Air Departure Tax: consultations and environmental report

1 Introduction

1.1 Policy plan for Air Departure Tax

1.1.1 The Scottish Government aims to reduce the overall burden of Air Departure Tax (" ADT") by 50% by the end of the current session of the Scottish Parliament. The Scottish Government considers that this will boost Scotland's air connectivity and economic competitiveness, encouraging the establishment of new routes which would enhance business connectivity and inbound tourism and help generate sustainable growth.

1.1.2 Important decisions have yet to be taken on how the overall 50% reduction could be delivered, including how the reduction will be distributed across tax bands ( e.g. short-haul and long-haul flights) and tax rates. Tax bands and tax rate amounts are not set out in the Bill, and will instead be set out in secondary legislation in the autumn and will be shaped by, amongst other things, the policy and by responses to this consultation.

1.1.3 Further background information on this policy can be found earlier in this document.

1.2 What is Strategic Environmental Assessment

1.2.1 The Environmental Assessment (Scotland) Act 2005 ("the 2005 Act") requires the assessment of certain plans, programmes and strategies that may have significant effects on the environment. This process is known as Strategic Environmental Assessment (" SEA"). Further guidance on SEA including requirements and stages, is available on the Scottish Government website ^[7] . SEA is a key component of sustainable development, achieving this through:

• systematically assessing and monitoring the significant environmental effects of plans, programmes and strategies;
• ensuring that expertise and views are sought throughout the process from Scottish Natural Heritage, Scottish Environment Protection Agency and Historic Environment Scotland; and
• providing an opportunity for public participation in the decision making process, including a requirement to provide a statement as to how these opinions have been taken into account (a "Post Adoption Statement").

1.2.2 This SEA has been undertaken in parallel with the policy on ADT to both inform its development and assess how the adoption of the proposals may impact on the environment, both positively and negatively.

1.3 Context of ADT

1.3.1 The 2005 Act requires that the Environmental Report includes an outline of the relationships between the proposals for ADT and other relevant plans, programmes and strategies. It is also a requirement of the 2005 Act that relevant environmental protection objectives at the international, European or national level be identified.

1.3.2 A number of policy and legislative drivers at a national and UK level relate to Scotland's economic ambitions and seek to ensure future sustainable growth to match these ambitions. Scotland's Economic Strategy ^[8] sets out ambitions to create a more cohesive and resilient economy that improves opportunities for business and the people of Scotland alike, based upon increasing competitiveness and tackling inequality. The Economic Strategy also discussed the findings of the Smith Commission and that devolution of powers over Air Passenger Duty (" APD") to the Scottish Parliament would "enable [Scotland] to set a policy that helps support our internationalisation ambitions, and in particular improve connectivity with major airport hubs". It also stated the importance of work to "expand the rail network and improve accessibility of ferries and airports" to "rural parts of Scotland".

1.3.3 These ambitions reflect those set out in the 2016-17 Programme for Government ^[9] , including the importance of transport investment in enabling this growth. This is also reflected in Scotland's Infrastructure Investment Plan and the related projected project pipeline published in early 2015 ^[10] , in addition to being a key component of Scotland's National Transport Strategy which was updated in 2016 ^[11] . The role that transport plays in producing greenhouse gas (" GHG") emissions is recognised and it was announced in 2016 that the National Transport Strategy will be subject to a full review. The review will include setting out an updated vision and exploring ways to address the strategic challenges facing the transport network.

1.3.4 These ambitions are also mirrored in the vision of 'A Connected Place' set out in National Planning Framework 3 (" NPF3") ^[12] , which discussed improving connectivity in transport links between Scottish towns and cities, and proposals for airport enhancements at Aberdeen, Prestwick, Edinburgh, Glasgow and Inverness. Scottish Planning Policy (" SPP") ^[13] was published alongside NPF3 and set out how these visions will be delivered.

1.3.5 nce developed, the legislative proposals for ADT will also sit within the context of a number of Scottish Government policies, including many focused on meeting ambitious statutory targets for the reduction of GHG emissions, as set by the Climate Change (Scotland) Act 2009 ("the 2009 Act").

1.3.6 The Climate Change Delivery Plan ^[14] , published in 2009, set out the high level measures required in each sector to meet Scotland's statutory climate change targets, looking both up to 2020 and beyond. This was taken forward following the introduction of the 2009 Act. The 2009 Act requires that annual GHG emissions targets are set, by Order, for each year in the period 2010 - 2050. Section 35 of the 2009 Act also requires that Scottish Ministers lay a report in Parliament setting out proposals and policies for meeting these emission reduction targets. These are the Reports of Proposals and Policies (" RPP"). RPP ^[15] and RPP2 ^[16] contain policies and proposals for sectors across the economy for the period 2010 to 2027 to reduce GHG emissions per the statutory targets.

1.3.7 In January 2017, the draft Climate Change Plan: the draft Third Report on Policies and Proposals 2017-2032 ^[17] was published for parliamentary scrutiny. The draft Climate Change Plan builds on the work of the previous RPP reports, taking forward these ambitions and exploring opportunities across the economy to reduce Scotland's GHG emissions by 66% in 2032 (against the 1990 baseline). Four Parliamentary committees scrutinised the Plan, and the Scottish Government is now considering the Committee reports.

1.3.8 Scotland has made strong progress towards the emissions reduction targets set by the 2009 Act ^[18] and the Scottish Government has confirmed its intention to bring forward a new Climate Change Bill to establish a "new and more testing 2020 target" ^[19] . In March 2017, the Committee on Climate Change, which has a statutory advisory role under the 2009 Act, provided advice to the Scottish Government on a range of issues, including the potential level of ambition for new Scottish climate change targets ^[20] .

Collaborative Climate Change Action

1.3.9 The International Civil Aviation Organization (" ICAO"), a United Nations specialised agency, and the aviation industry, represented through the cross-industry Air Transport Action Group (" ATAG") ^[21] are jointly endorsing collaborative efforts to reduce climate impacts. Common goals include: improving fuel efficiency by an average of 1.5% ^[22] per year until 2020; stabilising net emissions from 2020 through carbon-neutral growth and reducing net aviation carbon emissions by 50% by 2050 relative to 2005 levels ^[23] . To achieve these measures, a comprehensive set of mitigation actions have been rolled out which include new, more efficient aircraft technology, sustainable alternative fuels and better use of infrastructure and operational improvements, particularly air traffic management ^[24] . The development of an effective, global market-based measure to fill any remaining emissions gaps is another measure in the four pillar strategy set to meet these targets ^[25] .

1.3.10 Other aviation mechanisms include the European Union (" EU") Single European Sky Initiative ^{[26] [27]} . In addition to tackling issues such as air traffic safety, the initiative has the potential to deliver benefits such as fuel efficiency. The objectives of the Single European Sky are met through the Civil Aviation Authority's Future Airspace Strategy which sets out a plan to modernise airspace by 2020 ^[28] . These initiatives are complementary and both have a common aim of reducing the environmental impact of aviation through the improved airspace design and new on-board and ground-based systems. These new technologies and procedures should allow flight routes to be more direct and reduce fuel burn ^[29] .

1.3.11 Sustainable Aviation is a long-term strategy which sets out the collective approach of the UK aviation industry to tackling the challenge of ensuring a sustainable future of the industry ^[30] . It is an alliance of UK airlines, airports, aerospace manufacturers and air navigation service providers and its goals and commitments cover climate change, local air quality and noise. The Sustainable Aviation CO ₂ Road Map ^[31] sets out a number of activities being undertaken in the sector to reduce CO ₂ emissions. These include optimised aircraft operations and air traffic management, improvements in aircraft and energy efficiency and sustainable biojet fuels. The Road Map states that "UK aviation is able to accommodate significant growth to 2050 without a substantial increase in absolute CO ₂ ^[32] .

1.3.12 The Committee on Climate Change has stated that policy approaches to aviation emissions should be set at a global or EU level given the international nature of the industry. The Committee have further indicated that, until these are agreed, an appropriate long-term planning assumption for UK aviation is for emissions to be around 2005 levels in 2050 ^[33] .

1.3.13 Further information regarding other plans, programmes and strategies of relevance to the context of ADT are considered throughout this document.