﻿ UK set to hit aviation with more taxes in global warming fight - 8/14/2007 - Flight Global

UK set to hit aviation with more taxes in global warming fight

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The UK's efforts to gauge whether aviation meets the true cost of its effect on global warming could lead not only to a political move to keep the controversial air passenger duty, but could also lead to further charges and taxes - on top of emissions trading costs.

The UK Department for Transport plans to sound out industry on developing a three-yearly emissions cost assessment to be used to shape future policy, feeding specifically into regular governmental reviews of the nation's air transport policy.

It aims to produce a retrospective snapshot using 2005 as a baseline year that will, going forward, show if the costs of civil aviation's climate change impacts within and from the UK are being met.

It proposes to calculate carbon dioxide emissions for all flights leaving UK airports - domestic and international flights - using data currently collected for the UK Greenhouse Gas Inventory, which records the annual UK uplift of both UK and foreign aircraft.

The DfT notes that while the financial implications of the European Commission's emissions trading regime remain unknown for airlines, aviation needs to face the full consequences of its global warming effect.

"In the case of aviation, this means reflecting climate change costs in the price of air travel. If this is not done, prices will be too low and hence demandtoo high to achieve a long-term sustainable outcome," says the DfT.

Plans will take into consideration airlines' emissions trading costs as well as air passenger duty now levied on a passenger per UK flight basis and revenues from aviation gasoline used by smaller aircraft.

Even so, the DfT adds, "this may need to take account of the difference between the market price of carbon in an emissions trading scheme and its estimated social cost".

The proposed methodology will critically feature a range of scenarios using a variety of radiative forcing (RF) metrics and carbon costs anchored by a central case of a 1.9 RF and £84/tonne ($170/tonne) of carbon dioxide.

Tim Johnson of environment group Aviation Environment Federation says the proposed methodology provides recognition of the high "damage" cost of carbon and the radiative forcing effect of aviation emissions.

"Using 2005 data, our worry would be that applying a scenario of a 1.9 RF effect and carbon costs of £84/t, there is a very close link between the established cost and what current levels of duty would have raised, ultimately reducing the pressure for regulation.

Other scenarios showing a shortfall would increase the pressure for regulation. Both sides of the aviation environment debate have reason to worry depending on what metrics are adopted within the methodology is accepted as it could create the justification for a political decision."