asked Her Majesty's Government:

Whether they will propose the inclusion of aviation in the European Union Emissions Trading Scheme.

My Lords, on 24 October, the Council of the European Union adopted a directive including aviation in the European Emissions Trading Scheme. All flights arriving at and departing from European airports are to be included in the scheme from 2012 onwards. The Government led the debate within Europe on including aviation, and we are very pleased with this outcome.

My Lords, I am very grateful to my noble friend for that Answer and I congratulate the Government on that achievement. It is a great reflection on the Government. Does my noble friend agree that, when the proper values are attributed to air to reflect the damage that emissions cause, air traffic volumes will probably reduce, or at least the growth will be reduced, which is something that the airlines are already forecasting? In the light of that situation, my noble friend was at Paddington station last week to receive a cheque for, I think, £350 million from the British Airports Authority. Do we assume that that was something to do with inducing him to go for the third runway, or was it for Crossrail?

My Lords, I was receiving a cheque for only £230 million, but if my noble friend would like to make good the other £120 million, he is very welcome to do so. I stress that the contribution that BAA is making towards Crossrail is in respect of the current two-runway airport and the benefits that will accrue to that airport. It does not imply any decision in respect of further changes to runway alignments at Heathrow.

My Lords, I wonder whether the Minister has thought of the certificates of origin that have to be presented when a claim is made stating that the carbon emissions have genuinely been saved somewhere else. Can he reassure me that this is not some sort of plaything for the financial services industry to make a profit?

My Lords, this will be a robust scheme, but we have only just agreed the basis on which it will proceed. There will need to be considerable preparation before the scheme comes in to see that there are no ways of evading it unduly.

My Lords, do the Government see the ETS as currently configured as a vehicle for the calculation of aviation carbon emissions under the Government's Climate Change Bill proposals? Is the problem not the challenge of Europe-wide agreement, which is welcome, but of relating a European system to a global market?

My Lords, the noble Lord is right that there is an international dimension to this well beyond Europe. We are leading discussions in the United Nations Framework Convention on Climate Change and in the International Civil Aviation Organisation. Negotiations will conclude in 2009. We still believe that we can get a global deal, including international aviation. The steps that we are taking in the European Union are an enormously important building block to achieving that global deal.

My Lords, does my noble friend agree that the aviation industry, apart from this issue, has made considerable progress? Does he further agree that quieter aircraft will be coming into service, perhaps in three or four years, and that we should certainly see an improvement? Does he also agree that there are different techniques for landing and take-off? All in all, the aviation industry has made a lot of progress.

My Lords, I agree with my noble friend that the aviation industry is making progress. Including aviation in the new EU emissions trading scheme will contribute to a reduction in CO2 emissions of up to 129 million tonnes by 2015 and 194 million tonnes by 2020. So the steps that we have agreed within the European Union are hugely important in terms of the climate change agenda.

My Lords, have the Government studied the latest analysis by the Open Europe think tank, which shows how the whole climate action and renewable energy package, of which the ETS forms a part, may be severely misguided? For example, it will increase our fuel bills by around 13 per cent and push at least a million more people into fuel poverty. Given that the planet now appears to be cooling down, would it not be better to abandon the ETS and all the rest of it? Have the Government even thought of this as a way forward?

My Lords, it is hard to know which of the noble Lord's questions was more tendentious, but since I assume that they started from a deep prejudice on principle against any action at European level, almost irrespective of the issue at stake, I suspect that that might deal with the substance of his questions.

Shame.

My Lords, the evidence set out in the Stern report was clear, and we regard action at the European and national levels as urgent if we are not to see very serious impacts on the planet over the next 50 years.

My Lords, as someone who has opposed airport expansion in the south-east, particularly the third runway at Heathrow and expansion at Stansted, for rather longer than the Conservative Party, I at least welcome its conversion to this cause. In view of the fact that 100,000 of the annual number of flights at Heathrow are to destinations that can be served easily by rail, and given my noble friend's enthusiasm for high-speed rail and rail expansion, would it not make sense for them to take the place of those flights and for the third runway to be abandoned?

My Lords, my noble friend is absolutely right to say that I am keenly interested in the potential for expanding the rail network, including the introduction of high-speed lines, but, as my noble friend will be aware, fewer than 3 per cent of flights to and from Heathrow are to Manchester or Leeds, the areas suggested in the party opposite's plan for a high-speed line. Therefore, we are discussing apples and pears; to my mind, there is a compelling case for examining the possibility of developing a high-speed line, but that does not relate at all clearly to the case for or against expansion at Heathrow.

My Lords, the Minister said that the ETS scheme had to be elaborated so that the aviation industry could not evade it unduly. Did he mean that it is okay for it to do so just a little bit?

My Lords, I think that we are working through the implications. I did not fully catch the noble Lord's question, so I will write to him.

My Lords, I congratulate the Government on the progress they have made on aviation. What work is being done regarding an even bigger polluter—shipping? When are we likely to see that included?

My Lords, actually, on Thursday there will be a Question in the name of the noble Lord, Lord Higgins, on shipping and climate change, but I can tell my noble friend that the UK is proposing that the IMO negotiates a new convention to deal with greenhouse gas emissions from ships, using economic instruments such as an emissions trading scheme. We would welcome the inclusion of shipping in the EU Emissions Trading Scheme.