Select Committee on Environmental Audit Sixth Report


102. We asked for evidence on whether or not offsetting should become compulsory for some of the more carbon-intensive activities, such as flying. Although there is an absence of analytical data in this area, anecdotal and other evidence points to air travel being a principal area in which individuals in particular are more likely to want to offset. As one of the most carbon intensive activities in which a member of the general public is likely to engage, it is something on which the carbon offset industry focuses both on its websites and in its literature. Indeed, several companies exist to offset flights and flights alone.

103. As several of our previous Reports have emphasised,[107] aviation's peculiar contribution to carbon emissions and to climate change represents a key target in any strategy to tackle the problem of global warming. International emissions from aviation are still rising at an alarming level, and between 2000 and 2005 carbon emissions from UK aviation alone (domestic flights and international departures) rose by 16%. [108] Even under the Department for Transport's "best case" projections (with which we have taken serious issue in the past), aviation will grow from around 5% of the UK's carbon emissions today to 24% in 2050.[109] Under other projections, aviation emissions will consume all of the carbon permissible by 2050 if there is a 60% target in place for that date as the current draft Climate Change Bill before Parliament proposes. Any way in which the use of offsets for air travel could contribute to mitigating the problem of climate change would be well worth encouraging.

104. There was no clear consensus in the written evidence we received on the question of making offsetting mandatory for aviation and other carbon intensive activities. Some considered the question to be largely irrelevant. Some evidently believed that offsets were an inappropriate and possibly counter-productive way of dealing with a phenomenon that needs to be directly reduced.[110] The more desirable advice in their view was to travel by air less often.[111] Some pointed out that with aviation due to be included in the EU ETS from 2011 (that now being the earliest possible date for inclusion) it may not be equitable to require offsets from an industry (or its customers) the emissions from which are shortly to be covered by a comprehensive cap and trade system. Others favoured considering, encouraging or mandating offsets for air travel.[112] The Energy Saving Trust for example conceded with some reluctance that "there may be a specific role for offsetting to play in the case of aviation".[113]

105. DEFRA, in its consultation, did not single out aviation, but had two significant suggestions for how some businesses, such as the airline and travel industries, might wish to participate more fully in the Government's plans for offsets: by offering carbon offsets at the point of sale as a 'compulsory choice' (that is, something that will automatically be added to the purchase of an air ticket unless the consumer explicitly asks otherwise), or by making the default option for the price of the ticket inclusive of an appropriate offset—both suggestions conceived as means of encouraging the take-up of offsets.[114]

106. The key to encouraging take-up is to stress that action is needed now regardless of whether or not the aviation industry is able to deliver carbon reductions on a greater scale over the medium to long term. Mr Lawrence Hunt, CEO of Silverjet, set out this timescale clearly in his evidence to us.

    "I think long term we need better technology and that is 20 to 30 years, and that is fuel technology, it is aircraft engine technology, it is composite technology…[that] is the long term solution but we cannot sit around and wait for that. Then we have the Emissions Trading Scheme and we are promised the date of 2012… and that is clearly a good interim solution, but, until such time as that happens, then I think the airline sector needs to address the short-term issue and the only way to address that is with offsets."[115]

No-one can be certain about the rate of technological and 'procedural' improvements (the better management of flight, holding and descent paths, for example) or the speed of impact on emissions brought about by the EU ETS. In our view, as much as possible has to be done before these occur to address the continued accumulation of atmospheric carbon caused by aviation. We accept that the highest priority needs to be reducing emissions directly, but where this is not possible or is improbable—and transport is a notoriously intransigent sector in this regard, and aviation is perhaps the most truculent mode within it—then some compensation for or offsetting of emissions needs urgently to be undertaken.

107. We have often had cause to criticise the Government for not acting with sufficient urgency or for not taking effective enough measures to deal with the problem of aviation emissions. The Government developed the Government Carbon Offsetting Fund (GCOF) in order to deal with its own aviation emissions, in line with the UK Sustainable Development Strategy launched in March 2005. This Fund, which covers all Government departments with the exception of the FCO (which has its own, older, scheme in the form of REEEP[116]), will offset all official flights between April 2006 and April 2009. The Government's recognition of the importance of offsetting to compensate for its travel emissions is to be welcomed. No doubt this endeavour will continue beyond 2009 when the Government is likely to extend its offsetting activity to help render the central government estate carbon neutral as set out in its announcement of June 2006.[117]

108. The airline industry was invited, alongside others, prior to the public announcement of the DEFRA consultation on offsetting, to indicate its support for the proposed Code and to suggest the involvement of the industry in supporting publicity for the proposals.[118] Whole-hearted co-operation between the airline and travel industries and the Government over promoting the take-up of offsets may have had a significant impact on the growth of the voluntary market over the next few years.

109. Unfortunately, the Chancellor's proposed increase in Air Passenger Duty (APD) announced in the 2006 Pre-Budget Report, which appears to have surprised DEFRA and OCC officials as much as it startled the airline industry,[119] led to most of the industry pulling away from even contemplating co-operation with the proposed DEFRA Code: it is only fair to add that some airlines explicitly stated to us that they may not anyway have wished to support the DEFRA Code because of its exclusion of VERs. While we have some reason to be sceptical of the likelihood of the airline industry enthusiastically promoting a product that highlights its own poor environmental impact, there is clearly increasing demand from passengers—and possibly from airline staff[120]—for offsetting or other environmental initiatives.

110. We welcomed the increase in APD announced in the 2006 PBR, which we felt did not go far enough.[121] Obviously the coverage of APD is only partial—air freight lying outside the APD regime—and it is clearly a blunt instrument. We are pleased to see that the Government has recently issued a consultation on the application of APD in order to mitigate some of its perverse effects,[122] but we hope that the outcome does not lessen the already marginal impact of the measure. One possible benefit of the consultation would, however, be to re-establish co-operation between the industry and the Government and perhaps to marshal the industry's support for whatever improved proposal on offsetting follows on from what has clearly been a flawed consultation, in terms of the process and the proposed Code.

Airlines' diverse approach to offsetting

111. We decided to take oral evidence from a number of airlines, despite not having received any written submissions from them. The airline industry taken as a body has no corporate view on offsetting and we therefore considered it important to speak to companies who handle offsets differently, or not all, as well as some of the key players in the market. We thus took oral evidence from British Airways, which directs those wishing to purchase offsets to a BA page on the Climate Care web-site; from Virgin Atlantic, which currently does not offer an offsetting service but which plans some initiative in this area later in the year; and from Silverjet, which claims to be the world's first carbon neutral international airline, and which matches its aviation-related emissions with offsets delivered by The CarbonNeutral Company (TCNC).

112. The three airlines were still not disposed to consider whole-hearted co-operation with the Government over offsetting on account of the unexpected increase in APD. As the current use of offsets by all three companies varies, there was also clearly a lack of consensus on the value of offsetting with regard to air travel which may anyway have obstructed such corporate cooperation. British Airways launched its offsetting initiative which it conducts with Climate Care with some fanfare in 2005 but the profile of the scheme since has been, to put it kindly, almost non-existent. In a previous Report we drew critical attention to the very poor uptake of offsets for BA flights which seemed to reveal a certain reluctance to advertise an activity that only focussed attention on the fact that air travel was damaging to the environment.[123] Anecdotal evidence has revealed a widespread ignorance of the scheme amongst BA staff.[124] The British Airways web-site for a long time revealed the continuing low profile accorded to offsetting.[125] Mr Alan Buchanan, Company Secretary, and Mr Andy Kershaw, Climate Change Manager, British Airways, did however both stress the work being done to make air travel more environmentally benign, whether through encouraging technological improvements (lighter air-frames and more efficient engines, for example) or advocating procedural adaptations, such as reducing holding times.[126]

113. Since its offsetting scheme with Climate Care was launched in 2005, British Airways has encouraged the purchase of only 1,600 tonnes of offsets on average each year, approximately the emissions from "four return flights to New York on a 777".[127] This is risible. The company clearly recognises this, and during our evidence session announced its intention to improve the prominence and accessibility of offsetting on its website from the beginning of May. At the time of our agreeing this Report, this simple change had not yet been made.

114. Virgin Atlantic currently offers no offsets of its own to its customers, nor does it point them towards an offset provider or allow them to calculate the emissions for their flight. In evidence to us, Barry Humphries, Director of External Affairs and Route Development, Virgin Atlantic, concentrated on the future impacts of the EU ETS and on the other ways in which its airline was helping to mitigate emissions. The various environmental initiatives initiated by Sir Richard Branson were outlined, such as the towing of aircraft at airports and allowing continuous descent.[128] Mr Humphries did however allude to Virgin Atlantic's intention to launch an offsetting initiative later in the year,[129] since offsetting "ticks all the right boxes".[130] We look forward to the launch of this initiative and hope that it is pursued with greater vigour than was the case with BA's pioneering launch of its own offset initiative a couple of years ago.

115. The position taken by Mr Hunt of Silverjet was at some remove from those of his bigger rivals. The decision taken to make Silverjet carbon-neutral through the purchase and retirement of offsets was put forward as the most direct and appropriate response by an airline to the environmental damage with which it was associated. He believed that "the airline industry, frankly, has been pathetic in its response to [its environmental impact] over the last four or five years."[131] The responsibility to offset was thus removed from the customer and borne by the airline. Silverjet is to be congratulated for its stance towards its own emissions, although the scale of its operations makes such integral offsetting more practicable than is the case for its larger competitors. It was not clear, however, which of its non-aircraft related emissions were offset. Silverjet could make more clear in its literature the exact nature of its carbon neutrality. It also needs to do as much as it can, offsets notwithstanding, to improve its carbon efficiency. It has nothing to lose by this as it is clearly pioneering a more environmentally sound and speedier response to aviation's harmful climate impacts than other airlines.

The EU ETS and offsets

116. Even if air travel enters the EU ETS in a limited form in 2011 (to include CO2 emissions from all intra-EU flights) the pressure on airlines to reduce their emissions will in two respects be diluted. In all probability, the impact of the first cap proposed for aviation emissions, set at the average level of emissions for years 2004-2006, will be countered in first instance by the allocations being in their vast bulk issued for free rather than auctioned (even if the airlines accept the cap, which seems unlikely), thus permitting the airline industry to benefit from the sort of windfall profits seen in the energy industry earlier in the Scheme, as airlines pass the costs of compliance (which may anyway be negligible) onto their customers. Secondly, airlines will be able to match their emissions, whatever the cap, with spare EUAs from other participating industries: while Phase II of the EU ETS will no doubt be more stringent than the lax initial phase, the number of available allowances is unlikely to be low enough to make their cost prohibitive. The nature of Phase III of the scheme which will follow from 2012 and which it is planned will include aviation more fully (all flights departing or arriving at EU airports) is of course still under consideration.

117. Although there are a number of initiatives underway which may well lead to per capita rather than absolute reductions in emissions from aviation, the timescale for these is fairly lengthy and in the more immediate future most commentators and the Government agree that the upwards projection for air travel and its emissions is still steep. Although the airlines' own figures for sales since the price of tickets rose on account of increased APD are not yet in, it is extremely unlikely that the Government's increase in APD announced in December 2006 will have any real effect on this trajectory, and even an unprecedented upsurge in offsetting, while very welcome, will only flatten a little the real impact of the curve's ascent. Again we stress to the Government that it needs to do more than tinker with the blunt instrument of APD and place unrealistic hopes in the timely impact of aviation's entry into the EU ETS to level off the airline industry's emissions trajectory. While we commend the Government's attempts to bring the airline industry together in a more co-operative and active way, and to encourage their giving greater prominence to offsetting, there is clearly an urgent need for the Government to re-think its entire aviation strategy, notwithstanding its apparent belief in the over-riding social and economic merits of ever-expanding air travel.

118. We were a little dismayed during the evidence sessions, both with Virgin Atlantic and Silverjet and with British Airways, that the difference in effect between offsets and carbon trading seemed less than clear to the airlines. Clearly, there is a connection between the two, given the capacity for the use of a variable proportion carbon credits from CDM projects to help match emissions totals under the EU ETS. As some doubts had been raised in memoranda to us as to whether it would be appropriate to continue to mandate (if that became the case in the interim) or even encourage offsetting for flights once aviation entered the EU ETS, since such may involve elements of double-counting or issues of non-additionality, we put these points to the airlines, adding a question concerning the airlines' own perception as to how customers would react to the expectation to offset for flights when aviation was also covered by emissions trading. Mr Lawrence Hunt of Silverjet appeared to believe that the advent of the EU ETS would make all participating airlines carbon neutral, and so he would presumably bring to an end the current scheme his airline runs with The Carbon Neutral Company to provide offsets for its current activities.[132] British Airways has also stated that carbon offsetting is "a close relative of carbon trading and in many cases amounts to the same thing"[133] and Mr Alan Buchanan told us in evidence that the EU ETS will, if the cap is set at a sufficiently strict level, "mean that the cost of the emission offset is included in the fares". [134] Mr Humphreys told us that if "the ETS… works efficiently, then that should cover all of the airlines' emissions".[135]

119. These statements appear to represent a misunderstanding of the nature of the EU ETS. While a carbon offset is intended to represent the compensatory saving of an amount of carbon dioxide equal to that released into the atmosphere by a particular activity, the EU ETS will set limits for carbon emissions against BAU forecasts which are expected to encourage airlines to emit less than the limit set or to purchase allowances or credits to cover any excess emissions beyond that limit. Some of the allowances or credits purchased will be excess EUAs (allowances representing emissions below the allowable limit) sold on by other bodies in industries covered by the EU ETS which do not need them (as their emissions have reduced below the limit set for them) or may be CERs from CDM schemes. The overall effect will not be to ensure that all aviation emissions are offset but rather that they do not rise beyond the limits set (one way or another) and are effectively offset if and when they do. For example, if on entering the EU ETS Silverjet were to abandon its current scheme for carbon neutrality then while its absolute emissions might not be able to increase as expected, and may over time be encouraged to fall, none of the emissions permitted within the level or cap set will be offset and thus Silverjet will become a net contributor to global emissions having until then been a carbon neutral presence. An airline which decides to offset all of its emissions is arguably doing more to tackle the problem of climate change—at least in the short-term—than an airline which under the EU ETS meets the cap. The EU ETS may over the medium term flatten the trajectory of rise of aviation emissions, and may even, in the long term, cause the trajectory to level out or dip: but at the moment those emissions below the cap will not be offset or compensated for unless airlines or passengers choose to do so voluntarily.

120. Both British Airways and Virgin Atlantic were optimistic that aviation would indeed enter the EU ETS in 2011, and would be happy with earlier incorporation if it were possible.[136] As we have explored in our recent report on the EU ETS,[137] we are not entirely convinced that the UK airline industry's conversion to the EU ETS was founded upon its expectation of tough limits shortly after entry, and, although we have some concerns about the timeliness and actual impact of the EU ETS on aviation emissions, we consider it essential that the EU ETS should be structured in such a way as to bring about an early decrease in emissions from air travel, and to enforce a continuing trajectory towards a substantial cut in emissions.

Mandating offsets for flights

121. In this particular context, some mitigation of the effects of the current trends in emissions from air travel could be achieved were offsets to be mandatory for all airline tickets bought in the UK, or for all flights commencing in the UK, or for all UK airline tickets bought. We recommended in our recent Report on transport emissions that the Government should make offsetting payments a compulsory charge on all airline tickets.[138] The Government's response stressed the awareness-raising effect of offsetting, despite the fact that it clearly offsets its own aviation emissions in the belief that it truly compensates for the damage otherwise caused to the environment.[139] The Government must have the courage of its own convictions to recommend its own course of action as one that must be adopted by others responsible for air travel. Although offsetting alone will have only a minor impact at best on increases in global emissions as a result of air travel, the action of offsetting air travel may encourage better carbon behaviour overall.

122. Of course there are possible practical difficulties with mandating the purchase of an offset with each air ticket. Some commercial bodies offset in advance (or in retrospect) their total emissions, for travel or for all their activities, and thus in principle might be forced to offset twice. The Government itself falls into this category, of having its own comprehensive and multi-departmental offsetting scheme for air travel: and other public or charitable bodies do likewise. A small if increasing number of individuals also take care to offset their carbon footprint annually or otherwise outside of the act of purchasing an airline ticket. For that reason we support the Government's proposals to require all those selling air tickets within the UK to include in the price offered the cost of an offset, and to retail that offset along with the ticket unless the customer requests otherwise.

Variation in offset price and radiative forcing

123. Aviation is an area in which there is great variance in the price of offsets which. While some variations in price are not only to be expected but to be encouraged, since there is a great variety of schemes from which offsets spring and differing schemes inevitably have differing costs, a major cause of the variation is differing calculations of carbon emissions from flights of equal length. These variations cast doubt in the eyes of many considering offsets on the rigour of the calculations used to measure offsets and the validity of the array of figures quoted.

124. The airlines cite, amongst other things, different routes, different engines and different load factors to account for the variations given for carbon released into the atmosphere from journeys of similar or identical length by different airlines and/or calculated by different offsetting companies or other online carbon calculators. Recent research has highlighted the significant number of relevant factors: flight distance, occupancy efficiency, type of plane/engine, class of seat (since business seats are more spaced out they have more carbon impact per seat than economy seats), inclusion of a radiative forcing factor, and the simplicity of the calculator used (ease of use as opposed to accuracy). Research has also revealed that for identical journeys, calculations of carbon released often differ considerably and the costs of an offset to cover the carbon released differ even more. A paper released in December 2006 from the Tufts Climate Initiative sets out neatly how for a return flight from Boston to Washington DC there were variances between calculations even in flight distance of up to 10%. Calculations of emissions from the return flight varied from 0.19 to 0.44 tons; and the cost of the appropriate offset was cited from a low of $1.31 to a high of $18.40.[140] Recent European research published in the Journal of Sustainable Tourism has confirmed these variations: the amount of CO2 emissions calculated for a flight from Amsterdam to Barcelona by various offset companies varies "by at least a factor of 3 between companies". The costs of offsetting 1 tonne of CO2-e vary by a factor of 15, and thus the cost of an offset for the flight concerned can be as low as €1.92 or as high as €20.33.[141]

125. There is a need for an authoritative evaluation so that the average consumer, whether individual or commercial body, can assess the robustness of the various avenues for offsetting available. We welcome the launch of DEFRA's Act on CO2 Calculator and hope that the data, methodologies and assumptions upon which it is based prove acceptable to the airlines. We also note that DEFRA is content for its work to be used by companies in their own proprietary calculators, and we welcome the effect this may have in helping standardize the currently too great range of calculations for carbon emissions from flights. We also hope that where airlines do not themselves offer a carbon calculator they will be happy to refer customers to the Act on CO2 Calculator.

126. While it ought to be fairly straightforward for DEFRA to provide some sensible average for CO2 emissions for a given length of flight, the issue of radiative forcing has the capacity to make aviation offsets more complicated and variable still. As we stated above, one of the reasons for differing calculations for aviation offsets—in terms of carbon effect and thus in terms of costwas down to whether or not an RF factor was used: even if an RF factor was used the size of the factor also varied considerably, from just over 1 to almost 4. The original IPCC RF factor was set at 2.7 but consensus until lately was concentrating on 1.9 following research under the TRADEOFF project. The Treasury and the DfT, amongst others, have themselves over time used different factors in their own calculations, of 2.5 and 2, the later being used in calculations for the GCOF.[142] There is still no scientific consensus on the factor, its size or temporal impact, and recent research indeed points towards its likely inappropriateness for the calculation of climate effects above and beyond those delivered by carbon. This research, which has in effect been accepted by the Tyndall Centre for Climate Change, but on which a broader critical consensus has yet clearly to emerge, argues that non-CO2 multipliers based on a radiative forcing index are a misapplication of science as they fail to account for the resident timescale of emissions. British Airways brought this research to our attention during oral evidence and robustly stated its dissatisfaction with any automatic expectation for offsets (or emissions trading) to take formal account of radiative forcing: rather, appropriate calculations should be based purely on CO2 emissions. The European Commission has itself recently decided that the EU ETS is not an appropriate mechanism for taking account of the effects of RF; and it may be the case that over the next few months fewer and fewer offset companies or schemes use an RF multiplier of any sort and thus some slight parameters may appear around the range of offset cost for flights.

127. We believe there is clearly a need for new research until some appropriate successor system to the current use of the Radiative Forcing Index is identified and agreed upon. The European Commission is engaged in drawing up an instrument that will take account of aviation's non-CO2 effects, and we support this approach whole-heartedly. Given the complexities of climate change science, and the number of often conflicting climatic factors for which aviation is responsible, it may well be the case that no consensus emerges, or that there is insufficient basis in science to conclude that aviation's impacts extend significantly beyond its CO2 impacts. Nonetheless, the pure CO2 effects of aviation are sufficiently challenging to make the climatic effects over and above that more grave still if they exist, and actions to reduce carbon impacts will clearly likewise mitigate other impacts should there be any. As the current use of RF factors for offsets may be a source of confusion in the marketplace, and as we agree that lack of agreement on a definite figure makes the inclusion of such factors in the RF mortally problematic, there is nevertheless a clear need for those who purchase flights to understand that aviation's climate impact is not down to carbon alone—and that even the most robust and accurate carbon offset will not compensate fully for the climate effects of a flight. We are pleased to see that DEFRA's assumptions for aviation emissions on its Act on CO2 web-site, while making no direct allowance for radiative forcing, do explicitly deal with the issue, and that there are clear statements in its Frequently Asked Questions section and in relevant Action Plans that the effects of aviation on climate are greater than its carbon impacts alone. It is also good to see that the web-site refers to the Government's use of a radiative forcing factor in its own calculations. We hope that such statements appear even more explicitly in whatever calculator is agreed later in the year for use with the DEFRA Code of Practice for offsetting.

107   See, for example, EAC's Ninth Report of Session 2005-06, Reducing Carbon Emissions from Transport, HC 981; and also EAC's Ninth Report of Session 2002-03, Budget 2003 and Aviation, HC 672 Back

108   Environmental Audit Committee , Fourth Report of Session 2006-07, Pre-Budget 2006 and the Stern Review, HC227, para 63 Back

109   Environmental Audit Committee, Ninth Report of Session 2005-06, Reducing Carbon Emissions from Transport, HC981, para 116 Back

110   see, for example, Ev5 (RSPB memorandum) Back

111   see, for example, Ev227 (WDM memorandum) Back

112   see, for example, Ev73-4, p19, answer to Q2 (Climate Care memorandum Back

113   see, for example, Ev2, Para 11 (EST memorandum) Back

114   DEFRA Consultation, p19, Q10 Back

115   Q186-7 Back

116   Curiously, as we have reported in our Fifth Report of this Session, Trade, Development and Environment: the role of the FCO, HC 289, overseas posts' travel has to be offset voluntarily by each post and is not covered by the general FCO scheme Back

117   June 2006 announcement on the Sustainable Operations on the Government Estate (SOGE) Back

118   Q214 and Q320 Back

119   Q245 and Q324-6 Back

120   Q199 Back

121   Fourth Report of Session 2006-07, Pre-Budget 2006 and the Stern Review, HC 227, para 68 Back

122   HMR&C, Air Passenger Duty: Consultation on the Definition of Class of Travel, 1 May 2007 Back

123   Environmental Audit Committee, Ninth Report of Session 2005-06, Reducing Carbon Emissions from Transport, HC981, para 138 Back

124   Q309 Back

125   Offsetting was not advertised on the BA UK home-page, nor could it be easily found except by entering it into the web-site's search engine: Q299-300. Shortly before this report was agreed, the otherwise obscure BA link to Climate Care's BA offset page was moved to the BA UK home page. Back

126   Q314-5 Back

127   Q301 Back

128   Q210 Back

129   Q184 Back

130   Q199 Back

131   Q183 Back

132   Q259-60 Back

133   Ev147, para 18 Back

134   Q337 Back

135   Q258 Back

136   Q256-7 and Q327 Back

137   EAC, Second Report of Session 2006-07, The EU Emissions Trading Scheme: Lessons for the future, HC 70 Back

138   Environmental Audit Committee, Ninth Report of Session 2005-06, Reducing Carbon Emissions from Transport, HC981, para 137 Back

139   Currently unprinted, but available on the EAC website at environmental_audit_committee/eac_EU_ETS_Gov_response.cfm Back

140   Tufts Climate Initiative, Voluntary Offsets for Air Travel Carbon Emissions, December 2006, Back

141   Journal of Sustainable Tourism, May 2007, Voluntary carbon offsetting schemes for aviation: efficiency, credibility and sustainable tourism Back

142   Environmental Audit Committee, Ninth Report of Session 2005-06, Reducing Carbon Emissions from Transport, HC981, para 139 Back

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