Good morning, lady and gentlemen. We are short of one witness, who we hope may join us later. Would you be kind enough, starting with Ms Hewitt, to identify yourselves, please?
I would like to ask a question of all three panellists and to thank them for taking part today. How do you think the CAA could most effectively use the Bill’s information powers to promote environmental objectives and to ensure that passengers and consumers have a better understanding of the carbon impacts of their travel choices?
Cait Hewitt: We very much welcome the proposed introduction of information powers for the CAA. At the moment, our organisations, and organisations like ours, receive a lot of requests from members of the public for environmental information about aviation, to some of which we feel the CAA would be well placed to respond, particularly in relation to airspace issues, for example. Many people contact us with concerns about whether their current home, or a home they are looking to buy, is likely to be overflown. We think that the CAA would be well placed as an information provider on that front.
On CO2 impact, in particular, I will defer to Tim, who has been involved in some work on trying to provide better information to consumers of air travel on the CO2 impact of different airlines.
Tim Johnson: These days, I think the consumer is looking for the ability to distinguish airlines and airport performance. A lot of information in the public domain is fairly generic industry averages, and I think the consumer is looking for something a little bit different that will enable them to make choices. That does not exist at the moment, but I think the information that would allow them to make such choices does exist. A portal, if you like, is needed to present that information to the consumer, and I think the CAA could play an important role in doing just that.
Matt Gorman: I would echo the welcome for the Bill’s information powers. We see an important role for the CAA in providing a sort of independent objective analysis in what is, at times, quite a polarised debate on aviation environmental issues.
Specifically on the consumer angle, the industry already publishes a significant amount of information. I work for an airport operator, and we, like colleagues in the airline and manufacturing sectors, publish information. There is a potential role, as Tim has said, for the CAA to act as a portal for that information. I think it would be important for the CAA to articulate clearly how it is adding value, so it would be important if there were an option to signpost consumers to existing information, rather than mandating new information requirements. It is important to ensure that the CAA is not duplicating or imposing unnecessary or disproportionate burdens on the industry, but it is worth saying from a customer perspective that, if the industry, airports and airlines perceived providing such information as a customer driver, it is likely that the industry would be doing so already.
My question was whether you had any suggestions on how the CAA might use the Bill’s information powers to ensure that passengers have a better understanding of the carbon impacts of their travel choices and to further environmental objectives generally.
David Kennedy: This is not something that my organisation has a very detailed view on. I think I am here to give a broader context on the environmental challenge for the aviation industry. But on the specific question, it is important that people have information about their carbon footprint, whether it is in the consumption of food or energy or related to their travel choices and aviation. It is important that people have information so that they can then make decisions around that. I think I would agree with the others that there is a potential role for the CAA but it should not duplicate that of the other organisations.
What is the view of the panel about the culpability of airports when it comes to ground transportation, which obviously can be a significant aspect of air pollution around airports but is not necessarily in the control of individual airport operators?
Tim Johnson: Indeed. I am not sure that culpability is the term we would use. Obviously there are significant contributions from airport sources, albeit that background levels of air quality often determine the overall concentration levels and therefore whether an airport is at the brink in terms of compliance with environmental limits. The challenge is whether it is responsible or not. It is obviously in the airport’s interests to create the environmental headroom in which it needs to operate in the future. That alone should encourage the airport operator to think about collaborative partnerships—that is the key phrase here—with transport operators and to look to provide additional ways on public transport of getting passengers to the airport. Finally on that topic, there is a lot of focus on public transport initiatives. Experience has told us all the way through that unless you take equal measures to try to make it less attractive to go to the airport by car, you will not necessarily succeed in getting people to shift modes.
We have just had the airport operators in and obviously they were strongly opposed to an environmental duty being introduced as part of the Bill. You are saying very similar things in welcoming the information requirements in the Bill on environmental matters, but the AEF’s briefing paper says that you support a statutory duty being introduced. Could you elaborate a little more on the strength of feeling on that aspect?
Cait Hewitt: There have been two significant reviews of the CAA’s role and function in recent years. The first was Sir Joseph Pilling’s report, which contained two key recommendations that we feel are not reflected in the Bill and which we support. One was that the CAA should be given a statutory duty, not just towards consumers, but to the general public. There is a difference. Aviation activity has impacts on people other than consumers of air travel and that is something that increasingly the Government are looking to take into account and we think the CAA should do likewise. The other was that the CAA should be given a statutory duty on the environment. We see that as something that very much reflects work that the CAA is already engaged with and which would act as an appropriate balance to specific duties towards the consumer in the context of economic regulation. We are not asking for the CAA to undertake a lot of new environmental activity. In fact, we think it is important that the CAA should deliver the Government’s policy in terms of environmental impact as well as other areas. We would like to see the Government providing guidance for the CAA on how in the course of its duties it could further the Government’s objectives on the environment.
Matt Gorman: It is important to distinguish the two kinds of duty that have been discussed. I think your question referred to an overall supplementary duty for the CAA. There is also the question of a duty in terms of airport economic regulation, which was the Minister’s question at the last panel session. To echo what Emma Gilthorpe said at the last panel, from an airport perspective the current regulatory regime does not prevent us from taking environmental issues into account. We have a strong environmental programme, and we make investments in line with that. I am happy to talk more about that.
In terms of the overall supplementary duty, we see the powers in the current Bill concerning information provision as sufficient. It will be for the CAA—as it is already doing through a consultation process—to define how it seeks to use those powers, and to articulate more clearly what it sees as its role.
Of course there is a consensus that we need to take very seriously the carbon impact of aviation. When it comes to measures to address that impact, however, is it not sensible to apply them in an even-handed and fair way across the airport sector rather than singling out particular environmental measures for airports that happen to have substantial market power and happen to be subject to economic regulation? Why should we link environmental measures specifically to economic regulation rather than looking across the board at the environmental impact of all airports when deciding to how to respond to climate change and other environmental matters?
David Kennedy: I agree that, obviously, there is a major environmental component, and within that a carbon component, of the aviation industry. That has to be considered both by Government and internationally. How do we address aviation emissions? The approach has to be international, and we have to have a UK approach within the international one. That approach has to be led by the Government; you would not want the CAA leading on environmental policy with respect to aviation. There should be a route through which the Government can influence how airports are operated in the future in order to be able to implement the strategic approach, whether or not it is through this legislation. It would be odd if there was not a route to go from the Government, to the Government’s strategy, to the implementation of the strategy, including any implications of that strategy for airport development and management in future.
Cait Hewitt: We agree very much that all airports should be treated even-handedly in this respect, which is partly why we support a general environmental duty on the CAA that would inform all its activities across the airports at which it works. We are not asking for the CAA to take additional environmental measures beyond those that are required already by Government policy; we are simply asking for the appropriate legislative framework to allow the CAA to deliver Government policy at those airports at which it feels it is appropriate.
On economic regulation, we have called for an environmental duty as a counterbalance to the new focus on consumers that the Bill would create, because we feel that interests can pull in different directions in terms of the general public and the environment, and the consumer interest. We feel that to allow the CAA flexibility in continuing to make a judgment about how best to balance those interests, there should be a specific environmental duty in the context both of economic regulation and of its work more generally.
I will make one further, very brief point. We have mentioned carbon impacts a few times. Noise impacts are also very significant for local communities around airports, and that is something on which the CAA is already very much engaged. A high-level environmental duty would reflect the interests that the organisation already has in trying to mitigate noise for local communities.
I wanted to pick up on a point you made. Where do you think there would be conflicts of interest between passengers and the wider public? I am not saying that there will not be, but I would be interested to hear where you think that might be the case.
Cait Hewitt: Specifically, if we are talking in the context of economic regulation, airports are, as we have heard this morning, engaged in environmental and community measures and plan to continue that work, and we are obviously pleased to hear that. Our concern is that a specific legislative duty to focus on the consumer could lead to a minimisation of costs for consumers above all else, so that, in future, if airlines wish to mount a challenge against charges that were being levied to help support community projects, they might find support in the Bill for doing so.
The airport operators that were asked to give evidence earlier were offered the opportunity to comment on the conditions that the CAA might impose on dominant airports and/or others. Does any of you have a view on the differential between what are described as dominant airports and other, smaller airports?
Matt Gorman: The general point I would make is that there are a number of drivers for airports of any size to tackle environmental issues. I pull out three in particular. The first is that there is a significant body of environmental regulation that airports need to respond to, covering the issues we have talked about—noise, carbon emissions, air quality, and waste and water issues. There is a lot that an airport of any size will need to do.
The second driver is a commercial one: there is a good opportunity to save money through lots of environmental initiatives, particularly energy-saving, water-saving and waste initiatives. The third driver is stakeholder expectations; by “stakeholder” I mean local communities and politicians more broadly. Particularly for any airport that is seeking to develop, a strong environmental programme will be an important part of earning the licence to develop.
I am not really well placed to comment on the specifics of market dominance in relation to the environment. I simply make the point that there is a strong case for an airport of any size to conduct an appropriate environmental programme.
I am trying to offer you the opportunity, if it is not a contradiction in terms, to bang your environmental drum. You have the ears of the Committee, so bang away.
Tim Johnson: We should not confuse the size of an airport with the scale of its environmental impacts. Obviously, that is a factor in them, but they are also a function of geography, especially with local issues.
Our members—we should have said this at the beginning—are the community groups around the UK’s airfields and airports, and much smaller airports could, just because of a function of geography, experience quite widespread environmental disturbance and be looking for solutions. Concentrating just on the regulated airports was a mistake, which is why we were looking for the general environmental duty, rather than something that focused just on the specifics.
I was interested in what you said earlier, Mr Gorman, although I think this was implied in other people’s answers, about the reporting requirements. You said the information was already out there and that it was a case of putting it in a particular place. Can you expand on that? Are there specific additional requirements regarding the collection of information that you would see as necessary for reporting, or are we seriously talking about there being no additional burden at all?
Matt Gorman: Let me answer that particularly from an airports and BAA perspective. Over close to two decades, we have published a growing body of information on the environmental impacts of our airports on local communities. We have done that in response to a number of drivers—local community interest, planning conditions that have been placed on us and, increasingly, a broader consumer interest in our performance. We therefore publish a lot of information.
Specifically on consumers, the trend in recent years is that consumers are more interested. From an airport perspective, it is important to put that in context. Consumers are not yet choosing which airport to fly from based on its environmental performance. Destination, price, closeness to your home will be more significant factors, but environmental performance is a factor. The key point I was making was that there is a significant body of airport information. I think the same applies for airlines.
I agree with Tim that there may be a role for the CAA in acting as a portal for that information and bringing that together perhaps in a clearer way. But it will be for the CAA to articulate clearly the benefit it sees from any particular information requirements that it proposes and effectively conduct an impact assessment of any particular proposal for information, explaining what the benefits will be and what the costs to the industry will be. Once the Bill comes into force, we will look for the CAA to articulate that clearly.
Tim Johnson: I think a general power for the CAA on information provision will bring us two clear advantages over the information that is already out there. The first would be comparability. There is a lot of information out there. The choice of metrics and how individual companies choose to portray themselves varies. The other thing it would give you is wider coverage. There are some very good airports and airlines with strong environmental credentials that like to tell you about them, but there are a lot out there that do not. There is no information on these companies at all. Something that gives a bigger picture and provides it in a comparable format is something we would seek.
So the one thing you would see as good about voluntary reporting requirements is that you would probably not see an increase in the level of reporting that they would need to do, but that this would level the playing field for those who did not?
As I mentioned earlier in the scenario and example that I gave, aviation travel is much cheaper and the benefits for the economy are important. We need aviation contacts with China and Brazil so that we can take advantage of the economic pluses that come out of that.
At the same time, we have the environmental needs; I think specifically of Belfast City airport. It needs to expand. It needs to give flight opportunities and travel and at the same time a very vociferous group of people who live close by have a concern. Can the balance be struck? There was mention earlier of beating the drum. A Northern Ireland man can beat a drum probably better than anybody. But how would that work? Can we get a balance? Can we ensure that the airports can expand and bring the economic boost that comes with it and at the same time address the concerns of local people who clearly have issues to be addressed?
Tim Johnson: You can get a balance, but you need to have all the information that is available. This is what we are really saying. Unless there is a general requirement on the CAA to take these other factors into account, to produce the necessary evidence and to weigh them up in decision making, you will not achieve that balance. There is the potential there for a skewed outcome.
Cait Hewitt: I would like to add to that. We discussed earlier what the difference would be of giving the CAA an explicit duty to consider the environmental impacts as opposed to the work it already does.
In many ways, what we are talking about is ensuring that the organisation reflects on environmental duties that the Government are already taking seriously in relation to noise and to CO2. The importance of this is reflected particularly in some of the recent work that the CAA has done through its insight notes—a series of documents put out to the public through press release, essentially setting out its views on various aspects of Government policy. We see through those a very clear focus on the consumer and, in that context, an active call for increased airport capacity.
In a separate note, the CAA goes on to consider the environmental impacts of aviation and how these might be mitigated. Our understanding is that the previous and current Governments’ approach is to want to take account of environmental considerations at the start in looking at the economic and other benefits that could come from airport expansion, and consider at that stage and within that framework what kinds of airport activity could take place. To achieve the kind of balance that you are talking about, it is very important to have environmental considerations—noise and climate change—right at the top.
David Kennedy: Coming back on what the appropriate balance is, we did a piece of work for the previous Government on how to balance the economic and climate objectives and, in particular, what happens to aviation in the context of our 80% emissions reduction target under the Climate Change Act. What that said is that, first, the good news is that we can fly in a carbon constrained world, so we do not have to stop flying, but the bad news is that, unsurprisingly, we cannot have unfettered flying. The answer is somewhere in between.
The balance for us was that with some modest demand growth over the next four decades, we can still achieve the 80% target. Our figure of 60% demand growth is compatible with meeting the 80% emissions reduction target under the Climate Change Act, and that is down from business-as-usual demand growth of 250% over the next four decades. The question is, how do we achieve that?
I have said that we cannot achieve emission reductions in aviation through unilateral UK action—we could, but it would be detrimental from an economic point of view. There has to be a hierarchy in terms of how the policies work. We have to go international—whether that is Europe or, ideally, global—through to the UK Government rather than the regulator.
There is a question: what is the role for the regulator in implementing policies that may have implications for how we develop and manage airports, although we do not know at the moment what those implications would be in future? It comes back to whether there should be a link between Government policy and strategy and implementation by the CAA. I do not think that you want the CAA in the driving seat—certainly not. It is a matter for Government in the international context, but do you want that link given the possible future implications for airport development and management?
We have understandably focused on general duties, licensing and publication of information, and those issues have been covered pretty thoroughly in your answers. Do you have any other areas of concern with the Bill as it is framed? The answer may well be no, which is quite a helpful answer.
Will you accept that under the current system, without an explicit environmental duty, the CAA has the ability to approve spending by regulated airports that is focused on environmental protection, whether that is noise or other environmental impacts? Under the current rules, it is clear that the CAA can take into account environmental matters, even in the absence of the sort of explicit duty that you would like in the new rules.
Cait Hewitt: Under the current rules it does. I think that it is less clear whether that is explicit in existing legislation, but it certainly does take those impacts into account. The point is that we feel that the new primary duty on the consumer might force something of a change of thinking in the approach to economic regulation in both the CAA and the aviation industry, where, as we have said, that duty might exert new pressures. We feel therefore that in the context of economic regulation, as well as more generally, there is a need to counterbalance that.
But is it not in the passengers’ interest that an airport acts responsibly? Surely that is why airports that are not regulated regularly invest in environmental mitigation measures without being forced to do so by any regulatory system.
Tim Johnson: I think that a previous witness referred to something similar and said that there was a natural motivation to do this. Environmental issues are currently very high up the political agenda, which is why that natural motivation is there. Is that universal? Does that apply consistently over time? I think that the motivation has changed, and what we are looking for is not to say that it is not working at the present time or that anything is being inhibited, but more that we are providing a guarantee that, as focuses and airport stakeholder interests change, this remains and is taken into account.
David Kennedy: Can I agree, but say that it is an empirical question? It could take them into account. Does it in practice? I do not know the answer to that, but if you look at other industries with economic regulations, Ofgem was certainly not taking its environmental aspect seriously and had to have a specific duty, which was problematic, actually, because it has struggled to interpret what that duty means and how it should balance consumer interest and environmental obligations.
If you look at the water industry and Ofwat, again, they have not taken the low-carbon aspect seriously in their investment planning for the future. While economic regulation does not preclude environmental aspects being taken seriously, it is not guaranteed, and in other industries there has been an explicit inclusion of such duties in legislation.
Tim Johnson: Mr Kennedy refers to a very important point, in that if you give an organisation a specific environmental duty, you have to define its boundaries and give them a sense of expectation. We have consistently called not only for an environmental duty on the CAA, but also for that to be backed up with very specific environmental guidance from Government on how the CAA would be expected to discharge that. As has been said before, we do not see it as it being the CAA’s role to interpret and fill in the gaps on environmental policy; that is the Government’s role. The two need to go hand in hand.
As a follow-up to that, there is clearly a question of who should enforce or oversee an environmental duty—the CAA or otherwise—but, on the wider question that was suggested before, is it not a bit naive to suggest simply that the airlines will naturally take into account their wider environmental obligations? If that were the case across the board, could we not just simply do away with environmental legislation?
Matt Gorman: I do not think that I have suggested that that will happen universally or naturally. I come back to the three big drivers that I highlighted for the industry to tackle environmental issues. A significant body of regulation is a fundamental part of that and that exists from central Government through the Environment Agency and other bodies, so it is an important driver.
There are also commercial drivers, cost-saving opportunities, as I said, and stakeholder expectations—local communities and, increasingly, passengers. There are a number of drivers, but regulation is certainly part of that. In terms of the CAA, I come back to my opening point, which was that, in what is often a polarised debate on aviation and the environment, there is a useful role that the CAA can play as an independent, objective analyser of aviation-environment issues and as a source of information.
Tim Johnson: I fundamentally agree. Going back to the information provision clauses, that is why you want to be able to distinguish between companies and what they are doing and what they are not doing. We currently have regulatory pressures on companies to perform. We do not really have many market pressures. Through transparency, you will then see a rise in consumer awareness and that will hopefully help to bring about change as well.
David Kennedy: I agree that you would not expect to have the emissions reductions that we need if you just left the industry to it. That is why we have a whole set of policies, both internationally and domestically. We have the EU emissions trading scheme, which provides incentives for more efficient planes and the use of biofuels over time. We have passenger levies and other things.
Given all those policies, which will drive the carbon aspect of the industry, what is the interface of that with the economic regulation of airports? I have to say that I do not know the answer. I do not know what the interface is. I do not know what the role of the CAA is, but there may be one.
Any final thoughts? No? Thank you very much indeed. Ms Hewitt, Mr Johnson, Mr Gorman, Mr Kennedy—we are indebted to you. Thank you for taking the time and trouble to come this morning.