Q7) Externalities and Air Transport

The Government recognizes the benefits that the expansion in air travel has brought to people's

lives and to the economy of this country. The increased affordability of air travel has opened

up the possibilities of foreign travel for many people, and it provides the rapid access that is

vital to many modern businesses. But we have to balance those benefits against the

environmental impacts of air travel, in particular the growing contribution of aircraft emissions

to climate change and the significant impact that airports can have on those living nearby."

Air travel has increased five-fold over the past 30 years, and demand is projected to be between

two- and three-times current levels by 2030.Some of our major airports are already close to

capacity, so failure to allow for increased capacity could have serious economic consequences,

both at national and at regional level. That must be balanced by the need to have regard for the

environmental consequences of air travel. The Government believes that simply building more

and more capacity to meet demand is not a sustainable way forward. Instead, a balanced

approach is required which:

Recognizes the importance of air travel to our national and regional economic prosperity, and

that not providing additional capacity where it is needed would significantly damage the

economy and national prosperity;"

Reflects people's desire to travel further and more often by air, and to take advantage of the

affordability of air travel and the opportunities this brings.

Seeks to reduce and minimize the impacts of airports on those who live nearby, and on the

natural environment;"

Ensures that, over time, aviation pays the external costs its activities impose on society at

large - in other words, that the price of air travel reflects its environmental and social impacts;"

Minimizes the need for airport development in new locations by making best use of existing

capacity where possible

respect the rights and interests of those affected by airport development.

Provides greater certainty tor all concerned in the planning of future airport capacity, but at

the same time is sufficiently flexible to recognize and adapt to the uncertainties inherent in the

long-term planning.

As part of this approach, the Government believes more needs to be done to reduce and mitigate

the impacts of air transport and air development. At the global level, the government will play

a major role in pressing for new solutions and stronger action by International bodies. And the

White paper sets out proposals to bring the aviation within the European Union emissions

trading scheme, to help limit the greenhouse gas emissions.

Question:

What is meant by Externalities? & Outline the advantages and disadvantages of Airline Travel

(10 Marks )