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Davies Commission needs to blow away the hot air in the airports debate

10th November, 2014


We’ve heard too much from the Heathrow and Gatwick PR machines. Their countless adverts overplay the benefits of expanding South East airports and downplay the accompanying costs. If anybody took Heathrow or Gatwick’s adverts as the truth, they’d be sticking a spade in the ground tomorrow.

Now the Davies Commission – due to publish its appraisals of Heathrow and Gatwick runways on Tuesday – has one last opportunity this side of the General Election to blow away the hot air in the airports expansion debate and set out the realistic costs and benefits.

What are the overall benefits of expansion?

 ‘Every month construction of Britain’s next runway is delayed is another month of missed economic growth for our county’ Gatwick Obviously poster October 2014

‘Every month this problem goes unsolved costs the British economy£1.25 billion through lost trade’ Heathrow Taking Britain Further poster September 2014

The Airports Commission estimated with ‘major uncertainties’ last December that the cost to the UK economy of not building a new runway from 2021 could be £30-45 billion over 60 years. The Commission said this figure didn’t factor in any environmental benefit of not expanding. Essentially, the Commission presented half of a cost benefit analysis without presenting the environmental benefits. With any potential costs of not expanding emerging from 2021 and increasing over the 60 years, the idea that a month’s delay in a decision today means a month of lost economic growth is hot air. Let’s hope the upcoming appraisals give both sides of the impacts equal attention.

What will it be: public money or higher ticket prices?

£0 Public subsidy Gatwick advertise as being required for their runway proposal. Heathrow adverts say ‘lower cost to the taxpayer than building a new airport’

£11.5 – 17.7 billion the estimate provided by KPMG. £11.5 billion for Heathrow and £17.7 for Gatwick

Consultants advising the Airports Commission believe that for expansion to make economic sense, significant public money would be needed to cover the cost of building roads and rail as well as a new runway. A detailed estimate of the cost to the public purse is needed given the overwhelming majority (84% of the public) agree that airports should be required to improve transport links if allowed to expand. Heathrow and Gatwick both fail to take responsibility for paying for those aspects in their proposals.

If the Airports Commission thinks private investors could cover expansion costs, then it will need to show whether that would mean higher air fares and if so how that would affect budget airlines and so future demand for a runway.

Who would pay the climate costs of a new runway?

£3 Current market cost of a tonne of carbon dioxide.

£600 Cost per tonne of carbon dioxide used in Airports Commission models to limit passenger growth following a new runway

A significant cost had to be added to the price of flying in analysis by the Airports Commission in order to control future passenger growth if a new runway is built, amounting to £43 on average being added to a plane ticket to Europe. The cost doesn’t have to be paid by passengers though. It could be transferred to regional airports by preventing them from growing in order to manage passenger growth. Or the burden could be added to other industries by requiring them to make unrealistic emissions cuts up to 2050. The Commission needs to demonstrate that these costs have been taken into account in their expansion appraisals.

Who pays the environmental costs?

Top two environmental risks in Europe according to the WHO: noise and air pollution

£300 million The potential fine for each year that parts of the UK breach legal air quality levels

The costs of air pollution and noise from expanding airports are borne by those living closest to the airports but the impacts are widespread. A report in 2012 estimated that a third runway at Heathrow would lead to 100 additional premature deaths from air pollution, adding to the already 1 in 12 deaths in London that can be attributed to air pollution each year. Doubling Gatwick flights would take away the local benefit of tranquility, which has a national economic value of £6.76 billion each year according to the Campaign to Protect Rural England. Both Gatwick and Heathrow have said environmental impacts from their expansion options would be minimal. Now the Airports Commission need to blow away those claims and provide a transparent breakdown of what they think the local environmental impacts of expansion would be.

This is the last opportunity for the Commission to be up front and clear about the costs and benefits of the different expansion options and, importantly, who would pay them. Let’s hope Davies and the Commission seize it or questions will be asked of the legitimacy of their conclusions.

All references are available on request

Image creditLuigi Rosa via Flickr