21st REPORT: INCLUDING THE AVIATION SECTOR
IN THE EUROPEAN UNION EMISSIONS TRADING SCHEME
Government Response
INTRODUCTION
The Committee's report has been published at
a timely point in the development of EU policy and we welcome
the Committee's input into this subject.
Rather than respond in turn to each of the conclusions
or recommendations in the House of Lords' report, we have grouped
the concerns expressed by theme, and addressed them in this way.
DECISION TO
INCLUDE AVIATION
IN THE
EU EMISSIONS TRADING
SCHEME
224. We do not agree with the Environment
Council that global aviation emissions are currently a serious
problem but we agree that they will become so. The current level
of aviation emissions is small as a proportion of total global,
European Union or United Kingdom CO2 emissions. It is most unlikely
that aviation could be included within the EU ETS (if that is
the desired option) by 2008. Stavros Dimas, the European Commissioner
was recently quoted as saying that aviation would be included
in the ETS at the earliest opportunity but that this was unlikely
to be before 2012. It is important that any legislative proposals
are well thought through and sustainable in the longer term, both
on environmental and economic grounds. (para 219)
225. Two options were considered by the
Commission to be the best means to achieve effectively the policy
objectives of restraining growth in aviation emissions:
— en-route charges or taxes on aircraft
emissions and impacts;
— emissions trading for aviation.
We agree that these are the main options. (para
61)
250. The December 2005 Environment Council
Conclusions noted the Ell's position that all policy instruments
should be maintained as potential options but said that the inclusion
of the aviation sector in the EU ETS seems to be the best way
forward and that it has greater potential for application internationally
than other policy alternatives. We agree with them but there are
substantial problems ahead. (para 218)
251. It is important that all government
departments are fully involved in developing the United Kingdom
analysis of any Commission proposals as the consequences of joining
the ETS or of alternative policies involve industry, users of
aviation services as well as the environment. The analysis and
recognition of those wider consequences appear to us not yet to
have been thought through with sufficient rigour. We shall scrutinise
the Commission's Impact Assessment and the United Kingdom's Government
Regulatory Impact Assessment with considerable care when they
are published in the next few months. (para 219)
The core theme of the Air Transport White Paper
is that aviation must be sustainable. This means striking a balance
between the economic, environmental and social impacts of aviation.
The Government recognises the benefits that air travel has brought
to people's lives and to the economy of the country. But we have
to balance those benefits against the environmental impacts of
air travel, in particular the growing contribution of aircraft
emissions to climate change and the significant impact that airports
have on those living nearby.
Within such a framework, the Government believes
that over time, the aviation should pay the external costs its
activities impose on society at large.
We would like to emphasise that there is close
co-ordination between relevant Government departments on the matter
of including aviation in the EU Emissions Trading Scheme (ETS).
The Department for Environment, Food and Rural Affairs and the
Department for Transport are working very closely with other Government
departments (particularly the Department for Trade and Industry,
the Treasury, the Foreign and Commonwealth Office, Cabinet Office
and the Devolved Administrations) in considering these issues
further.
Our aim is to press for the inclusion of aviation
in the EU ETS from 2008, or as soon as possible thereafter. In
taking this commitment forward we recognise the importance of
a thorough impact assessment involving all Government departments.
IMPACTS OF
INCLUSION OF
AVIATION IN
THE SCHEME
237. The impact of aviation entering
the ETS can be assessed in a number of ways. We consider these
in Chapter 5. Witnesses addressed themselves directly to just
some of these, while giving little attention to wider impacts
upon economies, business or consumers. None addressed the impact
upon airfreight. Most attention was paid to the impact upon aviation
in general and through that upon the environment. Many witnesses
addressed the knock on effect upon other industries that were
in the ETS and for some witnesses this was a major issue.
238. Many said that there were too many
variables in the detailed design of an ETS that included aviation
for authoritative figures to be produced. The Minister told us
that, "The forecasting of allowance process is complex and
highly uncertain". Industry bodies and airlines appeared
not to have carried out their own detailed research into the impacts
of including aviation in the EU ETS. We would urge them to do
so as far as is practical ahead of the publication of the Commission's
legislative proposal to bring aviation into the ETS which is expected
to be produced in 2006. This would enable them to respond fully
when the proposals are published. (para 160)
239. The majority of witnesses, including
DEFRA, told us that the impact upon passenger air fares and hence
upon demand for air travel would be very modest. Clarity is needed
about present and future policy on the level of permitted carbon
emissions, both in total and for the aviation industry. We have
severe doubts about the view that the impact upon emissions allowances
prices, airfares and air travel will be modest, except in the
short term. (para 168)
240. The inclusion of aviation in the
EU ETS will affect the EU carbon allowance price, which will have
a subsequent cost to existing (non-aviation) EU ETS sectors. The
Commission's feasibility study revealed that around 15% of CO2
emissions reductions post-aviation entry to the ETS are expected
to come from aviation and around 85% from other industries. While
precise estimates have not been forthcoming and many uncertainties
exist, it seems clear that other industries and their customers
will feel the main impact of including aviation within the ETS.
(para 173) The magnitude and nature of this impact will depend
on a wide range of design factors. DEFRA commissioned an interim
study of these matters. In view of the full-hearted commitment
given by the United Kingdom Government to the inclusion of aviation
in the ETS from 2008, we find it surprising that a fuller assessment
of these matters has not preceded that policy commitment. It is
imperative that both the Commission and the United Kingdom Government
now conduct a rigorous assessment of all relevant issues before
further policy commitments are made. (para 174)
241. Some of our witnesses looked to
the longer term and told us that, given the United Kingdom's target
for a 60% reduction in CO2 by 2050, the consequences of continued
aviation growth for other sectors would be severe. Under some
assumptions, no growth in carbon emissions by other sectors would
be possible after 2017. Growth in aviation emissions would only
be possible if emissions by other sectors were reduced over and
above any contraction in emissions required to meet EU targets
by 2050. One witness suggested that if aviation is included in
the ETS and the EU sticks to its emissions targets, a rise in
price of emissions allowances would be likely to prevent the currently
projected 2017 level of aviation activity and emissions. This
presages very substantial increases in air fares and air freight
charges within the next 10 years while at the same time prices
of energy and other carbon intensive industries will have risen
very sharply too, driven in part by the demand for aviation services.
This scenario would have major consequences for the aviation industry
and its customers and for other industries in the ETS albeit over
a rather longer time period for adjustment. This is a very different
picture from that provided by the Commission, the Minister and
the airline industry. it highlights that there are substantial
issues underlying EU policies on emissions targets and the inclusion
of aviation within the EU ETS.
244. The most dramatic forecast of the
Tyndall Centre is that aviation services for the EU might have
to stop growing by 2017. Even if that exaggerates the position,
when applied to the EU and the global economy it raises important
issues of international competitiveness, economic development
and of personal lifestyle choices. Within the EU itself, what
would be the impact upon EU economic and social integration? Can
the EU take decisions that impact more widely on other economies
without consequences for its own international competitiveness
and potential retaliation? Can the EU determine a policy unilaterally
that will raise airfares substantially and limit growth in air
travel and airfreight between the EU and for example North America,
India, China and the Far East without regard to the competitive
position of the EU in relation to those markets? (para 207)
246. It is, of course, not the inclusion
of aviation within the ETS per se that would raise prices of emissions
allowances, of air travel, of all industries in the ETS and curtail
growth in all the sectors concerned, but the contracting emissions
cap that is necessary for the ETS to achieve its ultimate purpose.
The same issues and others too arise with alternative approaches
to aviation emissions.
247. Witnesses gave evidence on a number
of more detailed impacts if aviation enters the EU ETS. Low fares
airlines argued that they would be affected disproportionately
in various ways. Other EU airlines were concerned about the impact
of the ETS on them relative to non-EU airlines that would be less
dependent upon the EU market. Most of the views expressed appeared
to assume relatively mild impact on airline costs and airfares.
As airfares may rise more sharply than airlines acknowledged,
their concerns may be increased. We agree that the design of an
aviation scheme within the ETS could have differential affects
upon different airlines and believe that the Commission's 2006
Impact Assessment should examine these issues. (para 190)
The Tyndall Centre's forecasts are based on
their own projections of demand and emission levels and are greater
than those in the Government's Air Transport White Paper (ATWP).
This is due to different underlying assumptions, notably on infrastructure
constraints, and more conservative assumptions on fuel efficiency
trends post 2030. However, we consider that the assumptions in
the ATWP remain valid.
The Government has a thorough Regulatory Impact
Assessment (RIA) process, which requires an Initial, Partial and
Final RIA. An Initial RIA accompanied the Explanatory Memorandum
and this will be developed as the work progresses.
Our initial impact assessment analysed the pros
and cons of the different options available for dealing with the
problem of aviation's greenhouse gas emissions. These options
were:
— Include aviation in the EU ETS.
— Impose a tax on aviation fuel.
— Introduce emissions charges
— Introduce a ticket or departure
tax.
— Encourage voluntary action by the
airlines.
We are in agreement that the inclusion of aviation
in the EU ETS is the best way forward. We also agree that further
analysis of potential impacts and design details is required.
The analysis we are currently undertaking on
this subject will feed into the Partial RIA, on which we will
have a formal consultation. This will be published following the
Commission's legislative proposal. After further analysis, a final
RIA, which takes into consideration the results of the consultation,
will be presented alongside the legislation when it is presented
to Parliament.
We regularly meet with representatives of many
different industries in order to understand their concerns regarding
the impacts of including aviation in the EU ETS.
A CAP FOR
AVIATION
232. In an ETS scheme including aviation,
the adjusted level of overall allowances and the initial cap for
aviation will be a key driver of the price of emissions allowances.
This in turn will determine the effect on aviation and other industries
in the ETS. The Minister told us "it is the crucial factor".
He also told us "We need to give industry a long-term signal
so that they can plan and invest". But the Minister told
us that, "It is crystal ball stuff really". There is
considerable lack of clarity in the detail of thinking in this
area both within the Commission and within the United Kingdom
government. This cannot be left as a detail to be dealt with after
legislation is passed. The Commission's Impact Assessment must
be more forthcoming and explicit about likely initial allowances
for aviation and the principles governing future levels. (para
170)
We recognise the importance of the initial cap
for aviation from both an environmental and economic perspective.
While there is not yet an agreed position across the EU on how
a cap for aviation would be decided, there is widespread support
for a harmonised approach to setting the cap and how it is distributed
to regulated entities. This would provide more consistent treatment
across the EU25 and would reflect the largely homogenous and integrated
nature of the industry.
The cap itself does not necessarily need to
be specified in the legislation. In the current EU ETS, it is
the process for deciding the cap not the actual level of the cap
that is set out within the legislation. This means that the actual
level of the cap can be defined without having to renegotiate
the legislation.
Regardless of the process and the relative roles
of EU institutions, we believe that agreeing the level of the
cap is dependent on having accurate projections of emissions from
the aviation industry, and on having a clear understanding of
the abatement costs for aviation. We are continuing to draw on
existing research on both of these issues, in order to evaluate
the need for further work.
These two elements will facilitate the final
decision on the level of effort required. We believe that the
cap needs to be stringent and scientifically robust but that it
cannot create competitive distortions and would like to reassure
the Committee that all impacts will be taken into account before
the final level of the cap is agreed.
INTERACTION WITH
THE KYOTO
MECHANISMS
226. If aviation enters the ETS, technological
improvements in the aviation industry will become even more urgent
in order to reduce emissions while maintaining growth in air travel
and airfreight. Air traffic management and control improvements
can help reduce aviation emissions and measures to maximise these
improvements should be pursued vigorously within the EU and internationally.
(para 80) A more positive development of the Clean Development
Mechanism and Joint Initiative schemes should be encouraged by
the EU and by the aviation industry. (para 205)
243. Mr Gammeltoft for the Commission
told the Committee that in the shorter-term aviation within the
ETS will help reduce overall emissions in other sectors by buying
allocations and essentially financing efforts to reduce CO2 emissions
in sectors where it is cheaper. In the longer term, he told us,
the EU ETS would impact on the environmental performance of aircraft.
On current evidence we believe that this takes an over-optimistic
view of aviation's ability to reduce its own emissions even in
the longer term and under-states the potential conflict with other
industries. (para 176)
248. Faced by increasingly strong environmental
constraints, the aviation industry will be able obtain extra emissions
allowances through financing Clean Development Mechanism and Joint
Implementation projects, which are Kyoto Protocol mechanisms,
if this is permitted under Phase 2 of the ETS. We believe that
they should be permitted. We note the view of British Airways
that the schemes were currently too bureaucratic and changes were
required to make them cheaper and easier to implement. We urge
the Commission to ensure that these concerns are fully reviewed.
(para 204)
As international aviation is outside of the
remit of Kyoto, there will not be Kyoto backed allowances for
aviation emissions. This is a technical issue and we are currently
looking at a range of options to resolve this.
The Government has already allowed for use of
Clean Development Mechanism (CDM) and Joint Implementation (JI)
credits in the EU ETS through transposition of the EU's "Linking
Directive". Use is allowed under Phase 1 of the ETS and will
continue to be allowed under Phase 2. The Government, in line
with the requirements of the Directive, is currently considering
the limit on use of project credits in drawing up its Phase 2
national allocation plan. As CDM and JI credits can already be
used in the EU ETS, the aviation industry could take advantage
of those credits when it is included in the scheme.
It is not currently possible to undertake CDM
or JI projects directly in the aviation sector. Such adjustment
to the CDM and JI regimes would be subject to international agreement
on treatment of these emissions more widely.
The CDM in particular has come under a lot of
criticism for its bureaucracy and the UK Government has played
a pivotal part, leading the EU, in arguing for and securing reform
of the mechanism. At the First meeting of the Parties to the Kyoto
Protocol (COP/MOP1) in Montreal in December 2005, we negotiated
a decision which introduced a number of concrete measures to focus
the CDM Executive Board more on its oversight role and provide
for strengthened support to the Board from the UN Secretariat.
We also negotiated a decision on JI, setting in place necessary
measures to facilitate prompt and efficient implementation of
the mechanism. This provided for the possibility of drawing on
experience under the CDM, where appropriate, to ensure greater
efficiency.
As outlined in the Future of Air Transport
White Paper, we are also pressing for a range of other measures
including: adoption by airports, airlines and air traffic controllers
of working practices that minimise the impact of their activities
on climate change; research and development by aerospace manufacturers
of new technologies to reduce the climate change impact of future
fleets; and voluntary action by airlines, airports and aerospace
companies to control greenhouse gas emissions and develop sustainability
strategies.
NON-CO2 EMISSIONS
223. All commentators agree that, in
the absence of public policy changes, passenger air travel and
air freight will continue to increase and with it a significant
growth in CO2 emissions. in addition to CO2 emissions, aviation
causes other emissions that appear likely to contribute to global
warming. We agree that action will be needed to address this environmental
issue.
229. The European Union Emissions Trading
Scheme monitors and aims to reduce CO2 emissions but currently
does not monitor or seek to address the other climate change impacts
of aviation, which include emission of nitrous oxides and water
vapour (which is a greenhouse gas), formation of condensation
trails and emissions of sulphate and soot aerosols. The Environment
Council says that both the CO2 and non-CO2 impacts of aviation
should be included in a future scheme to the extent possible.
We urge the United Kingdom Government and the European Commission
to fund further research into understanding and addressing the
non-CO2 climate change impacts of aviation, and to seek wider
international agreement on this issue as the basis for future
policy. (para 102)
We recognise the concerns surrounding the unique
climate impacts of aviation, due to the range of emissions released
and their effects at altitude. The Environment Council agreed
that one of its guiding principles would be that both the CO2
and non-CO2 impacts of aviation should be addressed to the extent
possible, recognising that a pragmatic approach should be taken
in light of the scientific uncertainties. It has been estimated
that climate impacts of aviation are two to four times that of
its CO2 emissions alone. While further research is needed, the
broad conclusions that emissions are significantly more damaging
at altitude is clear.
QUANTIFY (Quantifying the Climate Impact of
Global and European Transport Systems) is the main EU research
programme dealing with the climate impacts of transport. It is
funded until 2010 by the European Commission within the 6th European
framework programme. Also, the Commission has entered into contract
negotiations for a Specific Supporting Action (SSA) to provide
an updated assessment of transport emissions on climate. This
consists of four assessment activities: aviation, shipping, road
transport and metrics. DfT is providing funding support for the
launch conference in June 2006 (as announced in the Budget).
The UK Government has also funded research into
the effects of non-CO2 emissions of aviation. An early assessment,
The effects of aviation contrails on global climate, was
funded by the DETR in 2000. Since then, the Department for Transport
(DfT) has funded work at Manchester Metropolitan University (MMU)
and Reading University to further understand the uncertainties
surrounding contrails. It has also funded QinetiQ and MMU to undertake
measurements of stable Carbon isotope ratios of aviation particles
with the aim of identifying discreet source markers that would
help in targeting policy measures. There are also a number of
Natural Environment Research Council (NERC)-related programmes,
which have been largely completed and address some of the issues
related to the effects in the Upper Troposphere/Lower Stratosphere.
We will continue to improve our understanding
of the non-CO2 effects of aviation and will continue to consider
areas for further research and development, building on industry's
commitment in the Sustainable Aviation strategy to provide
data and expertise to enhance understanding and support improvements
in metrics for quantifying and reporting effects.
GEOGRAPHIC SCOPE
230. An ETS scheme with aviation should
include all flights departing EU airports. This would cover all
the EU's contribution to aviation's CO2 emissions, some 40% of
which arise from intra-EU flights and some 60% from departing
flights to third countries. We agree that this is a desirable
goal but we identified doubt whether the EU can unilaterally impose
a scheme upon non-EU airlines. It is important that this legal
uncertainty is resolved speedily. Otherwise, the EU may be forced
to introduce a scheme based on intra-EU flights only and even
then there may be challenge on the inclusion of non-EU airlines.
(para 128)
231. We do not believe that a wider scheme
to include in the ETS all flights arriving as well as departing
EU airports is desirable or practical. Such a scheme would go
well beyond dealing with the CO2 emissions for which the EU could
reasonably take responsibility. (para 129) Any doubts as to the
legality of imposing an EU scheme on non-EU countries referred
to in paragraph 121 above would apply more strongly in this case.
The commitment in the Air Transport White Paper
was to press for the inclusion of intra-EU air services in the
EU ETS. However, we recognise the advantages in environmental
terms of a scheme that covers all departing flights. Any scheme
will need to comply with the current legal framework for international
aviation and be able to stand up to challenge. The feasibility
study conducted by CE Delft for the Commission concluded that
there were no legal obstacles to covering international aviation
in the EU ETS, including the flights of non-EU carriers and flights
departing the EU. Nonetheless, we recognise the Committee's concerns
about the legal uncertainties and work is ongoing to examine the
details of the different options.
Trading Entity
233. During the design of any ETS system,
it will be necessary to address the issue of which entities would
receive emissions allowances and be required to surrender allowances.
Our witnesses appeared to assume that the aircraft operators would
be the trading entities and we agree with them. (para 136)
We have considered the different options for
trading entities in the scheme. We have concluded that the entity
best suited for surrendering allowances for emissions generated
is the airline operator.
ALLOCATION OF
ALLOWANCES
234. The method of distributing the total
level of CO2 allowances for aviation raised disagreement. The
British Air Transport Association told us that, "...other
industries currently in the scheme account for about 50% of total
EU carbon emissions and we are just 2%..., so we do not see that
we should be treated any differently from the other industry sectors"
(Q 13). We agree that this is a strong argument against auctioning
for initial aviation CO2 emissions allowances, unless basic CO2
allowances for all industries were put up for auction in Phase
2 of the EU ETS. (para 147)
235. Some airlines argued against auctioning
permits because, "it takes resources away from the airlines
which they really need—and we are not a particularly financially
successful industry—to make the investment in the technology
and in the emissions reduction". Economic analysis suggests,
however, that even if initial emissions allowances are distributed
free of charge, airlines might still raise airfares in the medium
term to cover the opportunity cost of those allowances. In that
event, airlines would make windfall profits equal to the value
in the market place of their free CO2 allowances. This would strengthen
the case for auctioning. Airlines, air fares and air-freight charges
should come under close scrutiny for evidence of windfall profit
taking in the event that allowances are issued free of charge.
(para 148)
236. If initial carbon allowances to
aviation are allocated free of charge, there are compelling arguments
in favour of a benchmarking basis for allocation between airlines.
It is more consistent with the "polluter pays" principle
and ensures that the significant investments made by airlines
in the recent past to cut their emissions are rewarded. We conclude
that any permits which are allocated free of charge should be
allocated based on a benchmarking system. (para 156)
We are taking into consideration lessons learnt
in Phase I of the EU ETS and are still assessing which methodology
is the most appropriate for aviation. We acknowledge the pros
and cons of auctioning as highlighted by the Committee and recognise
that existing EU ETS sectors favour benchmarking as the most appropriate
approach to free allocation, as it delivers the right messages
for emissions reductions and recognises early action. Any benchmarking
methodology would need to be developed in collaboration with industry
and we think this is an area where further dialogue would be helpful.
SUITABILITY OF
THE ETS FRAMEWORK
FOR AVIATION
227. There are a number of important
detailed design issues for an emissions trading scheme that includes
aviation. We consider these in Chapter 4. They are of substantial
importance in determining a number of matters. What will be the
initial and future impact upon the price of carbon, upon other
industries in the ETS and their customers, and upon CO2 emissions?
Will the ETS be a robust framework within which to accommodate
EU policies on aviation emissions and on air-passenger and air
freight growth in the future? Are those policies clear and compatible?
(para 95)
242. Commenting upon these projections,
the Minister said that they give a projection at the upper end
of growth in aviation and that it is very difficult to say for
sure whether those figures are actually going to materialise".
But, he added, "it is likely that there will be an impact
upon fares" but it would be premature to say that it would
be an enormous impact. Greater clarity from the Government on
these matters would be helpful, as would answers to the following
questions:
— Will inclusion of aviation within
the mainstream EU ETS eventually become a major problem for other
industries in the ETS? If so, over what timescale?
— Should that potential problem
be recognised now and if so, what are the implications for the
proposal to deal with aviation climate change emissions within
the framework of the EU ETS?
— Is aviation a special case in
the context of emissions-reduction policies in the sense that
its ability to reduce the level or even the growth of CO2 emissions
is extremely limited in the foreseeable future?
— Is an environmental policy driving
a proposed way forward that may quite quickly lead to a serious
clash with policies on aviation and economic growth? (para 185)
As the Committee will be aware, an initial report
by ICF Consulting[21]
has been carried out to evaluate the impact that including aviation
in the EU ETS might have on permit prices. This report concluded
that over the period 2008-12, there would be no discernable impact
on the allowance price, as a result of including aviation in the
EU ETS. We have been presenting this report to stakeholders and
are discussing with them the extent to which, further analysis
will need to be undertaken.
There are other sectors already included within
the EU ETS that have high abatement costs and a limited potential
to reduce their emissions. The fact that these sectors have been
successfully included in the first phase of the EU ETS is confirmation
that the rationale behind emissions trading (that environmental
costs can be covered through a mixture of emissions reductions
and purchase of reductions produced more cheaply by others) functions
in practice.
As outlined in The Future of Air Transport
White Paper,[22]
the Government recognises that the benefits that air transport
brings to this country need to be balanced against the environmental
impacts. The White Paper also promised that, as a matter of principle,
action taken to tackle environmental impacts of aviation would
take full account of the effects on the competitiveness of UK
aviation and the impact on consumers.
INTERNATIONAL DIMENSION
228. Witnesses and the Commission agreed
that emissions from international aviation should ideally be included
in a wider international, even global agreement. We encourage
the Commission to continue to press for international aviation
to be included in any post-2012 climate change regime. (para 97)
245. The overall answer provided to the
questions above may be either that there will be no problem or
that every effort will be made to persuade other countries to
join an ETS including aviation. The former is unlikely, the latter
may be wishful thinking. We hope that the Commission's 2006 Impact
Assessment will address these and many other issues with the same
rigour as that applied to the environmental impacts of its proposals.
(para 208)
249. Two principle ways have been suggested
to avoid some of the problems identified earlier. The first is
to place aviation in a separate ETS. The second is en route charges
or taxes on aircraft emissions and impacts. We consider these
in paragraphs 210 and 211. There are advantages and disadvantages
of both.
The International Civil Aviation Organisation
(ICAO) has specifically endorsed the concept of an open emissions
trading scheme for international aviation, demonstrating international
support for emissions trading as the best means of dealing with
the environmental impact of global aviation emissions.
The advantage of open emissions trading is that
it enables a specific environmental outcome to be achieved at
the lowest cost across the economy. In a sector like aviation,
where abatement costs are higher, participants pay for reductions
in other sectors where it is cheaper to reduce emissions. This
ensures that the lowest cost reductions are carried out first.
There is little support for a dedicated ETS
for aviation (a closed scheme) as the principal benefits of an
ETS would be lost and such a scheme would largely similar in cost
and impact to a charge or a tax.
CONCLUDING REMARKS
We would like to thank the committee for their
useful contribution, which has highlighted some very important
and relevant issues.
We fully intend to continue our close working
relationship with other Government departments on this subject.
We will also continue to update the House of Lords as we progress
with our work in this area.
21 http://www.defra.gov.uk/environment/climatechange/trading/eu/pdf/including-aviation-icf.pdf Back
22
http://www.dft.gov.uk/stellent/groups/dft_aviation/documents/divisionhomepage/029650.hcsp Back
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