Environmental Audit Committee

1 April 2003 Budget 2003 and Aviation

1 April 2003 Budget 2003 and Aviation


The Environmental Audit Committee regularly examines the progress made by the Treasury in placing environmental objectives at the heart of its fiscal policies.   It will take evidence from John Healey MP, Economic Secretary to the Treasury, on Wednesday 30 April.   One of the main issues the Committee will examine is the progress being made to take account of the environmental costs of aviation in the light of the recent Treasury discussion document, Aviation and the Environment:  Using Economic Instruments.   The Committee is interested in the following specific issues:

1. Can the full environmental costs of aviation be identified?  What are the main issues of principle and methodological difficulties in attempting to do so?   Can remote but potentially catastrophic risks be properly reflected in such an approach?

2. How comprehensive and accurate are the environmental costs included in Aviation and the Environment: Using Economic Instruments, and in the Department for Transport's consultation The Future Development of Air Transport in the United Kingdom.

3. Has the Government defined the correct environmental policy objective for aviation - that, where appropriate, the industry should pay for its environmental costs? How does this relate to the Government's primary objective for airports -to maximize the significant social and economic benefits, whilst seeking to minimize the environmental impacts?

4.Would the incorporation of environmental costs be sufficient to achieve sustainability in the air transport sector?  What additional measures, if any, would need to be taken if this were to have little impact on rates of growth?  To what extent is there a tension between the policy of incorporating environmental costs (especially of carbon) and the Government's long-term objective of a 60% reduction in CO2 by 2050?

5. Given the international context, what practical options for incorporating environmental costs are really available to the Treasury and the Department for Transport, and how should any revenues be used? 

The Committee would be grateful to receive memoranda from interested individuals and organisations relating to these issues.  Written evidence should be sent to the Clerk of the Committee, Mrs Jessica Mulley, by  Friday 25 April 2003 either by post or emailed to eacom@parliament.uk. For printing purposes we would be grateful if electronic copies could be provided where possible.  A brief guidance note on the preparation and submission of evidence is available on the Committee's web pages.

Notes for Editors

1. Since its inception in 1997, the Environmental Audit Committee has regularly reviewed the progress made by the Treasury in placing environmental objectives at the heart of its fiscal policies. In doing so, it has taken as one of its reference point the Statement of Intent on Environmental Taxation which the Treasury released in July 1997.

2. The Committee's Fourth Report of Session 2002-03, Pre-Budget Report 2002, HC 167 was published today.  This includes an analysis of the Treasury's environmental tax strategy and the approach it has adopted with regard to monetary valuation.    Readers are referred to a second press release issued today, entitled The Pre-Budget Report 2002:  Report Publication.  The press notice and report (from 3.30pm today) can be found on the Committee's web site at:


3. The Committee's inquiry complements the  wide-ranging inquiry currently being conducted by the House of Commons Transport Select Committee on Aviation, which was announced in their press release of 22 November 2002.   The press notice can be found at: