December 07, 2009

Behold, the glory of a "mixed economy"

The UK has a mixed economy.  That means it's part free market and part government control.  On the surface, you look at the average London street and see all the same kind of shops you'd see in, say, New York.  The big difference is that, while here in the US, occassionally the FDA or some other regulatory body will step in and say, "Uh, dude, that toy has too much lead," or, "Yo, that diet pill is totally made of crack," in the UK, they can step in and say things like, "The snarky, funny labels on Vitamin Water are illegal because idiots might think they really can make you beat your granny in an arm wrestling match," or, "We have to limit the number of people who fly because they're killing the earth and stuff.  Except Prince Charles.  He can do whatever he wants in the name of global warming."

If the aviation industry continues to grow unchecked, passenger journeys would increase by 200% in the next 40 years, but that cannot be tolerated because carbon dioxide emitted by carriers in 2050 must not exceed 2005 levels.

"This is a very challenging target," said David Kennedy, the committee's chief executive. "Don't be deceived by the fact that demand can grow. It will have to grow by much less than if we didn't care about carbon dioxide."

Today's report says ministers must consider measures including: a carbon tax on passengers; limits on runway expansion; and restrictions on flights at existing airports. Passenger growth will have to be limited to 60% over the next four decades, compared with an increase of 130% since 1990, allowing the UK a maximum of around 370 million air travellers by 2050, from 230 million currently.

"Demand can increase, but only in a limited way," added Kennedy. The committee forecasts that unchecked airline growth would shatter emissions targets, increasing passenger numbers by 200% to 695 million per year.

Asked if fares will also have to increase in order to choke off demand, Kennedy said: "The price has to cut back some of the growth, so you do have to have rising prices."

[...]

Even with an anticipated carbon price of £200 per tonne passed on to fares, the creation of a high-speed rail network, and more use of video-conferencing to cut business travel, the committee warns that more action such as constraining airport use might be needed in order to stop the population from flying. The report singles out a "carbon tax" as one of the solutions, which would be levied on top of the £200 per tonne carbon price.

"The policy instruments which could achieve this restraint include a carbon tax on top of the forecast carbon price, limits on further airport expansion, and restrictions on the allocation of takeoff and landing slots even where airports have the theoretical capacity available," the report says.

[source]

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