ĐĎࡱá>ţ˙ @Aţ˙˙˙=>?˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙ÜĄhcŕ e€;Ux8t^t^^v^v^v^v^vrvrvrvrvrvrvŽvŽrvwžwwwwwwwwwwwwwwwĽwXxAw^vw#wwwwww^v^vwwwwww^vw^vww —‡NŻÂrvrv^v^v^v^vwwwwFuture Development of Air Transport RESPONSE BY WEST LONDON FRIENDS OF THE EARTH 1 INTRODUCTION 1.1 West London Friends of the Earth West London Friends of the Earth is a network of local Friends of the Earth groups in West London. The boroughs included are : Hillingdon Hounslow Harrow Brent Ealing Kingston Richmond Hammersmith & Fulham Kensington & Chelsea Westminster 1.2 Scope of evidence 1.2.1 A particular interest to this network is Heathrow. However, many of the points about the environmental impacts on Heathrow have been made in the responses by other parties. We do not wish to re-iterate all those points and we therefore our comments on number of particular environmental issues are limited to a number of ‘strategic’ issues. Such topics include water, surface access and development pressures. The fact that we only touch on these subjects briefly does not mean that we do not regard them as significant issues. 1.2.2 A key feature of our response is that we are not ‘nimby’. While we oppose a third runway and associated developments at Heathrow, we do not just say “put it somewhere else”. We are opposed to the provision of any extra runways in the SE and, indeed, the rest of the country. The reasons ofr our opposition to extra runway is explained in detail in this submission and is summarised in section 18. 1.2.3 Much of this response deals with issues that extend beyond Heathrow. This is because the ‘threat’ of a third runway and additional expansion at Heathrow arises more from the Government’s forecast demand for the UK and the SE than any Heathrow-specific issue. 1.3 Contents This response is divided into the following sections : Introduction Consultation process Sustainable development Demand forecasts External costs Tax avoidance Other economic issues Employment Air pollution Greenhouse gases Noise Biodiversity Public safety Development pressures and Green Belt Water Environmental limits Surface access to airports Position on airport expansion Further submissions 2 THE CONSULTATION PROCESS 2.1 There are a number of concerns about the consultation process. One of these is the fact the public events or displays were often not held where the main impact would be felt. For example the one and only Heathrow display was held at the Renaissance hotel. This is on the boundary of the airport, it is soundproofed, and no-one lives nearby. 2.2. We are of the firm opinion that the Consultation Documents (CDs) do not portray the issues in a balanced manner. There is a great deal of emphasis on economic and employment benefits. The reality is much more complicated, with there being significant cost and disbenefits, but these are almost entirely ignored in the CDs. The environmental issues are also down-played. Details are given in subsequent sections. 2.3 We were particularly concerned about the questionnaire. The questions are ‘leading’ because they offer false and unnecessary choices which will elicit apparent support for massive and environmentally damaging expansion. Professional market researchers have been consulted and they share our concerns. 3 SUSTAINABLE DEVELOPMENT 3.1 Friends of the Earth position on sustainable development 3.1.1 The Consultation Document for the SE says (2.4) “The Government is committed to ensuring that the long term development of aviation is sustainable. In practice, this will mean striking a balance between the social and economic benefits of air travel and the environmental effects of any developments.” We do not accept the Government’s assertion that SD is just a matter of “balance” between economic, social and environmental issues. That would mean that the environment can be ‘traded off’ for economic and social considerations. We consider that SD requires improvement, or at least no further degradation, in each of the economic, social and environmental areas. We note the Government has never explained why it has re-defined SD, has never publicised the issue and has never consulted about it. 3.1.2 The CDs continues “The Government believes that, in principle, its policy for airports in the South East should aim both to maximise the significant social and economic benefits that growth in aviation would bring whilst trying to minimise the environmental impacts.” Simply “minimising” the impacts of the extra growth means that the impact would go on increasing year by year. This is not consistent with SD. 3.2 Sustainable Development Commission The Sustainable Development Commission reported one day before the closing date of the consultation (30th Nov, before the Government announced an extension). We have not been able to study their submission or ascertain to what extent they are reflected in other submissions. We therefore quote a number of thee conclusion of the commission and their members and wish to place on record our support and agreement on these points. “The analysis is based on the flawed and old concept of 'predict and provide', which will only lead to unconstrained growth.” “A full analysis is needed to bring out the true environmental and social costs imposed by the aviation industry, including those from airports and their users, so that they can develop innovative ways of meeting those costs.” “We need an engaged national debate, set within a proper sustainable development framework, to explore the balance of the costs and benefits entailed in any airport expansion.” “Climate change is a far more serious issue than is acknowledged at any point in the consultation documents, and the contribution of emissions for air transport much more significant than acknowledged. Unless Government addresses the continuing growth of air transport, this global problem will only get worse.” "Why should the rest of British business and society have to pay the penalty, just so that airlines and airports can continue to grow while ignoring their environmental responsibilities?" "Society as a whole has to accept the necessity of accepting limits and constraints." “The Government's approach to air transport is stuck in the old mindset of 'predict and provide'. But asking which airports should be expanded or built before appraising the balance of costs and benefits in any expansion programme is missing the point. It will be crucial to engage the public in a proper debate on how air travel fits into the broader picture of sustainable transport, and how it helps to deliver sustainable development here in the UK and further afield." “All Government policy in this area must be founded on the need to take forward its own sustainable development strategy. This document fails that test by taking a narrow focus on the economic benefits of airport development, implicitly accepting that any environmental and social costs, however great, are the necessary price of progress.” “A full analysis is needed to bring out the true environmental and social costs imposed by the aviation industry, including those from airports and their users, so that they can develop innovative ways of meeting those costs.” "It's clearly time for a major rethink. Not least because the Chancellor's pre-budget statement has reaffirmed the urgency of developing economic instruments to help the industry reduce its environmental footprint" 4 DEMAND FORECASTS 4.1 Introduction 4.1.1 The consultation and the various options set out are entirely dependant on the underlying forecasts of demand that are used. These forecasts are basically the ones used in the ‘Air Traffic Forecasts for the UK, 2000’. Those forecasts only go up to 2020; they have been extended up to 2030 for the present studies. 4.1.2 As with any forecasts, the forecasts of demand for air travel depend critically on a set of underlying assumptions. We do not wish to address these in detail, but comment on a couple of issues. 4.2 Economic growth The forecasts are based on an assumption of an annual growth of 2.25%. Although the past couple of years has seen high growth in the UK , 2.25% pa up to 2030 is an optimistic forecast. 4.3 Price reductions 4.3.1 In the Air Traffic Forecasts the issue of the rate of price changes over the forecast period is discussed (App 3 Air Fares). A basic assumption of a reduction of 1% pa is assumed. This takes account of the fact that the recent trend was 2% pa, but recognised that this had been driven by changes in traffic mix and technology improvements which were unlikely to continue at the same rate. In the current studies, this approach has been retained and it underlies the forecasts given in Fig 5A of the SE CD (Consultation Document). 4.3.2 An extensive section in the SE CD (5.12) argues that a more realistic price reduction should be 2% pa instead of 1% pa. We do not have a view as to whether 1% or 2% is the best estimate, but we note that the arguments for reducing prices from 1% pa to 2% for the next 30 years are based on the changes are based on evidence from just two years: “Evidence since the forecasts were published suggests that costs have continued to fall by 2% pa”. The 2000 forecasts had recognised a 2% historical trend but assumed that it would fall to 1% for the next 20 years. Just 2 further years of a 2% reduction is an extremely flimsy reason to increase the rate of price reduction for the next 30 years. This is particularly so when the period and changes in the market were dominated by a single unusual event, the terrorist attack on 11 Sep 01, and consequent increases in spare capacity. 4.3.3 Notwithstanding our doubts as to the validity of an ongoing 2% reduction, we consider there is a lack of consistency in the CDs. If the DfT/Govt believes that a 2% price reduction is valid, then the forecasts in Table 5a should be based on that assumption. The options suggested should likewise be based on that level of demand. As it stands, the studies are inconsistent and could mislead the reader. 4.3.4 In the CDs, the suggested change from a 1% to 2% price reduction is closely associated with the discussion of a possible CO2 (carbon dioxide) tax (5.7-5.8 of the SE CD). It is even stated that “ .. if the reduction of air fares in the long term is 2% pa rather than 1% .. the demand would rise by 20% .. would comfortably exceed the reduction in demand due to a CO2 tax.” This, together with the fact that the forecasts have not actually been revised, makes it hard to resist the conclusion that the real reason for reducing prices by 2% is to enable the issue of a CO2 tax (and external costs generally) to be ‘talked out’. 4.4 Demand and capacity at Heathrow Impacts are based on low assumed levels of throughput (89m passengers pa with two runways; 116m with three runways.) At the Terminal 5 inquiry it was widely accepted that 100m with two runways was a reasonable forecast. The rate of growth since then suggests that this is, if anything, an under-estimate. Alternative scenarios with at least 100m passengers for two runways and 127m passenger for 3 runways (100 + 116 – 89) are needed. More passengers and more flights, together with the extra road traffic, mean greater environmental impacts. 5 External costs 5.1 External costs should be paid 5.1.1 Currently, the air transport industry and its users do not pay for the external costs they impose on society. The main forecast used in CDs assumes this will continue to be the case up to 2030. The Government has said on various occasion that it believes air transport should pay its external costs; the SE CD (para 5.5) says “It is Government policy that aviation should meet its external costs, including environmental costs – that is, the costs to society of aviation noise, and other adverse impacts on, for example, climate change, local air quality, landscape, biodiversity and heritage.” 5.1.2 Given this clear position, it is remarkable that the CD and the packages are based on the assumption that the industry will continue to not meet its costs. (It is arguable that an allowance has been made for greenhouse gases by means of the ‘adjustment’ of prices as noted in 4.3.4 above. But it is clear no other external cost have been allowed for.) While there a significant difficulties, such as international agreements, which make rapid changes difficult, it is hardly conceivable that the government could not have made progress 28 years later. 5.2 Sensitivity tests External costs are included in a couple of ‘sensitivity tests’ which are reported in the CDs. However, the tests are very limited and they assume very low external costs. Being just sensitivity tests, they do not influence the results, that is the options put forward. Given the Government’s position that the industry should pay its external costs, the main forecasts should assume that external cost will in fact be charged those costs and those should be the main forecasts. The effect would then be reflected in the main options presented in the consultation. The alterative assumption - that external costs will not be charged - should be relegated to a sensitivity test. 5.3 Estimating external costs There has been a good deal of work on estimating external costs, particularly of transport, over the past 10 years. External costs are, however, very difficult to calculate and different studies tend to come up with different results. The report ‘Environmental signals 2001’ published by the European Environment Agency puts the cost at 8% of GDP of the EU – a total cost of 530bn Euro pa in the EU. Allocated to air travellers, the cost is 44 Euro per 1000 passenger km and 211 Euro per freight tonne km. Other studies have come up with lower figures. 5.4 Noise costs 5.4.1 The calculated cost of noise is surprisingly small : Values at Heathrow ranged between 36 and 40 pence per passenger; at all other airports, values never exceeded 5 pence per passenger.” (App B, p150). The small figures do not appear to bear out the annoyance and even misery that many people suffer around airports. There follow a number of reasons why we consider that the published costs in the CDs do not reflect the real cost. 5.4.2 The SE CD explains “Monetary values for the effects of noise were estimated by assessing the impact of increased air traffic noise on house prices in the region of the airport option ..” (App B p150). House prices are the most commonly used approach to estimating the cost of noise. This is because they are objective and avoid the manifest problems of asking people what they are prepared to pay and other techniques. 5.4.3 The CD notes : “ The tentative finding of past research, that a 1 decibel change in noise level results in an approximate 0.5 to 1 per cent change in house prices, was used to estimate the order of magnitude of the noise value of different options. (App B p150). The calculations then use a figure is 0.5%, ie the bottom of the range. We see no reason for taking the bottom of the range. A midpoint of 0.75% would have been more appropriate or perhaps the ‘geometric mean’ which is sometimes used in such circumstances. The geometric mean is about 0.7%. 5.4.4 The effect of using 0.7% instead of 0.5% would increase the estimated costs by 40%. This is a large proportion. We consider that, at the very least, an explanation should be given for such an important decision. 5.4.5 The method of calculating the cost of noise – by estimating an effect per decibel (dB) of noise on house prices – was described in a study by Professor David Pearce and Brian Pearce ‘(Setting Environmental Taxes for Aircraft: A Case Study of the UK. 2000’). The method has been used in the studies (although the results have been calculated afresh from DfT data on house numbers, prices, etc. However, a study by the AEF has uncovered some major shortcomings in the method. 5.4.6 The study only refers to noise within the 57 Leq contour and thus ignores all people who are affected by noise but are not exposed to 57dB. The 57 cut-off was based on a study over 20 years ago which took 57dB as the upper noise limit representing low levels of "high annoyance". However, recent studies indicate the onset of annoyance at around 50dB and the WHO considers that people should not be exposed to levels over 55dB on health grounds. The British government has signed up to the WHO studies. It should also be noted that the studies of noise that the Government relies upon for the costs of 0.5% to 1.0% per dB do not give a cut-off of 57dB. At least one study explicitly considers there are costs at least as low as 50dB. It is also generally recognised that a quiet neighbourhood is an asset. A quiet side street may be 45bB Leq and a very quiet one 40dB. These belie the imposition of a cut-off at 50dB, let alone 57dB 5.4.7 There are also other problems with the method. There is an interaction of aircraft noise with other noise such as road traffic. If road traffic is moderate, but just below the onset of annoyance, quite modest amounts of aircraft noise, itself below the level of annoyance, could take the total noise above. 5.4.8 We have not been able to quantify the effect of making changes to the DfT estimates to allow for these factors. However, the DfT estimates use the same basic method as Pearce and Pearce. We previously calculated that, due to the same shortcomings, Pearce and Pearce’s costs were less than half of the true ones. Our results were sent to the DfT several months ago. No acknowledgment, let alone rebuttal, has been forthcoming. 5.4.9 The studies referred to by the DfT relate typically to daytime noise, measured as Leq. It is generally recognised that (unadjusted) Leq is an inappropriate measure at other times, particularly at night. The impact of any noise event of over about 60dB is significant – it can wake people up. The cost people put on night noise can be gauged from the fact that a few citizens in a few quite narrow band around one airport were prepare to find over Ł100,000 to fight a court case which was by no means assured of success and even if it did succeed, would not mean an automatic ban on night flights. Equally telling was the Government’s view that many millions of Łs would have to be paid in compensation if the case succeeded. It is not at all obvious that such cost are captured in the deprecation per dB of day noise. 5.4.10 Apart from the issue of night flights, deprecation of house prices does not by any means capture all the other costs. 5.4.11 The method does not appear to capture costs of industrial buildings, schools, hospitals, etc. People occupying such sites may suffer the noise, for example worse working conditions for staff, slower learning schools (this has been shown in studies) or slower recuperation in hospitals. These will all give rise to economic costs. Alternatively, the site concerned can undertake amelioration, such as double glazing. This also gives rise to economic costs. Depreciation of house prices does not cover such items. 5.4.12 The estimates presumably reflect the cost of noise to people who live in the area affected, whether they are indoors, in their gardens or in parks, etc. They do not however capture the costs for visitors. To take an extreme case, the cost of intense aircraft noise in the Peak District would be very low as measured by depreciation in house prices. But the effect would be devastating; a large part of the very real value that visitors put on the area would be lost. 5.4.13 In the case of such special areas, values for onset of annoyance of 57dB or 50dB are completely inappropriate. An especial value of such areas, and indeed the countryside at large, is peace and quiet. Noise levels well below 50dB can destroy this peace and hence enjoyment of their countryside by large numbers or urban visitors as well as local residents. 5.5 Air pollution 5.5.1 In discussing external costs, the paper states that “Robust values of the effects of local air quality on health are not available.” (14.28, Annex B, p152). This is undoubtedly true. However, the fact that they are not robust does not mean that no estimate should be made of the economic cost. It is probably the case that the estimate of the economic cost of CO2 emissions is also not robust, but this has not prevented consideration of the issue and the running of sensitivity tests. 5.5.2 The South East CD dismisses the economic cost of air pollution thus : “The analysis indicates that within the South East, only an additional runway at Heathrow could (without preventative measures) lead to a significant number of people being subject to changes in NO2 of this magnitude, and this on conservative assumptions. These estimates of the costs of respiratory illnesses indicate that the total amount would be too low to be expressly represented in any environmental levy.” (App B, page 151) In other words, the economic cost of air pollution is too small to worry about, even at Heathrow. A closer look suggests a rather different picture. 5.5.3 The CD only takes account of the effect of NO2 (nitrogen dioxide) on hospital admissions which do not lead to death : “Robust values of the effects of local air quality changes, primarily NO2, on health are not available. But information supplied by DEFRA suggests that respiratory hospital admissions might increase by 0.5 per cent for each 10ug/m3 of NO2. This implies an increased admission rate of approximately 5 per 100,000 people at an NHS cost of Ł1500 – 2700 per respiratory hospital admission. These values give a total cost of around Ł10,000 for every 100,000 people subject to an increase of 10ug/m3 of NO2 arising from respiratory illnesses (this does not include any deaths brought forward for which there is no evidence at present).” There are a number of shortcomings of this approach. 5.5.4 The NHS costs are only part of the story. The total cost of illness and suffering is greater than the costs of treating it. While it is harder to put a cost on suffering than a straightforward financial cost of treatment, there are established methods of estimating such economic costs. 5.5.5 The CD suggests that there will be no deaths from air pollution and therefore there will be no cost. This cannot be right. Air pollution is a major killer in the UK – following work by its Committee on the Medical Effects of Air Pollution (COMEAP), the Government now accepts that air pollution causes 12-24,000 premature deaths a year. These deaths are due only to short episodes of high pollution levels; the committee was not able to estimate deaths from long-term or chronic exposure. Since airports are a major polluter in the area where they occur, they will cause deaths from air pollution. It was estimated by Friends of the Earth that Heathrow Terminal 5 alone would cause 17 deaths pa from air pollution and have an economic cost of about Ł40m pa. These figures were not disproved by the industry or rejected by the Inspector or the Government. 5.5.6 The CD says there is no evidence for deaths from NO2. This may be correct in respect of direct deaths, although how hard the Government has looked for evidence has to be questioned. However, NOx leads to production of other potentially lethal gases, especially ground level ozone. ‘Non-methane volatile hydrocarbons’, also emitted by airports, also lead to ozone. Ozone is one of the most dangerous pollutants. The other dangerous pollutants are PM10 (small particulate matter) and to a somewhat lesser extent SO2 (sulphur dioxide). While they are not emitted in such large quantities around airports as NOx, there can be enough to cause ill health and death. The economic cost of illness and deaths from these various pollutants has been ignored in the CDs. 5.5.7 Interestingly, the cost of air pollution were estimated by Peace and Pearce (2000). The government has used Pearce and Pearce’s method for costing noise (Annex B, p150), but not for air pollution. We have not been able to carry out a full comparison, but Pearces’ costs are almost certainly much higher than the NHS cost. Examples in their paper suggest that the cost of air pollution may be about 20% of the cost of greenhouse gases and the same order as their estimate of the cost of noise. 5.5.8 There are also effects of air pollution other than those on human health, including corrosion of buildings and structures, soiling of materials, interference with agriculture, damage to habitats and local extinction of species (see 4.8, etc of air pollution briefing). These will also have economic costs. 5.5.9 From the above the statement in the CD “ .. the total amount would be too low to be expressly represented in any environmental levy.” cannot be justified and so is very misleading. The DfT may claim that the statement refers only to NHS costs for NO2 , but there can be little doubt that the reader could easily be misled in thinking there is no significant economic cost of air pollution. We are unable to estimate the costs with any degree of accuracy, but there is no reason to assume the cost of air pollution is negligible. 5.5.10 Given that there are external costs of air pollution, it is right that those who suffer should receive compensation. Those near an airport and thereby exposed to a significant increase (more precisely, an increase over the amount there would have been without expansion, not necessarily an absolute increase) should receive compensation. This is consistent with the Polluter Pays Principle. (BA has apparently said that the government, not the industry, should pay for the costs or air pollution incurred by a third runway at Heathrow.) 5.6 Greenhouse gas costs 5.6.1 The CD for the South East describes work done on external costs of greenhouse gases and sensitivity tests to take account of them. The explanation is very confusing because it is spread over various places in the SE CD – 5.7, 5.8 , 5.10, 5.11/4, 16.21, App B p150, Annex E p159 last para. 5.6.2 An external cost for greenhouse gases is used for the sensitivity tests as described in (Annex B p159 para 5). It can be inferred from this that the cost of Ł70 (increasing by 1% pa) per tonne of carbon has been multiplied by 3 to take account of the full ‘radiative forcing’ of the emissions and then applied in the sensitivity tests. The results support this interpretation. 5.6.3 This cost has been assumed to be charged as a tax on fuel, set at 100% of the cost of basic cost of the fuel. The effect on demand is estimated initially at 12% : “The combined effect of these two revisions indicates that the demand for air travel could reduce by about 12 per cent.” (Annex B p150, para 5). The calculations were carried out a computer modelling programme called ‘SPASM’ which we have not been able to study. However, the result is consistent with what would be expected if the elasticity of demand is –1 (see 5.10.1) and the cost of fuel represents 10-15% of the costs of airline operations. 5.6.4 Although we do not disagree that the DEFRA that a cost of Ł70 per equivalent tonne of carbon equates to a tax of about 100% on fuel at present, we do not consider this is the right approach to calculating the effects of a charge. The external costs depend on the impacts of the fuel burnt, not on its price. The cost should therefore be expressed as an absolute value, eg 17p per litre, not a relative one, eg 100% of fuel cost. Use of the latter means that if fuel prices change, a sensitivity based on 100% of basic fuel price is not meaningful. 5.6.5 Although a tax on fuel would reduce demand, the effect is not as great as one would expect on the basis of price elasticity alone because a higher cost of fuel gives more incentives to the industry to use more fuel-efficient aircraft. This in turn means the impact of the tax on demand is reduced as described in Annex B p150 paras 6,7. The net effect in the CDs is estimated to be a reduction of demand by about 10% instead of 12%. 5.6.6 Although demand is only reduced by 10%, the CO2 emissions will be reduced by more. This is because of supply side effects referred to above. The more fuel-efficient aircraft will produce less CO2, so CO2 emissions and global warming are reduced by more than the fall in demand. This illustrates the value of an environmental tax without it needing to reduce demand. 5.6.7 As noted in 9.2 above, the DfT has used a DEFRA estimated of external cost of Ł70 per tonne for CO2. But the European Environment Agency (EEA), an agency of the EU, has used a figure some 4 times as great. While the EEA figure could be an over-estimate, it shows equally that the figures in the CDs could very significantly understate the importance of the issue and impacts of charging external costs. 5.6.8 Having derived an external cost for greenhouse gases and shown that application of charge on fuel would make an appreciable impact on demand, the CD appears to then try and ‘talk it out’. This issue is discussed in 4.3.4. 5.7 Other external costs 5.7.1 There are other costs in addition to those of noise, air pollution and greenhouse gases. Some are environmental; others not : loss of wildlife, habitats and biodiversity impacts on watercourses and groundwater increased risk of flooding due to loss of natural surfaces loss of countryside loss of landscape harm to townscape and visual amenity loss of heritage, eg ancient churches, old buildings and monuments third party safety (insofar as insurance/compensation not covered by the industry) traffic congestion bringing disease into the UK 5.7.2 The consultation is unambiguous in that such external costs should be charged : “It is Government policy that aviation should meet its external costs, including environmental costs – that is, the costs to society of aviation noise, and other adverse impacts on, for example, climate change, local air quality, landscape, biodiversity and heritage.” SE CD, para 5.5) 5.7.3 With the exception of congestion, none of these are very amenable to calculation of external costs. If, however, one were able to assess costs, it seems likely that these would not be insignificant compared with the costs where estimates have been made, namely noise, air pollution and greenhouse gases. There is no doubt that these additional items figure appreciably in the lives of many people. 5.8 Traffic congestion costs 5.8.1 Congestion costs are relatively easy to estimate, given adequate road traffic studies. Such studies will show the extra congestion imposed by a new airport or by airport expansion and thus the extra time spent by motorists and by public transport users. When these are multiplied by the standard value of time used by the DfT, an economic cost is obtained. 5.8.2 The detailed traffic studies needed to assess the cost of congestion have not been carried out in the air studies. However, work at the Heathrow Terminal 5 Public Inquiry illustrates the likely scale of cost. Friends of the Earth used DfT and BAA data to calculate an economic cost of about Ł60m pa due to Terminal 5. (This figure was not disproved by the supporters of T5 or rejected by the Inspector or by Government.) These costs related to an increase of 30m passengers pa. 5.8.3 If the same relationship between congestion cost and numbers of passengers were to pertain across the country, the total cost of congestion would be Ł640m pa. This is undoubtedly an over-estimate, as most of the country is not as congested as the area around Heathrow. But even if reduced substantially, the figure is not insignificant compared with the claimed economic benefits of airport expansion. 5.9 Total external costs related to fares 5.9.1 As is clear from the foregoing, there is a good deal of uncertainty in the individual external costs. It is therefore not possible to derive a precise figure for the total external costs. It is however instructive to derive a rough estimate. Moreover, it is important to do so, as it will inform an important national debate. 5.9.2 The external cost of greenhouse gases appears to be about 12% of the average fare. (This is based on the estimated reduction of demand by 12%, 5.6 above, and the assumption of an elasticity of -1). 5.9.3 According to the study of Pearce and Pearce (5.4.5 above), the cost of air pollution may be around a quarter of the cost of greenhouse gases. This would correspond to a 3% cost. Friends of the Earth’s estimate for Heathrow Terminal was a cost of Ł40m pa relating to a passenger throughput of 30m pa. This corresponds to a cost of Ł1.33 per passenger (one trip end). With the price of flights coming down, it could be assumed that a typical (one-way) flight will cost Ł100 by 2030. The economic cost of air pollution is thus 2.7% of the fare (1.33 x 2 / 100). This close to the 3% of Pearce and Pearce. The air pollution costs at Heathrow are undoubtedly higher than at other airports, due to the greater number of people exposed. We make the (rather arbitrary) assumption that averaged across all airports, the cost is half, ie 1.5%. 5.9.4 The cost of noise quoted in the CD is 36 to 40p at Heathrow. Noting that their figures are under-estimated by a factor of over 2, see 5.4.6-8, the real cost would be at least Ł1, particularly if the factors that are not captured by the house price methodology are added in. As there is noise nuisance at each end, the cost per trip is Ł2. The noise cost is then 2% of the fare. The noise pollution costs at Heathrow are undoubtedly higher than at other airports, due to the greater number of people exposed. We again make the (rather arbitrary) assumption that averaged across all airports, the cost is a half of the Heathrow figure, ie 1.0%. 5.9.5 As noted in 5.8.2, the estimated cost of congestion at Heathrow due to Terminal 5 is Ł60m pa. This relates to 30m passengers, so the cost is Ł2 per passenger for one trip end. The total cost per trip would be Ł4, so using the same assumption of an average single fare of Ł100, the congestion cost is 4%. The traffic congestion costs at Heathrow are undoubtedly higher than at other airports. We make the (rather arbitrary) assumption that averaged across all airports, the cost is a half of the Heathrow figure ie 2.0%. 5.9.6 The total of 4 of the costs – greenhouse gases, noxious gases, noise and congestion - is thus 16.5%. There are no reliable estimates for the other external costs mentioned in 10 above. Given the significant types of impact however, it seems reasonable to increase the figure of 16.5% to, say, 20% to allow for all these other impacts. The total external costs could therefore be of the order of 20% of the (unadjusted) fare. 5.9.7 It was noted (5.3 above) that the EEA has estimated an external cost of 44 Euro per 1000 passenger km. Assuming a typical flight is 1000km (600 miles) and its typical cost is (by 2030) Ł100, the external cost would be about 28%. This is rather larger than the figure of 20% derived above using UK data, the difference being mainly due to the higher assumed cost of greenhouse gases in the EU estimate. 5.10 Effect on demand of applying external costs 5.10.1 If an external cost of 20% were charged, the demand might be expected to would fall by some 20%, given an elasticity of -1. There would probably be some supply side effects offsetting this figure, as noted for greenhouse gas emissions. However, they would not be large, as it is not as easy to improve performance across a whole range of parameters as it is in one parameter, such as fuel consumption. A reduction of 10% in the initial fall of demand of 20% is assumed, giving an actual reduction of 18%. Thus a demand of 501m passenger pa becomes 411m. In the SE the demand of 301 is reduced to 247m. 5.10.2 A fall in total demand at 2030 means a larger % fall in growth from 2000 to 2030, because one is moving from a situation in 2000 where external costs are not charged to one in 2030 where they are charged. The reduction in demand at 2030 of 18% corresponds to a reduction in growth from now to 2030 of 29% : 100 – { (411 – 181) / (501 – 181 }. The figure for the SE is similar. 5.10.3 It is not possible at present to translate the reduction of demand properly into alternative packages, as this would require re-running of some of the RASCO studies. In the case of the SE, however, where there are a small number of heavily used runways, the effect can be gauged. Table 14.4 of the CD shows the amount of the demand that would be met with the various options and Table 14.6 shows economic benefits. A package that meets the great majority of the unadjusted ‘demand’ and shows high economic benefits (by the DfT’s method ) is one extra Runway at Heathrow and two extra at Stansted. A reduction of demand to 247m would render this option unnecessary. Options such as two new runways at Stansted or one at Heathrow and one at Stansted would meet the demand. Thus a 3rd runway at Heathrow or Stansted could be rejected. 5.10.4 This reduction of need for runways from 3 to 2 because of applying external costs does not of course mean that two are still needed. There are other factors, most notably tax ‘equalisation’ which need to be considered before the real need for runways can be ascertained. 5.11 External costs in absolute terms The external cost can expressed in Ł instead of a % of fares. If the average fare is assumed to be Ł100 as before and there are 501m passengers in 2030, of which 20% are domestic, the annual expenditure will be Ł45bn. An external cost of 20% corresponds to a value of about Ł9bn pa. Back at 2000 levels of traffic and prices, this would be very roughly Ł3bn pa. 5.12 Inadequate treatment of external costs in the consultation Sensitivity tests have been carried out in which the cost of greenhouse gases is included (see 4.3.4, 5.6). This suggests that the price of air travel could rise by 12% and demand would fall by 10%. The government is able to talk its way out of this by pointing out, with some justification, that 10% is within the accuracy of the forecasts and in any case only corresponds to a couple of year’s delay in reaching the forecast traffic. But if the government were to add in proper costs for local air pollution, noise, other environmental cost and also non-environmental costs, the approach would less tenable. As our calculations show, an increase in fares of about 20% to reflect external costs would have a significant effect on demand the need for new runways. It is hard to resist the conclusion that the DfT and/or the government have avoided adding in all the other external costs as well as greenhouse gases because it would expose the limitations of their forecasts and would invalidate the some of the ‘need ‘ for expansion. 5.13 Conclusions It should be emphasised that these calculations are very approximate. However, they clearly show that external costs are very significant, some 20% of the price of fares. While greenhouse gases are the most important single external cost, the other external costs, when taken together, are of the same order. If external costs were added to air fares, demand would be reduced at 2030 such that one of the three extra runways would not be needed. The above conclusions about costs and reduction of demand represent only part of the story, as the issue of tax avoidance needs to be factored in. Taxes are covered in Section 6. We have concerns that the DfT and government have played severely played down the impact of external costs. 6 TAX AVOIDANCE 6.1 No justification for tax avoidance 6.1.1 It is now well known that the air transport industry and its customers do not pay taxes which they might be expected to pay : No tax on fuel No VAT on tickets or on the components of air travel such as aircraft No duty or VAT on airport purchases for journeys outside the EU 6.1.2 When other industries and sectors pay tax and charges to their customers have to allow for this, these exemptions for air transport amount to a public subsidy to the industry and its customers. This is because they allow the air transport industry to operate at lower costs than other industries and, virtue of not paying tax, increase the tax burden elsewhere. The tax avoidance effectively subsidises those who fly (or fly more often) at the expense of those who do not. The subsidies also distort the economy. 6.1.3 There area no good social, economic or environmental reasons for these tax exemptions. The only justification appears to be that international agreements and practices are such that taxes are not charged at present. For example, there is an agreement (Chicago Convention, 1944) that tax should not be charged on fuel. (This only applies to international flights – there is no impediment to tax on domestic flights.) 6.1.4 Taking the longer view, it is reasonable to assume that the situation will be rectified and that air transport will pay its fair share of tax by 2030. The Government has a stated policy of ending the tax anomaly and of ensuring that the aviation industry pays its ‘external costs’. Even allowing for the ‘glacial’ pace of ICAO and international negotiations generally, it is hard to see why the anomaly should not be ended within 28 years. Germany is already planning to levy VAT on flights. And while there is no immediate prospect of a tax on fuel, various charges, such as an EU emissions charge are being considered. In the UK the Airport Passenger Duty (APD) sets a precedent which shows that a charge can be levied in lieu of another one such as fuel tax where that other one is not acceptable internationally. 6.2 The correct taxes for air transport 6.2.1 We are not aware of any agreed policy or framework that allows one to establish what the ‘correct’ or appropriate level of tax should be for any good or service. One therefore has to apply generally accepted principles as well as precedents and analogies. 6.2.2 VAT is charged on all items except where there is a good social reason for it not to be charged. Food, for example, is an absolute basic and an item that takes up a much larger proportion of the income of poor people. Air travel is most certainly not such an item. Thus, there is no justification for exemption (or Zero Rating) in the case of air transport. It should be noted that VAT is payable on the various components of car and lorry travel. It is also paid on telecommunications, which has a similar role to business travel insofar as it facilitates international business. 6.2.3 A high rate of tax is paid on petrol for cars. This is typically 45.8p per litre (there are variations according to the type of fuel.) There are lower taxes for particular uses, eg farm machines and buses – these reductions are for social reasons. The money from fuel tax makes an important contribution to public services such as health, education, and defence. The Government says that the tax on fuel is also intended to make a contribution towards the ‘external costs’ that are imposed by road users on the rest of society. (For more information on external costs see Section 5) 6.2.4 It is hard to see why air transport should not pay tax at least at the same level as motorists pay for their petrol. Unlike car use, air travel is not an everyday activity, needed for travel to work or for normal social activity. It is largely a luxury, the great majority of flights (nearly 80%) being for holidays and other leisure pursuits. 6.2.5 Air transport imposes significant external costs on society, so, like road traffic, it is reasonable that a tax on fuel should cover these costs. 6.2.6 The exemption from duty and VAT of goods (‘tax free’) purchased at airports and in aircraft outside the EU is also an anomaly. This is most notable for alcohol and tobacco, which carry excise duty as well as VAT. There is no logical reason why air passengers should obtain their purchases tax free, while anyone who purchases those same goods in the high street has to pay a higher price. 6.2.7 Based on the above, it is entirely reasonable that air transport should pay : VAT at the normal rate of 17.5% Tax on fuel at the same rate as petrol for cars, ie 45.8p per litre. VAT and duty on consumer purchases at airports 6.2.8 Air travel is very much skewed toward the better off - 53% of flights were made by just 11% of people according to ‘Travel Trends 2000’ It seems reasonable to tax air travel substantially for social reasons as it would be ‘progressive’, ie impinge on the better-off more than the poor. Indeed, on this basis the tax on aircraft fuel ought to be higher than for cars, where poorer people are significant users. 6.2.9 There is an argument used by the supporters of the aviation industry to the effect that taxes on air travel will affect the poor and prevent them flying. This does not stand up to scrutiny. If air travel were properly taxed, the money raised could be used to improve the essential services on which poor people are particularly dependent. Such money would be far more useful in alleviating poverty and improving equity than subsidising air travel where nearly all the benefits go to the better-off. If the money released were, instead of being diverted into provision of public services, given directly given to poorer people, eg by means of lower tax rates or income support, those people would be able to make a choice about how to use their extra money. They could use some of their extra money to the extra cost of then unsubsidised air fares or they could choose to spend all their money in other ways. 6.2.10 Based on the above, an appropriate and socially just level of tax can be calculated. VAT of 17.5% should be added to the basic fare. A tax on fuel of 45.8p per litre represents a charge of about 32% on the price of a ticket (based on the DfT sensitivity test). Charging VAT and duty on goods purchased at airports is equivalent to about 3% on the price of a ticket. The total effect would be to increase fares by 52.5% (17.5% + 32% + 3%). 6.2.11 It may be noted that this calculation assumes that VAT is not levied on the duty component of the fuel. This is in contrast to petrol, where such ‘double taxing’ occurs. Thus, we are actually assuming a more benign regime for air transport than for car users. 6.3 Effect on demand forecasts 6.3.1 The DfT forecasts in the CDs up to 2030 are based on the assumption that none of these taxes will be paid. (It may be argued by the DfT that some element of tax is covered insofar as they considered a CO2 tax and then offset the effect on demand by increasing the underlying forecast, see 4.3.4, 5.6.) Based on the DfT and other government data, it is possible to re-calculate the forecasts. 6.3.2 Air passengers already pay Airport Passenger Duty (APD). This is equivalent to about 6.5% on fares. The DfT forecasts are understood to assume that this will continue. This 6.5% should therefore be netted off the 52.5% in 6.2.10 to give the correct increase in fares, a value of 46%. The DfT considers that the ‘elasticity of demand’ is about –1 (see 5.10.1). This means that the DfT’s demand would be reduced by 46% of the original 2030 forecast. The demand at 2030 would then be 270 million passengers pa instead of 501. The SE demand would be reduced to 162m from 301m. 6.3.3 These estimates assume that taxes remain at the same (relative) levels in 2030 as they are now. We have no reason to believe that VAT or excise duties will alter in real terms. But if air fares decline as predicted by the DfT in their CDs, the tax as a % of fares will increase, because the fuel tax will be bigger in relation to the fare. 6.3.4 In the discussion on external costs (Section 5) it was noted that reduction in demand due to imposition of a fuel tax was not quite as large as one would expect on the basis of price alone. This is because a tax on fuel encourages fuel efficiency and thus cushions slightly the impact on demand. The DfT estimated that demand would fall by 2% less than expected (from 12% to 10% on their sensitivity test). The result here are not adjusted for this factor; we assume that this factor and the one in 6.3.3 above offset each other. 6.3.5 A fall in total demand at 2030 means a larger % fall in growth from 2000 to 2030, because one is moving from a situation in 2000 where tax is avoided to one in 2030 where it is paid. The reduction in demand at 2030 of 46% corresponds to a reduction in growth from now to 2030 of 72%: 100 – { (270 – 181) / (501 – 181 }. The figure for the SE is 75%. 6.3.6 The above calculations used an elasticity of –1 which remains fixed however far the price departs from the starting point. This may be termed an ‘arc elasticity’. The issue was raised with the DfT and they did not say that taking their value of -1 as an arc elasticity was inappropriate. Nonetheless, we are concerned not to over-state the effect the effect of tax avoidance, especially as the apparent impact is so large. We therefore make an alternative assumption that the elasticity of –1 is in fact a constant ‘point elasticity’. This is a more ‘conservative’ assumption in that the effect on demand of a given price change is not so great. 6.3.7 Using a point elasticity, it is estimated that removal of tax anomalies would reduce the annual demand at 2030 by 31% : 1 – { 100 / (100 + 46) }. The effect is to reduce national demand from 501m to 343m. SE demand reduces from 301m to 206m. 6.3.8 As before, a fall in total demand at 2030 means a larger % fall in growth from 2000 to 2030, because one is moving from a situation in 2000 where tax is avoided to one in 2030 where it is paid. The reduction in demand at 2030 of 31% corresponds to a reduction in growth from now to 2030 of 50%: 100 – { (343 – 181) / (501 – 181 ) }. The figure for the SE is 53%. 6.3.9 The effects of these reductions are profound. They mean that the entire basis of the CDs and the consultation itself is dubious. Much of the ‘need’ for massive airport expansion that the CDs appear to portray is in fact not necessary. Over half of the ‘forecast’ growth evaporates. 6.3.10 The estimates of taxes, fare increases and reductions of demand are all approximate. However, the resultant changes in the forecasts are so large that even if there are appreciable errors in our calculations, there is a major issue with the CD forecasts an d the resulting options. 6.4 Effect on need for additional runways 6.4.1 It is not possible at present to translate a 46% (UK) reduction of demand properly into alternative packages, as this would require re-running of some of the RASCO studies (but see 19.2). In the case of the SE, where there are a small number of heavily used runways, the effect can be gauged. 6.4.2 Table 14.4 of the CD shows the amount of the demand that would be met with the various options and Table 14.6 shows economic benefits. A package that meets the great majority of the unadjusted ‘demand’ and shows high economic benefits (by the DfT’s method) is one extra Runway at Heathrow and two extra at Stansted. With the application of taxes, demand would reduce to 162m. Table 14.4 indicates that this level of demand could be comfortably met by using more fully existing runways (maximum capacity 189m). The adjustment of demand means that new runways in the SE are totally unnecessary. 6.4.3 If one takes the more conservative assumption relating to ‘point elasticity’ (see 6.3.6) the situation is not quite so clear-cut. The SE traffic of 206m is not quite met by the ‘maximum use of existing runways’ option, capacity being 17m short. The options with one extra runway provide ‘over capacity’ of 14m or 24m for the Heathrow and Stansted options respectively. 6.4.4 Although there would be a slight shortfall in capacity in the SE, some of the demand could probably be taken up in adjacent regions, where there would be excess capacity, even without new runways or airports. 6.4.5 If one looks at the national picture, it appears there is more than enough capacity. The ‘maximum capacity’ is 428m passengers pa (table 14.4 of the SE CD). This is far more than the ‘corrected’ demand of 270m in 6.3.2 above. It is also well under our alternative figure for corrected demand of 343m, calculated using a more conservative assumption on elasticity. 6.4.6 The corresponding figures for regions outside the UK are a demand of 200m (501 - 301) reducing to 108m (270 - 162). Using our more conservative assumption on elasticity, the demand falls instead to 137m (343 - 206). 6.5 Tax avoidance includes external costs In the section on external costs we estimated that if external costs were charged, fares could rise by about 20%. This is not a cost additional to that from charging taxes, estimated here to increase fares by nearly 50%. This is because it is assumed that part of a tax on fuel would be to cover the external costs, as is the case for petrol tax. 6.6 Tax avoidance in absolute terms It has been calculated by the AEF that tax avoidance amounts to some Ł7.5 bn pa at 2000. This would be expected to increase to some Ł20bn by 2030 if nothing is done to alter the situation. 6.7 Omission of tax issue from the consultation 6.7.1 It is clear that removing the tax exemptions which the industry currently enjoys has an enormous impact on the forecasts and therefore the options presented in the CDs. It is remarkable therefore that the issue of tax avoidance is barely mentioned in the thousand-odd pages of CDs. If it had been, the thrust of the CD and the consultation as a whole would be significantly changed. 6.7.2 As it stands, with no mention of these issues, the consultation is seriously misleading. It is inconceivable that the Government and DfT were not aware of these issues or the impact they would have on the result. We are forced to the conclusion that the Government and DfT have ignored the issue of tax avoidance in order to demonstrate more strongly a ‘need’ for airport expansion in the consultation. 6.8 Conclusions There is no justification for assuming that air transport will continue to avoid taxes. For social, economic and environmental reasons, air transport should be taxed at a rate which corresponds to an increase in fares of about 46%. If these taxes were paid the need for additional runway by 2030 in the SE would virtually disappear. Nationally, there would be ample capacity without new runways. The issue of tax avoidance is barely mentioned in the CDs. We are concerned that the DfT and government have avoided the issue because it would cast severe doubt on their forecasts and the ‘need’ for more runways. 7 OTHER ECONOMIC ISSUES 7.1 Contribution of air transport to the economy 7.1.1 The CDs point out, correctly, that air transport is a big business. Oxford Economic Forecasting, whose studies have been used in formulating the consultation, estimate that the industry ‘contributes’ Ł10.2 billion to the Gross National Product (1.4% of the total). [The Contribution of the Aviation Industry to the UK Economy, 1999.] 7.1.2 This ‘contribution, is however irrelevant to the debate on the growth of air travel. The fact that air travel is part of the economy does not mean that the economy would be smaller if there was less air travel. If billions of Łs was not spent on flying, it would be just be spent on other goods and services. An independent consultancy says, “ .. If for various reasons, air travel capacity was constrained resulting in less resources being used in air transport, additional resources would be employed elsewhere in the economy and labour would be created and employed elsewhere. .. If UK passengers cease to fly, the money saved does not burn a hole in their pockets, they spend it elsewhere.” [Berkeley Hanover report: The Impacts of Future Aviation Growth in the UK.] 7.1.3 Of course there will be economic benefits to the air transport industry of rapid growth. But this is unimportant in the context of the consultation – the key issue is the economic impact on the UK as a whole. As shown above, the impact is neutral ie the size of the economy is not affected (as least to the first order) by the size of the air transport sector. Thus the direct ‘contribution’ of air transport is irrelevant to the decisions on capacity. 7.2 Assessed economic benefits 7.2.1 Economic benefits, cost and net benefits have been calculated, as described in ‘Economic Appraisal’ supporting document (Section 3). Results for the SE are presented in Table 14.6 of the CD. The benefits calculated are those that accrue to passenger, freight users, producers (suppliers) and government. Costs are financial costs that are incurred in providing extra capacity. We have no comment on these values. 7.2.2 It is important to emphasise that while these parties are very important, they do not represent the totality of people who have cost or benefits associated with airports. A key issue is that there are significant costs associated with flights which are imposed on people who are not flying. These are not recognised in the ‘marketplace’ for air travel and they are not included in the assessed net benefits. (Costs imposed on the passengers are part of the ‘marketplace’ for air travel and they are allowed for assessed net benefits.) 7.2.3 The cost imposed on those not flying are called ‘external costs’. It is estimated in 5 that the external costs of air transport are about Ł3bn pa and will rise to about Ł9bn in 2030. If one wishes to assess the total or societal net benefit of air transport, these external costs need to be added in. 7.2.4 Unfortunately, there is no year-by-year data on assessed benefits given in the Economic Appraisal report or the CDs. The benefits are calculated by taking yearly benefits up to 2030, extending up to 2060 and then converting to a ‘present value’ (PV). One can however do a rough comparison of figures to ascertain the relative order of the assessed benefits and the external costs. 7.2.5 The 3-runway options in the SE are the most useful to analyse because they can meet most of the (apparent) demand without great excess capacity. The net benefits (Table 14.6 of the SE CD) are Ł17.8bn and Ł20.9bn. We take the higher value - which is for two extra runways at Stansted and one extra at Heathrow - as the example. 7.2.6 If annual external costs are Ł3bn pa now and we assume they increase steadily up to Ł9bn at 2030 (see 5.11) the average is Ł6bn pa. This represents an increase of Ł3bn pa over the present situation and can be taken as a very rough cost of allowing unconstrained growth. If this average figure is taken as a constant figure over a long period, say 60 years, it can be readily converted to a present value of 3bn / 0.06 = Ł50bn. This must be subtracted from the assessed net benefit calculated by the DfT in order to allow for the societal impacts that are not captured by their method. The result is a net benefit of - Ł29bn (Ł21bn - Ł50bn), a very large net disbenefit. 7.2.7 We are fully aware that this is not a proper calculation; it is no more than a juxtaposition of figures to a give feeling for the likely impact. In particular the costs are nothing like constant – the passenger benefits, the industry benefits and the external costs due to provision of extra capacity all start at zero and rise up to 2030. Nonetheless, the calculation shows that the apparent large economic benefits are likely to be converted into large negatives if external costs are included. 7.2.8 The fact that there is such a large net disbenefit should come as no surprise. The reason for such high forecasts and the ‘need’ for 3 new runways in the SE is, as shown in Section 6, is largely a result of tax avoidance and non-payment of external costs. If these are taken into account in the economic calculations, one would indeed expect the net benefits to become negative. If on the other hand, those costs are paid and the forecasts drop accordingly, the adjustment for external cost will be far less and the option that shows the best economic benefit would be one where that reduced level of demand is met. In the SE, this would probably be an option with no or perhaps one extra runway. 7.2.9 It must be emphasised that figures in Table 14.6 are only those for the consumers and suppliers of air travel and do not reflect benefits to the UK as a whole. The benefits to consumers and suppliers is a function of the price that the service can be supplied at. If the price of air travel were to fall further, the net benefits as shown in Table 4.6 would be higher. As we have shown, the benefits are only achieved because of the large amount of tax avoidance and non-payment of external costs. If we to go further by, for example, removing APD, by building new airport capacity from public funds and by financing development of new aircraft, the benefits would be larger. If we were to go further and pay for people’s trips out of the public purse, the benefits would be bigger still. But to suggest that we should do these things would be absurd. The flaw is, of course, that while doing these things would indeed benefit passengers and the air transport industry, the cost to the rest of us would be far greater. 7.2.10 Given the severe limitations of the benefits figures, it is most unfortunate that no qualification is given in the CDs. The fact that the figures bear little relationship to societal benefits is of crucial importance and should have been explained. The absence means that the CD will be misleading for most readers and will tend to lead them down a path that is not justified. 7.2.11 The benefits of air travel extend to many users who are not themselves travelling, for example, the purchases or goods which are flown. However, no allowance for such benefits needs to be made. This is because the market captures such ‘knock-on’ benefits and the benefits are already captured by the methodology which derives producer and consumer benefits. 7.3 Constraints and fare premiums for passengers 7.3.1 In the SE CD it is stated that “ .. unless substantial additional capacity is brought on-stream airfares from the SE are likely to to increase sharply. We estimate a fare premium of Ł100 .. if no new runway capacity is provided.” There is no explanation of how this figure was derived. 7.3.2 Analysis of the studies reveals that this Ł100 is a premium on a long-distance flight, a return trip and at 2030. That is, about the most extreme case possible. It is hard to resist the conclusion that this case has been chosen in order to ‘scaremonger’. If the price premium on a more normal flight, such as the Ł100 single ticket that we have used illustrate our case, the premium in Ł would have been seemed modest. 7.3.3 It is of course correct that prices will tend to go up if there are constraints (assuming a free market is allowed to operate). It is also obvious that this is not good news for passengers. But the fact that passengers would not like it is not the point. The issue is whether it is good for society as a whole. Following from our previous analysis, the answer is yes, higher prices would be good. The reason for this is that presently air fares are artificially cheap because they do not for their ‘external costs’ and they avoid large amounts of tax. If prices were ‘corrected’ economic theory tells us that this would be beneficial overall. 7.3.4 The scenario posited in the CD appear to be that no new runways are built in the SE and that the shortage of capacity is overcome by rationing by price. While this could, as noted above, be beneficial, physical constraints such as not building runways, are not the optimal solution. They are blunt instruments which are ‘economically inefficient’, that is they do not deliver the required result in the most economic manner. Far better would be to ensure that passengers pay the right price at the outset, ie they pay the external costs and taxes. This would be more economically efficient for everyone and would deliver bigger environmental benefits. If this happened, the need for new runways would largely disappear, as shown in Section 6. It is because physical constraints have a somewhat similar effect to charging the proper price that somewhat similar benefits are achieved. 7.4 Foreign Direct Investment 7.4.1 There is a complete unbalance in the CDs in that potential benefits are emphasised while corresponding disbenefits are ignored (eg SE CD 3.32). Business travel can bring investment and money into the UK, but by the same token it can take it out. 7.4.2 The DfT argues that expanding airport capacity would attract more overseas investment to the UK, thereby creating business and jobs in the UK that otherwise might not exist. But the DfT does not acknowledge that air transport also attracts UK investment overseas, creating business and jobs overseas rather than in the UK. 7.4.3 Even Oxford Economic Forecasting, in a study funded largely by the UK air transport industry for the Department, acknowledged that international investment flies both ways: “ .. the UK received an average $22 billion of inward investment a year between 1993 and 1997 … the UK’s good air links have also encouraged UK firms to invest abroad by making it easier to manage overseas subsidiaries – between 1993 and 1997 UK investment overseas averaged $39 billion.” [The Contribution of the Aviation Industry to the UK Economy, 1999.] 7.4.4 Between 1997 and 2001 overseas investment in the UK averaged $73.2 billion per year and UK investment overseas averaged $135.8 billion per year [Source : United Nations Conference on Trade and Development (UNCTAD) ; World Investment 2002: Transnational Corporations and Export Competitiveness, September 2002.] This represents an average annual deficit of $63 billion, compared with an average annual deficit of $17 billion between 1993 and 1997. These figures indicate that the UK is investing more in jobs and businesses in other countries than other countries are investing in the UK, despite the alleged role of Heathrow (as the world’s premier international airport) in attracting overseas investment to the UK. 7.4.5 The UK’s track record on international investment suggests that more business travel by air may result in even more UK funds being invested in jobs and business overseas, particularly in developing economies where salaries and standards of living are lower than in the UK. Expanding airport capacity at Heathrow or elsewhere in the UK is therefore no guarantee that the UK will in future attract more funds from overseas than it invests overseas. 7.4.6 It should also be noted that business travel represent only a small proportion of air travel. For the reasons given in 7.5.3, the effect on business of any constraints on overall capacity would be very marginal. 7.5 Business performance and productivity 7.5.1 It is claimed that constraints in air travel will reduce the performance and competitiveness of business (eg SE CD 3.31). However there is no evidence that economic performance is linked to the volume of air travel. Even Oxford Economic Forecasting, in a study funded largely by the UK air transport industry for the Department, were unable to demonstrate. (This did not prevent them assuming a link anyway and then using it to demonstrate an economic cost of constraint!) 7.5.2 The other key point is that if there were constraints, these would overwhelmingly affect tourist traffic, not business. The fact that business travellers are prepared to pay prices far higher than the cheap fares of low cost carriers demonstrate that if there were constraint and price were to rise, business travel would be little affected. The cost of air travel is a minor factor when compared with the other costs of doing business. The high value of time for business people, quoted by the DfT, demonstrates that. It is only leisure travel, which is very price-sensitive and totally discretionary, which would be significantly affected. 7.5.3 The proportion of business passengers is only about 20% and is expected to change little. A full breakdown is not available for 2030, but in 2020 is forecast that just 8% of trips will be made by UK business people plus perhaps a couple of percent on low cost airlines, say a total of 10% [Source: Air Traffic Forecasts for the United Kingdom 2000 (Department for Transport, Local Government and the Regions, 2000.] Assuming the same proportion applies at 2030, there would be about 50m UK business passengers. The capacity for this volume to traffic is comfortably available today – the demand alone at 2000 was 181m and capacity far more. This demonstrates that without growth of airports, business people would have no trouble in flying where they needed. 7.6 Tourism 7.6 1 There is a big difference between the amount of money spent abroad by Britons flying out of the UK. The UK balance of payments deficit on spending by visitors to and from the UK by air was Ł31 billion between1998 and 2001. DfT forecasts show that in 2020 UK residents will make 88 million visits overseas by air and that foreign residents will make 54 million visits to the UK by air. By 2030 UK residents visiting overseas by air will spend Ł46 billion, compared with Ł34 billion spending by overseas residents visiting the UK by air. Also, the Treasury loses more than Ł1 billion VAT each year because UK residents spend more overseas than overseas residents spend in the UK. 7.6.2 Encouragement and support for growth in air travel, not least by continuing with non-payment of external costs and tax, will cause even more money to leave the country. FOE is not saying that people should not be allowed to fly abroad for holidays. But whether and how often we take holidays abroad is a social issue. What is wrong is to suggest that there are major economic benefits when in fact there is a large net loss. The CDs (eg SE CD 3.33 give a totally misleading impression. Of course there will be economic benefits to the tourist industry of rapid growth. But this is unimportant in the context of the consultation – the key issue is the economic impact on the UK as a whole. The impact is clearly negative. 7.6.3 Already the UK Government is effectively subsidising the aviation industry to the tune of around Ł7 billion a year to help its citizens to fly abroad to spend Ł17 billion outside this country. Meanwhile British holiday resorts are crying out for visitors and local economies are suffering. The UK economy and our local tourist industry would benefit greatly if they were to persuade British people to stay in this country. Removal of financial incentives to fly abroad would be a great help. So would not covering the country with airports and roads, thereby not destroying the very peace and beauty of our countryside that many tourists value. 7.6.4 It should also be pointed that in addition to the overall disbenefit to the UK, regional imbalances will be exacerbated if more foreign tourist traffic is encouraged. British people visit all parts of the country on holiday while foreign tourists concentrate on the 'hotspots' such as London, York, Edinburgh, Oxford and Stratford-upon-Avon. More Britons holidaying at home would spread prosperity around the country instead of causing over-crowding and ‘over-heating’ of local economies. 7.7 Regional effects While the effect of air transport on the UK economy as a whole may be minimal, there may be more marked effects at a regional level. The issue of employment and the regions is closely related to regional economies and the conclusions to be reached are very similar. See 8.3 for the relevant sections. The conclusion is clear - development of airports and air transport is very unpromising means of improving the economy in a region. It is most unlikely to be useful as a tool in reducing regional imbalance. 8 EMPLOYMENT 8.1 The amount of employment associated with air transport A study by Oxford Economic Forecasting (OEF) has been used extensively in the SERAS and RASCO studies and reported in the CDs. OEF estimates that “In 1998 the UK aviation industry directly employed about 180,000 full-time equivalent workers.” This represents 0.8% of total UK employment ..” . OEF also say “These jobs do not reflect the total employment ‘generated’ by the aviation industry .. an additional 200,000 indirect jobs through the supply chain – that is, the aviation industry generates, directly and indirectly about 380,000 jobs in the UK.” [OEF report] 8.2 Impact of air transport on UK employment 8.2.1 There is a single point of over-riding importance in considering the relationship of employment and air transport in the UK economy : The amount of air transport and its rate of growth have no significant effect on the total number of jobs in the UK. This appears counter-intuitive – one might expect that more air transport means more people employed in the industry and therefore more jobs over the whole UK economy. The paragraphs below explain why this is not the case. 8.2.2 This is not just our view. It is basic economics that is accepted by professional economists. Oxford Economic Forecasting say as much. “ This does not mean that these additional jobs [from aviation] would not exist in the long run without the aviation sector .. in the long run the overall level of employment is not determined so much by the level of demand from particular industries as by the supply of workers looking for a job.” [The Contribution of Aviation to the UK Economy, 1999]. 8.2.3 Berkeley Hanover, who have advised Local Authorities, concur : “The number of jobs it [aviation] provides or may create is also irrelevant to the issues about future capacity. .. If people's preferences for air travel change or the resources required to produce these services change then the employment outcome is different. If for various reasons, air travel capacity was constrained resulting in less resources being used in air transport, additional resources would be employed elsewhere in the economy and labour would be created and employed elsewhere. .. If UK passengers cease to fly, the money saved does not burn a hole in their pockets, they spend it elsewhere. Air industry jobs disappear but other jobs arise from the new pattern of expenditure.” [The Impacts of Future Aviation Growth in the UK.] 8.2.4 These arguments apply of course to any other sector. The difference between air transport and other sectors is that the employment argument is used by the air transport industry and supporters to try to promote growth by making misleading claims about the jobs it creates. Other industries do not make such claims or certainly not to the same extent. For example, we do not see serious claims that we need to sell more cars and build more motorways because manufacturing more cars and constructing motorways will generate jobs. Nor do not see energy companies advocating consumption of more energy, despite the fact it would create jobs in the energy supply industry. 8.2.5 The crucial distinction is between jobs in the air transport industry and those in the economy as a whole. It is obvious that there is link between the size of the industry and the number of jobs it supports. As a first approximation, however, it can be assumed that the number of people employed in the industry is roughly proportional to the size of the industry. This is basically what is assumed in the CDs. 8.2.6 If the employment in the air transport industry is related to the size of the industry yet total employment is not related to its size, a profound conclusion emerges : every extra job in air transport can be expected to lead to one less job in other sectors of the economy. 8.2.7 The reason for this is in fact not hard to see. In our economy, people have a choice as to how they spend their money. They may choose to spend it on air travel, in which case there will be jobs created in the air transport industry as it meets that demand. But if they choose instead to spend their money on some other product, the demand for that product will equally generate jobs within the industry that supplies that product. This general principle applies to any product – any goods or services on which people spend money will generate jobs in the industry that supplies that demand. So whether people spend more or less on air travel does not affect total employment. All it affects is the distribution of employment between the various sectors of the economy. 8.2.8 There are a considerable number of references to national employment, eg “It is a central economic objective of this Government to achieve high and stable levels of growth and employment so that everybody can share in higher living standards and greater job opportunities. The aviation industry directly employs over 180,000 people in the UK, and, in addition, indirectly supports up to three times that many jobs.” (1.3.6, N of England CD; 2.19, SE England CD, 3.12 SE). “Chapter 3 explains the benefits of aviation to the UK and sets out arguments for meeting demand for air travel in the South East: the large economic benefits; generating tens of thousands of jobs ..” (1.7, SE). “ In 1998 it was estimated that the UK aviation industry directly employed some 180,000 people and supported up to three times as many more jobs indirectly, for example in firms that supply goods and services to the industry such as aircraft fuel and equipment, computer systems of airports and airlines and construction of additional airport facilities.” (3.9, SE) “Adding new runways [in SE only] could generate an additional 55,000 – 80,000 jobs, depending on how much additional capacity was provided. (3.10, SE) ..“ Growth in air services .. will also generate more jobs” (7.2.1, N) The benefit to the nation from these additional jobs ..” (3.11, SE). 8.2.9 The crucial point about all of these is that they are irrelevant to the debate. Given that the amount and growth of air transport does not affect employment nationally, these comments about the amount of employment generated have virtually no bearing on decisions about the growth of air transport. 8.2.10 It is very disturbing that CDs are full of such statements such as these without qualification or explanation. The absolutely critical point – that employment is not affected by the growth of air transport – is never mentioned. By making all the statements about jobs, without ever mentioning this fact and by never qualifying any of the statements and figures, the whole consultation becomes biased. The reader is led to believe that growing air transport will create jobs in the economy at large, not just in the air transport industry. 8.3 Effect of air transport on regional employment 8.3.1 Although there is no effect on employment at a national level due to air transport, there may of course be more local effects. At a local level, such as near or even at a big airport, there are obviously far more jobs than there would be if there was no airport. This, however, is mainly an illustration of the fact that the geographical distribution of people and jobs is extremely uneven. The existence of town and countryside, housing estate and business park testify to that. The important issue is whether there are extra jobs at a wider level. The CDs are silent on the matter. 8.3.2 If a new or expanded airport creates no net jobs in the UK economy, then there are two extreme effects possible. Firstly, all the extra airport jobs could contribute to a net increase of jobs in that region. If this is the case, an equal same number of jobs must be lost from the rest of the country, since the net effect nationally is nil (see 4 above). Alternatively, the region could be large enough that the spending substitution effects between sectors of the economy that were described in 4 for the national economy apply also to the regional economy. 8.3.3 It is likely that the real situation for a region such as the North is somewhere in between. If a new or enlarged airport takes passengers from its own region, it diverts spending power that would otherwise be devoted to other things, at least some of which would be local to that region. In this case there is likely to be no net increase in employment. If, on the other hand, the airport takes passengers from other regions, there is likely to be a net increase in employment because spending power has not been diverted entirely from the N region. 8.3.4 The alternatives described above apply if the airport in question is expanded while all others remain the same. This is not a realistic scenario. If airports across the country expand, then a new or expanded airport in one region can only increase the total employment in that region if its airports are growing faster and/or it is taking more passengers from other regions. If a region’s airports are just growing at the average rate, there is no reason to suppose that regional employment will grow, given that national employment does not. If a region’s airports are growing faster than average, but the extra traffic comes from the region itself, there is still no reason to assume growth in regional employment, because of spending substitution effects. 8.2.5 There may be gains in one region and losses in others. But there cannot be gains in all regions; otherwise there would be a net gain in the UK. 8.3.6 This analysis shows that although there will clearly be local jobs created in the air transport sector if airports are built or expanded, there is no good reason to assume that this will lead to an increase in total employment at the regional level. 8.3.7 The absence in the CDs of this critical point is very concerning. In the absence of a discussion of the issues, most readers would reach the obvious, but wrong, conclusion that building or expanding airports is good for regional employment. 8.4 Use of airports to redress regional imbalances 8.4.1 Although growth of airports and air transport will not, as shown above, create jobs in the context of the UK as a whole, it is possible that it could have some re-distributive effects. As noted in 8.3.3, if air transport services were to grow in a region and that growth arose from taking demand from other regions, that could lead to an increase in employment in the region concerned. 8.4.2 Taking business from other regions would be a very dubious approach. Meeting demand from another region will often mean making passengers and freight travel further to get to the airport. This does not make economic, let alone environmental, sense. It is also unlikely to be a successful strategy in the long run as it will lead to pointless and wasteful competition between regions whereby everyone loses. 8.4.3 There is one exception to this generally unhelpful conclusion is the case where demand from a region is currently being met from another. For example, a significant number of people travel for the north to fly from Heathrow. If they were able to fly from a more local airport, this could be beneficial in that environmental impacts could be reduced and jobs would be transferred from the over-heated SE to the north. However, it needs to be recognised that there are good reasons for such out-of-region traffic, such as ‘hubbing’ and other economies of scale. To artificially induce a re-balancing of traffic could have deleterious economic effects. It could even have harmful environmental effects, due to a larger number of smaller, more poorly filled aircraft. 8.4.4 Air transport is very much a national and international activity. This means that much of the income is ‘exported’ out of the local area and region while only a modest proportion of income is circulated around the local economy. In economic parlance the ‘multiplier’ is low. This means that building or growing airports is likely to be a poor way of stimulating economic growth and employment in regions. Other forms of investment would be far more effective as a means of regenerating regions. 8.4 5 From the above, the conclusion is that development of airports and air transport is very unpromising means of increasing employment in a region. It is most unlikely to be useful as a tool in reducing regional imbalance. 8.4.6 It is sometimes argued that although expansion of air transport may not lead directly to increases in employment, it will lead to indirect increases by supporting other sectors of the local economy. This is in fact an economic argument rather than an employment argument per se. 8.5 Local employment effects 8.5.1 As noted in 8.3.1 airport growth and, even more so, new airports will clearly give rise to an increase in jobs in a locality. The key issue is to determine if this is a useful or desirable outcome. 8.5.2 It is government policy, and one that most people would support, to reduce unemployment. The reasons for unemployment are complex; unemployment cannot necessarily be solved by ‘dumping’ some jobs in an area. There is always some level of unemployment – typically 1 to 2% - and there can be higher unemployment levels than this while at the same time there being labour shortages in the area. 8.5.3 Generating jobs by airport development can only help if there is significant unemployment. If there is already fairly full employment, creating more jobs in air transport will lead to loss of jobs in other sectors as labour and other resources are diverted into air transport. 8.5.4 An alternative response by the market and planners is to encourage people to travel long distances to work at the airports. This is not a sensible or sustainable approach. At Heathrow, many staff drive 25 miles or more, causing congestion and pollution. 8.5.5 Another possible response to the extra job opportunities is to increase the local population by migration into the area. This is likely to lead to all sorts of social and environmental pressures it is most unlikely to be in the interests of the local community. It typically means building houses as well as roads and other infrastructure over the countryside. This issue is addressed in the CDs, eg referring to Stansted : “By 2015, we estimate that the housing provision .. around the airport required to meet the needs of one new runway would be some 44 per cent in excess of the provision identified in current regional planning guidance. This equates to about 18,000 dwellings and a growth in population of over 40,000. This demand for housing could be met only by a fundamental change in the settlement pattern (i.e. major urban extension or new urban community, possibly involving loss of Green Belt).” (9.33 of SE CD) “By 2030 .. The potential growth in airport employment (up to 83,000 jobs) is large, however, in relation to RPG additional housing provision in this wider area projected forward to 2030 (83,000 additional houses by 2030), reinforcing the need for a sectoral shift in employment and the remote sourcing of labour in order to reduce the need for additional housing.” (9.34, SE CD) “Significant change in the pattern of development in the partly rural core catchment area would be required to accommodate development on the scale envisaged. Such a scenario does not form part of the current planning policy for the area and any decision to expand Stansted would need to inform future RPG reviews.” (9.35, SE CD) 8.5.6 It is not government policy, as far as we are aware, to increase employment by inducing mass migration, as opposed to reducing existing unemployment. 8.6 Employment and tourism 8.6.1 The SE CD says “Tourism, an industry critically dependent on air travel, would undoubtedly suffer if there were significant constraints on air services. (3.33, SE) Tourism is also a major employer, providing more than two million direct jobs. Tourism-related employment in the South East has risen 23 per cent in the last five years.” (3.34, SE) 8.6.2 These statements may be correct. But again, they are of very limited relevance and they most certainly should not be given without qualification. Tourism is two-way traffic. Tourism takes far more money out of the economy than it brings in (see 7.6.1). Money spend by UK people holidaying abroad is money not spent in the UK. This represents a loss of UK jobs. Conversely, foreigners coming into the country increase the number of jobs. 8.6.3 If tourism takes much more money out of the country than it brings in, it is an entirely reasonable assumption that it also takes more jobs out than it brings in. (The relationship will not be precise since wage rates and productivity will differ.) Thus tourism gives a net loss of jobs to UK. As written in the CDs – with no mention of the adverse balance of tourism - the reader is led to think that there is a net benefit in employment as a result of tourism. In fact only the tourist industry gains jobs; other sectors loose them - and more. 8.6.4 The quote in 8.6.1 is from the SE CD. There is no equivalent statement in the N or SW CDs. Presumably this is because the SE benefits from considerable numbers of foreign tourists while the SW and N do not. The SE may have a net benefit (or not such a large deficit); the SW and N presumably have a large deficit. This is a significant factor which has been omitted from the SW and N CD – loss of jobs associated with an increase in air travel. 8.6.5 The imbalance in jobs generated by in-bound tourists has significant regional and local implications. A large proportion of tourist-related jobs are in London, and a few other particular locations, eg Stratford on Avon. These are places where there is already over-crowing and over-heating of the local economy and are exactly where more tourist-related jobs are not needed. In contrast, the UK citizens going out of the country are much more evenly spread. The money and jobs taken out of, say, the NE will be far more than are brought in. Thus extra tourism (fuelled by cheap, subsidised air fares) is likely to exacerbate regional imbalances. 8.7 Skilled or unskilled jobs ? 8.7.1 The CD for the North of England says “The aviation industry directly employs over 180,000 people in the UK, and, in addition, indirectly supports up to three times that many jobs. Many of these are high quality jobs, highly skilled and well paid. (1.3.6) .. opportunities to attract business from small foreign airlines that don’t have their own facilities .. This would generate new jobs in a highly skilled sector.” (7.10.10). It appears that the government is using quality of jobs, not just their number to convince respondents to support growth in air transport. 8.7.2 In fact, the jobs are by no means all or even highly skilled or well paid. : “ ..little reason to doubt that extra low-skilled jobs at the airports can be filled (6.7.6 North CD) .. Typically, around half of an airport’s workforce is formed by semi-skilled manual and administrative functions. These jobs are typically quite low-paid. (6.7.3) .. airports as a whole offer a wide range of employment opportunities – at the larger airports at least, managerial and professional employees tend to account for around 30% of employment and skilled manual workers for 10 to 15%, with the remainder being made up of varying mixes of clerical/secretarial, other service workers and semiskilled or unskilled manual workers ..” (6.3.21). 8.7.3 These statements support what is obvious to anyone who has travelled by air – many of the jobs are low-grade eg cleaning floors, dispensing coffee and selling goods at airport shops. This all suggests that quality of jobs is a poor argument for supporting growth of air transport. It may well be the case that other sectors, which would benefit if air transport did not consume an increasing proportion of the national resources, could offer a better range of more skilled and rewarding jobs. 8.8 Indirect and induced employment 8.8.1 Economists often talk about ‘indirect’ jobs. This is explained in the context of air transport “In 1998 it was estimated that the UK aviation industry directly employed some 180,000 people and supported up to three times as many more jobs indirectly, for example in firms that supply goods and services to the industry such as aircraft fuel and equipment, computer systems of airports and airlines and construction of additional airport facilities.” (2.19 of SE CD, etc) 8.8.2 There are figures in the various CDs about the regional jobs “ .. in the North of England directly support close to 22,000 jobs and a further 17,000 indirectly in other parts of the North of England’s economy.” (1.4.2 in North CD). 8.8.3 There are also figures for individual airports “ In 1999 Manchester Airport’s operations directly supported the employment of around 16,400 people both on and off site and a similar number through indirect and induced employment effects. (6.3.19, N) .. At the four main South East airports, the number of direct and indirect jobs supported by aviation in the same year was about 160,000. Our studies suggest that this figure would be maintained up to 2030, even after taking account of productivity gains over time, if airport capacity was increased by making more intensive use of existing runways (i.e. if no new runways were built).” (3.10 in SE CD). 8.8.4 These indirect jobs are nothing special to air transport. In a sophisticated economy, all industries and sectors spend only a proportion of their money on wages to their employees; the rest is paid to suppliers, thereby supporting indirect jobs. This effect may be important when considering local effects, but its relevance is very doubtful in a broader context. If one added up the direct and indirect jobs from every sector, one would get a total number of jobs far larger than the actual total in the economy ! This is because jobs are ‘double counted’ – a direct job in one sector is also an indirect job in another. 8.8.5 There is an additional effect of ‘induced’ employment. The money paid to employees will be used to purchase good and services and this in turn generates more jobs. This is just another manifestation of the ‘circulation of money’ – the blindingly obvious observation that one person’s spending is another person’s income. Again, there is little relevance - if all the induced jobs from each sector where added in to its employment, the total employment in the UK would be higher than the UK population, let alone its workforce ! 8.8.6 The CDs quote the indirect and induced jobs without any explanation or qualification. The reader is thereby led to believe that far more jobs will be generated or are at stake than is really the case. 8.8.7 In 8.2 it was shown that each job in air transport corresponds to a job lost in other sectors. This was in the considered in the context of direct jobs. A similar principle applies in the case of indirect and induced jobs. If a job in air transport replaces a job in another sector, the indirect and induced jobs from air transport are offset by the indirect and induced jobs lost from the other sectors. (In fact more jobs are likely to be lost than gained because air transport multipliers tend to be low). 9 AIR POLLUTION 9.1 Introduction Air pollution seems to be considered as one of the two main local impacts, the other being noise (eg 1.20). This is interesting because previously, government has indicated that noise is the main issue. Air pollution is rarely obvious, unlike noise, but is arguably more important due to its severe and definable health impacts. However, the reason for the government’s increased interest is probably due to the mandatory nature of the EU standards. There is no such compulsion on noise. 9.2 EU limits There is extensive reference to the “mandatory EU limits” (eg 1.22, 6,24, 16.11, 16.28 of the SE CD). The evaluation of impacts at each airport appears to considered only in terms of whether these EU limits will be exceeded or not. This raises a number of issues: The EU limits are less stringent for some pollutants than those originally set by the UK government. We do not consider that the UK should accept the ‘lowest common denominator’ from the EU; our environmental standards and airports policies should take account of the UK concerns on air pollution. The objectives for PM10 have already been weakened in the UK. This is understandable insofar as there is no prospect of meeting the original standards by, say, 2006. But in the timeframe of the airports policy – 30 years – the ‘real’ requirements should be considered. Standards and objectives are always to an extent arbitrary. If air pollution is just below a limit value, that does not mean there are no health effects. Some pollutants do not show a ‘threshold’ effect whereby only pollution above a particular level has an effect. It should be an objective to reduce pollution to the minimum, irrespective of official limits. The UK and EU limits quoted in the CDs only take account of human health. But there are other effects such as corrosion, dirt and damage to wildlife and habitats which may occur at concentrations well below the health-based standards. The estimates only consider the immediate vicinity of the airport/proposed development. However, the impact of vehicles travelling to the airport acts on a much wider geographical scale. For example, an airport at Cliffe would inevitably result in increased traffic around the M25, further increasing emissions and congestion. 9.3 Uncertainties and sensitivity tests 9.3.1 Reference is made to the uncertainty of the estimates of air pollution (1.20, 6.25). It is certainly the case that estimates are only approximate. However, the document suggests that the estimates are “conservative” ie tending to give higher values than will actually be the case (7.28, Annex B pages 146, 151). We do not yet have a view as to whether this position is justified. A sensitivity test was done for Heathrow using “more challenging assumptions” ie more optimistic ones (6.25). However, if one carries out a sensitivity test which is more optimistic than the base case, it would seem sensible in the interest of balance to also do a sensitivity test using more pessimistic assumptions. Notwithstanding the comment about “conservative” estimates, the lack of an opposite sensitivity test can only engender suspicion. 9.3.2 There is a further important sensitivity test missing. The estimates for Heathrow were done on the basis of 89 million passengers and 480k flights for two runways and 116m/655k for three runways (7.8). There has been a constant history of under-estimating capacity at Heathrow. At the Terminal 5 inquiry, BAA ‘forecast’ 80m/453k for two runways at 2016. Most other parties, including government and the inspector considered that 100m/475k was a more reasonable estimate. Figures as high as 120m/650k were suggested (with mixed-mode working etc) and no evidence was given to the effect that this could not be achieved. More passengers and more flights, together with the extra road traffic, means more emissions. A sensitivity test for 100m passengers and a corresponding number of flights should have been done for two runways. A sensitivity test for 3 runways with at least 127m passengers (116 + 100 – 89) is also needed. 9.4 PM10 The estimates of PM10 pollution, produced by computer modelling, say tersely “ The population exposed to an exceedance of EU limits – nil ” or words to that effect. (7.27, 9.28, 10.24, 11.24). This is not adequate, given the issues raised in items 9.2 bullet 1, 2. The population that would be affected with more pessimistic assumptions and without the weakening of objectives should be given. (We have not yet studied the supporting documents to try and ascertain how many people would be affected.) 9.5 NO2 limits 9.5.1 There are in fact two objectives for NO2, the one-hour average and the annual mean (see 1.15 above). The modelling for this consultation was done only on the annual mean, because this is generally the more stringent of the two standards. However, there will probably be some cases where the one-hour standard is breached, but the annual mean is not. This means that the contours of air pollution and estimates of populations affected may in fact understate the problem. 9.5.2 The estimates of people affected must be qualified as indicated in 9.2 bullets 1-4 above. Sensitivity tests are needed and may well show far more people affected. 9.5.3 NO2 has adverse effects on vegetation and habitats at levels lower than the standards set to protect human health. Indeed there is standard that is more stringent than the one for human health. There will therefore be impacts, especially near Heathrow and Stansted. This issue has been completely omitted from the CDs and the totality of impacts is thereby under-stated. 9.6 Ozone Ozone is one of the most dangerous pollutants. But no mention is made of it in the entire consultation document, except as the word in connection with climate change in 16.15. (The EU target value for ozone is 120ug/m3 in an 8 hour period.) Omission of ozone means that the air quality impact is under-stated in all scenarios and is under-stated the most in the scenarios where more demand is met. 9.7 Impacts at particular locations 9.7.1 For Stansted and Luton it is stated that “It is likely that such impacts could in practice be prevented.” or words to that effect (9.28, 10.24, 14.16). We assume this means that the developers could afford to buy up the properties and move people out. If that is what is proposed, the CDs should say so. 9.7.2 For Heathrow the problem is orders of magnitude bigger. Demolition of 35,000 people’s houses seems unlikely for political as well as financial reasons. The cost would be of the order of Ł3.5 bn. This suggests that either expansion will be ruled out or that some way of avoiding demolition will be found. The key may be the more optimistic assumptions (7.28). If the people affected were reduced to 5,000 (7.28), the cost of demolition would be of the order of Ł500m. This could well be financially viable, recognising that Heathrow shows the biggest economic benefits and that Terminal 5 will cost Ł2bn. 9.7.3 It seems just too convenient that a more optimistic set of assumptions on emissions will reduce the problem at Heathrow to15% of the original estimate and make R3 financially practicable ! If these assumptions were to be used as the basis for a third runway, it would be essential that the take-up of capacity on the runway should be conditional on the air quality forecasts being realised. That is, air quality would have to be shown to remain within limits as capacity was taken up. Unless this condition is built in at the outset, by legal agreement, it would encourage developer to make misleadingly low forecasts of air pollution and obtain permission under false pretences. Methods by which emissions might be reduced are mentioned in 16.30; however “undertakings”, ‘confirmations’ or even the imposition of performance standards on individual aircraft by no means ensure that air quality standards will be met. 9.8 Surface access to airports 9.8.1 Much of the pollution around airports is due to airport-related road traffic. (We have not examined the RASCO studies to ascertain the proportion of air pollution due to aircraft and road traffic). Because buses and trains produce less pollution per passenger, an important method of minimising air pollution to limit the amount of car traffic and achieve modal shift to bus and train. 9.8.2 A key point is that it is far easier to prevent more road traffic to airports than it is to prevent more air travel. While there are dire warnings about the effect on the economy etc if air travel is constrained, there do not seem to be any suggestions of dire consequences if people have to take a bus to the airport instead of driving. It would be entirely possible to make any airport expansion conditional on a radical modal shift away from cars. This would require deterrents to car use, such as charges and parking constraints; not just a few ‘hopeful’ public transport projects (hopeful in the sense that one hopes they might encourage some drivers out of their cars). There is a whole chapter on ‘surface access’ (Chapter 17), but it does little more than discuss hopeful public transport projects. 9.9 External costs Air pollution incurs considerable economic costs in the UK at large. Air transport, as an appreciable emitter of pollution, must impose costs. This issue is dealt with in the section on external costs; see section 5. 10 AIRCRAFT EMISSIONS AND CLIMATE CHANGE 10.1 Introduction People living near airports have long suffered from aircraft noise, traffic congestion and air pollution. Indeed communities around airports have been concerned about these issues for years. However new evidence shows that air travel is contributing towards a far greater threat – climate change. 10.2 Air travel growth and CO2 emissions 10.2.1 Air travel is the world's fastest growing source of greenhouse gases like carbon dioxide (CO2), which cause climate change. Globally the world's 16,000 commercial jet aircraft generate more than 600 million tonnes of CO2, the world's major greenhouse gas, per year. Indeed, aviation generates nearly as much CO2 annually as that from all human activities in Africa One person flying a return trip between London and New York generates between 1.5 and 2 tonnes of CO2. 10.2.2 The huge increase in aircraft pollution is largely due to the rapid growth in air traffic which has been expanding at nearly two and half times average economic growth rates since 1960. It is expected the number of people flying will virtually double over the next 15 years. This means increasing airport capacity, more flights, more pollution and increasingly crowded airspace. 10.3 Impacts of climate change Scientists predict surface air temperatures are likely to rise between 1° to 3.5°C over the next century. This rate of warming is likely to be greater than at any time in the last 10,000 years. Although the effects will vary from place to place there is expected to be : An increase in the number of very hot days and a decrease in the number of very cold days. More extreme weather events - Global warming is likely to lead to more natural disasters such as hurricanes, droughts and floods. The number of major natural disasters has increased threefold since the sixties. Spread of infectious diseases -The likely increase in warmer and wetter weather could enable infectious diseases such as malaria and yellow fever to spread to new areas. Indeed, the first occurance for many years of malaria arising from a mosquito bite in this country was reported recently [Times Online – 29/8/02] Disappearing countries - Global warming is expected to lead to a rise in sea levels of between 15 and 95cm over the next century. Many islands and low lying coastal areas will be affected by rising sea levels and some island nations could disappear altogether. Environmental refugees - Global warming could lead to the displacement of millions of people. Rising sea levels, floods and drought could make former land uninhabitable. Changing weather patterns could affect food crops and accelerate water shortages. Effect on tourism - Ironically one of the industries most at risk from climate change is tourism. Many tourist destinations depend on the natural environment for their appeal to tourists. A study commissioned by the World Wide Fund for Nature (WWF) found many popular British tourist destinations would be threatened as a result of global warming. 10.4 Aviation’s Contribution to Climate Change In 1999 the world's top climate scientists, the Intergovernmental Panel on Climate Change (IPCC), published a detailed study of the impact of aircraft pollution on our atmosphere - Aviation and the Global Atmosphere. The report's findings support the following: Aircraft release more than 600 million tonnes of CO2 into the atmosphere each year. Aircraft currently cause about 3.5% of global warming from all human activities. Aircraft greenhouse emissions will continue to rise and could contribute up to 15% of global warming from all human activities within 50 years. Nitrogen oxides (NOx) and water vapour from aircraft engines are important greenhouse gases. Water vapour contributes to the formation of contrails, often visible from the ground, which in turn are linked to an increase in the formation of cirrus clouds. Both contrails and cirrus clouds warm the Earth's surface magnifying the global warming effect of aviation. Together, NOx and water vapour account for nearly two-thirds of aviation’s impact on the atmosphere. Hence any strategy to reduce aircraft emissions will need to consider other gases and not just CO2. An increase in the number of supersonic aircraft could further damage the ozone layer as aircraft emissions of NOx deplete ozone concentrations at high altitudes, where these aircraft would typically fly. The impacts on the global atmosphere from air travel will be concentrated over Europe and the USA where 70-80% of all flights occur. Hence the regional climatic impacts of aircraft emissions over these areas are likely to be greater than predicted by the IPCC report (which used global averages). Most significantly, it concluded that improvements in aircraft and engine technology and in air traffic management will not offset the projected growth in aircraft emissions. That is, we need to slow the growth in air travel if we want to reduce the growth in aircraft greenhouse gas emissions. 10.5 Action at international level 10.5.1 Emissions from international aviation are specifically excluded from the targets agreed under the Kyoto Protocol. Instead, the Protocol invites developed countries to pursue the limitation or reduction of emissions through the International Civil Aviation Organisation (ICAO). To date, ICAO had not agreed any specific action, although its environmental committee is considering the potential for using market-based measures. 10.5.2 Furthermore, despite the UK Government’s stance that aviation and its users should pay for the social and environmental costs they impose, there is no duty on kerosene. The absence of a fuel tax, or an emissions based levy, allows airlines to charge artificially low fares as the cost of pollution is passed on to society and not the passenger. 10.5.3 If aviation had to meet its external environmental and social costs in full, and did not benefit from large subsidies (see section 5), the growth in demand for air travel would be much slower. Additionally, airlines would have an added economic incentive to invest in the cleanest technology available. Using measures to correct these market distortions is central to delivering a sustainable aviation policy. This year, the European Commission is expected to publish a consultation paper on a European-wide aviation environmental charge for greenhouse gas emissions. This presents the Government with an opportunity to demonstrate its commitment to the “polluter pays principle” by supporting the proposal. 10.5.4 Given the intent of the EU and the UK to take action, the air transport policy should explicitly recognise these moves; the forecasts and policies taking account of the EU initiatives up to 2030. 10.5.5 We do not consider that there should be reliance on emissions trading, as proposed by ICAO, to deal with the problem of greenhouse gas emissions. Firstly, there is no assurance that ICAO will agree and implement a system. Secondly, even if they do implement a system, there is no assurance that it would be effective. The value of an emissions trading scheme will depend entirely on the nature of the system, such as whether it is ‘open’ or ‘closed’ and the number and price of permits. For example, the system could be open and the market be flooded by cheap permits from, say, China where they were going to replace inefficient power stations anyway. This would mean that permits would be very cheap so that airlines could purchase them at minimal cost and not have to do anything to reduce emissions. Thirdly, a system of trading for CO2 only addresses part of the problem. CO2 only represents just over a third of the greenhouse gas emission (NO2 and water being the others). 10.5.6 A system of charges, on the other hand, is almost certain to be effective. Various studies, including one by the UK government, show that charges would be effective and have calculated the effect. Firstly, such charges, due to being passed on as higher prices, would reduce the rate of growth of demand. Secondly, they would encourage the use of more efficient aircraft and thereby reduce emissions. 10.5.7 If it is not possible to institute the most desirable measures, due to inability to reach international agreement, it is possible to impose a charge as a ‘proxy’. The Airport Passenger Duty has already been proven to be acceptable insofar as it has not been challenged internationally. 10.5.8 Royal Commission on Environmental Pollution (RCEP) This commission reported on 29th Nov, one day before the closing date of the consultation (the date before the Government announced an extension). We have not been able to study their submission or ascertain to what extent they are reflected in other submissions. However, we therefore quote a number of thee conclusion of the commissions and their members and wish to place on record our support and agreement on these points : "Instead of encouraging airport expansion and proliferation, it is essential that the government should divert resources into encouraging a shift from air to high-speed rail for internal UK travel and some intra-European journeys." "The aviation industry pays no tax on the fuel it uses and is now the fastest-growing cause of climate change.” "If growth is not curtailed, aircraft will become a very significant contributor to global warming” " .. little sign of having recognised [the atmospheric havoc wreaked by aircraft] “ "We believe a stable climate is a good thing and worth modifying human behaviour for." “ .. caused was unfair to future generations, which would feel the effects of global warming” "If growth is not curtailed, aircraft will become a very significant contributor to global warming" "The government shows little sign of having recognised that action to reduce the impacts of air transport is just as important as action in other sectors contributing to climate change.” "Society as a whole has to accept the necessity of accepting limits and constraints." "We believe we should restrict airport development, rather than just expand in response to demand." "fundamental contradiction .. [to] sustainable development". 10.5.9 There are strong reasons to take action, the government has said its policy is to charge the external costs and there are a number of fiscal means by which the objectives could be achieved. Given these, there is no excuse for the government to assume that no action will be taken, even by 2030. The government should assume that the external costs are charged (by some means) and should adjust the forecasts accordingly. (We do not accept that the government’s sudden alterations to its price assumptions – see 4.3.4 - does that.) 10.6 Action at national level Emissions from domestic aviation are included within the targets agreed by countries. However, the UK climate change strategy does not include any measures for tackling the domestic aviation sector. There are no impediments to action on domestic flights. The government should therefore adopt a policy forthwith that domestic flights should pay their external costs taxes (except perhaps for social reasons, such as routes to the Highland and Islands). It should be noted that there are no competition issues with foreign countries when including such charges on domestic flights. The forecasts of demand and capacity should be adjusted accordingly. 11 NOISE 11.1 The problem of noise Noise is the most obvious problem for most communities living around airports and under flight paths, especially at night. Aircraft noise has been an issue ever since the introduction of the first jet aircraft, since when the benefits of progressive technological improvements have tended to be offset by the introduction of larger aircraft, more frequent movements, often at sensitive times of day. This is compounded by the issue of growing community expectations – people expect a better rather than a deteriorating quality of life. 11.2 Aircraft Noise and the Regional Studies 11.2.1 The Government’s Regional Air Studies include 'noise contours' showing the number of people affected at each airport at or above 57 dBA Leq. They also estimate the numbers that would be affected by an average of 54 decibels, but most of the charts and maps only highlight the 57 dBA Leq figure. The difference in the number of people affected at the larger airports is huge. At Heathrow at present 307,000 are affected by the 57 Leq figure, but this rises to 603,000 when the 54 Leq figure is used. 11.2.2 Aircraft noise is expected to increase under many of the proposals put forward by Government. For example, Heathrow is expected to decrease from 307,000 in 2000 to 226,000 in 2015 (allowing for T5), but the development of an additional runway would increase that number to 333,000 by 2015. (This is using the government measure of population enclosed by the 57dB contour.) Elsewhere, Manchester could expect to see a further 21,000 people within the 57 Leq contour, with up to an additional 11,200 and 70,000 people respectively within the 57 Leq contours at Leeds Bradford airport and Birmingham airport (the latter assumes a new runway). 11.2.3 These increases go against Government and European Union policy objectives. The growing public intolerance of noise in general, and the increasing scientific evidence supporting the need to protect people from exposure to high levels of aircraft noise, is reflected in the current focus on this issue by regulators and advisory bodies alike. The European Commission recently published its proposal for a European Noise Directive which aims to harmonise standards, monitor noise levels and create action plans. Meanwhile over 50 Ministers worldwide have signed a Charter on transport, environment and health which acknowledges the WHO guidelines. Specifically in relation to aircraft noise, UK Ministers share the European objective that the number of people exposed to aircraft noise should not increase after 2002. The regional studies contain no reference to how these objectives are affected by the airport proposals. 11.2.4 There is little prospect of significantly quieter planes being introduced over the next 20 years. Last year, the International Civil Aviation Organisation (ICAO) set a new standard for aircraft noise that will not come into force until 1 January 2006. However, the standard is already met by 98% of aircraft currently in-production. ICAO also agreed that there should be no global phase-out of existing “Chapter 3” aircraft to speed up the transition to quieter aircraft. This means that the sort of expansion envisaged in the Regional Air Studies will inevitably lead to more people across the country being exposed to higher levels of noise. 11.3 Problems with the government’s measure of noise 11.3.1 The Government’s official noise index is an Loudness Equivalent, which averages out the noise throughout the day: it measures the noise of each aircraft (ie the sound energy, in decibels, that each aircraft movement produces) and averages the total out over a 16 hour day to get what is known as an equivalent continuous noise level (abbreviated as Leq). It also averages out the value for the whole of the summer period. This measure has major flaws. 11.3.2 The average Leq includes the periods in the day when there are no aircraft noise events. This means that if there is noise at a level which is clearly disturbing, it may get disregarded if it is ‘cancelled out’ by quieter periods. An important case arises with ‘easterlies’ and westerlies over Heathrow. Large areas of London are affected by aircraft noise only when winds are easterly and the planes therefore take-off eastward (only areas near the two landing paths are affected during westerlies). Because easterlies occur only about 30% of the time, the Leq during that time can be much as 5dB higher than the average over the whole summer period. The government thereby claims that people are not affected, even thought it is up to 62dB on such days, because the average is less than their cut-off figure of 57dB. Easterlies typically occur on hot summer days when people are often in their gardens, or otherwise outside. It is absurd to claim that they are not disturbed at these times, just because they are not disturbed at some other times. 11.3.3 A further issue is with the Leq measure itself. Many people consider that, in assessing the noise, too much weight is given to the noise of individual planes and not sufficient weight to the number of noise events. Most people, for example, would find a doubling of aircraft numbers far more annoying than an average increase in noise of 3dB per aircraft, which is perceived as only a very slight increase. Because individual planes have got quieter over the last 20 years, the Government and industry can claim that noise exposure contours have shrunk, when the reality is that noise remains as much of an issue today as it has ever been, if not more. This issue is highlighted by the situation at Heathrow where the noise contours are greatly affected by the presence or absence of a handful of Concord flights. Indeed, the government is relying on Concord being phased out in order to demonstrate there would not be an appreciable increase, as compared with now, in the areas enclosed by the 57dB contour if a third runway was build. 11.4 People are affected by noise levels below 57dB The CDs are very misleading in that they deal only with areas that are within the 57dB noise contour. It is implied that only people within this contour suffer from aircraft. This is emphatically not so. The WHO (World Health Organisation) recognises 50dB as an onset of community annoyance and 55dB as a serious issue (and about 10 decibels lower at night). On this basis, it recommends maximum noise exposure levels of 55 dBA Leq to avoid people being significantly annoyed. The UK government has signed up to the WHO conclusions. The EU is introducing Directives which recognise the 50 and 55dB benchmarks. There is also ample evidence from official noise complaints and reports by members of organisations that noise below 57dB does affect people. 11.5 Competition The government hints at competition issues if stringent noise standards are imposed : “This would not be easy or cheap and some airlines might prefer to move some or all of their operations to another airport.” (16.35 of the SE CD). We do not accept this as justification for not imposing strict standards. Instead of using competition as an excuse for minimising action, the government ought to be planning for more stringent and rigorous noise controls at all UK airports. This would prevent undesirable competition arising through airports competing by minimising environmental standards. It would also provide the ideal opportunity for the UK govt to discuss with other countries, especially EU ones, similar controls at their airports. Many in those countries are keen to impose stricter controls, but are themselves citing competition, not least with the UK, as a reason for not acting. 11.6 Using benefits at Heathrow to pay for environmental costs We do not necessarily disagree with the concept expressed in 16.38 of the SE CD . “ .. we are proposing is to use a substantial proportion of the higher economic benefits to reduce the environmental impacts to acceptable levels.” However, this misses the main point. External costs ought to paid, whatever they are, wherever they are. “Acceptable levels” should be defined in their own terms eg by reference to health and quality of life criteria. If it needs a certain amount of money to achieve acceptable levels, that is the price that should be paid. The economic benefits of the development that cause the problem do not affect the external cost imposed (after any mitigation that is proposed as part of the development). If the economic benefits are not sufficient to pay the price to reduce noise to acceptable levels and to compensate for the residual noise that is caused, the correct economic solution is simple – do not undertake the development. 12 BIODIVERSITY 12.1 The issue of biodiversity Preservation of biodiversity is one of the great issues of our time. The Biodiversity Convention was one of just two signed by the UK government in 1993 after the Rio conference (the other being on climate change). The goverment followed this up with a national Biodiversity Action Plan, which said, among other things the overall objectives for conserving biodiversity : “To conserve and where practicable to enhance: (a) the overall populations and natural ranges of native species and the quality and range of wildlife habitats and ecosystems; (b) internationally important and threatened species, habitats and ecosystems; (c) species, habitats and natural and managed ecosystems that are characteristic of local areas; (d) the biodiversity of natural and semi-natural habitats where this has been diminished over recent past decades. To increase public awareness of, and involvement in, conserving biodiversity. To contribute to the conservation on a European and global scale.” 12.2 The consultation view of biodiversity at Heathrow The SE CD dismisses the whole of biodiversity in respect of Heathrow thus : “ There are no high impacts”. 12.3 SERAS view of biodiversity 12.3.1 The reason for this scant dismissal may be found in the SERAS documents. In the Stage 2 report, Table 7.4 shows “value of resources” for biodiversity. Based on the definitions in the table, loss of any the following would be interpreted as of “low” impact : Loss of any number of Local Nature Reserves of any size Loss of any number of Biodiversity Action Plan and other sites of interest of any size Loss of any number of sites and species where any number of habitats or species have declined by up to 10% over recent years Loss of any amount of habitats which are rare in the district These would not be construed by anyone with a knowledge of conservation or biodiversity as “low impacts”. Yet such a development would be assessed in SERAS as damaging resource of low value. 12.3.2 Many of the proposed or short-listed sites will have effects on a number of habitats and/or species, but not on the sites or species in the “medium”, “high” or “very high” values. (Indeed, the cynic might consider that that is exactly why the categories have been defined as such.) The reality is that biodiversity cannot be protected just by preserving the rarest and most special sites and species. It has been emphasised that the preservation of biodiversity is not primarily about protecting a few especially threatened ‘flagship’ sites and species. It requires that we protect habitats and species that are currently (thankfully) still reasonably common. 12.3.3. It is also stated that there will be “l