Economic growth and global connectivity are entirely possible within environmental constraints, says BA's Walsh
Steve Howard, CEO, The Climate Group and Colin Matthews, CEO, BAA
Fri 12 Nov 2010 – Growth of the economy and global connectivity were entirely possible within the constraints of national and international environmental targets, British Airways CEO Willie Walsh told an environmental seminar hosted by the airline and the London Chamber of Commerce and Industry earlier this week. He said aviation played a key role in ensuring London remained open for business and attracting inward investment and tourism. BA’s Head of Environment Jonathon Counsell said global regulation on carbon emissions was critical to the aviation industry but warned that “punishing” aviation taxes would take away investment in new technology and did nothing for the environment in reducing emissions. A great deal could be done on the ground as well as in the air to reduce aviation’s impact, said Colin Matthews, Chief Executive of airport operator BAA.
“While it’s crucial that London’s infrastructure keeps pace with its growth, it is also crucial it is not at the expense of the environment,” said Walsh. “The will is there. Both the UK and the aviation industry have a strong track record in tackling climate change.”
He said that while the new UK coalition government had yet to express a clear policy on aviation, he welcomed the view of Boris Johnson, the Mayor of London, that the capital and the south-east of England needed additional runway capacity.
“There is a large gap that needs to be plugged quickly so that the industry can move forward with some idea of what the government wants but if we are to maintain a focus on competitiveness and play our part in developing the UK economy then we will need further infrastructure.
“We respect the government’s decision that the third runway at Heathrow will not be built but we need to look for a coordinated policy on airport capacity in the South-East.”
BAA Chief Executive Colin Matthews added that rationing runway capacity at Heathrow increased rather than decreased carbon emissions.
Aviation is absolutely key to London’s economy and its position as a global trading centre, said Martin Powell, the Mayor of London’s Advisor on the Environment. He said the capital’s airports served 370 domestic and international destinations, with passenger numbers increasing by 91% and flights by 57% in the last 20 years.
“This is extremely good news in economic terms but there is an obvious cost in environmental externalities such as noise and emissions of carbon, NOx and particulates, which the industry is striving to mitigate,” he said. “In overall terms, emissions have increased and the 5% contribution of aviation to the UK’s greenhouse gas emissions is significant.”
He pointed out that local government had provided seed funding and brokerage for new green initiatives including contributing to a hydrogen fuel cell technology project for airport mobile power plants and had brought interested parties together for the proposed waste-to-aviation biofuel plant in East London, which he said was moving forward rapidly.
BAA’s Matthews said there was a great deal airports could do to reduce emissions and improve air quality, such as providing more convenient ground power so that aircraft did not need to use their APUs, using electric vehicles within and around the airport and encouraging people to use public transport when coming to the airport.
He said the closure of Heathrow due to the Icelandic volcano eruption had enabled the airport to measure the contribution of aviation to air quality at the airport. “What we found was that levels of nitrous oxide declined by around 30% within the airport but didn’t outside the airport.”
He said pollution levels within the centre of London were twice those at Heathrow. “So to regard air quality as an aviation issue would simply be to short-change the population. It is principally an issue about diesel engines.”
Matthews said noise was the main concern of residents around airports such as Heathrow. While airlines were introducing new and less noisy aircraft into their fleets, there was a perception by residents that the problem was getting worse, he said.
“Why is this? I think there are three possible reasons: although the noise footprint of houses affected is smaller it is more intense because there are more flights than there were, say, 10 years ago; secondly, our perception of noise is relative, not absolute; and thirdly I don’t think residents trust what we as a company have to say about noise, and we really have to work on this and do a much better job and communicate better.”
He said he was proud that Heathrow had recently received ACI Carbon Accreditation status at a higher level than other airport hub in Europe (see article). “Great news, but we have such a lot to do,” he added.
Matthews unequivocally supported a high-speed rail (HSR) connection to Heathrow, which he said would bring the airport into line with the other main hubs in Europe that already had such links and would also have significant environmental benefits in that regional passengers would require only one flight instead of having to take two on long-haul journeys.
British Airways’ Jonathon Counsell questioned the environmental claims of high-speed rail, believing they had been overstated. He said one UK train operator had maintained that the emissions from HSR transport were one-tenth those of flying but he had found independent studies that had showed the HSR benefit as closer to two to one when the entire lifecycle emissions were taken into account. “However, we welcome the introduction of high-speed rail, although it has to link directly into the airport,” he added. “Passengers have to have a seamless transfer experience.”
From an international perspective, Counsell told the seminar that global regulation on the aviation industry’s carbon emissions was critical.
“We have worked closely over the past two years with our industry body IATA in developing a common position,” he said. “We want to be included in a post-Kyoto global framework. We are an unusual industry in wanting to be regulated, although it must be done in an appropriate way.
“What this means is that we require a global sectoral approach in which we are treated as one sector, meeting our carbon costs in the most effective way possible, paying for our carbon emissions once and minimizing any competitive distortions.”
He said there was a big concern in the industry over the proliferation of “punishing” aviation taxes, with Germany and Austria joining the UK in introducing passenger departure taxes, along with proposals just published by a UN group to raise global climate change finance from aviation levies.
“This would be damaging to the industry and take money away from investment in new technology. Importantly, it does nothing for the environment in reducing carbon emissions.”
Counsell said the UK’s Air Passenger Duty (APD) was leading to carbon leakage whereby UK passengers were hubbing on long-haul flights through other European airports to avoid paying the heavy tax.
According to Mark Schofield, Global Leader, Sustainability & Climate Change Tax Network, PricewaterhouseCoopers, a survey of UK businesses found that 58% of respondents believed APD had not been at all effective in changing their organization’s environmental behaviour.
“If we’re going to have taxes in this area, it is really important that the government understands what the policy is that’s being pursued and then understand how the policy instruments being used have the desired impact,” he said.
“Is it going to make much difference to people’s behaviour? It’s difficult to know whether APD is a revenue raiser or whether it is intended to put people off air travel. This is an important question. If it is the former then you have to understand there is a potential economic knock-on effect.
“Businesses are looking for consistency in terms of policy, effectiveness and a level playing field. If you have a single-country tax, arguably there is no level playing field and it can be economically damaging to the country.”
Steve Howard, CEO of The Climate Group, pointed out that the amount of revenue raised by the UK government on APD was similar to that proposed by the UN High-level Advisory Group on Climate Change Financing on what could be raised on a global level from aviation (see article).
“Can we raise money from aviation on a ‘polluter pays’ principle, then answer is yes but it doesn’t have to be punitive,” he said. “If it’s done through a global cap-and-trade system then that should be highly efficient and shouldn’t put the cost of flights up significantly. And some of those revenues should be used to help fund projects in low carbon aviation technology.
“What is likely to happen for a while, though, will be a patchwork quilt of regional emissions trading and differential taxation in various parts of the world. It’s going to be messy despite the best efforts of all of us to push for something that is even-handed, progressive and meets its objectives.
“Will we get a cap-and-trade agreement for aviation emissions at COP16 in Cancun? It is unlikely and may take several years to get there, but progress is being made.”
Other speakers at the seminar included Paul Nash, Head of New Energies at Airbus; Lord Smith, Chairman of the UK Environment Agency; and Jim Fitzpatrick, Shadow Minister for Transport.
From left: Martin Powell, Advisor on the Environment to the Mayor of London; Willie Walsh, CEO, British Airways; Jonathon Counsell, Head of Environment, British Airways; Paul Nash, Head of New Energies, Airbus (all photos: LCCI)