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THE BUSINESS TRAVEL MAGAZINE I 39 The Review THE GREEN WATCH ➔ Airlines to get smart with carbon trading


PAYING more to be green? We have heard it so many times, but still most of the taxes and charges we pay on travel are not green ones, writes Roger Gardner. The government has suggested


that Air Passenger Duty (APD) has an environmental purpose but most commentators see this as straight revenue-raising. But are things are changing? From the beginning of this year aviation has been included in the EU emissions trading scheme (ETS): in order to grow, airlines will have to either improve efficiency or buy carbon credits from other sectors where action to decarbonise is easier. Separately, discussions in Durban during the December UN climate talks pushed the proposal for a $100billion annual levy raised by developed nations to help poorer countries tackle climate change. Aviation and shipping have


been identified as sectors from which money can be raised. In part, this move is intended to bring emissions from these transport modes within climate protocols from which they have hitherto been excluded. Despite the controversy attached to both measures, there is an inexorable move to use taxes and charges to drive the adoption of cleaner technologies


and smarter operational practices. We will end up paying more to fly and perhaps to cruise. Unlike road vehicles, aviation


fuel is not taxed. However, with APD already in place and continually rising – the government announced in November that it would rise by eight per cent in 2012 – and new international


“Airlines and air traffic management agencies continually strive to make operational performance better“


environmentally related costs, air transport is being hit quite hard. The question is whether these measures will have the desired effect of controlling cabron emissions. Owing to the immense costs involved, airline investment in aircraft is understandably long-term as aircraft typically


have a life of around 25 years. The pace of technology improvement, though steady, similarly does not allow for dramatic change in emissions performance. The trend is for


fuel efficiency improvement at about one per cent per annum. So there is some room for improvement, but not much, beyond what already happens, and cost pressures will ensure that fleets are replaced as early as economically possible. Airlines, airports and air traffic management agencies continually strive to make operational performance better but, unfortunately, the hurdles are often political ones rather than technological. While complex European air space is gradually becoming


better organised, it is a slow and frustrating process, made slower by states’ wrangling over sovereignty and charges. With industry hopes that biofuels will become available at a commercial scale and biofuels zero rated under the Emissions Trading Scheme, this particular route to growth is being keenly pursued by many airlines. Encouraging development of


low carbon fuels is a principal goal for the ETS. However, with airline profitability almost an oxymoron and the pace of growth slackening, there is not much room for airlines to absorb new environmental development costs without fares rising. With emissions trading now generally recognised as the most effective way to control carbon, we are looking at a future where the world’s desire to increase flying will involve airlines buying credits from industries and paying into a United Nations climate fund. The net effect will more than


likely be more expensive air fares but, as scientists warn that ‘dangerous’ climate change is ever more likely, we can at least be certain that a genuinely useful contribution is being made to protect our planet for future generations to come.


50 I THE BUSINESS TRAVEL MAGAZINE


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