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Air Transport White Paper Progress Report 2006

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1. Introduction and overview

Introduction

1.1 In December 2003, the Government set out a sustainable long-term strategy for the development of air travel out to 2030. It balanced the growing aspirations we have to travel and the needs of our economy with the need to protect our environment. It rejected a 'predict and provide' approach and instead proposed a comprehensive strategy that:

  • committed the Government to ensuring that aviation reflects the full costs of its climate change emissions, which will influence the amount of traffic growth that will occur. This is the same approach Sir Nicholas Stern[1]  recommended right across our economy;
  • put in place tough local environmental conditions for our most environmentally sensitive airport, London Heathrow. Further expansion in flights would not be allowed unless limits on noise and air quality could be met;
  • recognised that aviation brings real benefits to the lives of ordinary people and to business. It connects people and places in ways that many people value highly and is also critical for a successful economy. Since publication of The Future of Air Transport White Paper in 2003, the number of passengers using our airports has risen by 14 per cent[2]; 
  • rejected proposals for new capacity at several airports and at new greenfield locations, and instead promoted making much better use of existing airport capacity. The strategy supported the development of regional airports mostly within existing capacity, as well as the construction of a further runway at Stansted and at Heathrow, and measures to make better use of existing runways at those airports.

1.2 The Government remains committed to the strategy set out in the White Paper: it strikes the right balance between economic, social and environmental goals. This document reports on progress on the policies and proposals set out in the White Paper.

The global environmental challenge

1.3 The Stern Review has stressed the need for an urgent and effective international response to the global problem of climate change. Aviation emissions contribute to climate change regardless of the country in which they are emitted.

1.4 Our national climate change strategy sets out our commitment to reduce climate change emissions right across our economy, including domestic aviation, by 60 per cent by 2050. We are strongly committed to achieving this goal, and aim to do so in the most effective way.

1.5 The Stern Review also recommended that the best way to tackle the complex pattern of carbon emissions is to ensure that each activity which consumes carbon is priced in the way that reflects its true cost to society, and to the environment. The Review thus supported the policy set out in the 2003 The Future of Air Transport White Paper which stated that the price of air travel should, over time, reflect its environmental and social impacts.

1.6 As a result:

  • We continue to pursue the inclusion of aviation emissions in the European Union (EU) emissions trading scheme (ETS) as soon as practicable, and to do so for all flights departing from EU airports, whatever their destination. This trading scheme ensures that carbon emissions from all sectors of the economy that are included in the scheme are properly priced. Inclusion of aviation in the EU ETS is the most efficient and cost effective way to ensure that the sector plays its part in tackling climate change. It avoids artificial targets for each sector which would distort economic decision-making.
  • However, the Government has always recognised that its focus on EU ETS should not preclude examining other economic instruments to ensure that aviation reflects its environmental costs.
  • We propose to consult on the development of a new emissions cost assessment to inform Ministers' decisions on major increases in aviation capacity. This assessment would consider whether the aviation sector is meeting its external climate change costs.
  • We aim soon to bring forward proposals which will make it simpler for air passengers to offset the carbon emissions arising from the flights that they take by setting out a Government standard for how such schemes should operate. This will help people to take responsibility for tackling their contribution to climate change. Some airlines and travel agents have already begun to do this, as part of the aviation industry's concerted work to deliver a more sustainable model for their business.
  • At the same time, Government is leading the way in taking responsibility for the carbon that we emit. We are offsetting officials' and Ministers' air travel through equivalent investment in renewable energy technologies and energy-saving projects. In the first year we estimate that we will contribute around £1 million towards these projects, which is equivalent to offsetting up to 100,000 tonnes of carbon. Some companies have also begun to follow the Government's lead in offsetting travel undertaken by their employees.
  • The 2006 Pre-Budget Report announced that the rates of air passenger duty (APD) would double with effect from 1 February 2007.

1.7 Chapter 2 of this progress report deals in more detail with the central issue of the part aviation must play in the global challenge to reduce carbon emissions.

The local environmental challenge

1.8 The Future of Air Transport White Paper likewise provided a clear approach to the local environmental challenges of airport operation, in terms of air pollution, noise and the impact on the area in which airports operate. There are a number of important strands to this:

  • Parliament has recently agreed the Civil Aviation Act 2006, which introduces measures to strengthen and clarify airports' powers to control noise and local air quality. This means that airports will be able to penalise the noisiest and most polluting aircraft.
  • The aviation industry has itself made progress in addressing the noise of the airline fleet.
  • We are pleased that most airport operators have chosen to promote their plans for airport development in consultation with the local community. Their master plans provide a basis for ensuring that measures to address noise, air quality, impacts on biodiversity and heritage, and issues of blight are properly considered, clearly set out and taken forward transparently.
  • We welcome the leadership of those airport operators who are taking steps to improve local air quality. At Heathrow, reducing air pollution levels is vital before the airport can expand further. For other airports the focus is on developing public transport links to airports and promoting effective travel planning so as to increase the number of passengers taking public transport to and from airports.

1.9 Chapter 3 of this report deals with these local environmental issues in more detail.

Economic benefits of air travel

1.10 The aviation industry makes an important contribution to the UK economy, supporting around 200,000 jobs directly[3] and many more indirectly. The importance of aviation to the economy is rising as a result of broader economic trends:

  • growing global economic integration, which leads to increasing business travel and greater movement of international freight: about one-quarter of the UK's visible trade by value is carried by air[4];
  • rising disposable incomes in the UK, which enables more people than ever before to travel abroad for leisure;
  • increases in the number of foreign visitors and residents travelling to and from the UK;
  • the UK's success in acting as a hub for international air travel - 15 per cent of international air passengers are flying to or from a UK airport[5].

1.11 Other EU countries with major hub airports have already expanded capacity to cater for future demand. For example, airports in Amsterdam and Paris now operate five and four runways respectively, and a fourth runway is also planned for Frankfurt. Internationally, over the next five years, China plans to invest $17.5 billion on launching 71 airport expansion projects, relocating 11 airports and building 49 new airports[6].

Progress since the 2003 White Paper

1.12 Three years into the White Paper's thirty-year strategy, delivery on the ground is at an early stage.

The first priority is to make the most of the UK's existing airports through a process of improvement and modernisation. Growth and developments at regional airports, without the need for new runways, give people across the country improved access to air travel from modern airports. It is now clear that operators of Edinburgh and Birmingham airports, where new runways were supported, do not expect to build them until some time after 2020.

At Heathrow, where The Future of Air Transport White Paper indicated that delivery of a new runway could be in the period 2015 to 2020, expanding the airport is conditional on meeting the noise and air quality limits that we have set out. The Government has led work to consider whether the environmental impact of making more use of existing runways, or building a third runway, would be acceptable. We will be consulting in detail on these issues in 2007.

At Stansted, significant progress has been made on the location, layout and operation of a potential second runway. We expect BAA to submit its planning application in 2007. But there is a planning process to be gone through and a substantial amount of work still to be done.

1.13 Chapter 4 of this report updates the Government's forecasts of air passenger demand and covers changes in the aviation industry. Chapter 5 then reports progress on developments since 2003, and next steps.

1.14 Aviation has an important role to play in the future, in developing the UK economy, supporting leisure, and in further enhancing our global connectivity. There is a strong demand for air travel, but this must be delivered in a way that balances the need to manage aviation's environmental obligations. This report sets out the current progress towards achieving this.

1.15 The report also sets out specific next steps in delivering the Government's policy. We intend to report on progress again in three to five years' time. The exact timing will be aligned to the delivery of significant milestones on major policies in The Future of Air Transport White Paper.

[1] Stern Review on the Economics of Climate Change, published 30 October 2006, www.hm-treasury.gov.uk
[2] CAA Airport Statistics (2005), www.caa.co.uk
[3] Oxford Economic Forecasting, The Economic Contribution of the Aviation Industry in the UK, December 2006
[4] Department for Transport, Focus on Freight, 2006 edition, www.dft.gov.uk
[5] Calculated from ICAO data and CAA data, 2004
[6] Source: Chinese Government's official web portal, http://english.gov.cn/

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