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House of Commons Hansard
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EU Emissions Trading Scheme
19 December 2006
Volume 454
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1. What steps he is taking to include aviation in the EU emissions trading scheme. [109928]

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We have pressed for early progress on this issue. We expect the Commission to publish a draft directive imminently. We call upon the German and Portuguese presidencies to make this a high priority in 2007.

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I am sure that my right hon. Friend will do all that he can to ensure that aviation is included in the EU emissions trading scheme, particularly given the Stern report’s clear backing for such measures to help tackle climate change. I would, however, be grateful if he could reassure me and the House that the Government will continue to press for any agreement to avoid being over-generous in the credits offered to airlines to ensure that they cannot benefit financially from entering the agreement, and that it will be brought forward as soon as possible along with other measures to ensure that they reduce their overall emissions.

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I am aware of the concern that my hon. Friend expresses. I can give her the comfort that she seeks, because we are determined to ensure that aviation comes within the EU emissions trading scheme. I am also aware of the recent publication by the Institute for Public Policy Research suggesting that that could somehow result in a significant windfall to the airlines. Our intention is absolutely that that should not be the outcome. Aviation will clearly continue to be a very competitive sector and I am sure that the design of the scheme will reflect that.

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Does the Secretary of State think that encouraging the growth in air transport is good or bad for the environment?

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The Government are very clear about the important challenges involved in getting aviation within the emissions trading scheme, so that we can reach a judgment as an economy and as a society on what we value and where the limited availability of carbon credits should be directed. It is worth bearing in mind, for example, that five power stations alone generate more CO2 than the entire aviation sector in the United Kingdom. It is therefore right that aviation takes its place along with the other sectors of the economy as we seek to deal with the issue as the Stern report recommended.

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Will my right hon. Friend explain how building new runways at Heathrow and Stansted will reduce the rate of growth in aviation carbon emissions?

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Our objective is that aviation should come within the emissions trading scheme. If one reads the Stern report, as I did ahead of the progress report on the air transportation White Paper, it is clear that the right response to meeting the environmental challenge that faces the aviation sector is not to make arbitrary decisions in relation to the cancellation of particular pieces of infrastructure, but instead to work internationally and domestically to meet this challenge. That is why we have been at the forefront of efforts to bring aviation within the emissions trading scheme. It is worth reminding the House of just how international is the challenge that we face. China is currently building 49 airports. We need only look across the channel at the number of runways at Schiphol or in Paris to see that the challenge must be addressed internationally, given that carbon does not respect international borders.

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Does the Secretary of State accept that if the inclusion of aviation in the emissions trading scheme is to be effective, the scheme will need to be rather more robust than that which came from the European Union in the first round? In particular, what are the Government doing to ensure that the credits that are available will be offered to companies by auction rather than by a system of grandfather rights?

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Of course, we want to see what lessons can be learned from the establishment of the emissions trading scheme at a European level. The hon. Gentleman is right to recognise that there have been difficulties with the original scheme, but that does not argue against the need to ensure that improvements are made to it or, indeed, that aviation should come within it. That is the most effective means by which we can take international action, and at the same time reach that judgment as an economy and as a society on where we place our priorities.

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Does my right hon. Friend think that Britain’s contribution to dealing with aviation emissions is likely to lessen unless BAA at Heathrow gets its security shaken up and sorted out? What is the Department doing to ensure that that happens before BAA management at Heathrow cause lasting damage to Britain’s tourist trade and London’s position as a world centre, let alone severely inconveniencing travellers over this holiday period?

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Of course there will be peak demand at Heathrow in the days to come—that is why only yesterday I had a lengthy conversation with the chief executive of BAA to ensure as best I could that he was offering me the assurances that need to be given. Clearly, there will be challenging days ahead given the volume of traffic passing through Heathrow, which I hardly need remind the House is the busiest airport in the world. Since the events of August, BAA has taken steps in recruiting more staff, but I will watch closely the progress that BAA management make on what are essentially operational decisions in the days to come.

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Now that we have all seen the paper anyway, does the Secretary of State agree with AirportWatch and others that a carbon trading scheme that will reduce emissions by 2020 from 142 per cent. to 136 per cent. is “meaningless” and at the same time manages to be burdensome and difficult to implement. Is there not a better way?

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We are committed to the emissions trading scheme because it represents the most effective way forward in terms of both the action that we can take and the action that needs to be taken at a European level. I certainly do not think that the way forward is to offer different messages to different constituencies. When preparing for the debate today,I took the trouble of familiarising myself withthe various representations that have been made on the emissions trading scheme. Although the leader of the Conservative party has supported the emissions trading scheme, the hon. Member for Epsom and Ewell (Chris Grayling) stated to Tory Radio on 17 April:

“I don’t think that Conservatives should seek to proactively try to constrain growth in aviation because that’s not the way we work.”

In contrast, he told a green audience—

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Order. Perhaps we will leave that.