Budget 09: Air Passenger Duty to increase but aviation is excluded from first ever carbon budget

22nd April, 2009

The budget set out today by Alistair Darling confirms that Air Passenger Duty is set to increase. But accompanying documents contain forecasts suggesting these modest tax rises will not be enough to stem the growth in the UK’s aviation emissions.

Increases in APD were confirmed by reference to the pre-budget report; AEF believes these are justified and welcomes the better correlation between emissions and taxation that the new APD distance banding will offer. But we are disappointed that a previous proposal to amend the duty to cover cargo and transfer passengers has been dropped. The duty rate for aviation gasoline (avgas), which is used by general aviation leisure aircraft, will rise by 2.31 pence per litre.

This budget was the first to be accompanied by a carbon budget. The government will adopt a legally binding target to reduce the UK’s greenhouse gas emissions by 34% from 1990 levels by 2020, announced the chancellor. But documents accompanying the budget make clear that this figure excludes emissions from international aviation and shipping. 34% was the target recommended in December last year as an ‘interim’ goal by the Committee on Climate Change (CCC), to be adopted in the absence of a global agreement on how to tackle global warming. The budget states that if a satisfactory global agreement can be reached the UK will increase the stringency of its ambition, but stated that the Government will in that case ask the Committee to review their advice on what this tighter, ‘intended’ budget should be.

The Government has accepted the advice of the CCC that the UK’s long term target to cut greenhouse gas emissions by 80% of 1990 levels by 2050 should include aviation. In the short term, while aviation will not be explicitly covered by the carbon budgets, the sector’s emissions will be monitored and reported, as required by the Climate Act. The Government has today published forecasts for UK aviation emissions for the first three carbon budget periods, which show them increasing by 30% from today’s levels by 2022, even without including aviation’s non-CO2 effects.

AEF remains concerned that the Government’s continued failure to bring aviation emissions into line with climate policy will put any long term targets out of reach.

Budget documents can be downloaded from
http://news.bbc.co.uk/1/hi/business/8012222.stm