Air Passenger Duty: analysis of responses to the strategic environmental assessment screening and scoping report

Responses Received to the Screening And Scoping Report

This section sets out a summary of responses received to the specific questions set out in the SEA Screening and Scoping Report. An overview of the text to which the questions relates to has been provided.

Overview - Key Assumptions and Questions (Section 2 and Questions 1-2 of the SEA Screening and Scoping Report)

27. Views were sought on the key assumptions and questions set out in the SEA Screening and Scoping Report. It is proposed that these will form the basis of the environmental assessment work and be applied to draw out the likely significant environmental effects that may arise as a result of the reduction and eventual abolition of APD in Scotland. These have been set out below in Box 1. Views were also sought on the appropriate scale of environmental impacts to be included in the assessment.

Box 1 Key assumptions and questions

The proposal to reduce and eventually abolish APD in Scotland will lead to an increase in the overall number of flights and could potentially create opportunities for new routes to be created.

Q 1: What are the likely environmental effects that will arise from an increase in the number of flights?

An increase in flight numbers will lead to an increase in overall GHG emissions ( CO2 and non- CO2 emissions), even with advances in technology.

Q 2: What are the likely impacts that may arise from increased GHG emissions?

An increase in flight numbers will result in a rise in passenger numbers, both of which will place increased pressure on existing airport and interconnecting infrastructure.

Q 3: What are the likely impacts that may arise from increased pressure on existing infrastructure?

Question 1: do you agree with the key assumptions and questions as discussed in pages 12-13 (of the SEA Screening and Scoping Report)?

28. Thirty respondents provided views to this question - of these, the majority agreed or broadly agreed with the key assumptions and questions. A few respondents stated that they were unsure or had no view.

29. Whilst supportive of the key assumptions and questions, a few respondents felt it was important that the assessment give greater consideration to the wider context of growth and the environment. For example, the assumptions setting out that there will be an increase in GHG emissions and increased pressure on infrastructure should be considered in conjunction with potential mitigation, such as new technologies, fuels and operational improvements and greater optimisation of current capacity. Furthermore, one respondent noted that the issue of capacity (how much is utilised now and following any changes with additional flights), would benefit from further investigation to address the question of the likely impacts arising from increased pressure on infrastructure.

30. The work of Sustainable Aviation, such as the industry noise and carbon road maps, was highlighted as demonstrating that additional connectivity can be delivered within current obligations and environmental targets. The role of the International Civil Aviation Organization ( ICAO) in delivering environmental improvements at a global level (such as the development of global market-based measures), and the EU Emissions Trading System ( ETS), was also highlighted.

31. The work and commitments of Sustainable Aviation was also noted by another respondent who did not agree with the assumption that an increase in flight numbers will lead to an increase in overall GHG emissions (CO ₂ and non-CO ₂), even with advances in technology. They noted that in the short term there may be an increase but, in line with commitments with Sustainable Aviation's carbon road map, carbon neutral growth was expected from 2020 onwards. Another respondent stated that any additional activity generated as a result of a reduction or abolition of APD would be compatible with delivering Sustainable Aviation's environmental obligations.

32. Whilst agreeing with the assumptions in principle, another respondent stated that each question should be accompanied by consideration of the effect on environmental objectives. For example, with regards Question 2 which considered the impacts of increased GHG emissions, it should be specified that the key issue being assessed is the impact the policy change would have on Scottish and UK climate change legislation and objectives arising under the Paris Agreement. Another respondent considered that the assessment should also include questions regarding the impact of aviation emissions at differing atmospheric levels (known as the multiplier effect).

33. Potential impacts arising from modal shifts in transport was raised as a key consideration - for example, modal shift from lower carbon forms of transport and the GHG emissions implication arising from this. This topic was also considered by respondents who stated that they did not support the assumptions and key questions. One respondent held the view that it was not clear if the environmental impacts of any modal shift had been, or would be, adequately modelled or accounted for in the assessment process. This view was supported by another who believed that air travel taxation could not be viewed independently of other transport taxes.

34. Some respondents did not agree with the assumptions and key questions, stating that they did not support the policy proposals as they considered these as incompatible with environmental and climate change objectives. Other views included that the report was flawed as it did not take into account UK climate change commitments, or that consideration had not been given to the potential impacts on passenger migration from other airports. Concerns were also expressed that the effect on non-air infrastructure and the health implications of noise and air pollution from emissions had not been addressed.

Question 2: Is it appropriate for the assessment to consider effects at differing geographical scales as discussed on page 18 (of the SEA Screening and Scoping Report)?

35. The majority of the 27 respondents to this question supported this proposal. This was viewed as essential and sensible given the global nature of the industry. Respondents emphasised, however, that different weight or significance should not be given to national priorities or impacts over local effects. Noise and air pollution were provided as examples of where the effects are experienced more acutely at a localised scale. A few other respondents considered that, as a global industry with global effects, recognition should be given to measures and mitigation implemented globally by the industry.

36. Reasons for not supporting the consideration of two geographic scales included a view that the general approach to the SEA was conceptually flawed in its attempt to look in detail at the potential effects. Rather than commenting on the geographic scale, one respondent felt that the assessment should be undertaken by an independent body. One respondent did not support this approach, stating that they were un-supportive of the policy proposals.

Overview - Alternatives (Section 2 and Questions 3-4 of the SEA Screening and Scoping Report)

37. The SEA is required to consider reasonable alternatives to the policy proposals for a Scottish replacement to APD. At screening and scoping stage, three policy alternatives were proposed for consideration in the assessment. These have been set out in Box 2. Views were sought on these.

Box 2 Proposed reasonable alternatives at screening and scoping stage

Alternative 1: The introduction of a Scottish replacement tax with the same design, structure and tax rates as UK APD. This would represent a 'like for like' approach.

Alternative 2: The introduction of a Scottish replacement tax with the overall tax burden in Scotland (compared to UK APD) being reduced by 50% by the end of the current Scottish Parliament. The Scottish Government will consult on how the replacement tax should be designed and structured, exploring options such as changes in the method of charging (for example passenger or flight-based) and the methodology for determining rates and bands.

Alternative 3: The Scottish Parliament does not legislate for a Scottish replacement tax. Once powers over APD had been devolved this would mean that there would be no tax on the carriage of air passengers from Scottish airports.

Question 3: Are the proposed alternatives set out on pages 21-22 (of the SEA Screening and Scoping Report) reasonable?

38. Twenty nine respondents provided views to this question. The majority of these respondents did not support either some or all of the alternatives proposed. A few respondents provided no clear view and two were unsure or had no view. Of the respondents supporting the proposed alternatives, little further information was provided except from one respondent who viewed alternative 1 as being the most reasonable.

39. The environmental impacts arising from aviation was a common concern raised by many of the respondents who did not support the policy proposals. The proposed policy was also considered to be an unnecessary financial boost to the aviation industry. As such, alternatives 2 and 3 were considered by a few respondents as neither reasonable nor appropriate. Others suggested that an alternative option of applying the tax at an increased rate should be considered. Another respondent felt that the alternatives as set out seemed prescriptive and suggested that they could be applied more flexibly. For example, if applying alternative 2, consideration could be given to issues such as rates and bands.

40. A few respondents felt that the introduction of a replacement tax was not an appropriate and cost effective measure when considered in a purely environmental context. They noted that domestic and intra- EU flights are already subject to the EU ETS, stating that these constitute the majority of current operations at Scottish airports. As such, any increase in air traffic would be addressed through the mandatory compensation imposed by the ETS. In addition, the ICAO development of a market-based measure for aviation, which will require aircraft operators to offset the growth in emissions from international aviation by 2020, was noted. It was also felt that local environmental impacts would be best addressed through the adoption of local level measures.

41. One respondent expressed concern that some of the environmental issues identified would not be easily measurable. They suggested that, in order to model the predicted impacts robustly and regulate effectively, a Scottish equivalent of the Civil Aviation Authority ( CAA) and NATS should be established.

Question 4: Do you have suggestions for additional approaches to APD policy?

42. The majority of the 31 respondents to this question provided further information or suggestions of additional approaches for consideration in the assessment. A few of the respondents who stated that they had no further suggestions reiterated their view that APD is not an effective mechanism to address the environmental impacts arising from aviation (submitted in response to Question 3).

43. A common view held by the majority of the respondents was that an APD replacement tax should reflect the environmental and social impacts of aviation or be increased to reduce growth in the aviation sector, thus reducing the associated environmental effects. Suggested alternatives included increasing the rate of the tax, linking it more directly to CO ₂ emissions, or applying it on a per plane model. A few respondents also proposed that the tax could take the form of a "frequent flyer" levy or one better designed to resolve the environmental challenges posed by the aviation sector, for example by linking this to specific environmental objectives or scaled to reflect environmental impact. Suggestions of how this could be achieved included increasing the rate of the tax to the point where demand was anticipated to fall to a level consistent with the Climate Change (Scotland) Act 2009, or linking the tax charge to the noise certification of the aircraft.

44. Wider transport implications were considered by a few respondents. One respondent stated that it was critical to understand the possible transport changes that may arise as a result of a reduction of APD. They raised concern that a lack of robust evidence of the likely impacts of the policy could lead to a failure to plan for these changes to avoid any adverse effects. Another respondent felt that there needed to be a clear distinction between the proposed cut in APD on domestic versus international travel. They believed this differentiation would avoid unintentional consequences of a negative modal shift, further adding that policy options could be developed to incentivise a positive modal shift, while still meeting the strategic priority of improving air connectivity.

45. A few respondents suggested that other alternatives could include applying variable options or amending the criteria applied to the current banding system, for example distance criteria. Others felt the policy should not be driven primarily by fiscal aims, that the tax should be completely removed and that there should be democratic control of an overarching body, for example a Scottish equivalent to the CAA.

Overview - Evidence base (Section 3 and Questions 5-6 of the SEA Screening and Scoping Report)

46. The SEA Screening and Scoping Report set out the evidence that had been drawn on to undertake some early assessment work at the screening and scoping stages of the SEA. It was noted that this evidence base is proposed to be used to inform the assessment process as it progresses.

Question 5: Do you have any comments regarding the proposed evidence base for the assessment set out on pages 24-51 (of the SEA Screening and Scoping Report)?

47. The majority of the 23 respondents to this question submitted further views or information for consideration. Of the few respondents who stated that they had no further comment, one expressed a view that the report did not take account of the UK's Climate Change commitments.

48. Views on the proposed evidence base within the SEA Screening and Scoping Report varied. One respondent stated that it seemed reasonably comprehensive, but suggested it should take a more balanced approach in respect of the current and future mitigation measures. A few respondents felt that the information was too general and speculative or lacked sufficient detail on the current situation in Scotland or around Scottish airports and evidence of how this will change depending on what model is introduced. Another respondent considered it overly complicated.

49. The source of the baseline information presented in this section was questioned. Questions were raised about the origin, objectivity and reliability of the text. A few respondents pressed the need to have a robust and unbiased evidence base and believed a precautionary approach should be taken when considering evidence gathered from the aviation sector. To illustrate this point, examples were provided to demonstrate where differing conclusions had been presented between industry sources and independent appraisal. It was suggested that the assessment process be undertaken by an independent body, for example a non-governmental organisation.

50. A few respondents emphasised that it was important that the impacts of Scottish air transport are not assessed in isolation and that the assessment considers the environmental implications the potential changes may have on other transport sources or at other locations. For example, an increase in CO ₂ levels in some airports may be offset by decreases in others, or noise impacts should be considered relative to other sources, such as road and rail. In addition, it was thought that the assessment did not adequately consider the extent to which the increase in air traffic could be accommodated within existing infrastructure and capacity. As such, it was felt that the linear relationship the assessment appeared to present between passengers and emissions was neither reflective of wider considerations nor an accurate way of estimating the environmental impacts of an increase in air traffic movement. Suggestions of other considerations included Scotland's overall transport and environmental policies.

51. A few respondents were of the view that the assessment needed to better consider current and future environmental measures, policies, improvements and mitigations. Examples included the extent to which environmental measures such as the EU ETS already addresses and offsets a potential increase in the environmental impacts of air transport. It was also suggested that consideration should be given to aviation activity through the International Air Transport Association ( IATA) and ICAO in delivering a global market-based measure to enable a global carbon offset scheme. The work undertaken by Sustainable Aviation, such as road maps on carbon, noise and sustainable fuels, was also discussed. Whilst it was noted that the SEA Screening and Scoping Report referred to these, it was felt that insufficient weight had been attributed to these in drawing together the initial conclusions. It was requested that this body of work could be more thoroughly assessed and incorporated into the evidence base.

52. Views on the effectiveness of mechanisms such as the EU ETS and the work of Sustainable Aviation and ICAO differed. A few respondents felt that text in the SEA Screening and Scoping Report was not an accurate reflection of current schemes. Some felt references to the collaborative approach and targets set through the work of Sustainable Aviation were misleading. They were considered to be aspirational targets of the aviation industry and not based on actual emissions trends and evidence of implementation of emissions reductions mechanisms. Further, whilst it was acknowledged that some progress has been made with a global market-based measure via ICAO, no standard had yet been adopted. The effectiveness of the standard (once adopted) in meeting the target deadlines, such as stabilisation of emissions by 2020, was also questioned due to timing implications of its adoption.

53. In addition, concerns were raised that the EU ETS had been noted in the SEA Screening and Scoping Report as the main policy lever for addressing GHG emissions from the aviation sector. It was noted that only flights within the EU are considered within the ETS. Concerns also included that the ETS had been subject to implementation problems and that the cap on aviation emissions was not stringent enough. As such, it was considered that the inclusion of aviation emissions in the EU ETS alone is not, in itself, a sufficient policy lever to address climate change emissions from the industry.

54. Another respondent believed that international measures would be unable to deliver legally binding domestic carbon commitments without complementary policy action. Furthermore, the implications for meeting climate change targets (both Scottish and UK) and commitments under the Paris Agreement were highlighted as a key question for the assessment to address.

55. Specific consideration of the impact on CO ₂ emissions as a result of incentivising a modal transport shift from rail to air, or vice versa, was also requested. Whilst noting that it was problematic to forecast, it was felt this could include consideration of the likely impact of rail growth and future investment on CO ₂ emissions. It was also requested that the text within the SEA Screening and Scoping Report focusing on the varying effects of aviation emissions at differing atmospheric levels (known as the multiplier effect) be highlighted and taken into account as the assessment progressed.

Question 6: Is there further information you feel should be considered or included to further inform the assessment?

56. Suggestions of further evidence covered a range of issues. Sources of information related to climate issues were submitted. These included the Paris Agreement and the Committee on Climate Change's reports "The high ambition towards a low carbon economy" and "Meeting the UK Aviation target - options for reducing emissions to 2050",

57. Other suggestions included calls for more Scottish-specific data, including modelling of noise contours around the major airports with predicted higher flight numbers, and for more detail, for example a street-by-street assessment process to identify where the effects may be realised more acutely. One respondent stated that the collection of data should be taken and analysed independently by interested parties.

58. It was suggested that the assessment should also give greater consideration to the airline fleet replacement programme and major investment in modern, quieter and fuel efficient aircraft. Opportunities for exploring the production of sustainable alternative fuels in Scotland could also be evaluated in the assessment.

59. Wider social, economic and political issues were raised as relevant considerations. It was suggested that experience from other countries and the economic lessons learned from these should be considered. The need to take into account possible changes in the political landscape, including a potential scenario whereby the UK Government matched Scotland's APD reduction in the rest of the UK, was also highlighted.

Overview - Initial Findings (Appendix 2 and Question 7 of the SEA Screening and Scoping Report)

60. Early assessment work and the findings of this were set out in the SEA Screening and Scoping Report. The findings were based on the key assumptions and set out relevant considerations to be taken into account in determining significance, such as existing planning mechanisms and commitments to international agreements.

Question 7: Do you agree with these initial assessment findings set out on pages 62-64 (of the SEA Screening and Scoping Report)? Are there additional environmental issues that should be considered?

61. A number of respondents broadly agreed with the initial findings but provided further comments. For example, the findings were considered by a few respondents as reasonable and thorough, but it was felt that wider considerations had not been sufficiently reflected. In addition to existing mitigation such as the EU ETS, and the ICAO development of a global market-based measure for international aviation, this included local airport policies and initiatives, such as those on noise and surface access. It was also felt that the assessment did not recognise the extent to which forecast growth may be accommodated through existing infrastructure and aircraft movement, for example in higher load factors. It was suggested that factors such as these should be given greater consideration in order to provide a more nuanced and complete picture of the likely effects. Concern was also raised that due regard be given to the actions undertaken in the aviation sector that demonstrate the industry's commitment of working towards the goals of Sustainable Aviation.

62. It was also requested that specific consideration be given to how the proposed policy could incentivise modal transport shift on routes where air and rail provide strong competition, and that the subsequent impact on CO ₂ emissions should be modelled. In addition, this would give a more solid basis for considering the various policy options, including those developed to more fully address the impact on rail.

63. Mitigation was also raised as an issue from a number of respondents who stated that they did not agree with the findings. One respondent considered the information included was inadequate as they believed that if air travel was actively discouraged then mitigation would not be required. It was also noted by another that the assessment presumed the legislation that currently exists is applied effectively and considered that too much responsibility for regulating impacts was left to the aviation industry. This view was mirrored by a respondent who considered the findings reasonable but expressed concern that mitigation such as climate neutral growth or sustainable fuels may be used to minimise the likely impacts.

64. Other views expressed included that the assessment was so narrowly focused that the initial findings section did not consider, in their view, the important effects that might arise. The challenges of calculating with certainty the impacts of emissions at atmosphere and the fact that the initial findings did not reflect the assessment of alternative 3 were also noted. A few responses reiterated a view that they did not support the policy proposals for the APD replacement tax due to the environmental impacts associated with aviation travel.