Air Departure Tax: consultations and environmental report

11 Summary of findings

11.1 Introduction

11.1.1 The following sections summarise the assessment findings of the preferred policy option of a 50% reduction in the overall tax burden of ADT by the end of the current session of the Scottish Parliament. Additionally, consideration was given to a number of illustrative scenarios that could be adopted to potentially deliver the 50% reduction in the overall tax burden set out in the preferred policy option. The findings have been set out under the headings of national and local implications, reflecting the assessment approach that was undertaken to consider the potential for environmental impacts to occur at differing geographical scales.

11.1.2 The assessment also considered a reasonable alternative to the preferred policy option. A summary of the findings of this assessment work has also been included below.

11.1.3 The detailed assessment, and the evidence used to inform the following paragraphs, are located in Sections 3 to 10 of Part Two of this Environmental Report.

11.2 Summary of findings: National Impacts

11.2.1 The 2017 research has estimated that the introduction of a 50% reduction in ADT (proportionally equally across all flight types) could lead to increased emissions of between 0.087 MtCO ₂e and 0.101 MtCO ₂e in the year of introduction (assumed to be 2018), relative to where they would be in the absence of the policy ^[277] . This is an increase greater than the estimated figures of between 0.05 MtCO ₂e and 0.06 MtCO ₂e set out in the 2014 research ^[278] . Furthermore, the 2017 research estimates that, assuming the growth in baseline passenger numbers used in the research continues, by 2021 the carbon emissions will increase by between 0.090 MtCO ₂e and 0.105 MtCO ₂e ^[279] . Aviation currently accounts for less than 4% of total Scottish emissions. The increase in aviation emissions forecast as a result of the 50% reduction in Air Departure Tax is estimated to represent less than 0.3% of the Scottish total ^[280] .

11.2.2 Carbon envelopes (or budgets) were developed for each sector as part of the Climate Change Plan to help set out an optimal pathway to meeting Scotland's statutory climate change targets. In 2021, an envelope of 12.2 MtCO ₂e for the transport sector was set out. The emissions predicted to arise from the aviation sector in 2021 from the implementation of the preferred policy option of a 50% reduction in the overall ADT burden by the end of the current session of the Scottish Parliament represents approximately 16% of the envelope target.

11.2.3 It is acknowledged in this SEA that there are a number of ways in which a 50% reduction in the overall ADT burden could be delivered. The tax charged across all flight types could be reduced proportionally by 50%. Alternatively, a zero tax charge could be applied to all short-haul flights whilst maintaining the tax charged on long-haul flights at current UK APD levels, or vice versa. The impacts of this in terms of passenger numbers will likely differ. For example, applying a zero tax rate amount to only short-haul flights has the potential to lead to higher passenger numbers than compared to either reducing both short and long-haul flights by an equal proportion or by applying a zero tax rate amount to only long-haul flights. This view has been based on the current understanding of price elasticity on passenger demand and there being fewer long-haul flights operating from Scottish airports, and therefore fewer passengers.

11.2.4 It is also noted that there are a number of variables that are likely to influence the GHG emissions arising from increased aviation activity which are outwith the scope of this SEA to consider. These include:

• the potential start-up of new flight routes and/or destinations;
• the extent to which any shift in modes of transport arises;
• the effect that certain aviation emissions have at atmosphere, known as the multiplier effect, as the impact of this effect is uncertain; and,
• the impact on Scottish emissions from technological developments and the development of a global measures to reduce emissions from the sector.

11.2.5 Significant progress has been made by the industry in establishing technology goals for reducing aircraft GHG emissions on a per-flight basis, and efficiency is expected to improve continuously through to 2050 and beyond ^[281] . However, it is also projected that GHG emissions will continue to grow in line with demand if greater improvements are not made.

11.2.6 There are also a wide range of relevant plans, programmes and strategies within which the preferred policy option will sit if implemented. These include those that set out long-term visions and ambitions for development and investment in Scotland to create a more cohesive and resilient economy that improves opportunities for business and the people of Scotland. Further key context is the current ambitions and objectives of the Scottish Government with regard to climate change which are set through a range of policies and proposals.

11.2.7 The UNFCC Paris Climate Agreement also adds new momentum to global action to meet the challenges of climate change. The Scottish Government has committed to keeping Scotland at the forefront of global climate action by responding to the UNFCCC Paris Agreement with a Climate Change Bill setting new, evidence-based, statutory emission reduction targets.

11.2.8 In light of the ambitious climate change targets, managing the environmental implications that are considered likely to arise from the introduction of the preferred policy option is likely to present some challenges. It is considered that a 50% reduction in the overall tax burden of ADT by the end of the current session of the Scottish Parliament will lead to short-term increases in GHG emissions relative to where they would otherwise be, even with efficiency measures in place. If the preferred policy option were to be reached through a pathway of applying a zero tax rate amount only to short-haul flights, there is the potential that this could lead to higher passenger numbers than reducing both short and long-haul flights by an equal proportion. In turn, this could have an influencing effect on overall GHG emissions.

11.2.9 In the medium to long-term it is more challenging to predict the magnitude of future increases in GHG emissions. Projecting an emissions profile beyond the short-term is complex and based on a number of key drivers. Technological developments and the aspirational goals as agreed by the aviation industry, alongside the development of global mitigation measures, will play a key role in the wider mitigation of emissions. However, the future implementation of global mitigation measures, and the exact form these will take, is uncertain in light of wider political changes.

11.2.10 A number of uncertainties also exist that could influence significance, such as the creation of new routes, the multiplier effect and price differentials, and it has not been possible to consider these in this SEA.

11.2.11 National level implications were also noted for a range of environmental receptors, such as biodiversity, flora and fauna, soil and water, linked to the effects of climate change exacerbated through increased air traffic movements in Scotland.

11.3 Summary of findings: Local Impacts

11.3.1 In undertaking this SEA, it has been assumed the introduction of the preferred policy option will lead to increased passenger and flight numbers, both of which will place increased pressure on existing airport and interconnecting infrastructure. The degree of pressure experienced will also be influenced by the extent to which the expected increase in passenger numbers are realised.

11.3.2 Currently some airport masterplans set out a primary objective of the optimal use of existing infrastructure before developing more facilities. However, they also note that in the medium to long-term it is likely that increased pressure on infrastructure though passenger growth will potentially lead to some airports undertaking development. The development of any new infrastructure can have a range of environmental impacts, for example potential impacts on soil, water, cultural heritage and biodiversity. Some of the identified impacts could be long-term in nature, for example soil sealing and loss of habitat, whilst others may be short-term, such as those likely to arise from construction activities. There is also the potential for benefits to arise for material assets though the provision of new airport and interconnecting infrastructure.

11.3.3 The preferred policy option sits within the broader context of growth in a range of sectors which all have the potential to influence local air quality. It is considered likely, however, that even in light of operational improvements, the predicted growth in the aviation sector could contribute to pressures experienced at a local level through increased flights and surface traffic to and from airports. A number of areas are currently designated as having air quality issues and increased pressure from any activity that contributes to air pollution could exacerbate existing problems.

11.3.4 Whilst the potential for a modal shift to arise remains a relevant consideration, the assessment cannot predict to an acceptable level the impact on emissions should this take place. Road traffic movement is a complex issue and there are a number of factors outwith the aviation sector that also influence modal shift.

11.3.5 Aircraft noise, and exposure to this, is likely to remain a key concern to those affected. Any increase in flight numbers or changes to flight patterns will continue to present a challenge in terms of how the industry can maintain growth whilst addressing concerns regarding noise implications. A number of airports produce noise maps and technological advances, and operational improvements continue to be developed that seek to reduce noise generated by aircraft.

11.3.6 The impacts identified as likely to arise at a local level are considered secondary impacts. Factors such as the ability of individual airport capacity to facilitate the predicted growth are relevant considerations and it is noted that these secondary impacts would be outwith the preferred policy option to influence.

11.3.7 The identified impacts have the potential to be long-term in nature, for example from development and operational activity, in addition to short-term such as those likely to arise from construction activities. Their significance will be dependent on factors such as current operational activities and mitigation applied at individual airports, the scale and location of proposed development, the extent of the increase in passenger numbers and the current state of the environment identified as likely to be affected.

11.4 Summary of findings: Reasonable alternative

11.4.1 A reasonable alternative to the preferred policy option is that no reduction in the overall tax burden of ADT is applied. It is considered that this represents a "like for like" approach, as the tax rate amounts would remain the same as those currently set under UK APD. Under this approach there would be no reduction in the tax burden and, as such, it is considered that there would be no additional impact on passenger and flight numbers. Activity in the sector would likely continue on the current trajectory predicted.

11.4.2 Research has concluded that the preferred policy option could result in an increase in GHG emissions, relative to where they would otherwise be. As it is considered that the reasonable alternative will not have an impact on passenger and flight numbers it would therefore be reasonable to assume that no additional impact on GHG emissions beyond that currently projected would occur.

11.4.3 A number of secondary effects that arise from activity in the aviation sector have been identified throughout this assessment, for example noise exposure and impacts on air quality and biodiversity, flora and fauna. It is considered that, under the reasonable alternative policy approach, these pressures would likely remain consistent with current levels of industry activity.

11.4.4 It is a requirement of the 2005 Act that consideration is also given to the evolution of the baseline in the absence of the plan, programme or strategy. Many of the trends identified in the environmental baseline are considered likely to continue on the current trajectory in the absence of the preferred policy option. As such, and for the purposes of this assessment, it is viewed that the assessment findings of the impacts likely to arise from the reasonable alternative can also be considered to apply to the evolution of the baseline in the absence of the policy.