Do the economic arguments for aviation growth really y?
Martin Cottingham, Victoria Johnson
26 September 2008
The international aviation industry is conspicuous by its absence from international and national targets for emissions reductions. It is also the fastest-growing source of greenhouse gas emissions in developed countries.
The impact of climate change, coupled with the threat of oil production reaching its peak and then declining, is challenging us all to learn to live with far fewer fossil fuel resources. There is overwhelming evidence of an urgent need for concerted global action to reduce greenhouse-gas emissions rapidly and significantly.
Despite the overwhelming environmental case for curbing aviation growth to ensure that we are able to make the cuts in emissions we know are needed to avert potentially irreversible climate change, the aviation industry and its supporters say that there are compelling economic arguments in favour of continued growth.
They argue that aviation growth: helps power the engine of international trade and global business, brings significant benefits to the UK economy, ‘democratises’ travel by enabling more people on lower incomes to take advantage of low-cost flights and provides a lifeline to the economies of poorer countries that are particularly reliant on income from international tourism.
The New Economics Foundation (NEF) and the World Development Movement (WDM) examines these economic arguments, assesses their worth and exposes the plain truths. It focuses in particular on the relationship between aviation, tourism and development in poorer countries.
To do this, we analysed the potential economic impact of curbing UK aviation growth on four leading UK tourist destinations – Kenya, the Maldives, Thailand and the Dominican Republic. In each case, our analysis of real economic benefit to those nations reveals that, once we account for the money which effectively ‘leaks’ out of those economies to foreign-owned companies and imported resources, the impact is marginal (see Table 1). Kenya, the Maldives and the Dominican Republic are also three of the most vulnerable nations to the impacts of climate change.
We have also considered the aviation industry’s claims that technological advances will empower airlines to neutralise the environmental impact of aviation growth by enabling them to become cleaner and greener in the near future.
Having examined the case made by the aviation industry, our conclusion is that:
It is clear that more research and a proper debate are needed because the economic case for growth advanced by the aviation industry is at best flimsy and at times fundamentally flawed. It is also clear that the policy measures put in place so far to mitigate the environmental impact of aviation, such as Air Passenger Duty (APD) in the UK and the European Union (EU)’s emissions trading scheme, will have little impact on the strong and environmentally destructive growth trend that we report.
What is needed instead is a bold package of measures that use a combination of carrot and stick to significantly reduce demand for air travel – including substantial investment in high-speed rail links and high taxes on short-haul flights for which alternative modes of transport are often available.
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