The Carbon Briefing: Is Tim Yeo right to claim a third runway won’t make any difference to UK emissions?
- 29 Aug 2012, 12:00
- Ros Donald
Energy and Climate Change (ECC) Committee chair Tim Yeo has
argued that a third runway at London airport Heathrow will not lead
to extra greenhouse gas emissions due to the aviation sector's
inclusion in the EU Emissions Trading Scheme (ETS) this year. Could
he be right?
Yeo was originally against the plan to increase Heathrow Airport's
capacity because he said a new runway would lead to an increase in
greenhouse gas emissions. But now, he's changed his mind.
As he wrote in a
Telegraph column this weekend, he thinks the European Union's
decision to include aircraft emissions in the overall EU emissions
cap in January means that as long as other industries continue to
cut their emissions, the UK can afford to increase its aviation
capacity. He writes:
"Even if we covered the whole of Surrey
and Berkshire in new runways it wouldn't actually lead to a single
kilogram of extra greenhouse gas emissions taking place."
Yeo also suggests that that if the UK were to increase its
airport capacity, carriers would be more likely to send their
newer, more efficient planes to Heathrow.
The UK's Institute of Directors (IoD) agrees with Yeo. In a
submission to the Department of Energy and Climate Change's
consultation on new airport capacity, it
"[I]nclusion of aviation in the ETS does
allow aviation to grow without worrying about carbon emissions,
given that emissions from air transport are now part of the overall
cap. The logic of the ETS is to reduce emissions where it is most
cost-effective to do so, which is unlikely to be in aviation. So
the inclusion of aviation in the ETS should allow a long-term
growth in air transport while the UK meets its emissions targets
Aviation in the ETS
Let's look at how the ETS now applies to airlines. The UK's
Climate Change Act doesn't
currently cover the UK's emissions from international aviation
or shipping. This means that the ETS is the only mechanism aimed at
limiting UK aviation emissions.
All aircraft operators became subject to the ETS in
January this year. This means that airlines receive
emissions permits from the government of the EU member state
they're based in. On the 30th of March every year, they have to
report their emissions, and from 2013 they'll have to surrender
enough allowances to cover them. They can emit more than their
allowance by buying permits from the market or, if they emit less
than the allowance, they can sell their leftover permits.
The ETS aims to reduce emissions from aviation in the EU every
year by increasing the amount of emissions permits that must be
bought. This year, the ETS cap on airline emissions is set at
97 per cent of average emissions from the sector in 2004 -
Eighty-five per cent of the emissions allowance is free of
charge to airlines this year, leaving airlines to bid for the
remaining 15 per cent of emissions at auction - a number that's set
to increase as time goes on. Airlines will be able to buy and sell
allowances across the EU. They will be able to buy credits from
other industries, but they'll only be able to sell them to other
Will the ETS be enough to limit the UK's
But not everyone agrees that the ETS will be enough to ensure
extra Heathrow capacity doesn't push up overall UK emissions.
high emissions caps, a
loophole that allows carbon offset credits from outside the EU
to be traded on the scheme and
legal challenges against the inclusion of aviation in the ETS
scheme from non-EU countries as reasons why the scheme isn't enough
on its own to keep emissions down if the UK keeps building runways.
And that's if the ETS manages to weather the
current slump in emissions prices - critics have also pointed
out that the scheme could fail altogether, as it already has -
Aviation Environment Federation (AEF) produced a response to
Yeo's claims in March, pointing out that cap and trade systems need
complementary legislation to keep them stable. The federation
claims that if the government decides to go ahead with the runway
believing the ETS will iron out emissions problems, it could face a
future crunch point if the price of emissions permits
goes up. It says the UK would have to either cut down on
aviation demand or overstep its emissions cap. AEF claims that the
latter situation is much more likely, given that the government
would make itself rather unpopular if it decided to limit aviation
activity by closing runways or rationing air travel.
But this argument assumes that the ETS will function according
to plan in the future, with emissions prices rising as the EU
tightens the emissions cap next year as part of the scheme's third
phase. ETS expert Michael Grubb wrote a
piece for the BBC after the second market crash in 2009,
calling on the EU to step in to ensure the carbon price stops
plummeting. Since he wrote the piece, of course, no such thing has
happened. The carbon price
crashed a third time this July, meaning it's currently too low
to drive emissions reductions - a low carbon price means it's
cheaper to emit greenhouse gases than invest in greener
Improving the ETS
But could the ETS be strengthened to the point where we can be
confident it will constrain aviation emissions? The EU
released a plan in late July to bolster the market by delaying
some carbon auctions, but this is unlikely to address the problem
The UK Parliament's ECC Committee produced a
report in January, which outlines a variety of mechanisms that
could be used to raise the carbon price again. These include
allowing countries to set aside emissions allowances aside,
ensuring there aren't as many available. Another possible solution
could be to further tighten the emissions cap. But opposition from
Poland appears to be holding these proposals back. The country has
lobbied against set-asides and recently blocked
a proposal for firm emissions milestones to be set in the
lead-up to 2050 targets under the ETS.
The Committee on Climate Change - which advises the government
on how to cut its emissions in line with the Climate Change Act -
wants the government to add its own cap on aviation emissions in
addition to the ETS. It says the government should
formally include aviation in its carbon budgets,
which are set every five years and place legally binding ceilings
on the level of permitted UK emissions.
But what if emissions trading started to expand to include other
countries? Australia and the EU announced today that they would
start carbon trading from 2015, potentially laying the
groundwork for a global scheme. The architects of the deal say that
it will create greater certainty in carbon pricing. Critics have
pointed out, however, that the EU is likely to dictate the level of
pricing, which seems a bit risky given that the EU's carbon price
is looking so shaky at present.
And then there's Yeo's claim that airlines will send their most
efficient planes to the UK if it increases its capacity. This
argument doesn't seem to have much to do with the ETS. As the
scheme also applies to other European countries, there doesn't seem
to be any reason why the cap would necessarily mean airlines would
send their newest planes to the UK over other EU destinations.
But it doesn't seem to be a serious argument in favour of the
third Heathrow runway, either.
Justine Greening, the current transport secretary, says the new
runway won't be a full-size one so it won't be able to "take the
So has the ETS fixed it?
Both Yeo and the IoD seem to think that the inclusion of
aviation into the ETS has solved any question of whether increased
capacity at Heathrow will have a negative effect on the UK's carbon
emissions. Unfortunately, this seems like a risky bet to make.
The ETS could start to work better, and the extra aviation
capacity could become much more expensive, or the ETS may just give
up the ghost again and leave aviation emissions unregulated. There
may be other arguments in favour of a third runway, but claiming
that the ETS has removed any cause for concern about emissions
seems a bit weak.