Aviation and UK climate change policy
Briefing paper on CCC advice to Government regarding
inclusion of aviation emissions in the UK’s carbon budget
31st May 2012
The UK’s Climate Act 2008, like the Kyoto Protocol and successor global climate agreements,
omitted emissions from aviation and shipping on the basis of difficulty in attributing them
appropriately to nation states. Nevertheless, the Act included a clause requiring the Government
to review the situation in 2012 and either to include these emissions or to explain to Parliament
why they should continue to be left out.
In the same year – 2008 – the EU agreed that from 2012 emissions from all flights entering or
departing from the EU would be included in its Emissions Trading System. Though this has
prompted opposition from many states outside Europe, it has also stimulated renewed discussion
at the UN’s ICAO (nominated under the Kyoto Protocol to tackle emissions from international
aviation) about possible global measures. The equivalent body for shipping, IMO, has also made
some progress in that it has now agreed minimum efficiency standards for ships.
In April 2012, the Committee on Climate Change, created under the 2008 Climate Act and
charged with advising Government on whether aviation and shipping should be included in the
UK’s carbon budgets from 2012, recommended that there were no longer good reasons to
exclude either sector, arguing that data generated as a result of aviation’s inclusion in EU ETS,
together with the IMO shipping efficiency targets and projections, now make inclusion possible.
This briefing paper – which addresses only the aviation component of this advice – falls into four
sections. The first analyses the CCC’s advice for aviation, the second considers the possible
implications of this advice for policy in relation to demand and capacity, the third describes AEF’s
view of how the sector should be treated in the context of UK climate policy, and the fourth
provides a brief conclusion.
Section 1: CCC advice
The CCC’s advice has two components. The first deals directly with aviation’s inclusion in the
carbon budgets, while the second concerns how the Government should plan for the future in the
context of, for example, long term infrastructure decisions. Both are considered below.
1.
CCC advises that aviation should from 2013 be included in the UK’s carbon budgets
at an annual level of 31 MtCO2e.
31 Mt (million tonnes) is CCC’s calculation of the UK’s share of the cap imposed on airlines by
the EU ETS, namely (from 2013 onwards) 95% of the average level of aviation emissions
between 2004 and 2006. Such an approach to the sector’s inclusion in the budgets would mirror
the treatment of other sectors that are covered by the EU ETS.
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The figure, based on net emissions, says nothing about what actual aviation emissions will be, or
should be. CCC (and others, including DfT) have elsewhere predicted that without additional
measures, UK aviation emissions will grow significantly beyond this level between now and 2050.
Inclusion of aviation on the basis proposed would not therefore require any additional ‘effort’ for
airlines beyond their participation in the EU ETS.
2.
CCC also advises, however, that the Government should assume for planning
purposes that international aviation emissions in the UK are no higher in 2050 than
they were in 2005, in other words no higher than 35 MtCO2e.
CCC provides several reasons why the UK should not simply rely on EU ETS to deliver its CO2
reductions but rather should aim for the bulk of these to be delivered domestically, in other
words, why it should consider gross as well as net emissions.
(a) Planning for domestic reductions will save money. At present, EU emissions permits are
very cheap. But in the longer term, all countries will, CCC believes, need to adopt some form
of emissions plan in order to ensure no more than 2 degrees warming, thus the availability of
‘offset’ credits will diminish. At the same time, easy wins in terms of emissions reduction will
soon become exhausted. The result, says CCC, is that credits are likely to become very
expensive. While the current trading price for CO2 is around £6/ tCO2, the Government’s
carbon values reach £200/tCO2e in 2050 in a central case. Modelling for CCC by UCL,
meanwhile, suggests that carbon prices in 2050 could reach around US$750 (£500) per
tonne with an active global carbon market, or above £1000/tCO2e if weak early action
requires even deeper 2050 emissions reductions. Looking at the UK as a whole, therefore,
CCC is confident that the 2050 target can be met at a cost of only 1-2% of GDP, even with
aviation and shipping included; but if all reductions were to be made through credit
purchase, the cost would be significantly higher.
(b) Appropriate planning assumptions can inform negotiating positions in international
agreements and underpin technology policy. CCC believes that ultimately, aviation
emissions should be tackled at EU and international levels. The appropriate approach for
the UK, CCC implies, is to push in appropriate forums for the adoption of emissions targets
in line with its recommended planning assumptions for the UK. In 2009 CCC recommended1
that all developed countries should commit to gross aviation emissions being no higher in
2050 than they were in 2005, mirroring the policy scenario for the UK. Given the global
nature of aircraft manufacture, for example, technology improvement goals focussed on
reducing emissions should be agreed at international level, argues CCC. The Committee
does not argue that the UK should wait for international agreement on mechanisms to
achieve emissions reductions before taking any action domestically but rather that we
should assume that these negotiations will in future be successful (for example, that all
developed countries will be taking measures to control emissions that are comparable to the
measures required for the UK) and should adjust these assumptions in future only if this
outcome fails to materialise.
1
http://www.theccc.org.uk/news/press-releases/478-global-aviation-emissions-must-be-capped-to-tackleclimate-change-9-september-2009
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(c) The recommended planning assumption of long-term gross emissions stabilisation at 2005
levels “should be considered in the context of infrastructure investment (e.g. airport capacity
development and possible expansion)”. While CCC does not elaborate on this point, it is
clear that it would be bad for businesses (and therefore for consumers) if investments in
airport infrastructure were suddenly rendered worthless by a rocketing carbon price. A
Government wishing to avoid this outcome would presumably, therefore, wish to adopt
policy that indicates its long term view of future aviation markets and their likely profitability.
Sections 2 and 3 provide more detailed consideration of this issue.
CCC is keen to draw a distinction between the adoption of its recommended planning
assumption and the setting of ‘unilateral emissions targets’ for which, it says, the Climate Change
Act does not provide. Nevertheless, CCC notes that:
… sectoral planning assumptions are required under the Act:
• Specifically, the Act requires that the Government is able to show how its policies and proposals
are compatible with meeting the 2050 target (Climate Change Act 13, 14).
• It is under this requirement that we and the Government have set out sectoral contributions to
meeting carbon budgets and the 2050 target.
• For example, we have highlighted the need for early decarbonisation of the power sector, and
suggested that the planning assumption should be to reduce carbon intensity of power generation
from current levels of around 500g CO2/kWh to 50g CO2/kWh in 2030. 2
For AEF’s own view on the advantages of adopting a policy that assumes limits to UK aviation
emissions beyond those arising from the EU ETS, see Section 3.
In addition to arguments in favour of the principle of a ‘planning assumption’ for UK aviation
emissions alongside the abatement implied by EU ETS, CCC also gives a number of reasons for
its recommendation that this assumption should be that emissions from UK international aviation
in 2050 will be no higher than 35 MtCO2e. (The 2009 CCC report Meeting the UK Aviation
Target referred to a figure of 37.5 Mt, which included emissions from domestic flying, which are
already included in the Climate Act and not therefore addressed in this recommendation.)
a)
CCC’s previous work, which assumes aviation emissions at this level and adjusts other
sectors accordingly, indicates that an overall cut of 80% of emissions in 1990 from the UK
as a whole by 2050 is achievable at reasonable cost (1-2% of GDP) if aviation emissions
stabilise at 2005 levels.
b)
In response to CCC’s 2009 report Meeting the UK Aviation Target, DfT produced a series of
MAC curves indicating possible costs and benefits of various policy options to reduce
aviation emissions. CCC’s analysis of this work is that it suggests that “there is scope, at
reasonable cost, to reduce emissions in 2050 to around 2005 levels, through a combination
of improvements in aircraft fuel efficiency, operational measures, biofuels penetration and
2
April 2012, Scope of carbon budgets: statutory advice on inclusion of International Aviation and Shipping,
page 54
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some demand growth constraint”. Figure 3.2 on page 39 of CCC’s report indicates that
under the DfT’s MACC analysis, this level of emissions constraint is achievable even under
a ‘low abatement’ policy path.
c)
The recently revised ‘road-map’ (March 2012) from the industry organisation Sustainable
Aviation provides, CCC notes, “a trajectory under which emissions return to 2005 levels in
2050”.
The original Sustainable Aviation road-map, published just 4 years earlier, had concluded
that this would be possible without recourse to offsetting or trading. The revised 2012
roadmap introduces the need for carbon markets because it adopts a new target, namely a
commitment to a 50% reduction in CO2 emissions (based on 2005 levels). But this revised
target masks the fact that the underlying analysis still supports a return to 2005 levels by
2050 without the need for market-based measures. The 2012 roadmap uses 2010 as a
reference year when emissions were nearly 11.5% lower than in 2005 (a total for domestic
and international flights of 33.3mtCO2 in 2010 compared to 37.6mtCO2 in 2005, using DECC
figures). Extending the reference year for the 2012 roadmap back to 2005 levels is
consistent with the reduction expected in 2050 through alternative fuels, and technological
and operational improvements alone. In other words, Sustainable Aviation provides
evidence of an ongoing industry view that the gross level of UK aviation emissions can be
brought down to 2005 levels by 2050 even without the use of trading, lending extra weight to
the CCC’s recommendation.
CO2 emissions from UK
aviation in 2005
Source: Sustainable Aviation CO2 Road-Map 2012; 2005 emissions level added by AEF
In its latest road-map, Sustainable Aviation expresses the view that “Any unilateral targets
and measures that attempt to limit UK aviation’s emissions through capacity constraints or
price-related demand reduction will lead to carbon leakage, market distortion and the loss of
economic benefit to our international competitors”. It is surprising, however, that this
statement assumes that unilateral measures to constrain emissions growth are required
while the previous Government’s target to ensure that UK aviation emissions in 2050 are no
higher than in 2005 was based on Sustainable Aviation’s own evidence that this could be
achieved without carbon pricing, relying instead on their own forecasts of improvements in
technology, operational efficiency and alternative fuels. In effect, the previous Government
had challenged the industry to deliver on its own promise.
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Section 2: Implications for demand and capacity
It is very important to note that the DfT’s MACC work and Sustainable Aviation’s latest road- map
(which assumed demand growth at the level of the 2011 DfT passenger forecasts) both provide
evidence for the affordability of emissions in 2050 of no higher than 35 MtCO2e, but on the
assumption that no new runways are built anywhere in the UK.
CCC’s 2009 analysis Meeting the UK Aviation Target concluded that in order to reach the target
then in place for gross UK aviation emissions to be no higher in 2050 than they were in 2005,
taking into account likely technological improvements, more efficient air traffic management,
carbon pricing up to £200/tCO2 and the introduction of some aviation biofuels, passenger
numbers could grow by only 60% of 2005 levels by 2050. In the absence of further measures to
control demand, emissions were forecast to grow from 37.5 MtCO2e in 2005 (international plus
domestic) to 48.5 MtCO2e by 2050.
At the time, CCC were basing their airport capacity assumptions on the 2003 White Paper and
therefore assumed new runways at Edinburgh, Heathrow and Stansted. The DfT’s 2011
forecasts for passenger demand and CO2 emissions, being published after the Coalition
Government announced effective suspension of the 2003 White Paper for national policy
purposes, assumed no new runways. Nevertheless, as a result of alternative assumptions about
how readily demand transfers from one airport to another (as well as slightly different
assumptions in relation to fuel efficiency and biofuels), the DfT forecasts for both passenger
numbers and CO2 emissions were remarkably similar to CCC’s. Even assuming no new runways
anywhere in the UK, and with passenger numbers predicted to grow by just 2% per year, DfT
forecast an increase in passenger numbers of 123% over 2005 levels (as against CCC’s targetcompatible 60%), with emissions increasing to 49 MtCO2.
As noted above, CCC recommends against the setting of a unilateral emissions cap for aviation,
preferring the concept of a planning assumption. The difference between the two, however,
seems to lie only in what is implied about the political approach to emissions reduction. A
unilateral cap could be imposed and pursued with no reference to comparable action required
elsewhere in the world in order to tackle global aviation emissions growth. The recommended
planning assumption, by contrast, makes explicit reference to the importance of the UK working
with EU and international partners to secure comparable commitments from other developed
countries, and a global emissions cap for aviation that applies to all. This does nothing, however,
to change the CCC’s analysis presented in its 2009 report which made clear that technology
improvements, biofuels, and more efficient air traffic management would be insufficient to bring
aviation emissions down to 2005 levels by 2050, leading to their conclusion in that report that
further measures, such as constraints on slot use or runways, or the introduction of a carbon tax,
would be necessary.
DfT’s subsequent MACC work indicates that even without the provision of new runways, the UK
is set to substantially overshoot CCC’s recommended assumption of 35 MtCO2e unless
additional measures are taken to control emissions.
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Section 3: AEF’s view
Even in the highly contested field of aviation, CCC has been remarkably successful in producing
figures and analysis that are widely quoted by both industry and NGOs. It has always been very
focussed on how to make emissions reductions in the most economically efficient way thus
addressing head-on many economic concerns about environmental protection.
1.
Inclusion in the carbon budgets
AEF believes that the Government should accept the CCC’s advice to include aviation emissions
in the carbon budgets and notwithstanding parliamentary process, would like the Government to
state its intention to do so in the draft aviation strategy. This would:

Ensure that the Climate Change Act covers all sectors of the UK economy, and that all
sectors play their part in delivering the 80% emissions reduction by 2050 that the Act
requires

Resolve the ambiguity in the Climate Change Act whereby the CCC is required to take
account of these emissions but not to formally include them

Provide certainty for the future which is necessary to guide appropriate investment
decisions, ensuring that it does not fall to changing governments or to the CCC to need
continually to make their own interpretations of the Climate Act in relation to aviation

Reflect the treatment of other sectors of UK industry that are included in the EU ETS
Given the wording of the Climate Act, as well as the precedent set in relation to other sectors,
AEF believes that 31 MtCO2e is the right figure to be entered in the carbon budgets. In future
there may be scope for tightening the terms of the EU ETS for aviation – a move we would
support – at which point the 31 MtCO2e figure would need to be revised downwards.
2.
Planning assumptions and targets for UK aviation
AEF is a vocal supporter of aviation’s inclusion in the EU ETS, and formally intervened in support
of the scheme when it was challenged in the European Court of Justice. We are also very
actively engaged in discussion at the UN’s ICAO about how emissions from aviation can be
controlled at the global level. We fully support the argument that the most effective way to control
aviation emissions will be through international action. Nevertheless we consider that there is a
need for countries with high per capita emissions such as the UK to show initiative and
leadership in terms of real emissions reductions, and believe that the UK is far more likely to
succeed in its stated aims of securing international agreement on climate change targets if it is
able to point to effective domestic action. The Climate Act itself – which we strongly support –
represents a unilateral action by the UK and, with respect to aviation in particular, British people
have a higher ‘propensity to fly’ than anyone else in the developed world, so it is right for us to
take the lead on this issue.
In addition to CCC’s arguments about the value of a specific planning assumption for 2050 in
relation to UK aviation emissions, (in terms of economic efficiency, guiding international
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negotiating positions, and informing infrastructure considerations), AEF considers that UK action
on emissions – be it expressed as a cap or as a planning assumption – is essential for the
success of the EU ETS.
It is important to understand the significance of the fact that the current EU allowance price is too
low to provide the signals that are needed in relation to planning and investment to deliver the
green economy. We welcome recognition of this problem by the UK Government, which recently
consulted on the introduction of a carbon floor price (“Carbon floor price: support and certainty for
low carbon investment”), and which has recently referred to its ambition to push for the EU ETS
cap to be tightened to deliver 30% rather than 20% emissions cuts by 2020. In relation to aviation
specifically, CCC has recommended in the past that 100% of emissions permits be auctioned
(which would have the effect of increasing their cost) though we recognise that this would require
agreement at EU level and that now may not be the best time to try to secure this.
By way of illustration of the kind of price signals that airlines will be given by the EU ETS, Ryanair
recently introduced a flat rate EU ETS surcharge of just €0.25 (around 25p) on its flights. The
revenue is predicted by financial analysts not only to cover the costs of all permits the airline will
need to buy, but to generate additional profit. In the longer term, particularly after 2030, however,
carbon prices are predicted to rise dramatically. The first of the graphs below presents DECC’s
illustration of its carbon pricing predictions. The second (taken from CCC’s technical report
published April 2012) reflects analysis by UCL for CCC and DECC, suggesting that even DECC’s
high figures may be very significant underestimates.
Source: DECC 2010, Guidance on estimating carbon values beyond 2050: an interim approach
http://www.decc.gov.uk/assets/decc/what%20we%20do/a%20low%20carbon%20uk/carbon%20valuation/1_2010
0120165619_e_@@_carbonvaluesbeyond2050.pdf
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Source: Committee on Climate Change 2012, The 2050 target: achieving an 80% reduction including emissions
from international aviation and shipping
There are two possible problems arising from this situation:

If governments throughout Europe choose consistently to adopt a hardline noninterventionist approach to the carbon market between now and 2050, there would be a real
danger that the carbon price increases could lead to business failures, job losses, and
widespread social impacts. Cheap carbon in the short term, in other words, risks
inappropriate investment in airport expansion by businesses, or in foreign property by
individuals expecting the trend of overseas travel becoming ever cheaper, which could in
future be highly damaging from the economy. CCC, strongly grounded in economic
concerns by Adair Turner and David Kennedy, has implied concern about this possibility.

If, by contrast, as the carbon price begins to bite, governments seek to protect their
electorates from increasing costs of fuel, food and travel, the EU ETS and/or other carbon
markets, on which so many hopes are pinned in terms of delivering carbon reductions
flexibly and efficiently, would begin to look fragile. As noted above, the UK Government has
acknowledged the need to strengthen the EU ETS emissions cap. In this situation, however,
a watering down or even dismantling of the system would be more likely. If such situation
arose, it is hard to imagine local actions (such as state-led CO2 abatement) stepping in to fill
the gap.
In terms of the appropriate level for a planning assumption, AEF considers 35 MtCO2e to
represent a very generous target for UK aviation.
With the Climate Act putting international aviation emissions outside the carbon budgets, yet
requiring the CCC to take these emissions 'into account' when setting budgets for other sectors,
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CCC's default assumption has been 'stabilisation' at 2005 levels. We assume that CCC regarded
this as a compromise between recognising both that aviation is a highly polluting sector whose
emissions growth was (and is) forecast to be significant, and that abatement of aviation CO2
emissions (through, for example, technological improvements or the use of sustainable fuel) is
relatively difficult and/or costly compared with abatement in most other sectors. CCC has
previously estimated that if aviation emissions were no higher in 2050 than in 2005, and if the
economy as a whole made average emissions cuts of 90%, then the overall 80% target could be
met at reasonable cost. Legislated carbon budgets have been determined on this basis, and
inclusion of aviation in a way that avoids the need for changes to existing budgets has clear
pragmatic advantages.
Nevertheless, now that CCC has been able to calculate the figure of 31 MtCO2e as the level of
the UK’s share of the EU ETS cap, we see no justification for reference to a figure for gross
emissions of 35 Mt. There are good reasons, we believe, why the UK should aim for gross
emissions to be lower than this.
(a)
The recommended level is 4 Mt per year higher than the UK’s share of the EU ETS cap
for aviation – 31 Mt CO2e. We see no justification for this.
(b)
35 MtCOe by 2050 represents 120% growth compared with 1990 levels, as against the
90% cuts expected from most other sectors of the economy, many of which are far less
discretionary than air travel. Propensity to fly correlates closely with income, so it is
primarily higher earners who benefit from its lenient treatment compared with other
sectors. Neither CCC nor the Government has ever produced analysis demonstrating
improved environmental or economic efficiency or social benefit arising from allowing
aviation more generous terms than other sectors of the UK economy.
(c)
There is no safety net for non-CO2 impacts in a planning assumption of 35 MtCO2e, as
CO2e takes account only the Kyoto basket of gases. AEF fully understands the fact that
climate scientists have yet to agree on the ideal metric to take account of aviation’s nonCO2 impacts – principally NOx and water vapour. Nevertheless, researchers reporting to
the UN on this issue are engaged actively in resolving this difficulty. In the meantime,
existing research strongly indicates that aviation emissions are around twice as harmful in
terms of global warming as CO2 alone and AEF continues to believe that use of a 2x
multiplier for aviation is very likely to generate less distortion than the current situation
which foresees no account being taken of aviation’s non-CO2 impacts between now and
2050. We do not accept CCC’s argument that given the shorter lifetimes of other ‘species’
compared with CO2 they are not an urgent concern. Regardless of long-term impacts, a
constant or growing level of aviation activity means a constant or growing level of global
warming as a result of non-CO2 as well as CO2 emissions from aircraft. At the very least,
we would therefore expect to see a commitment from Government to report annually on
when and how aviation’s non-CO2 impacts are to be accounted for.
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Section 4: Conclusion
AEF strongly supports CCC’s recommendation that aviation be included in the UK’s carbon
budgets. We also support the recommendation that the appropriate figure to be entered into
these budgets is the UK’s share of the EU ETS cap for aviation, namely 31 MtCO2e, though
we would support a tightening of this cap in future which would, in turn, require a lower figure
for aviation to be entered into the UK’s carbon budgets. Finally, we strongly support the
setting of a complementary target or planning assumption relating to actual (gross rather
than net) emissions from UK aviation. However, we regard 35 MtCO2e – a level 4 Mt higher
than the figure to be entered into the carbon accounts – as insufficiently stringent.
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