Green Week: Flying high for climate change

Jos Dings of the European Federation for Transport and Environment and Roy Griffins of Airports Council International, Europe debate the issues surrounding climate change and aviation.

The aviation industry's contribution to climate change is high on the European political agenda.

For campaigners who have been working for several years on the issue, this fact is a major step forward.

Just last October, it seemed highly possible that a US-led coalition would succeed in blocking all future measures to combat greenhouse gas emissions at the International Civil Aviation Organisation’s Assembly.

The US strategy backfired when 41 European states, backed by a strong European Parliament resolution, secured freedom to move on the topic.

The UK announced that aviation and climate change would be a top priority for their presidencies of the EU and the G8 in 2005.

This January, Jacques Chirac suggested a tax on airline tickets to fund development and the fight against HIV / AIDS.

The political ambition goes right to the top, and with good reason.

Aviation is the fastest-growing source of greenhouse gas emissions.

Its current share in the EU is five to ten per cent, and emissions are growing by three per cent per year.

The European Commission has now kick started a debate on the issue.

But so far, this debate seems to be about ‘choosing’ a single ‘solution’: inclusion of the industry in the EU Emission Trading System, kerosene taxation; or, less well known, en-route emissions charging.

What is the winning approach? Strangely enough, we don’t think it’s that simple.

Inclusion of aviation in emissions trading is an easy way out for the sector.

Industry chiefs, like Rod Eddington of British Airways, who has publicly pledged his support, are acting out of self-interest.

They see emissions trading as a way to avoid tougher - and hence more effective - measures.

From our perspective, there are several reasons why we believe that such measures as fuel taxation or en-route charges are also needed.

The first reason is that emissions trading is an inter-sectored scheme that results in equal CO2 prices for everyone – which seems fair, but isn’t.

Advocates and theorists say that equal CO2 prices in every sector are the major benefit of the scheme.

But it is also a major weakness, because it means that the ‘weakest link’ – the sector that is most exposed to international competition and relocation of production – effectively sets the ambition level of the scheme (the emission cap).

Analysis by the International Energy Agency shows that aluminium smelters could be one such ‘weak link’.

If CO2 prices rise, electricity prices might rise too, which could cause aluminium production to relocate outside of the EU, and therefore outside of the trading scheme.

This danger will scare politicians, who will be strongly tempted to raise, rather than lower, the emissions ceiling. This is not just a theory; it is exactly what has happened with the National Allocation Plans.

Aviation is not a ‘weak link’. In fact, it is quite comparable to road transport.

Road fuel taxes have not led to US or Chinese firms taking over our road transport industry.

Because if they did, they would not escape the taxes that European operators have to pay.

Aviation, albeit on a somewhat larger scale, is similar. It is a ‘sheltered’ sector and sheltered sectors could, and should, face a stricter climate policy than the more ‘exposed’ manufacturing sectors currently in the scheme.

A second well-known reason is that the sector currently escapes most of the taxes and charges that affect every other area of economic activity.

The sector does not pay taxes on fuel, nor VAT on international tickets, and both aircraft manufacturers and airlines have received billions of euros of direct and indirect aid.

All these subsidies end up in the pockets of the well-off, the people who fly most.

A third reason is that the EU is increasingly dependent on imports of oil from unstable regions.

This year the EU will spend some €15 billion on oil imports for the aviation sector alone.

The Intergovernmental Panel on Climate Change (IPCC) has said that alternatives to kerosene will not be available within the next 50 years, which implies that the only way to reduce our dependence on oil imports currently 80 per cent) is to use less.

Inclusion in the trading scheme will not do this – it will just enable the sector to buy emission reductions at a low price from other sectors.

And that is why a package of measures are needed whereby en-route emissions charges and/or taxes also play a role, in addition to measures to end VAT exemptions.

Such measures are necessary, or rather essential, if climate targets are to be reached.

The industry has a habit of calling these measures ‘blunt and ineffective’ instruments. Environmental economists tend to disagree.

A tax of just ten cents per litre on aviation fuel - a fraction of road fuel taxes – would reduce emissions by eight per cent.

From a global perspective, a criticism of climate measures for aviation has been that Europe is stupid to ‘do more’ than other regions.

But our economy will become more competitive when it becomes more expensive to pollute, because CO2 tax revenues can be used to lower labour taxes or boost innovation.

In addition, we will spend less on oil imports (and be more resistant to a fluctuating oil price), and the need for cleaner aircraft will boost Airbus’s sales.

Emissions trading on its own would be better than no measures at all - that is obvious.

But clearly this approach would do little to reduce the rapidly-growing emissions from the sector.

Only a package of measures that includes fuel taxes or en-route emissions charges will ensure that aviation contributes a fair share of emissions reductions.

Furthermore, only a package of measures will cut oil imports and remove some of the sector’s obsolete tax breaks.

Finally, only a package of measures will boost the competitiveness of the European economy.

It’s now up to the regulators and the industry to get such a package off the ground.

Jos Dings is Director of the European
Federation for Transport and Environment

Roy Griffins

Sustainable development is not only an environmental concept. It is also about social inclusion and economic health.

It poses challenges for Europe’s airports, challenges which have to be met if airports in Europe are to grow, to develop sustainably.

First the context: across Europe, you can divide airports into two main categories, those with insufficient traffic and those with insufficient capacity. Europe’s larger airports are mostly in the latter category, and it is here that the capacity crunch will hit first – and it will hit hard.

The figures speak for themselves: European air traffic is now expected to grow at the rate of 5 per cent to 6 per cent, per annum - doubling by 2020.

By 2025, over 60 European airports are forecast to be congested. These airports
represent over 90 per cent of commercial air
traffic in Europe.

All major research points to the fact that from this year onwards, airports are the bottleneck in the air transport chain.

Will European aviation be able to cope? I doubt it. Will passengers suffer? I think so.

Europe’s airport operators need to provide the terminals and runways to accommodate future demand, otherwise air travelers will soon face widespread delays as massive congestion and poor service standards hit Europe’s main airports.

Without capacity, there will be less competition, less choice, higher air fares,
less economic growth, fewer jobs and more social exclusion.

Policy makers and national legislators must recognise these pressures and give the social and economic benefits delivered by Europe’s air transport industry their rightful weight in the debate on sustainable growth.

Regardless of how far you squeeze the most out of existing airport capacity at Europe’s larger airports – the reality is that new runways and terminals are the only way to accommodate future demand.

But gone are the days of simplistic ‘predict and provide’. To get the permission to grow, the aviation industry as a whole needs to tackle the environmental challenge.

Even though it is airlines not airport operators who are the actual polluters in the air transport sector, the airport industry must take its responsibilities seriously.

It is at airports – the interface between the sky and the human community - that aviation’s negative products are most noticed and measured.

And airports are the ones who ask for air transport’s license to grow.

Noise pollution is as much a political issue as a technical one. ACI EUROPE has been consistent in advocating the reduction of aircraft noise at source.

There is no better way to tackle noise pollution.

The very least the aviation industry ought to be able to offer to someone living beside an airport is the promise that the noise of each aircraft movement will reduce and continue to reduce over time.

Airport operators must be able to apply and adapt local rules to address the local noise and air quality challenges.

Aviation’s contribution to air pollution and global warming poses a separate but serious challenge.

Although aviation’s share of greenhouse gas emissions is currently only 2 to 3 per
cent – compared with 25 per cent for energy production - it is the potential increase in aviation’s contribution that must be addressed if airports are going to be able to grow infrastructure in line with anticipated demand.

Without doubt, some progress has been made. Today’s aircraft are 70 per cent more fuel-efficient than the jets of the 1960s.

But Europe’s airports have recently endorsed a plan to include the climate change impact of aircraft in flight in the European Union’s Emissions Trading Scheme (ETS) from 2008.

Europe’s airports believe that the best prospect for controlling aircraft emissions is through economic instruments – especially the establishment of an open emissions-trading system.

Aviation’s inclusion in the ETS will have a direct and beneficial impact on the environment.

In contrast, taxation is a crude, blunt and unacceptable way of tackling the problems with no appreciable gain for the environment, unless you go so far in pricing people out of air travel that you abandon, even destroy, aviation’s economic and social benefits.

The social and economic benefits of airports and aviation must be recognised.

At Europe’s larger airports, access to markets and external and international transport links are regarded as “absolutely essential” to enterprises making location decisions.

Large airports are fundamental national economic motors, for example the role of Amsterdam Schiphol, London Heathrow, Paris CDG, Munich, Helsinki and Vienna.

Regional communities at Europe’s smaller airports greatly appreciate the role played by airports in boosting regional accessibility and social expansion, driving tourism development, and serving as national and regional economic
motors.

For every million passengers, each European airport supports around 3,000 jobs nationally of which some 50 per cent are generated in the immediate vicinity of the airport.

Research shows that failure to provide increases in airport capacity could cost between 2.5 and 3 per cent of national or regional GDP respectively.

These benefits are often overlooked. But industry has a role to play too. To build for the future - we must get the balance right.

Sustainable development is the key to future growth. If we cannot get permission to grow our facilities sustainably – then the entire industry suffers, stranding passengers, communities and commerce.

Roy Griffins is Director General of
Airports Council International Europe

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