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Last Updated: Tuesday, 29 July, 2003, 09:45 GMT 10:45 UK
Airlines face pollution tax pressure
Cars and planes
BA is disappointed with the report
Gas guzzling airlines should be taxed in an effort to limit emissions of carbon dioxide, a group of MPs claims.

They accuse the Department for Transport (DfT) of "overt bias" by consistently emphasising the economic benefits of aviation, while seeking to mitigate rather than avoid the environmental impacts.

The MPs criticised ministers for acknowledging the need for some form of congestion charging or pricing framework for roads, but dismissing a similar approach for aviation.

The forecast increase in passengers - from 180m passengers a year now to over 500m by 2030 - will have a huge impact on global warming
John Horam

But findings in the report by the Environmental Audit Committee (EAC) provoked anger from airlines.

The EAC inquiry, prompted by a government consultation paper on aviation and the environment, said an emissions charge could replace airport tax.

'Unacceptable' emissions

The anticipated growth in UK aviation could accentuate global warming and wipe out government targets to reduce CO2 emissions, the committee said.

"We regard the proposed growth in emissions into the atmosphere by the aviation industry as unsustainable and unacceptable.

Petrol pump
Motorists are clobbered by tax compared with airlines
"Were such growth to occur, it could totally destroy the government's recent commitment to a 60% cut in carbon dioxide emissions by 2050."

The MPs said they were "astonished" that Transport Secretary Alistair Darling had denied there was any parallel between road transport and aviation.

As with roads, ministers should aim to "decouple" growth in air travel from economic growth, they said.

"To achieve this it must be willing to use a range of fiscal and other policy instruments to manage behaviour."

Global warming

The environmental cost of expanding airport runways cancelled out the economic benefits, the EAC found.

Reports showed that, compared with road transport, the absence of a fuel tax and VAT on receipts meant the aviation industry received subsidies in excess of 9bn.

We are disappointed that the EAC has not recognised the success of the aviation industry in dealing with environmental issues in the past

The introduction of VAT on ticket sales for domestic flights may be necessary, the report said.

John Horam, the committee's Tory chairman at the time the report was agreed, argued: "The forecast increase in passengers - from 180m passengers a year now to over 500m by 2030 - will have a huge impact on global warming.

"The DfT airports consultation fails to take on board the new direction in policy initiated by the Energy White Paper, while the growth forecast in aviation - even on a constrained basis - will wreck the aspirations it contains.

"There is enough potential in existing airports to meet future demand - if we make rather more realistic assumptions than the DfT has done.

"We cannot get away from the fact that airlines pay no tax on aviation fuel - whereas 80% of the price motorists pay goes into the Chancellor of the Exchequer."

Economic case

Sue Doughty, a Liberal Democrat committee member, said the government had failed to understand the environmental and economic costs of aviation.

But a British Airways spokeswoman said: "We are disappointed that the EAC has not recognised the success of the aviation industry in dealing with environmental issues in the past and the potential for emissions trading to allow airlines to reduce or offset the growth of global warming in the future.

"This is a much better way forward than the large tax increase advised by the committee.

"Contrary to the view of the committee, there is a strong economical case for a programme of runway expansion with the development of Heathrow as the UK global hub.

"This would deliver substantial benefits to the UK's economy and society as a whole even when global warming costs are taken into account."

Key test

However, the Campaign to Protect Rural England (CPRE), described the EAC report as a "breath of fresh air" and said it represented a warning to the government about the air industry's impact on the environment.

Andrew Critchell, CPRE's aviation campaigner, said the government's Air Transport White Paper, to be published by the end of the year, would be a key test of its commitment to the environment, in particular to tackling climate change.

"An emissions charge to replace Air Passenger Duty and the introduction of VAT on domestic flights, as recommended by the committee, are both possible now," he said.

"The government should take these actions, rather than sanction new airports and runways and fly in the face of mounting evidence of climate change."


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