Airports should be able to buy the right to expand and emit more noise by paying compensation to local residents, a think-tank has proposed.
The free market Institute of Economic Affairs (IEA) said government involvement in the debate over aviation capacity is both unnecessary and undesirable and so airports need to be given the ability to cut deals with local residents independently.
Rather than getting involved in decisions about where to expand capacity, politicians should give airports a means to reach agreements with residents affected by their decisions.
A compensation mechanism would allow agreements that benefit both airports and those who live in their surrounds, the think-tank said.
In a more radical proposal, the IEA said ” tax havens” could be created around airports which pay a large proportion of local levies, allowing residents to pay lower taxes.
The IEA’s De-politicising Airport Expansion report comes on the eve of the publication of an interim report from the Government-appointed Airports Commission which will set out a short-list of options for extra runways at UK airports.
Mark Littlewood, the IEA’s director general, said: “With the private sector raring to invest in airport expansion, it is patently clear that the Government is creating a logjam at the expense of wider economic growth. A market mechanism is urgently needed to create a compensation mechanism for those that would lose out.
“Unless the Government steps back from the capacity debate, the findings of the Davies Commission will be completely futile. We need a radical shift away from politics to ensure that the interests of passengers and the wider UK economy prevail.”
The IEA (Institute for Economic Affairs) says of itself:
The IEA is the UK’s original free-market think-tank, founded in 1955. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
Given the current economic challenges facing Britain and the wider global environment, it is more vital than ever that we promote the intellectual case for a free economy, low taxes, freedom in education, health and welfare and lower levels of regulation. The IEA also challenges people to think about the correct role of institutions, property rights and the rule of law in creating a society that fosters innovation, entrepreneurship and the efficient use of environmental resources.
Its press release is at
Airport expansion must be wrestled from government’s hands, argues new report
The report says:
•”To get the national politics out of airport investment decisions, airports have to be given a means to find an agreement with those affected by their decisions, that is, the residents exposed to aircraft noise. The aim should be to create a framework for something approaching a ‘Coasean’ solution, in which residents could ‘sell’ the right to emit noise in exchange for a fee that they are free to set. That fee would be compensation for having to put up with noise, and its level would reflect the strength of residents’ aversion to noise. Airport activity would be redirected to the areas where people are least noise-averse, because these areas would charge the lowest compensation fees.”
You can get the flavour of the report from this paragraph:
“Supporters of airport expansion should stop hiding behind an instrumental defence of aviation, and openly make the case for air travel as a leisure industry. They should confront the mindset of ‘Malthusian miserabilism’ which characterises modern environmentalism. Environmentalists have become the latter-day heirs of the Duke of Wellington, who opposed railway travel on the grounds that it would ‘only encourage the lower classes to move about needlessly’”
“Supporters of airport expansion should therefore, all the more, drive home the point that market outcomes in aviation are still to a very large extent shaped by politics. In making the case for airport expansion, they should stop hiding behind ‘global race’ phrases, they should stop limiting their defence to an instrumental one. They should not evade, but actively confront the mindset of Malthusian miserabilism that stands behind the environmentalist opposition to
“They should explicitly challenge a mindset which stigmatises pleasure as ‘excess’, enjoyment as ‘hedonism’, progress as ‘hubris’, voluntary adopted consumption habits as ‘addictions’, and discerning consumers as ‘brainwashed’. In doing so, they will also need to go beyond the economic arguments presented in this paper, and coin a counter-narrative. This narrative should celebrate the plurality of motives for travelling, rather than bemoaning the fact that some people travel for the ‘wrong’ reason. It should welcome mass air travel not despite, but precisely because of the fact that it is not, strictly speaking, ‘necessary’ – for what is the point of economic progress, if not the ability to consume things for the sake of enjoyment rather than necessity?
“Supporters of air travel should not downplay the risks of climate change, they should not fall into the trap of trying to find faults with scientific papers just because they find their implications uncomfortable. Instead, they should simply introduce some sense of proportion.
Climate change is one challenge among many; it should be addressed through measures
that are cost-effective, targeted, and above all, proportionate. But climate change is not a reason to clamp down on leisure habits that millions of people enjoy; it does not offer a justification for a state-imposed, neo-puritanical asceticism.”
Some comments by AirportWatch members:
It advocates the government moving away from making aviation decisions and letting the market work by paying local residents to suffer the environmental externalities.
Apparently – they say – APD already over compensates for the carbon costs of flying (though the data supporting this seems very old, certainly before the tripling of costs that damaged the Heathrow economic case in the Judicial Review). And they mistakenly believe ETS is also working well ………….
Suppose my parish council proposed lowering the community tax in order that people with dogs could get away with an increased level of pavement fouling…
I can’t see definitions of who is in affected areas being easily solved – nor indeed any likelihood of the industry wanting to pay meaningful compensation. Trying to arrange the landing flight paths at Heathrow so that planes land over the houses of the willing in Spelthorne and avoid all the Malthusian miserabilists in Richmond, Chiswick and Putney could be interesting !
They say: “As long as emissions from aviation are part of an economy-wide (and Europe-wide) emissions cap, no reasonable case for a ban on airport expansion can be made.”
And as ETS is retreating and becomes more limited and further postponed, can be therefore gain support for a case for a ban ?
The report says: “All airports should be given the green light for any expansion they see fit, subject to approval from the local residents who are directly affected by noise. Wider environmental problems are already ‘overtackled’, and should play no further role in aviation policy.”
I contend that we are nowhere near overtackling the externalities…….
The report says: “The current system, which effectively turns the election of MPs in the affected constituencies into a (non-binding) ersatz-referendum on airport expansion.
“The introduction of a compensation option should therefore be accompanied by an abolition of price controls. [deregulation from CAA control]”
The way in which “more noise” is monetised is at best sketchy and inadequate – and also fails altogether to handle issues such as “how is it that 70% of noise complaints arise from way outside the DfT-inspired contour areas”.