COST EFFECTIVENESS ANALYSIS OF LOCAL AIR QUALITY CHARGES Roger Roy Director General, Economic Analysis Transport Canada
Overview of presentation SCOPE OF THE WORK ANALYSIS CONDUCTED FINDINGS
SCOPE OF WORK Aviation NOx emissions only Two airports Zurich (1/9/97) - Stockholm 1/1/98 Terms and conditions of charges introduced: Emission class assigned to engines (5 at Zurich, 6 at Stockholm) A % of the landing fees - 0% to 40% at Zurich; 0% to 30% at Stockholm Revenue neutrality Not considered: Quantifications of emissions impact Local emission dispersions Impact on human health Formation of secondary particles Identification of hazardous pollutants
Aircraft movements by emission charge classes at Zurich 100% 80% NOx + 60% 40% 20% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 - Emission Class 5 Emission Class 4 Emission Class 3 Emission Class 2 Emission Class 1
Changes in average aircraft classification Zurich, Stockholm, Western Europe Airports Average Category, 1985-2005 5.0 4.8 4.6 4.4 Swiss DC9 4.2 4.0 3.8 3.6 3.4 3.2 3.0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Europe Zurich Stockholm
Cost Comparison of different aircraft types Aircraft NEW Older Smaller Bigger Operating Costs # of seats 123 Reference 125 72 198 Emission NOx Charge 0.5% 1.1% 0.3% 1.5% Capital Costs per trip 16.2% 5.2% 10.4% 23.5% Other DOC 83.3% 87.4% 49.7% 104.7% Total DOC 100.0% 93.7% 60.4% 129.7%
NOx Charge - Developing Country Carriers 12 Distribution of the Number of Flights per Developing Country Airline at Zurich, 2005 10 Frequency 8 6 4 2 0 1 2 3-10 11-50 51-100 101-250 251-500 501-750 751-1000 > 1000 Number of Flights per year Source: Unique Flughaven Zurich
NOx Charge - Developing Country Carriers 5 Emission Class for 5 biggest Developed & Developing Country's Carriers, Zurich, 2006 4 3 2 1 Developed Developing
NOx Emissions per Aircraft Movement Total NOx emissions (kg) per movement 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 1991 1993 1995 1997 1999 2001 2003 ARN ZRH
Aircraft Movements per NOx Emissions Class Index 1998 = 100 200 180 160 140 120 100 80 60 40 20 0 Indexed Number of Movements, by Emission Class Zurich 1998 1999 2000 2001 2002 2003 2004 Class I Class II Class III Class IV Class V
Revenue-neutrality of Charge - Zurich Revenue neutrality of Zurich Nox charges SFr. 400,000 SFr. 200,000 SFr. 0 -SFr. 200,000 -SFr. 400,000 -SFr. 600,000 -SFr. 800,000 1998 1999 2000 2001 2002 2003 2004
Net income of NOx Charge Zurich 80,000 Net Income by Movement - 2004 70,000 71,183 60,000 50,000 40,000 29,700 30,000 20,000 10,000 0 5,689 3,8853,864 2 47 438 181 72 865 29 91 110 1 11 1 20 [-200] - [-175] [-175] - [-150] [-150] - [-125] [-125] - [-100] [-100] - [-75] [-75] - [-50] [-50] - [-25] [-25] - 0 0-25 25-50 50-75 75-100 100-125 125-150 150-175 175-200 200-225 225-250 250-275 275-300 300-325 325-350 350-375 Number of Movements Net Charge Paid by Movement
Use of charges net revenues Zurich - Mitigation measures & proceeds of charge Negative net proceeds Measures not contributing to NOx emissions reductions excluded from analysis, e.g. Air quality monitoring Development of an emission inventory and dispersion modeling Air quality management and research work Only measure considered construction of fixed ground power for aircraft at piers 75 tonnes of NOx saved attributable to measure Costs of NOx saved on high side but not extreme Add text
FINDINGS From analysis conducted Comparable shift to less NOx emitting aircraft at other airports but without a charge Significance of normal fleet renewal Level of the charge not high enough Revenue-neutrality led to winners > losers Additional NOx reduction achieved at low cost effectiveness from a mitigation measure Marginal impact on NOx emissions directly attributable to the charge at Zurich and Stockholm
THANK YOU for your attention