SSE NEWS ARCHIVE - January to March 2006

The Prime Minister Official Spokesman (PMOS) previewed the Prime Minister's speech on climate change later. He said that in terms of climate change, the Prime Minister would address the climate change conference which was being held in Wellington and he would join it via videolink at 9.00 New Zealand time tomorrow morning, which was 10.00 tonight in London.

The basic message, and this was if you like what united both John Howard and himself today, was that the way to deal with climate change was through developing the technology. Now for some people the need to deal with climate change was because of the environment's degradation and we very clearly believed in the science, for others the primary motive was energy security. Whatever perspective you took, the solution was developing the technology and giving the private sector the certainty and the confidence it needed to invest in developing that technology as quickly as possible. That was why tomorrow morning he would say in Auckland that we couldn't afford to wait the five years Kyoto took to negotiate, we couldn't afford that period of time because time was running out for the planet, and also because of the energy supply issue. The Prime Minister would say that we needed to make progress in 2006, that we couldn't afford to stand still after the progress that was made last year, and we needed to make progress to agree a future framework for when Kyoto ends in 2012, a framework that included China, India, the US and others who were not part of Kyoto.

The key point was that at the heart of that framework must be a goal to stabilise both temperature and concentrations of greenhouse gas emissions. We needed a technology revolution to do that, which he believed would be comparable with the internet, and again the key was a goal which would give business the confidence and the certainty it needs to invest in cleaner technology and reduce emissions.

This year the Prime Minister intended using the G8 meeting in St Petersburg in July, where energy is going to be a key issue, as identified by the Russians already, the Gleneagles dialogue in Mexico in September, which is the follow-up to our Gleneagles agreement on climate change, and the EU to drive this forward.

The PMOS gave some context around the publication of the review today. He said that the UK record on climate change was unmatched. The measures we announced today would mean that we would go significantly beyond our Kyoto target. The Kyoto target was 12.5%, and we were going to get to 23-25% cuts in emissions by 2012, in effect we are doing twice as much as required under Kyoto.

Asked if the Prime Minister would be mentioning Nuclear energy in his speech, the PMOS said that nuclear energy was clearly part of the energy review. That review was ongoing. The Prime Minister believed that nuclear energy must be part of the debate.

Asked if the Prime Minister believed it would be unchristian not to address environmental issues, the PMOS said that the Prime Minister's view was that whether we looked at this issue from a moral, environmental or energy security perspective the important thing was that we dealt with it. In the UK, in terms of greenhouse gas emissions we were doubling our Kyoto target. We needed to go further and recognise that the UK itself was only 2% of the overall problem. Therefore we had to develop solutions which were applicable, in terms of both the developed and developing economies, particularly China and India.

The Australian Prime Minister himself said this morning said that if you shut down all Australian emissions, China would reach that limit within 8 months. Asked if the Prime Minister welcomed the intervention by the Archbishop of Canterbury on this issue, the PMOS said that all contributions to this debate were welcome. The important thing was to find a solution. The solutions would come through giving private industry the certainty and the confidence with which to develop the alternative means of energy and the cleaner means of energy that were required to tackle this problem.

Asked if the Prime Minister would be taking up President Bush's record in this regard when they next met, the PMOS reminded journalists that President Bush had been part of the progress in Gleneagles last year, the US had been at the UN meeting in Montreal at the end of last year in which all countries agreed to discuss what the new framework would be in place after 2012. It was wrong to suggest that this was just a problem related to the US. It was a global problem and increasingly a problem involving countries such as India and China.

Asked if the Prime Minister was hoping to reach agreement on this before he left office, the PMOS said that he knew that someone would try to find some way of working that issue in. The Prime Minister saw climate change as a priority and an issue which he had been pursuing since the run-up to the Gleneagles agreement last year and this was an issue which he would continue to prioritise.

Asked if the Prime Minister would be arguing forcibly with his G8 partners to cut the emissions from aviation and presumably attempt to rein in the huge growth in aviation in the UK and elsewhere, the PMOS said that in terms of aviation and other sources, the important thing was to develop the technology to deal with the issues. At the same time the Prime Minister did not believe that electorates would support anything that would result in the economy suffering. The reason for that was that you had to have a buoyant economy to pay for the research, and the development of the very technology which would deal with the problem.

Asked what progress had been made on that, the PMOS said that the progress was that countries agreed at Montreal that we needed to discuss a new framework for what would happen after 2012. What we now needed to do was inject an urgency into that process. We also agreed at Gleneagles about how we would begin to exchange technology with countries such as China. We needed to develop that thinking as well and why we needed to bring all these strands together into the UN process.

Asked what was actually new in this speech, the PMOS said that what was new was identifying 2006 as the year when we began to get a consensus on setting a stabilisation goal. That process meant that we had to have intensive dialogue on this issue, with the US, the EU, India and China as well as other countries. That was why he would use the G8, Gleneagles and the EU to push this forward. As we had announced today we wanted to see 20% CO2 and 23-25% greenhouse gas emissions in 2012.

Asked if it was not ironic that the Prime Minister had flown halfway around the world to make this point, the PMOS pointed out that the emissions from the Prime Minister's plane would be offset and that from April 1st the emissions from all government planes would be offset. This problem would not be solved by preventing economies from working, this problem would be solved by providing economic incentives to deal with this issue. Asked what he meant by offset, the PMOS said that in terms of trading emissions it is offset. Asked if that meant like planting a tree, the PMOS said no, we provide additional funding into schemes which promote sustainable energy resources, mostly in the developing world.

Asked if the Prime Minister supported a levy on air travel, the PMOS said that the Prime Minister supported mechanisms that encouraged industry to develop the technology necessary to deal with this issue.

Asked if the Prime Minister had discussed the stabilisation goal with Prime Minister Howard, the PMOS said that climate change had come up in virtually all the discussions we had had in Australia, it had come up in the leadership forum discussions with business leaders, during the discussions in the bilateral with Prime Minister Howard and in the discussions with the Cabinet. As he had said, we might approach this from different angles. He didn't want to speak for Prime Minister Howard but he thought it was fair to say that he had made it absolutely clear that he recognised the need to develop cleaner technology. The PMOS pointed out that Australia was a major exporter of coal, it therefore had a very strong interest in seeing that that continued with new technology which was clean coal.

OUR COMMENT: A Technology Revolution Now! – BUT he has already had a revolution (though the ancients knew all about wind power) and these solutions have been available all the years he has been prime minister - renewable energy, wind, solar and wave as well as microgeneration. Has he promoted them? Plenty of words but less action, very little research on wave energy and very little encouragement to solar energy. It seems that our Prime Minister's obsession with technological solutions blind him to the simplest solutions, possibly because it means restraining those voters who might be antagonised if they were restricted in some of their choices. And, the government seems to be obsessed with choice.
Right now, without the need for a revolution, he could:
* Legislate to require all new buildings to observe a sustainable building Code which includes the highest standards of energy efficiency
* Promote all measures to ensure all new vehicles have low-emission engines
* Review the aviation White Paper, manage expansion, no more runways and promote international agreement on aviation emission limits
* Tell the DTI to agree a lower emissions cap for the EU emissions trading scheme.

Pat Dale

Carbon dioxide emissions in Britain have risen for the third year in a row, and are the highest under Labour, figures revealed yesterday.

A government review of climate change policies this week provoked concern over the political will to tackle the issue. About 157.4m tonnes of carbon were released into the atmosphere in 2004.

Friends of the Earth said this was 2.3% more than when Tony Blair became Prime Minister. The government blamed increased consumption and a small switch from gas to coal in power stations, but said net emissions were 5.5% down on 1990.

OUR COMMENT: Presumably emissions from international aviation flights leaving the country are not included.

Pat Dale

European freight transport continues to grow along with gross domestic product with no clear signs of decoupling between them, the European environment agency (EEA) warned on Tuesday.

Relative decoupling has emerged recently in passenger transport, but absolute volumes are still increasing, it said in a major review of transport and environment issues. The EEA warns that these persistent unsustainable trends are undermining undermine progress towards Kyoto targets.

Aviation is the most problematic area, with air passenger transport up by 96% between 1990 and 2002. In comparison, all passenger transport grew by 30% over the same period and all freight transport by 34%.

The report argues that areas affecting transport demand, such as spatial planning, industrial development and agriculture, must include demand reduction policies. "We are locked into patterns that are not easily changed in the short term", said EEA executive director Jacqueline McGlade. "Long-term policy initiatives are needed to encourage people to change their habits."

The "Term" report is the agency's sixth annual environmental assessment of transport in Europe. Most of the data comes from the period 1999-2002 though for some issues it reports trends up to 2003.

Greenhouse gas emissions from transport in Europe increased by 22 % from 1990 to 2003 while decreasing in other sectors, the EEA reports. Ireland posted a spectacular 130% increase in emissions over the same period. At the other extreme, in Germany the increase was only 5%.

The report explores transport's contribution to poor air quality and forecasts that many European cities will continue to fail EU limits. Limits set for ozone in 2010 are widely exceeded, the agency points out, and many member states including the Netherlands are struggling to meet fine particulates standards.

Although data on passenger transport is patchy, there is no evidence of a shift from road to rail, it says. Cars have declining /spanoccupancy rates, while average loads of lorries in countries like the UK, the Netherlands and Denmark either remain stable or are declining.

Airport operator BAA said on Thursday the Civil Aviation Authority (CAA) should ease regulation of BAA's trio of London airports.

"BAA is asking the CAA to consider removing those activities from the regulatory domain that are already subject to significant competition, namely advertising, long-term car parking and bureaux de change," the airports operator said in a statement to the London Stock Exchange.

BAA was responding to the CAA's review of caps it sets every five years on the fees which BAA charges airlines to use its London airports. The latest caps will apply from April, 2008.

BAA owns the three main airports, Heathrow, Gatwick and Stansted.

The CAA said in December it planned to regulate each of the airports on a stand-alone basis, ruling out the cross-subsidisation of projects such as a second runway at Stansted from charges at other airports.

LONDON (AFX) - BAA PLC, the airports operator under threat of a takeover bid from Spain's Grupo Ferrovial SA, said it supported the UK government's plans for more airport capacity in Southeast England.

BAA was responding to a policy consultation paper from the Civil Aviation Authority (CAA), on proposals to lighten the burden of regulation on airports.

This is the first stage in a five-yearly process examining the future regulatory environment for BAA's London airports, due for completion early 2008.

BAA expressed support for the government's White Paper, with its detailed plans for additional airport capacity in the South East of England. It also said it supported early investment in airport capacity in general and Heathrow Airport in particular.

The company said timely investment in a second runway at Stansted airport could be encouraged by adopting a 'dual till' approach for the airport. Under the current 'single till' system, BAA's profits from commercial operations like shops, restaurants and car parking are taken into account when the regulator calculates the fees BAA can charge airlines for using the airport.

BAA, the owner of London's Heathrow, Gatwick and Stansted airports, is looking to China to keep up momentum as passenger growth at its British airports slows and costs soar.

The company which bought Budapest airport for £1.2bn last year, is looking at China's "secondary" facilities rather than the main terminals at places such as Beijing or Shanghai. Mike Clasper, chief executive, said: "What we are looking at are the secondary airports but given the way the Chinese economy is booming the secondary airports are handling millions and millions of passengers."

He was commenting at the release of a trading statement from BAA, which has itself been the subject of an unwanted bid approach from the Spanish infrastructure group Ferrovial. BAA earlier this month rejected the £8.75bn conditional offer but there are growing expectations that the Spanish company, which already owns the British support company Amey, will come back with a high offer.

BAA said it expected passenger numbers at its seven airports across Britain to increase by 2% in the year ending March 31 - half the previous year's figures - while higher staffing costs, energy prices and business rates have driven up costs by 8%.

The group, which unveiled plans last November to save £45m a year from 2008-09 by cutting jobs and other costs, said its airport retail business performed strongly with income from passengers up by 2%.

Mr Clasper believed his company's overall trading position was still solid, "given the impact of a softer UK economy and increased security requirements".

BAA said it handled 145.1 million passengers at its airports - including Budapest - in the 11 months to the end of February, a 3.1% rise on the year before.

The new terminal 5 at Heathrow is now three-quarters complete, on budget and on schedule to open on March 30th 2008. BAA has agreed to the forward sale of a ground lease to Arora International hotels at the terminal worth £40m.

Mr Clasper declined to comment on the 810p-a-share offer from Ferrovial. Earlier this month BAA argued that the offer did not reflect the true value of its assets.

Cheuvreux, a European broking group, said it expected Ferrovial to launch a bid for BAA in the 850p to 900p range soon, adding that BAA "is a well run asset but we think Ferrovial can run it even better".

This year BAA is expected to handle 130.5m passengers at its three price regulated airports.

Grup Ferrovial has recruited Australia's Macquarie Bank to its consortium stalking British airports operator BAA, a move analysts said could increase the Spanish construction company's financial fire-power for a bid. It also removes a possible rival suitor with Macquarie, which is Australia's biggest investment bank, previously tipped as a potential alternative bidder for BAA.

Ferrovial said it had also reached agreement with Macquarie under which its investment fund, Macquarie Airports Group, could acquire Ferrovial's near-21% stake in Sydney airport and its half-share in Bristol airport.

The Ferrovial consortium, which includes Singapore's GLC Special Investments and Canada's Caisse de dépôt et placement du Québec, submitted an outline proposal for BAA in February valuing the UK company at £8.8bn or 810p a share. That was rebuffed by the company, which operates seven airports, including Heathrow, Gatwick and Stansted.

Earlier this month the Takeover Panel, which regulates bids for UK companies, gave Ferrovial and its allies until April 24th to make a firm bid or walk away. Yesterday analysts said Ferrovial could be in a stronger position as a result of the tie-up with Macquarie. "We now expect the consortium to become more aggressive price-wise on the bid for BAA without fearing Macquarie's opposition" analysts at Banco BPI said in a research note.

Damian Brewer, an analyst at investment bank JP Morgan took a similar line. "It brings Macquarie on-side and I think therefore increases the likelihood that we will see an improved offer from the Ferrovial consortium". Yesterday BAA shares rose 9.5p to 832p.

Macquarie Airports group already has substantial interests in airports in Birmingham, Rome, Copenhagen and Brussels. Under the terms of a series of put and call options with Ferrovial, which depend on the consortium succeeding in acquiring BAA, Macquarie Airports would pay up to £106m for Ferrovial's 50% stake in Bristol airport, taking its holding to more than 80%. It would pay up to A$1bn (£400m) for the 20.9% stake in Sydney Airport, which would raise its holding to more than 75%.

When it rejected the proposal from Ferrovial, BAA said the offer undervalued the group's assets. Earlier the company said it was trading in line with its own expectations, with traffic through the UK airports expected to grow by 2% over the year.

The company, which paid £1.2bn last year for Budapest airport, said it was looking to countries such as China to provide growth momentum, though it would look to "secondary" facilities rather than the main terminals at cities such as Beijing and Shanghai.

Mike Clasper, chief executive, said the full-year performance would be a "good result given the impact of the softer UK economy and increased security requirements".

The bulldozers are out this spring widening the congested southern end of the M1, which is welcome news for anyone who has missed a low-cost flight from Luton airport because they were stuck in a jam, but one example of why Britain is way off course on its climate change targets.

People want to drive more, fly more and use more energy and they have hardly begun to change their behaviour in order to lessen the impact on the environment. The result is that the M1 and Luton airport are busy but Britain's carbon dioxide emissions have increased by 5.5% since 1997. This has made a mockery of the government's targets to cut them to 80% of 1990 levels by 2010, a target which was in effect abandoned yesterday by Margaret Beckett.

Bowing to the inevitable after an 18 month review, she set out plans which she hopes will allow Britain to meet a new and less demanding reduction of 15-18% by 2010. But as environmental campaigners pointed out yesterday, achieving this goal is far from certain, not least because of a Whitehall turf war between Ms Beckett's department (which wants an 18% cut) and the DTI (which backs 15%). When ministers cannot agree on the destination, it is hardly surprising that the journey is a slow one.

True, Britain is on course to meet with ease a less demanding 12.5% target for all greenhouse gases, set by the Kyoto Treaty, and carbon emissions are still lower than 1990. But what Ms Beckett is less keen to advertise is the reality that this reduction was a byproduct of Britain's move in the 1990s from coal-fuelled power stations and the decline of heavy industry, rather than a genuine shift to a more efficient, less polluting society.

Exclude the switch from coal, and government efforts since 1990 appear to have had no impact at all. Worse, the official figures on carbon emissions (and Kyoto targets) exclude air and sea transport. Add that in and emissions are almost certainly higher than they were before anyone tried to do anything about the problem.

This is a bleak position to be in, since research suggests that both the pace and the impact of climate change are much greater than previously thought. Instead of scaling back its ambitions, as the government did yesterday, it should be scaling them up, towards the target of a 60% carbon cut by 2050 which the government once hoped to achieve. At the moment this looks impossible.

The good news is that the government and opposition parties accept the need to act: the bad news is that so far their solutions are superficial, spray-on greenery. The budget, spun in advance as an environmental breakthrough, was nothing of the sort, while the Conservatives have talked a big game but offered nothing that might cost them votes.

Politicians have pushed the seductive mistruth that climate change can be solved by painless, invisible measures: some windmills on chimneys and a few more trees. It cannot. Small measures will help, but big ones are needed too. Some of them will hurt and voters will squeal. That does not mean abandoning economic growth, as Bill Clinton pointed out in a speech in London yesterday. But it does mean sharing responsibility between individuals and industry, national governments and the world community. At the moment everybody seems to be waiting for someone else to take the burden.

Britain has at least acted more responsibly than most, not least at last year's Montreal talks. Tony Blair and Margaret Beckett are certainly sincere on the issue, but they must be judged by the results, which are so far not impressive.

Cheap flights, new roads and a frozen tax on petrol are all the product of government decisions. "We need a technological revolution…on a parallel with the internet," the prime minister argued yesterday. He is right, but there is little sign of it so far. And meanwhile the problem gets worse day by day.

The EU has called on all industrialised countries to make deep cuts in greenhouse gases in a submission ahead of talks on post-2012 global climate policy. The talks will be the first since world governments agreed in Montreal last December to begin discussing the issue in earnest.

A working group of countries that have ratified the Kyoto protocol will kick off the post-2012 talks in Bonn between 17 and 25 May. Just prior to this a broader "dialogue" on long-term climate change policy will be launched, bringing together both developed and developing countries.

The EU takes at its starting point a plea for policy to be guided by the UN climate change convention's ultimate objective of avoiding dangerous climate change, which it says should be taken as limiting an increase in world temperatures to 2 degrees Celsius.

To achieve this, scientists suggest that the world as a whole will have to reduce emissions by 15-50% by 2050, the EU says. As a more focused goal, it says, developed countries should make cuts of 15-30% by 2020 and further cuts by 2050, it goes on.

The EU insists that further binding quantified emission limits will have to be set for the post-2012 period.  Only with such limits will the Kyoto protocol's flexible mechanisms of joint implementation, the clean development mechanism and international emission trading also be able to function effectively, it argues.

At its first meeting, the Kyoto working group should try to agree a work programme to take forward discussions, the EU says.  It flags up a number of issues to be resolved, including the length of future commitment periods, how carbon sinks should be treated and whether emissions by aviation and international shipping should be brought into the protocol.

The EU's paper is one of about a dozen so far received by the UN climate change convention secretariat in Bonn.  It expects to start posting submissions on the internet in about a week's time, according to an official.

The UK government aroused a storm of protest on Tuesday by admitting that Britain will not cut CO2 emissions 20% by 2010 and by delaying setting a cap on industrial emissions under the second phase of the EU emission trading scheme.

It has been clear for some time that the unilateral 20% target would probably not be reached. Nevertheless, the government's public admission in a review of national climate change policy drew strong criticism from environmentalists and opposition parties.

It now forecasts that Britain will reduce CO2% by 15-18% by 2010, compared with 1990 levels.  The projected cut in all six Kyoto-controlled greenhouse gases remains higher at 23-25%, well above the UK's official commitment of a 12.5% reduction by 2008-12.

The range in forecast CO2 is entirely down to uncertainty over how strict a cap the government will put on industrial emissions in the second phase of the EU emission trading scheme.  The industry and environment ministries are widely reported to be fighting furiously over the issue behind the scenes.

The government released a draft of the UK national allocation plan (Nap) for the scheme's second phase alongside the climate change review.  It said that CO2 emissions would be brought down by 11-29m tonnes compared with business as usual depending on the stringency of the cap.  It will not release final proposals until close to the deadline of 30 June.

Green groups complained that even the strictest emissions cap envisioned would reduce the trading sector's permitted emissions by only 6% compared with the emission trading scheme's first phase.  At the upper end emissions would be allowed to increase by 2%.

A range of new measures other than the emission trading scheme should cut another 15m tonnes of CO2 annually by 2010, the government estimates.  Biggest amongst these is a renewable transport fuel obligation at 6m tones.  Other measures include subsidies for biomass heat, and implementation of the EU buildings energy and energy-using products (EUP) directives.

Friends of the Earth accused Ministers of lacking the political will to tackle climate change, following today's publication of the Government's review of its climate change programme. The environmental campaign group described the review as "pathetic" and called for a new law to make the Government legally responsible for reducing UK carbon dioxide emissions, a move backed by the majority of MPs.

The Government has repeatedly promised to cut carbon dioxide emissions by 20 per cent of 1990 levels by 2010, including in all three of the general election manifestos that have put New Labour in Government. But emissions have risen by three per cent since Tony Blair came to power in 1997. The latest figures show that they are currently only around five per cent below 1990 levels. The revised strategy was supposed to get the UK back on track – but it is clear that it has failed to do this.

Friends of the Earth director, Tony Juniper said: The programme published today has a number of significant failings:

• It will not deliver the Government target of a 20 per cent reduction in carbon dioxide emissions by 2010;

• It lacks an overall framework for tackling climate change, relying instead on a piecemeal approach which past experience strongly suggests is doomed to fail;

• It does not ensure that there will be significant carbon dioxide reductions from industry. The Government says that under the next phase of the EU Emissions Trading Scheme industry will have to cut its carbon dioxide emissions in 2010 by between three and eight million tonnes, based on projected levels. Because industrial carbon dioxide emissions are projected to rise, a reduction of just three million tonnes will actually see industrial emissions higher than they are today.

• It doesn't commit to a reduction in traffic and does not do enough to ensure that more efficient vehicles are used. Road transport accounts for 25 per cent of carbon dioxide emissions.

• There is no review of the Government's disastrous aviation strategy, which heavily subsidies cheap flights and is allowing a massive expansion in capacity through the building of new runways and airport terminals. Aviation is the fastest growing source of carbon dioxide emissions in the UK.

• It does not go far enough in realising the massive potential for energy saving, renewable power and combined heat & power schemes, leaving Britain largely dependent on the inefficient use of fossil fuels for electricity and heating.

Tough action is needed to tackle climate change. But once again the Government has caved in to short-term political pressures and produced a totally inadequate response. This pathetic strategy will not deliver the Government's promise to cut carbon dioxide emissions by 20 per cent by 2010, and will further undermine the Prime Minister's reputation on this issue. The ship is heading for the rocks, but rather than changing direction, Captain Blair has simply reduced speed while his crew continues to squabble."

"Most MPs now back Friends of the Earth's call for a new law requiring the Government to make annual cuts in carbon dioxide. It's time that Ministers accepted how their present programme is failing and embrace the need for a stronger and more structured approach. The solutions exist, but the Government clearly lacks the political will to use them." Friends of the Earth's climate campaign, The Big Ask, is calling on the Government to introduce a climate law that would set a legally binding target of reducing carbon dioxide emissions by 3 per cent every year, monitored through an annual carbon budget. For more information see www.thebigask.com

Sweden has set itself the goal of achieving total independence from oil by 2020. The country is already covering many of its energy needs with renewable resources such as bioethanol to fuel its cars and wood to fire its power plants.

If Swedish entrepreneur Per Carstedt is right, the next big energy revolution will really be a step backward. "The industrial age began with the transition from wood to fossil fuels," he says. "Now we're going in the other direction."

Carstedt reaches into a bucket of wood chips. This is the raw material he wants to convert into modern society's lifeblood -- fuel. But before wood can power a car engine, it needs to be chemically processed. And that is exactly what's happening on the top floors of the Örnsköldsvik plant in northern Sweden. Carstedt steps into a large room crowded with steel pipes and aluminium tanks. On the end of each pipe is a safety seal.

"Government regulations," the fifty-year-old Carstedt says with a smile. The material flowing through the pipes is quite popular on dark Scandinavian nights: alcohol -- or rather ethanol to be specific. "Nobody is allowed to tap it here without permission," he says.

The liquid produced in the pilot project of Sweden's Bioethanol Foundation will eventually reach the tanks of so-called Flexible Fuel Vehicles (FFVs) that run on both ethanol and gasoline. Tens of thousands of Swedes are already driving such cars. They're an important part of an ambitious project. The government has decided that Sweden will be the first country in the world to become independent from oil -- by the year 2020.

Breaking the Oil Habit

What got Swedish politicians so worried? The surge in oil prices, which many experts no longer expect will fall -- at least not by enough to make it economical. Oil consumption in China and India alone is pushing the technical capacities for oil production to the limit.

Even US President George W. Bush, a former oil man himself, recently criticized his country's "oil addiction." He also visited Colorado's National Renewable Energy Laboratory (NREL) and spoke enthusiastically about the research into alternative energy sources being conducted there. Bush was excited: "We are on the brink of a breakthrough -- we want people to drive with fuel that grows in America."

A whole series of biofuels are currently being tested. They have colorful names like "Sundiesel" or "CropPower85." Bioethanol is perhaps not the easiest fuel to produce, but the transition from gasoline to bioethanol is a simple one. Ethanol companies are currently a hot tip among investors. Bill Gates recently acquired stock in a company that soon plans to produce some 750 million liters (198 million gallons) of bioethanol. And intrigued US energy experts are already making their way to Sweden.

It's no accident the country -- which used to be known mainly in America for its pre-fab furniture -- is leading the way into the age of sustainable energy. As early as the oil crisis of the 1970s, the country began to turn its back on fossil fuels. Three decades ago, Sweden relied on petroleum for 77 percent of its energy needs. Today, that figure has shrunk to only 34 percent. Conversely, Sweden's use of renewable energy has increased steadily. No other European country covers as large a proportion of its energy needs -- 24.7 percent -- by such sources.

Sweden's geography puts it at an advantage. There are plenty of forests to provide biomass, and there is no shortage of water for producing electricity either. But it's mainly political decisions that have reduced the country's dependence on fossil fuels. Sweden now has a large number of small power plants. It's a decentralized but effective system that provides most homes with heating and many with electricity. The plants run mainly on wood and waste. In Germany, by comparison, heating comes predominately from gas and oil sources, and electricity is mainly produced by large coal-fired power plants.

Sweden in the lead

After re-thinking its electricity and heating, Sweden has now opted for a new course with regard to car fuel as well. An oil commission has been charged with leading Sweden into a greener future. The commission includes entrepreneurs such as Leif Johannson, CEO of carmaker Volvo. Bioethanol-powered cars have become a new sales focus for companies such as Saab, Ford, and Volvo. Around 450 gas stations are already providing an alternative fuel known as E85. By 2009, E85 will be available at every gas station in the country.

In fact, even drivers of regular cars are using bioethanol. In Sweden, conventional gasoline is really already a hybrid of gasoline and the new fuel. "The transition is in full course, and other countries will follow," predicts Kjell Bergström, a Saab engineer.

Sitting behind the wheel of his model 9-5 Saab, Bergström puts his foot to the accelerator. The engine makes a quiet, slightly high-pitched sound as it propels the car forward. Corn power gently pushes the car passengers against their leather seats. Some 85 percent of the fuel in the tank is ethanol obtained from fermented wheat. Bioethanol is slightly more flammable than gasoline and has a high octane rating of 104. "That means the horsepower of an ethanol-powered engine is about 180," Bergström calculates. "That's 30 more than an engine fuelled with gasoline."

That puts Saab's marketing department in the happy position of being able to sell the company's ethanol-powered cars as both environmentally friendly and fun to drive. A recent ad showed a tachometer with three green trees to mark the highest engine speeds -- instead of the usual red stripes.

Bergström, the engineer, knows very well there's another reason why bioethanol sells well: it's cheap. A Stockholm driver who uses only biofuel saves about €177 ($216) every year. Thanks to the government's tax policy, gas station customers pay about a third less for bioethanol than they would for normal gasoline. What's more, bioethanol drivers in Stockholm don't pay the tax normally levied on city driving. And a biofuel-powered Saab is only about €400 ($487) more expensive to buy than a regular car.

"In the end, it doesn't really matter why people buy the car," Bergström says. "What matters is that it helps the environment." As far as he's concerned, he simply appreciates bioethanol from the point of view of an engineer: it's more combustible than gasoline.

An accident of history

That cars haven't been running on ethanol for a long time is, in fact, simply a historical accident. In the 1920s, car magnate Henry Ford was in favor of ethanol-powered engines. But the Rockefeller oil dynasty was able to push through the use of gasoline motors.

But the wheel of history may be turning backward. The obstacles are certainly not technological, Bergström explains. He opens the hood of his Saab and points to the many tubes that run from the tank to the engine block. "They've got a special rubber coating," the Saab engineer says. Ethanol is more corrosive than gasoline; the tank and the engine valves need to be protected from the fluid. Saab's technicians also recently had to write new algorithms for the car computer, since the amount of energy contained in one liter of ethanol is lower than that contained in a liter of gasoline. The engine's fuel consumption is higher, but there are fewer emissions.

Compared to other fuels such as hydrogen and natural gas, ethanol has one decisive advantage: it's a liquid, not a gas. Bergström isn't impressed by scenarios that present gases as the fuels of the future. "It would be too complicated fueling the car, and the distribution network would have to be changed substantially."

Today's dual biofuel engines, which run on both gasoline and ethanol, are a transitional model, according to Bergström, who is convinced that engines running purely on ethanol will soon be introduced. "Then ethanol's high octane rating will allow us to make the engine run more efficiently and reduce emissions." What's most important to him is that Sweden has managed to solve the old dilemma of how to begin travelling down the road to sustainable energy. "Car producers used to keep demanding a new fuel from gasoline providers, and the oil corporations would reply: we'll get you a new fuel when you build a car that runs on it."

But will it work?

Whether the Swedish model will work elsewhere depends largely on whether enough bioethanol can be produced. Today the most effective source of ethanol is sugar cane. Brazil produces ethanol from it and Sweden obtains most of its ethanol from Brazil. But the country also already produces a fourth of its ethanol from Swedish wheat. Neither system is fully satisfactory in terms of energy output and the effects on the environment involved.

"We need a cellulose-based system," Bergström says. Developing such a system is one of the aims of Per Carstedt's pilot project. One day Carstedt's plant will be able to convert many kinds of organic matter into fuel: hay, tree bark, maize, leftovers from wine production. Around 400 billion liters of ethanol could be produced every year in the United States alone. But for fields and forests to become the primary energy source of the future, it will require a vast re-organization of the planet's agriculture. Both uncultivated land and organic waste would have to be put to use.

In Sweden, giant pine woods are waiting to be put to use as energy. Carstedt plans to extract 70 percent of the energy contained in wood. Around 500 liters of ethanol can be produced from two tons of wood. Lignin, a by-product of the cellulose-processing technique, could be converted into electricity and heat in power plants. "We have to think in terms of circuits and cycles, if we want to get the most out of this technology," Carstedt says.

One benefit is that wood is now cheaper than fossil fuels. Producing electricity from willow wood costs €8 per megawatt hour, whereas producing it from coal costs €9.50.

Eddie Johansson, the director of a power plant owned by the city of Enköping, 60 kilometers to the west of Stockholm, explains the attraction: "We're the first community to cover one hundred percent of our electricity and heating needs by processing wood." The community of 38,000 people has also managed to solve another problem thanks to the power plant: the sludge and carbon dioxide-rich water from the local sewage processing plant serves as fertilizer for Johansson's wood fuel.

"We have to get away from these bombastic solutions like giant coal plants and nuclear reactors," says Johansson. "Clever, locally based concepts are the key to success."

Over 70 million Africans and an even greater number of farmers in the Indian sub-continent will suffer catastrophic floods, disease and famine if the rich countries of the world fail to change their habits and radically cut their carbon emissions.

The stark warning, contained in a private Government document commissioned by Gordon Brown, comes days ahead of an announcement that will show Tony Blair backing away from his promise to "lead internationally" on climate change. The Government has decided to delay setting targets for industry to cut carbon emissions until other EU governments set theirs. Previously, Mr Blair has made a virtue out of leading the way in Europe.

The bleak facts on how climate change threatens the third world were laid out in a briefing paper drawn up this month by the Department for International Development. It pointed out that a quarter of Africa's population lives within 100km of the sea coast. As sea levels rises, when global warming melts the ice pack, the number of Africans at risk from coastal flooding will increase from one million in 1990 to 70 million in 2080.

In India, rising temperatures could drive down farm incomes by as much as a quarter, while the cost to Bangladesh of changes in the climate could be more than half the £58bn that country has received in foreign aid.

"It's the poorest people in the world who suffer from climate change, but they are the least responsible for it." John Magragh, of Oxfam, said yesterday.

The report emphasises that - despite the recent focus on New Orleans after Hurricane Katrina - 94 per cent of all natural disasters, and 97 per cent of deaths from natural disasters, occur in the developing countries.

All the work that aid agencies do to end hunger, improve education, combat disease, and close the gender gap will be jeopardised, the report warned. In Bihar, India, for example, flooding can shut schools across the state for three months of the year. Flooding caused by Hurricane Mitch brought a sixfold increase in cholera in Nicaragua. Mozambique's annual economic growth dropped from 8 per cent to 2 per cent in a year after a cyclone.

The briefing paper was drawn up for a review ordered by Gordon Brown into the economic impact of climate change. It was made public after a request by the BBC made under the Freedom of Information Act. The review team, headed by Sir Nicholas Stern, will report in the autumn. Sir Nicholas has already warned that climate change could push millions back into poverty, or force them to migrate.

Meanwhile, environmental agencies will focus their attention on next Tuesday's publication of the Government's climate change programme. A spokesman for the Environment department, Defra, said that the programme will contain "measures that will affect every sector of the economy" and said that the UK already has "one of the best records in the world" for combating climate change.

But the announcement could run into criticism from environmentalists for failing to specify targets on business to cut carbon emissions. This is the outcome of a battle between the Environment Secretary, Margaret Beckett, who wanted strict targets, and the Trade secretary Alan Johnson, who warned about the consequences for the competitiveness of British firms. The outcome is there will be no targets in next week's announcement.

The decision has angered the former environment minister, Michael Meacher. "Britain once led the EU and the world in our targets and our radical policies to tackle climate change. It's very disappointing that we seem to be holding back now to see what the rest of Europe is doing before we make up our minds."

Labour's general election manifesto last year singled out climate change as "one of the most pressing challenges that the world faces" and promised: "We will continue to lead internationally on climate change."

But the UK's carbon emissions, which had been falling since 1990, are now three per cent higher than when Labour came to power in 1997. This week, Gordon Brown announced that he is going to increase the climate change levy, which penalises businesses that produce high levels of carbon emissions, but it is thought unlikely that next week's programme will include any other increases in 'green' taxes.

Heating up

* By 2025, China will overtake the US as the leading emitter of greenhouse gases. It is already the world's biggest driver of deforestation.

* Current levels of carbon dioxide are higher than at any time in the past 650,000 years.

* Last year, the thermometer reached 50C (122F) in India, Pakistan, Bangladesh and Algeria.The northern hemisphere is warmer than it has been for 1,200 years. Temperatures are expected to rise by 6C in some places by 2100.

* The UK will fail to hit its 2010 target of reducing carbon emissions by 20 per cent on 1990 levels. The Government predicts a cut of 10.6 per cent.

* 2005 was a record year in the intensity and frequency of tropical storms: 26, compared with 21 in 1933. Fourteen were hurricanes. Hurricane Wilma was the strongest on record.

The airline industry is struggling to find pilots as demand for flights fuelled by no-frills airlines continues to grow.

While carriers continue to expand their networks, the soaring cost of aviation fuel is making training increasingly prohibitive, with one estimate putting the cost of getting a licence at more than £60,000.

Figures, show the number of UK-registered pilots falling from 2,723 in 2002-3 to 2,400 in 2004-5. According to the Civil Aviation Authority the number of planes taking off from and landing at British airports increased by 6pc in 2004 - the latest year for which figures are available.

British Airways is advertising for pilots, Ryanair is scouring Europe for recruits, and Easyjet has slashed its flying experience requirement from 1,500 to 500 hours.

"Pilots are in demand and cutting flying hours reflects that," said a spokesman for Easyjet, which has added 50 new routes this year.

According to one source at BA, nobody within the company can remember the airline advertising so extensively. "Ryanair is currently paying more to its Boeing 737 pilots than BA, and with the pension crisis and the retirement age of 60 years, many see little point in joining BA for 'job security'," the source said.

Ryanair, which has increased its UK-based routes from 116 last year to 178, is taking on about 300 pilots. The company has held recruitment fairs in a number of European cities and has benefited from shake-outs among some scheduled airlines by taking on staff who have been laid off.

But even Ryanair has struggled to keep up growth towards the end of its "flying year", which finishes at the end of the month.

Many of its pilots have come close to their 900 maximum annual cockpit hours and action was needed to make sure the company did not run out of flying time. As a result Ryanair had to cut capacity by 100,000 seats for the first three months of the year.

The company is prepared to pay salaries of up to £100,000 for an experienced pilot as well as share options.

"Experienced airline pilots are in short supply," said Nick Wilcox, commercial director of Storm Aviation, a company which supplies staff to the aviation industry. "It is extremely busy for this time of year."

"We supply a large number of blue-chip airlines and were recently contacted by a low-frills carrier saying they needed a significant number of individuals."

British-based airlines are in a stronger position than some of their continental rivals because English is the international language of aviation.

STANSTED Airport operator BAA has been slammed by campaigners for providing inadequate information on the impact of proposals for a second runway.

BAA is carrying out a two-pronged public consultation - one on the extended use of the existing runway and another on possible locations for a second runway - the latter which ends later this month.

Stop Stansted Expansion says the consultation "gives a misleading impression that a second runway is a foregone conclusion".

SSE chairman Peter Sanders rejected all runway options as unsustainable saying said: "If you're seriously asking members of the public to choose between the various options, you should at least put forward sufficient information to enable a meaningful choice."

SSE campaign director Carol Barbone added: "It seems the poll is more designed to convert people to BAA's preferred runway option than to gain an objective picture of what people really think."

"Such a questionnaire might suffice for a simple product launch but it is scandalous for such spin to be put on a complex and sensitive issue. We have grave doubts about the value of any analysis which follows from its results."

BAA communications director Mark Pendlington said SSE is creating a "smokescreen" because it does not fully understand what is being set out in the year-long consultation process.

He said: "The thousands of people we're engaging with about Stansted's future are much more interested in helping us to shape the development of the airport."

"This latest attempt at a news story by SSE quite blatantly sets out to undermine and discredit a process that the local community has taken part in with enthusiasm and understanding."

"Calling for a 'no runway' option clearly highlights SSE are living in the past - the Government's Aviation White Paper stated the first new runway should be built at Stansted, a policy confirmed by the outcome of last year's legal challenge by SSE."

"It's time SSE realised they represent only themselves, not the wider community, when they make these sort of claims. The debate has clearly moved on. The public tell us they understand that - SSE choose not to."

STANSTED GENERATION 2 INFORMATION UPDATE

Facts

We launched a public consultation on 9th December 2005, asking for views on our proposals for a second runway development at Stansted Airport. Details were sent direct to around 200,000 local homes.

Recipients were invited to attend one of 11 public exhibitions held locally, or to view the exhibition on line at www.stanstedairport.com/future. Everyone was invited to let us have their views, by letter, email, online, or by completing a questionnaire.

In the last month, 39,000 questionnaires were sent direct to local homes as a reminder of our invitation to local residents to let us have their views. This is in advance of the end of the consultation period on 24th March 2006.

The straightforward and clear questionnaire was prepared in conjunction with the independent national research company Populus. Populus abides by the Market Research Society's Code of Conduct, and has been at the forefront of the industry's recent moves towards greater transparency. Populus is a founder member of the British Polling Council, and as such takes its responsibility to ensure that polls are properly conducted very seriously.

The answers given on questionnaires will be fully analysed and will be part of the full Consultation Report to be published by BAA.

Why was there not a 'No runway' option on the questionnaire?

Because this is nothing to do with the current consultation. That was the subject of the separate Government consultation held between July 2002 and June 2003, to which half a million people responded. The issue was widely debated and discussed in this area at the time.

The decision to locate a second runway at Stansted was announced by the Government in December 2003, and BAA was tasked to bring forward plans for the development. The current consultation is the first of a number that will take place in advance of us submitting a full planning application for a second runway in Summer 2007.

However, those who wish to make a point about not having a second runway have the opportunity to do so in the questionnaire, where general comments are invited (section 11).

Why was there no mention of Climate change?

In the White Paper, the Government explained how it intended to allow the aviation industry to grow in line with both the policy recommendations for future runway capacity and the UK's wider climate change policy.

Specifically, the White Paper stated (in paragraph 3.37):
Reduction in greenhouse gas emissions across the economy does not, however, mean that every sector is expected to follow the same path. The Government is committed to a comprehensive approach, using economic instruments to ensure that the growing industries (such as aviation) are catered for within a reducing total.

The White Paper also recommended in Chapter 3 that:
Aviation's emissions form part of an EU emissions trading regime
The industry continues to pursue actions to improve the efficiency of its operation through development and adoption of new technologies and operational procedures
Options for other economic instruments continue to be pursued although these must take into account their effects on the competitiveness of UK aviation and the impacts on consumers.

We take this guidance as setting out a policy for managing the responsible growth of aviation's greenhouse gas emissions within an overall national target.

Climate change was not considered as part of our runway optioneering consultation process as it had been taken into account by the Government in its Air Transport White Paper and is in any event subject to a separate, nationwide action programme.

Emissions Trading progress:
In December 2005, after BAA took a lead in the lobby in Westminster and Brussels, the EU's Environment Ministers approved the inclusion of aviation in the EU Emissions Trading Scheme from 2008 and called on the Commission to bring forward a legislative proposal by the end of 2006.

SSE say there was a lack of information concerning environmental effects of the various options. Is this true?

No. The environmental analysis was thorough and complex, involving 15 topics with independent specialist consultants advising on each. Different options were judged to perform relatively better or less well than others on the basis of the criteria devised by each of the independent specialist consultants for their specialist topics. These include land take, properties and community facilities affected, ecology, air noise and ground noise impacts.

A number of other topics, including air quality and health, were considered during the environmental appraisal process, but as the outputs were so similar across the options, they did not help us choose between the options. These topics, however, will be included in the Environmental Impact Assessment of the scheme we eventually choose to take through the planning process.

It is important to remember that this is the first of a number of consultations concerning the development of a second runway. There will be further consultations on any road and rail schemes to serve a two-runway airport later this year, in conjunction with the Highway Agency and rail authorities respectively . Any airspace changes required for the new runway will also be the subject of a later and separate consultation.

SSE "audit" of questionnaire responses

No-one, other than Populus, has access to all the questionnaire responses, so it is simply not possible for SSE to present the results of any "audit" as representative or accurate.

OUR COMMENT: BAA is apparently relying on the assumed meaning of paragraph 3.37 in the White Paper quoted above, i.e. that growing industries such as aviation are not expected to reduce their carbon emissions, or even to take very seriously attempts to modify future increases - in other words, others have to take positive steps, not airports or airlines. However, since the Aviation White Paper was published, another White Paper, "Securing the Future" could be regarded as representing rather more up-to-date views. Those views are very clear - all new developments must be within environmental limits and the effects of any development on climate change must be considered. It is also extraordinary that air quality predictions were similar across all the options - if this was so, why not give the figures?

Pat Dale

NO TO NEW RUNWAY
Readers' Letters - Dunmow Broadcaster - 23 March 2006

I WRITE in response to the article headed "Campaigners blast survey as 'biased'", March 16.

I am one of the "thousands of people engaging in BAA's consultation" to say a clear and resounding 'No' to a second runway at Stansted.

Far from "living in the past", SSE's no runway option is the only option for the future. Only people who don't care or don't think about the future can possibly think a second runway is a good idea. A second runway at full capacity would release the same amount of carbon emissions as every household in the East of England region put together, effectively negating all other initiatives to reduce emissions in our region. This is a head in the sand strategy.

BAA's sham of a "consultation" is attempting to detract from the real issue with a smokescreen of corporate spin. Its aim is to make local people feel they are being democratically involved in the planning process by having a say in the location of the runway, when the real issue is not location, but that this is a runway that no-one wants in the first place.

Our community is not being deceived by these tricks and recognises the second runway for the environmental catastrophe that it certainly is.

C.A. Roberts
Address supplied

BAA FARCE
16th March 2006

BAA's latest consultation about siting a second runway at Stansted closes on March 24.

As usual the public has been asked to respond under the pretence that BAA "would like to know what you think". This is the third consultation from BAA.

Eighty-nine per cent of residents have already said no to a second runway but BAA does not listen.

They haven't in previous consultations, which have all been a farce.

People should fight BAA to protect our beautiful countryside and children's heritage. A children's story springs to mind ....

Who is this creature with eyes that glisten?
But has no ears so does not listen.
The pound signs in its eyes do roll, and from its mouth its tongue doth loll.
Dripping, foaming from its jaws, about to dig in its terrible claws.
And when it speaks with a poisonous roar,
It spouts propaganda, lies and more.
What is this creature who shows such contempt?
For all of its neighbours - no one is exempt.
Oh help! Oh no! It's the BAA ffalo!
"My favourite things" the BAA ffalo said,"are planes in the sky, the environment dead.
I care not for humankind.
Global warming's such a bind.
Reply to my consultation and you'll soon see, a second runway is for me.
No matter what you people say,
I'm going to build it ANYWAY!"
All was not quiet in the Stansted wood.
The people were stirring and this was good.

A. Armitage
Address supplied

BEMUSED BY AIRPORT
Readers' Letters - Dunmow Briadcaster - 23 March 2006

I AM bemused by your article quoting BAA's communications director, Mark Pendlington, considering people with a 'no runway' [for Stansted] opinion as "living in the past".

Did he not perhaps also make similar comment about Uttlesford District Council, who has the same stance as evidenced, on page 13, with their guidance on how to respond to the consultation? A definite NO in case Mr Pendlington missed it.

Or is it that he harbours a belief that, by not confronting the council and continuing to lambaste Stop Stansted Expansion, his company's requests for planning permission will gain miraculous and spontaneous support.

Does he believe this will get it nodded through?

Dear BAA, please wake up to the fact that within your own industry YOU are the lone voice behind the 'smokescreen' not those of us who denounce your destructive plans.

I would suggest that your time is better spent brushing up your CVs for the inevitable day when a foreign company subsumes you and looks long and hard at the economics of your unwanted proposals.

Terry Moore
Address supplied

Ryanair, Europe's No. 1 low fares airline today announced a partnership with BCP - the UK's leading airport car parking service that will enable passengers to pre-book discounted airport car parking and entry to executive lounges through www.ryanair.com .

Speaking today, Peter Sherrard, Ryanair's Head of Communications said:

"Ryanair is delighted to announce this new partnership with BCP at 17 of our busiest UK airports. Ryanair's passengers will be able to avail of discounts of up to 30% on car parking and executive lounge bookings."

"Ryanair has made flying cheap and simple and we are constantly looking at ways to enhance and make our passengers' trips as hassle-free as possible. Delivering online booking for low cost car parking and travel-related services is just another step in that direction".

BCP Commercial Director, Kevin Sage commenting on the new agreement said:
"We are delighted to be working closely with Ryanair, Europe's largest low cost airline. With so many people choosing Ryanair for all their travel needs, www.ryanair.com has fast become one of the most frequently visited web sites on the Internet for savvy travelers looking to book their trip quickly and conveniently. Now visitors to the Ryanair website will have the facility to be able to add one of BCP's many product offerings to their travel itineraries, such as discounted airport car parking, meet and greet or chauffeur drive services, and many more."

OUR COMMENT: Parking space is very short in Bishop's Stortford with all the new developments near the railway station. Those outside the town both working and using shopping facilities ought to have first use of any facilities available, if permission has been or might be given. What action is BAA going to take? Much of their income comes from car parking on the airport, so Ryanair is inflicting a "double whammy", low airport charges and now taking away parking business. It has, however, been accepted from the time that the airport was first given planning permission that all airport activities including car parking should be restricted to the airport. This has been rigorously imposed by Uttlesford Council.

Pat Dale

High ranking BAA shareholders are set to cash in on a bidding war from international consortia fighting to take control of the UK company by pushing the asking price past £10 per share.

Standard Life Investments has already disclosed that more than £10 a share wasn't an unreasonable price for any bidder to pay for control of BAA and other leading backers have fallen into line.

Taking off from San Jose's international airport alongside the likes of Southwest Airlines may become commonplace for local executives

Spanish company Ferrovial has already had a bid of 810p rejected by BAA's board and has been given a final deadline by the Takeover Panel of April 24 to lodge an improved offer.

But it now looks more likely that Australian based Macquarie Bank will come up with a more acceptable bid for BAA.

John Stent, former chief executive at BAA Stansted Airport, is on the board of the bank's Macquarie Airports subsidiary and former BAA colleagues are also involved with the business.

A firm offer would trigger a multi-billion pound bidding war. Macquarie is in talks with US private equity group Blackstone and Canada's Ontario Teachers' Pension Plan about piecing together the finance to launch a potential bid but talks are very early stage.

Even then, one well placed Australian financial source told Business Weekly he felt BAA may prove "too big a mouthful to swallow."

Stansted Airport executives are meanwhile getting on with the business of building the Essex hub into an ever-more glittering jewel in the BAA crown.

Business Weekly can reveal that talks have advanced on opening up a direct and major Asian route, understood to be Islamabad, the Pakistan capital.

Several new European routes are coming on board between the end of March and beginning of May, chiefly Helsinki and Gothenburg through Scandinavian Airlines subsidiaries, Athens (through FlyGlobespan) and Palma via Ryanair.

Officials from the capital of Silicon Valley, San Jose, have renewed a pledge to broker a proposed direct air link between the city and Stansted.

Business Weekly revealed last week that start-up airline, Maxjet planned to expand its existing transatlantic services to take in a direct route to Silicon Valley, with the aim of taking it live early in 2007.

The City of San Jose, which owns and operates Norman Y Mineta San Jose International Airport, says that a direct link forms a key strand of its policy going forward.

Joe Hedges from its office of economic development said: "Aviation links are an important area of San Jose's economic partnership agreement with the East England and efforts have been made to develop a San Jose-East of England flight."

Bill Sherry, director of San Jose International Airport added: "We have an ongoing air service programme focused on establishing international services that fit our market area. London and the East of England are areas of particular interest."

OUR COMMENT: Has building for expansion actually started at the airport? Has BAA (or the consortium) had time to find the money? – quite apart from the yet to be received first planning application.

Pat Dale

BEIJING, March 24 (Xinhua) -- The world's leading airport company, the Britain-based BAA, is interested in investing in some middle-scale Chinese airports, said Friday's Beijing News.

BAA is interested in those airports which have opened international air flights and have had an annual passenger volume of around 5 million journeys, said the newspaper, quoting a senior official with the BAA.

Currently, there are about 14 Chinese airports meeting the BAA's conditions and most of them are airports in provincial capitals.

Large Chinese airports like Beijing, Shanghai and Guangzhou airports are not on the list for BAA's China strategy, said the BAA official.

Statistics from the BAA said that about 142 Chinese airports are experiencing losses and are thirsty for investment.

To date, foreign capital is only allowed a limited stake in Chinese airports, with the Chinese operators owning a controlling stake.

Tensions between environmental and business groups over the future of Heathrow airport are growing, as the government seeks to press ahead with long-term moves to increase capacity at Europe's most congested airport.

Heathrow remains the busiest aviation hub in Europe measured by passenger numbers, but its competitive position in Europe is being eroded, as it runs up against the limits of its current capacity.

It is the main profits engine of BAA, the world's leading airports group, which is facing a possible takeover bid by a consortium led by Ferrovial, the Spanish construction, infrastructure and services group.

According to figures from ACI Europe, the airports trade association, Heathrow had the lowest growth last year of any of the top 30 airports in Europe with an increase in passenger numbers of only 0.8 per cent to 67.9m, compared with increases of 4.9 per cent to 53.8m at Paris Charles de Gaulle and of 2.2 per cent to 52.2m at Frankfurt, its main rivals.

Heathrow passenger numbers benefit from the airport's bigger share of lucrative long-haul traffic and therefore a greater number of large aircraft than its rivals, but it has already fallen behind both Paris Charles de Gaulle and Frankfurt in the number of aircraft movements.

Measured by take-offs and landings, Charles de Gaulle was the leading airport in Europe last year at 522,619 ahead of Frankfurt at 490,147, Heathrow at 477,888 and Amsterdam at 420,633.

Heathrow is one of the most productive airports in the world, as it operates from just two runways, while Amsterdam Schiphol already has five, Charles de Gaulle four and Frankfurt three with a fourth planned for the end of the decade.

According to Airport Co-ordination, the independent body responsible for allocating take-off and landing slots at Heathrow, there has been little increase in runway capacity since 2002.

With its aircraft movements last year, the airport is also already bumping up against the annual limit of 480,000 movements set by the government, as a condition of the approval to build the new fifth terminal.

Terminal 5, the £4.2bn project being developed by BAA will remove the bottleneck to further growth posed by the existing passenger terminal buildings.

The terminal, which will be exclusively occupied by British Airways when it comes into operation from March 2008, will add capacity for 30m more passengers taking the total airport up to about 90m.

Environmental and residents' groups are committed to fighting any further expansion, however.

According to the Aviation Environment Federation the airport is already breaching the European Union and UK legal limit for nitrogen dioxide emissions and therefore the present growth in flights is "probably unlawful".

Its recent report "Emissions Impossible" says that "all predictions to date showing that air pollution at an expanded Heathrow could be successfully mitigated rely on assumptions ranging from the optimistic to the implausible."

Without highly controversial moves to change Heathrow operating procedures, however, there is little that can be done in the short to medium term to raise the number of aircraft movements, meaning that further growth in passenger numbers will have to come from the use of larger aircraft.

The first 555-seat Airbus A380 super-jumbo, the world's biggest commercial jet, is expected to start commercial service to Heathrow with Singapore Airlines around the end of the year.

Heathrow's relative status as a world aviation hub is also declining against its rivals in terms of the network of connections it is able to offer.

The government supports the building of a third runway and sixth terminal at Heathrow to start operations between 2015 and 2020, but only if strict environmental conditions, chiefly for local air quality, can be met.

OUR COMMENT: "Emissions Impossible" can be obtained from the Aviation Environmental Federation - 020 7329 8160 and www.aef.org.uk. It gives an excellent breakdown of all the assumptions that have been made and are being made about the ability of management and airlines at Heathrow to manage a significant reduction in noise levels and an improvement in air quality, sufficient to satisfy the existing regulations / EU Directive on Air Quality. It reaches the conclusion that even if the most optimistic forecasts were actually put into practice, expansion would still lead to breaches of the Directive. This conclusion is very similar to the one reached by the Royal Commission on Environmental Pollution - that future technological changes in aircraft design will not be sufficient to allow for aviation expansion on the scale proposed by the government.

Pat Dale

The government has failed to resolve a row over how much businesses should be forced to cut their greenhouse gas emissions, days before the publication of its long-awaited climate change programme review.

The failure means that the review, which is due to be published on Tuesday after nearly a year's delay, will not give a clear signal to business on how the government plans to meet its target of cutting carbon dioxide emissions by 20 per cent by 2010. Alan Johnson, trade and industry secretary, told the Financial Times yesterday: "We haven't decided [the basis for emissions cuts] yet. We haven't decided a figure yet."

The government has indicated it will postpone a decision on emissions cuts for businesses under the European Union's greenhouse gas emissions trading scheme until the summer, after the deadline of June 30 which the European Commission has set. The decision involves carbon dioxide emissions in the second phase of the mandatory scheme, from 2008 to 2012.

Instead, next week's climate change review is likely to present a range of possible options.

Two government departments have been in dispute over how low the limits on business are set, with the Department of Trade and Industry arguing for a looser limit to give British businesses a competitive advantage and the Department for Environment, Food and Rural Affairs pushing for a lower limit that would have more effect on Britain's overall greenhouse gas output.

The compromise will not satisfy environmental groups, which have been arguing for tougher cuts to business emissions.

Mr Johnson also appeared to rule out big changes to taxation to reduce carbon emissions as part of next week's review. "We have to take this in bite-sized chunks," he said.

But he suggested the emissions trading scheme should be broadened after 2012 to include surface transport, and that UK ministers were lobbying Brussels for this.

Matthew Farrow, head of environment at the CBI, warned this could be tricky to implement. "It's very important to explore the scope for extending emissions trading but the practical implications need to be fully understood before a commitment is made."

Next week's review will also contain elements more encouraging for businesses. There will be details on government plans to report annually on the greenhouse gas output, steps to support small-scale renewable ener-gy projects and measures on energy efficiency in homes.

Mr Farrow said it was important to ensure consumers, small businesses and the commercial sector were obliged to cut emissions, as the brunt of cuts to date had been borne by companies in a few industrial sectors.

OUR COMMENT: Mr Farrow should have added aviation to his list of those who should be obliged to cut emissions.

Pat Dale

Draft national plans are starting to emerge for the second phase of the EU carbon emission trading scheme (ETS), running 2008-12. A number of member states are under pressure to cut the number of allowances compared with the 2005-7 first phase if they are to meet their Kyoto protocol emission commitments.

Early signs of how governments are approaching the task have emerged from Sweden, the Netherlands, Finland and Bulgaria. The latter is due to join the EU plus the ETS next year. The deadline for all states to submit their plans is 30 June, drawing on guidance issued by the European commission in January.

On Wednesday, the Swedish government submitted an outline of its second phase national allocation plan (Nap) to parliament. Numbers of emission allowances should be lower than what the trading sector is expected to emit, according to the document. However, it does not propose concrete numbers.

The Dutch draft plan will be issued in April, elements emerged in a letter sent by economy minister Laurens-Jan Brinkhorst to parliament, also on Wednesday. In his letter the minister presents possible options for the power sector during the period based on two consultancy studies.

One possibility would be to allocate fewer allowances to electricity companies. One study argues that a 10-20% reduction in allocations would not dramatically affect companies' profits.

In Finland, the emissions cap will be set "well below" the current level, according to an official from the ministry of industry and trade quoted by analyst Point Carbon. The country faces a significant challenge to bring national emissions back to 1990 levels by 2010-12.

Finnish companies were allocated 45.5m allowances per year for the scheme's first phase. Assuming proportionate emission reductions in the non-trading sector, this would have to fall to 37.4m allowances per year during the second phase. It could be higher, however, if the government purchased foreign carbon credits through the Kyoto flexible mechanisms.

A HOSEPIPE ban is to be introduced in parts of mid-Anglia from April 3. Three Valleys Water, which supplies Saffron Walden and Royston, is imposing the ban for the first time since 1992 because of low water levels in the region. It is set to run indefinitely.

The ban means domestic customers cannot use hosepipes to water gardens or wash cars. It also prohibits the use of garden sprinklers and irrigation systems. The Environment Agency warned that unless there is sufficient rainfall in the next few months, more drastic measures than a hosepipe and sprinkler ban may be needed.

Terry Hayes, Cambridge rainfall analyst, said: "Across Cambridgeshire we have so far had only 67mm of rain this year. For the same period last year we had 74mm. On an average year we would expect to see 125mm. So, it is a very significant decline."

Met Office spokesman Barry Gromett said: "Unfortunately there is no indication we will have a significant amount of rain during spring. However, even if we do have a very wet spring, this would only maintain the current status quo. We would also need a wet autumn and winter to redress the balance and replenish any empty reservoirs."

Water customers in the rest of East Anglia will not be affected. Cambridge Water, which supplies Cambridge, Melbourn, Guilden Morden and Ramsey, will not introduce a ban in the immediate future.

A spokesman for Anglian Water Services, which supplies the area of East Anglia not covered by Three Valleys or Cambridge Water, said their resources were also in good shape. The spokesman said: "We have no plans for a hosepipe ban this year. All our reservoirs are at normal operating levels. Rutland Water is 86 per cent full and Grafham Water is 92 per cent full."

Three Valleys said its drastic decision was the result of 15 months of below average rainfall. Peter Darby, managing director, said: "After careful consideration we have had to make this decision to safeguard supplies. Whilst we are not running out of water, supply levels are low and we need to be mindful of the position we may be facing in 12 months if the drought continues."

"We very much regret the inconvenience that will be caused to our customers. Our immediate concern is that we are already seeing lower flows of water in many of our rivers and streams. These lower flows will be exacerbated if there is a dry summer and people continue to increase their water use, so the ban will help prevent long-term damage to these habitats."

He added that a dry winter at the end of the year would cause major supply problems in 2007, which a hosepipe ban would help to avoid.

OUR COMMENT: The area round Stansted is even drier. There will also be problems in dealing with more sewage if building plans for thousands of houses go ahead. The same difficulties will be experienced in expanding the airport.

Pat Dale

The UN environment programme has warned that freshwater shortages are likely to trigger increased environmental damage up to 2020 in an assessment released to mark world water day on Wednesday.

The report identifies falling river flows, rising saltiness, loss in water wildlife and reduced sediments reaching the coasts as key threats.

UN secretary general Kofi Annan called for greater efforts to protect rivers, lakes and aquifers. In Brussels, Waterregio, a new network on water issues, was launched.

A commuter service from Cambridge to London has been identified by the Department for Transport (DfT) as the most overcrowded in Britain.

Statistics released under the Freedom of Information Act showed that demand for the service was 85 per cent greater than the number of seats normally provided.

According to the DfT's estimate, 433 passengers wanted to use the 234 seats in four carriages on the 8.02am train to Liverpool Street.

One, which is the company that runs the franchise, said yesterday that the snapshot survey appeared to have been distorted by service disruption on the day when it was carried out.

The company insisted that under the new timetable - which led to chaos on its network when it was introduced last December - that service now runs with an eight-car train. Another heavily oversubscribed service was Thameslink's Sutton to Luton 4.33pm train, which provided 412 seats for 618 passengers.

Southern's 7.51am train from Victoria to London Bridge came in at third place with 635 seats on offer for the 944 people it would normally expect to carry.

Yesterday South West Trains, which had two services in the "top" 10, announced plans to ease overcrowding, including longer trains and a major overhaul of London's Waterloo Station.

The strategy will see platforms at suburban stations extended. But finding room for the number of extra services needed at Waterloo during the rush hour will be difficult.

Last week Alistair Darling, the Transport Secretary, said the Government was considering reintroducing double-decker trains - last seen on the Dartford line in 1971 - as a means to ease overcrowding.

The Treasury was accused yesterday of "institutional inertia" over climate change in a damaging all-party select committee report that points out carbon dioxide emissions are rising at a time when government is cutting the level of green taxes as a proportion of national income.

The report by the Environmental Audit select committee was seized on yesterday by the Tories and Liberal Democrats as a sign that the chancellor, Gordon Brown, is not willing to take the tough, and sometimes unpopular decisions to cut Britain's carbon emissions.

The report reveals that Mr Brown has allowed receipts from air passenger duty to fall by 8% from £931m to £856m, even though the number of chargeable passengers rose by 25m, or 35%, largely due to his introduction of a lower £5 duty for economy short flights. The committee argues that the Treasury should tax air travel on the basis of a flight's level of emissions, and not the number of passengers.

It also points out that the freezing of environmental taxes, such as climate change levy, vehicle excise duty, fuel duty and aggregates, means the level of green taxes in Britain is now below that at the time Labour came to power. The proportion of total tax revenues made up from green taxes has fallen almost year on year since 1999 from a peak of 9.8% to 8.3% in 2004. Fuel duty has been frozen 4 out of the past 5 years.

The committee, chaired by the former shadow cabinet member Tim Yeo, rejects the Treasury claim that the fall in green taxes as a proportion of revenues is a sign of the success of its policies in that they must be discouraging the activities on which the tax is levied upon. The committee argues instead the green taxes are failing sufficiently to discourage the processes and activities that emit CO2 and said the Treasury's reluctance to take bolder steps was mystifying.

OUR COMMENT: It appears that Gordon Brown has taken some welcome steps to remedy the situation, but not enough to make up for past lack of action. Nothing effective to deter unnecessary flights! Or to encourage more fuel efficient planes.

Pat Dale

Budget airlines have been one of the business successes of the last decade. Led by easyJet and Ryanair more people are flying than ever before.

Eastern England, and in particular Stansted and Luton, airports have become the engines of this growth. Low-cost airline easyJet claims it has created 30,000 jobs directly and indirectly through its growth.

Yet environmentalists say our love air fare with budget air travel means pollution and harmful greenhouse gas emissions are rising so fast that the government will miss its target to cut carbon dioxide from 1990 levels by 20% by 2010. It is time, they say, to hike taxes on aviation.

At present travellers pay air passenger duty but there is no tax on aviation fuel, no VAT on the purchase of planes and no VAT on airline tickets. Mary Edwards a "Friends of the Earth" East region campaigner said: "Airlines are getting a free ride worth £9.2bn a year, equivalent to £300 per taxpayer. If they paid some of the above taxes the rest of us would be able to have lower National Insurance."

Aviation is the fastest growing source of greenhouse gas. At the carbon reduction unit at the University of East Anglia they say the need for action is urgent.

Dr Keith Tovey is the energy science director at the University of East Anglia's carbon reduction project. He said: "If you fly to Sydney, Australia, a plane will emit 5.6 tonnes of carbon dioxide per passenger, which is as much as an average household will emit all year."

The green lobby wants air passenger duty to go up in the Budget. It is currently £5 a journey when you leave the UK on a short-haul flight. Putting it up by, say, £10, as Friends of the Earth recommend, might reduce demand.

Mary Edwards of Friends of the Earth, said: "If people were to pay a full price for their ticket, not a subsidised price, they wouldn't go off to Rome for a cup of coffee at the weekend, which is what industry is based upon now."

The airlines point out they are busy buying new aircraft which pollute less than old ones. And they are discussing an emissions trading scheme to take account of environmental damage. As for a levy on aviation fuel, there are international treaties in place which say it should be exempt from tax. For Britain to work in isolation of other countries seems impossible, according to experts.

Dr Peter Morrell, Cranfield University, said: "If the UK tried to introduce a fuel tax it would be against these treaties. "Norway tried to do it but had to back down."

But would Gordon Brown really want to hamper that growth with higher taxes in his budget? Might the motorist be an easier target. The RAC Foundation is calling for a new £200 tax disc for gas guzzling vehicles.

Sheila Rainger, of the RAC Foundation said: "We wish to see a bigger difference between the taxation of cars. Smaller cars paying less, and those with very large engines, polluting the most, paying more."

The Prime Minister has described climate change as the greatest issue facing the planet. Critics say it is high time his Government faced up to that challenge.

Environmental concerns about air travel are changing attitudes in the boardroom, with almost half of businesses in the capital declaring themselves in favour of higher taxes on the cost of flights.

The London Chamber of Commerce and Industry yesterday revealed that 44% of its members believed higher taxes should be levied on aviation fuel and air tickets to mitigate the environmental havoc wreaked by aircraft.

A small majority, 56%, are holding out against any fiscal measures, but the degree of support for higher taxes surprised business leaders and environmentalists. Michael Cassidy, president of the chamber, said: "I think there's a recognition coming up, particularly through the younger generation, that aviation is a significant contributor to carbon dioxide emissions and that it might be preferable to restrict demand than to allow it to continue unconstrained." Support for environmental taxes was highest among the financial services sector, where 48% were in favour. Four out of 10 manufacturers and 20% of retailers backed paying more for flights.

Stephen Joseph, director of the pressure group Transport 2000, said: "It's part of a wider shift - there's been lots and lots of coverage recently about the impact of air travel."

Despite their environmental concerns, businesses are lobbying aggressively for expansion at Heathrow to prevent Britain's biggest airport from losing ground to European rivals. It emerged this week that Heathrow has been overtaken by Munich airport in terms of the number of destinations it serves and now lies fifth behind Frankfurt, Paris and Amsterdam.

Budget airlines oppose environmental taxes. Andy Harrison, easyJet's chief executive, said: "This... discriminates against the poorest in society who, until recently, were priced out of the sky."

Businesses from outside the aviation sector have renewed their call for urgent expansion of airports in the South East on the day that it emerged that Heathrow would soon fall behind Munich in terms of the number of destinations served.

Some 29 per cent of London firms rated access to an airport as "very important" to their business model, with a further 21.5 per cent saying it was "fairly important".

Heathrow is already used regularly for business purposes by 67 per cent of companies. Some 34 per cent think that Stansted should be expanded; 25 per cent that Gatwick should be expanded; and 22 per cent that Heathrow should be expanded.

A small but significant number of company directors (one sixth) said that they would consider switching their operations to a rival European hub, such as Amsterdam or Paris, if there was insufficient capacity at their usual airport.

The findings come from a report by the London Chamber of Commerce and Industry which interviewed 287 firms, overwhelmingly from outside the aviation sector. The report - The Business Case for Airport Expansion: Why the Anti-Airport Protesters are Wrong - has been produced to demonstrate how important aviation expansion is to businesses which are not in the sector but nevertheless depend on it.

In other findings, 93 per cent of firms said that they already accessed customers, partners or suppliers in other EU nations. The corresponding figures were 63 per cent for Asia, 54 per cent for North America and 31 per cent for Australasia.

On the question of whether higher taxes should be levied on aviation fuel and air passenger duty to limit the environmental impact of air travel, opinions were divided. Some 44 per cent of firms said yes they should and 56 per cent said no they should not.

"The debate over airport expansion is too often portrayed as the aviation lobby against local residents and environmental protesters," said LCCI president Michael Cassidy. "This report shows that large numbers of firms outside the sector are reliant on aviation and recognise the need for capacity to be expanded as soon as possible."

"Today's news that Munich will soon serve more destinations than Heathrow is a wake-up call. Government now needs to inject renewed urgency into aviation expansion - it would be scandalous if the date for the second runway at Stansted were to slip any further than 2013."

"Already, significant numbers of directors are reporting that they have difficulty finding the necessary direct air transport routes for their business. And many others think that surface access to airports in the South East is a problem."

"Everyone who wants to enter the debate should accept as a given that aviation underpins the prosperity that many residents and employees in the South East alike now take for granted."

OUR COMMENT: Yes, it is the same report! Hopefully more business travellers will also realise that for parts of Europe the train is not that much slower. It might also occur to them that perhaps the fact that they cannot always get to exactly where they want to from Stansted or Luton is because the low cost airlines choose to use airports with the lowest charges, not necessarily the ones their customers want to visit!

Pat Dale

THE Ferrovial consortium has earmarked up to seven BAA airports for disposal, should a bid eventually be accepted, to help secure financing for a raised offer. Ferrovial's £8.7bn (E12.52bn, $15.28bn) approach for BAA was rejected on Friday.

The Ferrovial consortium, which includes Grupo Ferrovial, Spain's second-biggest builder, Canadian pension-fund manager Caisse de depôt et placement du Quebec, and Singaporean GIC Special Investments, is also embarking on a charm offensive among BAA shareholders this week in a bid to win them over.

The Business has learned that while the consortium has committed to retaining all BAA's UK airports including Heathrow and Gatwick, as well as its stake in Budapest it is not wedded to its stakes in Italian and Australian assets.

A source close to the situation said it has identified stakes in Naples, Melbourne and Perth airports as well as four other Australian airports that could be sold. There are competition issues in Australia arising from Ferrovial's 20% stake in Sydney airport. While BAA's interest in Budapest Airport restricts an immediate sale, its Italian assets can be ditched and are not core.

Analysts at Dresdner Kleinwort Wasserstein estimate the value of BAA's international airport stakes at £840m. World Duty Free, through which BAA operates a retail business in three US airports, could be worth £250m.

Interest from the consortium has uncovered BAA's value and sparked interest from other trade buyers and infrastructure funds attracted by the group's growth potential. Ferrovial will also embark on a push to win over shareholders this week although its opening offer at 810p came in significantly lower than many had expected.

Some shareholders have already described the bid as "ridiculous" and the board meeting convened by Marcus Agius, the respected chairman of BAA, on Friday quickly rejected it.

Most analysts were expecting a price exceeding 900p and BAA's shares dipped to 828p on Friday, still up on the 655p value they had before rumours of a bid started circulating in the market.

The consortium said it would improve its offer by a small amount if it was given access to BAA's books. Opinion was divided over whether there would be a significantly improved offer, or whether the consortium has struggled with funding and is using this low bid as a face-saving way to bow out.

A City source told The Business that funding created a problem for any consortium: "I wouldn't be at all surprised if no one else comes forward because it's a very sizeable amount of funding that's required, and to be credible you have to have the capacity to continue BAA's expansion plans."

"Stansted Airport has been handed a golden opportunity to cash in on the frustration of Chinese carriers with limited capacity at Heathrow."
Terry Morgan

Managing director Terry Morgan has just returned from a series of summits in China with leading airlines and is confident he has succeeded in progressing a dialogue designed to plumb Chinese carriers directly into London and Cambridge through the Essex hub.

Morgan's fast-track mission saw him cover a lot of ground. He initially flew to Beijing for two days where he met with representatives from the Chinese equivalent of the Civil Aviation Authority.

"I had a very constructive meeting with the government officials responsible for the UK-Chinese bilateral air traffic regulations," he said.

Morgan then winged south to Guangzhou province, which is a designated Special Economic Zone. There he met with China Southern Airlines to talk about a potential hook up with Stansted, before moving on to the commercial capital of China, Shanghai. He also visited Hong Kong.

Morgan said the Chinese airlines and airport executives that he met were keen to hear about the hi-tech, knowledge-based industries in the East of England region.

"Many of the airlines were also attracted by Stansted's comprehensive European network, which would allow long haul travellers to easily connect to a huge range of European business destinations, especially in developing markets."

Why is China so important to Stansted? Morgan said: "At Stansted, we recognise the huge potential benefit of direct connections to China in terms of trade, commerce and tourism. Currently two Chinese airlines – Air China and China Eastern – operate services to Heathrow. However, many Chinese carriers are frustrated at the lack of capacity at Heathrow – and this is where Stansted can benefit as a viable alternative."

James Gray, chief executive of East of England International, praised Stansted's efforts to bring direct routes from China into the region. Gray said: "There are huge opportunities for growth in a number of markets, for Stansted, for the region and for the UK."

"Traffic from China is massive in terms of students coming here to learn at the region's world-leading universities, in terms of tourism and – increasingly – in respect of business."

"We are tremendously excited about what these hook-ups could mean for the East of England and are aware how energetically Terry and his colleagues at BAA Stansted are working on this initiative."

Those expecting climate change to have at least one silver lining - a tourism boom for domestic destinations over cheap package holidays in the Med - may be due a rude awakening. A new report into long-term visitor trends at major tourist attractions suggests a changing climate may bring as many challenges as opportunities for the visitor economy.

Worth £91.8 billion per year according to government statistics, the travel and tourism sectors in the UK employ 2.1 million people - over 7% of the working population. Domestic customers are key to the sector, with 86% of tourism income coming from domestic visitors - of the 194 million overnight stays taken in England in 2002, 135 million were made by domestic visitors.

The widely held belief that the sector will experience a boom courtesy of climate change is challenged by a new report compiled by Sustainability Northwest and The University of Manchester. The report looks at the impact of weather on a leading national tourist attraction, Chester Zoo and finds that weather has little or no impact on visitor numbers, and that conversely many tourist attractions will have their work cut out for them adapting to the hotter, stormier conditions expected in the years to come.

Conventional wisdom suggests hotter, drier, longer summers would help the tourism industry but evidence uncovered by this new report points to a more complex reality. Although longer summers and warmer weather may promote a more outdoor lifestyle, it has little effect on the demand for our 'honeypot' tourist attractions .

The Chester Zoo analysis - examining almost 30 years of visitor data - shows that temperature has no influence on visitor numbers over the long term. Rain causes small changes, mainly the postponement of visits. More significant are other factors, such as school holidays, marketing, and changes in how we spend our leisure time.

There is an important message here for those involved with the regional visitor economy. Businesses cannot rely on climate change alone to boost the visitor economy in the future. Effective forward planning and management will also be needed to fully exploit future opportunities, and to stimulate demand. The results from this study will provide an important evidence base to aid in this planning process.

Instead of people flocking to outdoor attractions, such as zoos, during the long summer season, the research has found that the effects of climate change could actually have adverse effects on the attractions themselves. There will be a need for more shade from the hot conditions, extra water supplies to prevent dehydration and strategies to deal with changing vegetation as summer temperatures rise and summer rainfall decreases.

The lead author on the report, Jonathan Aylen of Manchester Business School at The University of Manchester, spelt out some of the implications of the study: "Our research found that visits are not influenced by the weather. Only rainfall matters - if it rains, visits are postponed to the next dry day. As the climate has become milder there are no noticeable increases in visitor numbers. Visits to Chester Zoo have remained relatively stable over the 27-year study period.

"As people become increasingly cash rich and time poor they will become more discerning in how they spend their leisure time. Our report suggests that while there may be fewer zoo enthusiasts, those who are keen to see animals will spend more time at the attraction and more money while they're there."

Steven Glynn of Sustainability Northwest stressed the importance of the study: "Climate change is one of the most important issues facing us today and the biggest threat to our environment. This research is part of a wider scheme of work that is examining a number of issues relevant to tourism and recreation in the region. The results will help those involved in the visitor economy recognise, and prepare for, the impacts of climate change."

The Northwest Regional Development Agency - a lead body on tourism - helped to fund the study. Its Head of Sustainability, Mark Atherton, highlighted the wider implications for the visitor economy: "It's clear that climate change will create as many challenges as opportunities for zoos and other outdoor attractions. In fact, as people become more specialised in how they spend their leisure time, zoos and similar attractions will face marketing challenges to attract and retain their visitors, on top of the practical changes they'll need to make to adapt to the implications of climate change.

"Our region's tourism economy is going from strength-to-strength, and so this timely report, one of a number expected in the year ahead on tourism and climate change, is a welcome 'heads up' on what we can do now to prepare for an uncertain climate in the future."

The project is being managed by Sustainability Northwest with the University of Manchester's Centre for Urban & Regional Ecology (CURE) and Manchester Business School leading on the research. The work is funded by the Department for the Environment, Food and Rural Affairs (Defra), the Northwest Regional Development Agency, and the Environment Agency. The UK Climate Impacts Programme is lending its expertise to support the project.

OUR COMMENT: Is anyone in the Eastern Region looking at these problems? With the warnings about a lack of water in the south and the risks of being flooded by rising sea levels in the east maybe some research is needed!

Pat Dale

In conjunction with a study it commissioned to quantify the effect of the inclusion of air transport in the European Union's Emissions Trading Scheme, the European Low Fares Airline Assn. yesterday declared its support of the "principles" behind the policy but demanded an end to the "sloppy thinking and hysterical persecution" that finger aircraft as a leading emissions contributor.The association also protested the possibility that the EU may limit the scheme to intra-EU flights, thus singling out short-haul carriers and LCCs.

"Contrary to common misconception, aviation is not a major emitter and in fact its contribution to EU emissions accounts for only 4% of EU15 CO2 emissions and will only account for around 5% of EU25 CO2 emissions by 2030," ELFAA Secretary General Jan Skeels said. "This shows that too much of the debate thus far has been based upon inaccurate and one-sided information. The result is that some of Europe's biggest offenders in terms of emissions, in particular road transport, are getting off lightly and aviation is being characterized as a major problem."

ELFAA's study, prepared by Frontier Economics, noted that power generation is responsible for 34% of emissions and road transportation currently is not covered by the ETS. It argued that as a generator of 3.1 million jobs and €221 billion in GDP in the EU15, aviation should not be subject to policies that undermine its growth.

The study further said that airline emissions have decreased 64% in the past 30 years and that carriers, especially LCCs, already are burdened by high fuel prices and are given incentives to cut costs and operate more fuel-efficient and environmentally friendly aircraft. It identified opportunities for improvement constituting 8% of current emissions, but said half of that would come from improvements in Europe's "famously inefficient" ATC.

In addition, ELFAA called for a more equitable implementation of any ETS. It should be "pan-European," covering all flights leaving EU airports and not just intra-continental services. It should have "harmonized rules and administration" so as to "avoid favoritism and illegal protection of national airlines" and should "guard against distortion of competition" by including "inefficient national airlines operating with old, dirty aircraft" as well as LCCs flying new equipment.

ELFAA comprises easyJet, FlyBE, Hapag-Lloyd Express, Norwegian, Ryanair, SkyEurope, Sterling, Sverige Flyg, Transavia and Wizz Air.

OUR COMMENT: Where do they get their figures from for 2030? They don't even agree with government predictions and certainly not with the Tyndall Centre. They should do their sums again.

Pat Dale

Grupo Ferrovial, the Spanish construction, infrastructure and services group, will consider increasing its bid for BAA after the UK airports operator yesterday rejected the outline terms of a possible cash offer.

The Spanish company laid the groundwork for the world's biggest airports takeover with a conditional offer of 810p a share, valuing BAA at £8.75bn. It said it was prepared to increase the bid by "a small increment" if BAA recommended the offer and allowed limited due diligence.

Ferrovial sought to win over the UK government and Civil Aviation Authority, which regulates BAA's London airports, by saying it was committed to ambitious airport expansion plans. The Spanish group said it intended to keep BAA's UK regulated assets together and would work "cooperatively" with the government to deliver its 2003 white paper recommendations for new runways and terminals at Stansted and Heathrow.

Ferrovial is leading a bidding consortium which includes Caisse de dépôt et placement du Québec, the Canadian financial institution, and GOC special investments, the Singapore government's private equity arm.

Rafael de Pino, chairman of the majority family-owned group, met Marcus Agius, BAA's chairman, yesterday to present the proposed bid to initiate confidential talks. But within hours the BAA board rejected the approach. It said the proposal did not begin "to reflect the true value of BAA's unique portfolio of airport assets".

BAA controls 7 airports in the UK including Heathrow, the busiest airport in Europe by passenger numbers. It also has airport interests in Australia, Italy, Hungary and the US. Ferrovial said its offer price was a premium of 25% to the average price of 637p in the 30 days to February 6th when speculation about a bid started. It placed an enterprise value of about £14.8bn on BAA including debt.

The proposed offer fell short of the 900p sought by some leading BAA shareholders, and was pitched below the recent all-time high of 843p. Yesterday BAA shares closed at 828½p, down 1.25%.

The BAA rebuff to Ferrovial was backed by Scottish Widows Investment partnership, which has a stake of 3.4%.

Ferrovial said it was "the strong preference" of the consortium to proceed with the transaction on a recommended basis, adding that it was "disappointed" BAA had rejected the proposal "without discussion". It said debt finance for the bid had been agreed by Citigroup, Royal Bank of Scotland and Banco Santander.

Ferrovial is being advised by Citigroup and BAA by Rothschild and UBS. HSBC is advising CDC.

OUR COMMENT: This is the way our own lives could be affected by decisions taken by those with no particular interest in the wellbeing of North-West Essex or East Herts, or for the health of the Planet. However, whoever "owns" BAA, continued airport expansion on the scale proposed by the government will be one of the major factors in the UK's future contribution towards climate change. The worst effects will be in countries that can least afford it, in Africa and the Far East, though in the UK our own East of England will be the major sufferer.

Pat Dale

Steve Connor writes that satellite measurements in the Arctic indicate that sea ice has failed to re-form for the second consecutive winter, raising fears that global warming may have tipped the polar regions into irreversible climate change sooner than predicted.

Mark Serreze, a sea ice specialist at the US National Snow and Ice Data Centre in Colorado, said that the observed reductions in the sea ice cover, combined with recent Nasa findings that the Greenland ice sheet "may be near a tipping point," indicate that "the Arctic is starting to respond to global warming."

Cambridge University professor Peter Wadhams, the first Briton to monitor Arctic sea ice from nuclear submarines, said: "Climate models did predict a retreat of sea ice in the Barents Sea but not for a few decades yet, so it is a sign that the changes that were predicted are indeed happening, but much faster than predicted."

Green Councillors welcome Braintree District Council decision to oppose second runway at Stansted

Braintree District Council voted last night (15th March), almost unanimously, to oppose the development of a second runway at Stansted Airport.

Green Party Braintree District Councillors James Abbott and Philip Hughes have welcomed the vote, after many years of pressing for the council to adopt a clear position on the issue and consistently calling for BDC to join with the many other local authorities and groups in Essex and neighbouring counties battling the BAA over its huge expansion plans.

An amendment written by Green Councillors to expand on the original recommendations put before councillors was partly agreed. The successful clause states that

"This Council will work with local authorities in Essex and local authorities bordering Essex that oppose the major expansion plans of the BAA in order to help ensure a strong and united position for the protection of our shared environment."

Cllr. James Abbott, Green Party Braintree District Councillor said

"We welcome the almost unanimous decision by Braintree Council to oppose a second runway at Stansted Airport. It would have been simply untenable for the Council to continue to state its environmental credentials whilst sitting on the fence on this threat to Essex."

"It is also very welcome that the council has agreed to our proposal to join forces with the many other local authorities battling the BAA. If the BAA get their way, Stansted would become one of the largest airports in the world, swallowing up many thousands of acres of countryside. Road traffic would increase by millions of vehicle movements per year. Noise from jet aircraft would get much worse, with many more people having their sleep disturbed and not being able to enjoy being outdoors free from jet noise. Carbon dioxide emissions from the airport and flights would rise to such an extent that to mitigate the rise, every household in the East of England (several million) would have to use no heating, electricity and abandon their cars – clearly that's not going to happen, but it illustrates the impact on the environment and climate of a Heathrow sized Stansted Airport."

A NOISE quota system has been rejected in favour of a cap on the number of night flights, to the delight of Stansted campaigners.

Debating the Civil Aviation Bill last week, the House of Lords voted by 167 to 127 to keep a limit on night flights at South East airports instead of introducing a noise quota, favoured by the government.

Stansted already has 8500 flights a year between 11.30pm and 6am, an average of 23 a night, with proposals to increase these by up to 40 per cent.

Stop Stansted Expansion (SSE) campaigners have argued that a movements limit can be easily understood by most people and is far more transparent and open to validation than a noise quota limit.

SSE campaign director Ca