Department for Transport – Valuing the External Costs of Aviation

19th April, 2004

Aviation, in common with other modes of transport, gives rise to a number of adverse environmental impacts. These include aircraft noise, contributions to local air quality problems and climate change and these are among a range of ‘external costs’.In Dec 2003, the government published a document called ‘Valuing the External Costs of Aviation’. This was welcome as the UK’s first official quantification of the external costs of aviation, but there were major shortcomings in the estimates.Aviation, in common with other modes of transport, gives rise to a number of adverse environmental impacts. These include aircraft noise, contributions to local air quality problems and climate change, and other factors such as townscape, landscape, biodiversity, heritage and water, some of which cannot easily be quantified.These type of costs, which fall on society as a whole rather than on the suppliers or customers of aviation, are called ‘external costs’. For more about the principles underlying external costs see general article.]Under the polluter pays principle, external costs should be reflected in the costs incurred by the aviation industry, so that (in an ideal world) it fully meets its external costs. Most European governments, including the UK have adopted this principle.A key principle in the Integrated Transport White Paper issued in 1998 is that aviation should meet the external costs, including environmental costs, that it imposes.In Dec 2003, the Department for Transport (DfT) and the Treasury published a document called ‘Valuing the External Costs of Aviation’. This was one of a number of supporting papers for the goverment’s White Paper on aviation. While it was welcome as the UK’s first official quantification of the external costs of aviation, there were major shortcomings in the estimate. The cost of noise was severely under-estimated and no real cost was given for local air pollution.The DfT’s report can be downloaded from the DfT web site (PDF file; 106kb).