6.9.1. Introduction
Aviation affects the environment in a number of different ways, most notably:
•
noise, particularly around airports;•
emissions of pollutants affecting local air quality, in particular nitrogen oxides and volatile organic compounds; and
69 According to economic theory, tacit coordination is an equilibrium of the repeated “game” that airlines play, but it
is not the only equilibrium. In essence, firms face a coordination game between equilibria. An increase in fixed costs may make the high price equilibrium more of a focal point than before.
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•
emissions of carbon dioxide and other greenhouse gases, which have global impacts Market mechanisms will affect the environment in a number of ways. As we set out in Sections 6.2 and 6.3, important impacts are:•
an increase the number of movements at congested airports, because there will be more flights at off-peak times and better slot utilisation through fewer late slot returns;•
a shift from short-haul to long-haul movements, because of the greater price sensitivity of short-haul services; and•
an increase in the number of passengers per aircraft within each individual market segment, as less profitable services are replaced by more profitable ones.Below, we provide some broad estimates of the size of these effects. But there are likely to be other impacts that we have not quantified, including the effect of any changes in the number of movements (or types of aircraft used) at other airports. Particularly for airports that may be alternatives to congested Category 1 airports, the number of movements at these airports might either increase (because of charter or other services switching away from the congested airport) or decrease (because airlines that are currently using alternative airports but would prefer to use the congested airport can now obtain the slots they require) following the introduction of market mechanisms. If there is a decrease in movements at other airports, this should moderate the expected increase in total environmental costs noted below.
There could also be longer term benefits as market mechanisms allow airport capacity to be managed more effectively, which in turn might delay or even remove the need for additional airport capacity to be provided in some locations.
6.9.2. Quantification of environmental impact
To derive broad estimates of the change in environmental costs following the introduction of market mechanisms, we have used a study on the external costs of aviation commissioned by the UK Department for Transport.70 The study presents estimates of noise nuisance and
climate change costs associated with movements for different types of aircraft. We have used a weighted average value of these estimates to provide equivalent estimates for generic short-haul and long-haul services. These are shown in Table 6.13 The estimates are presented both per movement and per thousand passenger km.
70 UK Department for Transport (2001) Valuing the external costs of aviation. Although the study was commissioned by
123 Table 6.13
Environmental Costs for Short and Long-haul Movements
Noise costs Climate change costs Total costs
€ per movement Short-haul 63 418 481 Long-haul 118 5,259 5,377 € per 1,000 passenger kms Short-haul 0.60 3.98 4.58 Long-haul 0.09 4.09 4.18
Source: Derived from UK Department for Transport (2001).
Long-haul flights have larger noise costs than short-haul flights because heavier, noisier aircraft tend to be used. On average, the estimated climate change cost per long-haul movement is more than ten times that of short-haul flights, reflecting the longer distances travelled and the heavier aircraft used. But as long-haul flights carry more passengers and travel longer distances, their environmental costs per passenger km are typically less than those for short-haul flights.
The relationship between carbon dioxide and climate change is not fully understood, and therefore any valuation of the impact of fuel emissions is highly uncertain. Noise costs are also difficult to estimate because they vary greatly between locations – for example due to the proximity of residential areas – and by time of day – with night-time being most sensitive. Our estimates of environmental costs should be viewed only as a very broad indication of the likely order of magnitude.
We have applied these values to estimate the impact of our predicted changes in slot allocations, as described in section 6.4. The results, shown under the current system of slot allocation and under an ideal market mechanism, are presented in Table 6.14. The table shows the environmental costs expressed per thousand passenger km, for the five airports we have studied in detail.
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Table 6.14
Environmental Costs under the Ideal Market Mechanism (€ per 1000 passenger kilometres)
Current Ideal market mechanism
LHR 4.25 3.95
LGW 4.33 4.29
CDG 4.28 4.10
MAD 4.38 4.33
VIE 4.38 4.24
Average (all Category 1 airports) 4.30 4.13
Source: Derived from applying environmental parameters (DfT 2001) to NERA model of slot allocation
These reductions in environmental costs per passenger km reflect both the impact of increasing load factors and also some shifting from short-haul to long-haul services (particularly at LHR and CDG). But these changes, plus the increase in the total number of movements, contribute to an estimated increase of about €620 million per year in total environmental costs at Category 1 airports.
In the following chapters, where we discuss each market mechanism separately, we report the environmental impacts of each individual mechanism in terms of the general framework set out above. We also discuss in these chapters whether the individual mechanisms are consistent with environmental objectives and whether they can be modified to take such objectives into account.