Press Releases

Public to foot £62bn bill for climate damage from airport expansions

Aviation industry will only pay for 16% of the emissions clean-up costs of UK airport expansions


In allowing airports around the country to expand, the government is letting the aviation industry off the hook for £62bn of damage to the climate, analysis out today from the New Economics Foundation (NEF) finds. The analysis calculates that the aviation industry will only pay for 16% of the emissions clean-up costs of the eight airport expansions currently moving through UK planning processes.

The analysis finds that new government guidance issued in September has more than doubled the climate cost of the eight airport expansions. This is due to the expansion plans being developed based on out-of-date estimates of the cost of the climate crisis. The analysis shows that key expansion decisions have been made based on underestimated costs to the climate and society.

In September, the government updated its carbon values’ – the cost of cleaning up each tonne of emissions released into the atmosphere – to reflect its latest net-zero emissions target. As a result, short-term carbon values have more than tripled, meaning that the clean-up costs associated with infrastructure projects are much higher than previously assumed. The government does not have a comprehensive mechanism for recouping these costs from the aviation industry. The analysis finds that the main emissions taxation policy, the UK Emissions Trading Scheme (UK ETS) is full of industry loopholes and does not take into account the government’s updated carbon values, meaning that the aviation industry will only pay for 16% of the clean-up costs of airport expansions. The remaining bulk of the clean-up cost will fall to wider society and the taxpayer.

There are eight airport expansion projects which are active in legal planning procedures, ranging from projects in early consultation phases, like Gatwick airport, to projects which have been approved, but are subject to legal challenges, like Southampton airport. Previous NEF analysis showed that the climate impact of proposed regional airport expansions will be up to eight times worse than previously claimed, as airports have not been presenting the full climate cost of their schemes. The new analysis finds that all eight airports have had their climate costs underestimated even further.

Heathrow, the UK’s largest airport, is planning a new runway capable of increasing passenger departures by 40m a year. As a result of updated government carbon values, the cost of emissions from Heathrow’s proposed expansion from 2025 to 2050 has doubled, from around £50bn to over £100bn.

As a result of the change in carbon values, and taking just departing flights into account, the analysis finds that:

  • The clean-up cost of emissions from the Heathrow airport expansion cost has doubled to £49.2bn, of which only 15% will be paid for by the aviation industry.
  • The Gatwick airport expansion emissions cost has doubled to £9.1bn, of which only 7% will be paid for by the aviation industry.
  • The Luton airport expansion emissions cost has doubled to £5.2bn, of which only 26% will be paid for by the aviation industry.
  • Manston airport expansion emissions cost has more than doubled to £5.1bn, of which only 25% will be paid for by the aviation industry.
  • Stansted airport expansion emissions cost has more than doubled to £2.4bn, of which only 23% will be paid for by the aviation industry.
  • Southampton airport expansion emissions cost has more than doubled to £954m, of which only 22% will be paid by the aviation industry.
  • Leeds Bradford airport expansion emissions cost has more than doubled to £913m, of which only 24% will be paid for by the aviation industry.
  • Bristol airport expansion emissions cost has more than doubled to £645m, of which only 23% will be paid for by the aviation industry.

Alex Chapman, researcher at the New Economics Foundation, said:

More than two years on from adopting our 2050 net-zero target, the government has finally updated its estimates of how much it will cost to clean up greenhouse gas emissions from any new infrastructure projects. The huge increase means that decisions have been made, including on eight proposed airport expansions, on the basis of grossly underestimated costs to the climate and our society.

Only 16% of the £74bn tab for cleaning up the emissions from these expansions will be covered by the aviation sector. The rest will be picked up by wider society and the taxpayer. In essence, a colossal subsidy is being passed to polluting big business, and a debt passed on to future generations. As the majority of aviation emissions are made by a small number of wealthy frequent flyers, this is the opposite of levelling-up’.

In light of this new evidence all active UK airport expansions should immediately be paused, and re-evaluated in line with the new guidance. In addition, loopholes in current carbon taxes should be closed, and a Frequent Flyer Levy introduced to make sure the costs of cutting carbon emissions are passed on to the biggest polluters and the wealthiest in our society.”

Notes

The New Economics Foundation is a charitable think tank who are wholly independent of political parties and committed to being transparent about how it is funded.

The analysis, The £62bn carbon giveaway, can be found at https://​newe​co​nom​ics​.org/​2​0​2​2​/​2​/​t​h​e​-​6​2​b​n​-​c​a​r​b​o​n​-​g​i​v​eaway

Greenhouse gas emissions resulting from each proposed project are derived from each airport’s own planning application documentation or, in the case of Heathrow Airport, from Department for Transport modelling. NEF analysis calculates the total cost of emissions from each airport expansion over the period 2025 – 2050 using carbon values released by BEIS in September 2021. Discount rates are applied according with the methodology recommended by the Treasury’s Green Book. NEF compared these costs against the same costs calculated under previous guidance and using BEIS 2020 carbon values. The traded cost (ie, the price paid by aviation sector businesses) is calculated using BEIS forecast traded carbon prices.

For further information on the calculation of emissions costs from airport expansion, including the estimation of non-CO2 emissions, see NEF’s 2021 report Turbulence Expected: The Climate Cost of Airport Expansion

Table: Cumulatively, the eight ongoing UK airport expansions are expected to result in a giveaway of emissions worth £62bn.

Net present value in £millions (2025 – 2050) of emissions associated with eight airport expansions using BEIS 2021 carbon values, compared against net present value (2025 – 2050) of traded emissions using the latest BEIS (2018) traded emissions prices series.

Cost of emissions from departing flights (£m) — 2021 carbon values Forecast price paid for traded emissions (£m) Proportion of climate cost paid Implied cost to wider society and taxpayer (£m)

Cost of emissions from departing flights (£m)

Forecast price paid for traded emissions (£m)

Proportion of climate cost paid

Implied cost to wider society and taxpayer (£m)

Heathrow

49,213

7,401

15.0%

41,812

Gatwick

9,196

634

6.9%

8,562

Luton

5,231

1,367

26.1%

3,864

Manston

5,131

1,292

25.2%

3,840

Stansted

2,402

559

23.3%

1,843

Southampton

954

212

22.2%

742

Leeds Bradford

913

220

24.1%

693

Bristol

645

151

23.4%

494

Total:

73,685

11,836

16.1%

61,850

Source: NEF analysis of Department for Transport, and planning documents submitted by Gatwick airport, Luton airport, Manston airport, Southampton airport, Leeds Bradford airport, Bristol airport. *Emissions from Stansted airport have been adjusted as described in NEF, 2021.

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