and current policy. The AEF, in their supplementary evidence, argued that the Government had tacitly accepted the existence of a policy gap in their announcement and had decided to dispense with the planning assumption rather than try to meet it. The Secretary of State denied that such a gap existed—citing the Airports Commission’s work and the measures discussed above. The draft National Policy Statement states that Heathrow Airport will be expected to take “ambitious measures” to limit carbon emissions, however, as discussed earlier, the main generator of CO2 will be through flights themselves.
56.As an example, we asked the Secretary of State about carbon prices. The ICAO envisages a carbon price of between $12 and $40 per tonne in 2035. The price modelled by the Commission for 2035—under the carbon-traded scenario which underpins the headline figures in the Government’s announcement and which would miss the planning assumption by 15% in 2050—was £101 per tonne. For other scenarios, particularly the carbon-capped scenario in which the planning assumption is met—the price modelled by the Commission was higher. We note the uncertainty in carbon price forecasts, and that the price of an emissions allowance in the EU’s Emissions Trading Scheme was around €4.60 when this report was produced. In our interim report we remarked that these “give an indication of the scale of intervention likely to be required” to meet the CCC’s planning assumption.
57.In our interim report we noted scepticism from some witnesses that future Governments would be likely to sign up to such prices, although Heathrow Ltd. were confident of their ability to prosper under them. In oral evidence, to the Committee in 2015, the former Commissioner, Professor Dame Julia King, agreed that the lower carbon prices–for the carbon traded model–were in line with CCC and Government modelling, but higher prices–those needed to meet the planning assumption–“are such high carbon prices that [...] I do not think it is entirely sensible to regard them as in any way real carbon prices.” When asked if he could envisage carbon prices reaching those levels the Secretary of State said “The answer is we don’t know [but] the Airports Commission has taken some fairly prudent assessments on this.”
58.We asked the Secretary of State whether its upcoming aviation strategy would examine greenhouse gas emissions other than CO2. He said that non-CO2 emissions would be reduced alongside CO2, but “there is no clear scientific basis to look at other emissions and put those at the heart of our strategy”. The Assessment of Sustainability says that non-CO2 emissions “are likely to be up to two times the magnitude of the CO2 emissions themselves, but [...] cannot be readily quantified due to the level of scientific uncertainty and therefore have not been assessed”.
59.The headline cost and benefits figures in the Government’s announcement on Heathrow and the draft National Policy Statement assumed a black hole in the 2050 carbon budget that other sectors, such as energy or industry, would have to fill. It also assumed continued participation in the European Emissions Trading Scheme up to 2030, it is imperative that the UK remains within the EUTS or any future European emissions trading scheme. The Government has told us it intends to base its policy on another scenario which incorporates assumptions about the level of passenger demand compatible with managing emissions which are more optimistic than the Committee on Climate Change’s advice. The business case for Heathrow expansions must be assessed against a cost/benefit analysis which uses realistic carbon policy assumptions, in line with the Government’s aviation strategy, and takes account of the resulting impacts on other airports and other sectors of the economy. These must be the headline figures in future Government publications, including the final National Policy Statement.
60.The Government claims that Heathrow expansion can be delivered within “the UK’s climate change obligations”. The Government has not set out what it means by “obligations”, let alone how it will meet them. It has not decided whether to accept the Committee on Climate Change’s recommendation on limiting emissions from international aviation. It has not decided whether to follow the CCC’s advice on offsetting. The Airports Commission told us the appropriate body to make recommendations on managing aviation emissions is the CCC. It would not be a credible position for the Government to claim that it can deliver Heathrow expansion within emissions limits whilst rejecting independent advice as to what those limits should be and how they should be met.
61.The signing of the ICAO agreement is a necessary first step to reducing emissions from international aviation, but it is not sufficient in itself. The Government should reconfirm its intention to participate in this scheme from 2021, which is after the date when the Government intends to have formally completed leaving the EU, urge other major emitters, including the United States, to live up to their commitments to participate from the earliest possible date, and work towards strengthening the agreement during its review periods.
62.Our interim report noted a significant policy gap between the modelling done by the Airports Commission and meeting the Committee on Climate Change’s advice on aviation emissions. The Committee on Climate Change has repeatedly urged the Government to draw up an emissions reduction strategy for aviation. The ICAO agreement means the Government no longer has any excuse not to do so. In the absence of concrete policy proposals from Government, we cannot assess whether the additional emissions from additional flights to and from Heathrow can be properly mitigated. Expanding Heathrow without drawing up such a strategy would, therefore, be putting the cart before the horse.
63.The Government’s aviation strategy should be integrated with the cross-Government emissions reduction plan. It should set out costed policies to either meet the Committee on Climate Change’s planning assumption or to make up the shortfall from other sectors. This decision will have to take account of the limited progress towards decarbonisation outside the energy sector and the likely additional climate change impact of some non-CO2 emissions. Where the Government makes assumptions that are more optimistic than the Committee on Climate Change’s advice it should subject those assumptions to independent scrutiny from industry and the CCC and, if necessary, revise its plans accordingly. This strategy should be available well before the end of the scrutiny period for the draft National Policy Statement and consultation on it should be completed before the National Policy Statement is finalised.
64 Department for Transport, , para. 6.11.6; The impact of construction and operation of the runway itself is discussed in the Airports Commission’s Report and in written evidence from Heathrow Ltd.
65 The two main scenarios were carbon-traded (in which a global emissions trading system is in place by 2030) and carbon-capped (in which domestic policies maintain emissions to 2005 levels by 2050).
66 Environmental Audit Committee, , HC 389, Chapter 2
67 The Carbon Budget Order 2016
68 International Civil Aviation Organisation, , accessed 18 January 2017
69 European Civil Aviation Conference, , accessed 18 January 2017
70 , 25 Oct 2016, Col. 163 & 173
71 Department of Transport, , para. 4.53, accessed 2 February 2017
72 Caroline Low, Oral Evidence, 30 November 2016, Q67
73 Climate Change Act 2008, Section 10(2)(i) and Section 30(1)
74 Gross (absolute or actual) emissions refer to the level of emissions emitted by a country or sector. Net emissions is the level of emissions emitted, minus those emissions offset through international or cross-sectoral emissions trading and other schemes.
75 Environmental Audit Committee, Airports Commission Report, paras 6–8, HC 389
76 See for example, Sir Howard Davies, oral evidence, 4 November 2015, Q166
77 Oral Evidence, 30 November 2016, Q59
78 For example, Heathrow Airport Ltd. in their supplementary written evidence refer to “the Government’s target of 37.5MtCO2 emissions from aviation by 2050”
79 International Civil Aviation Organisation, , accessed 18 January 2017; AEF, supplementary written evidence and , accessed 18 January 2017
80 Sustainable Aviation, , accessed 18 January 2017
81 AEF, supplementary written evidence
82 Letter from Lord Deben to Rt Hon Greg Clark MP, Department of Transport’s Assessment of the Case for a Third Runway at Heathrow, 22 November 2016 (henceforth, CCC Letter)
83 Oral Evidence, 30 November 2016, Q56
84 Oral Evidence, 30 November 2016, Q56
85 Letter from Secretary of State for Transport to Chair, 9 January 2017, and CCC Letter
86 Oral Evidence, 30 November 2016, Q49
87 Environmental Audit Committee, , page 10, para 29
88 Letter from Secretary of State for Transport to Chair, 9 January 2017
89 Oral Evidence, 30 November 2016, Q50 & Q51
90 Ibid. Q55
91 DfT, , para. 4.53
92 Environmental Audit Committee, , para. 29
93 AEF, supplementary written evidence
94 Oral Evidence, 30 November 2016, Q68
95 DfT, , para. 6.38
96 International Civil Aviation Committee, , accessed 18 January 2017
97 Airports Commission, , para. 4.14
99 Environmental Audit Committee, , para. 17
100 Heathrow Ltd, supplementary written evidence
101 Oral Evidence, 4 November 2015, Q150
102 Oral Evidence, 30 November, Q57
103 Oral Evidence, 30 November, Q74
104 Department for Transport, , para. 6.11.10
20 February 2017