Lord Adonis on the UK Air Passenger Duty

The uncorrected transcript of the appearance by Lord Adonis. the UK Secretary for State for Transport, before the House of Commons Transport Committee inquiry into the Future of Aviation (see previous post) on 15 July 2009 is now available. The following is what he said on the subject of the UK Air Passenger Duty (see previous post):

"Q577 Chairman: I would like now to go back to aviation. Could you tell us what is the primary purpose of air passenger duty?

Lord Adonis: The primary purpose is to recover the environmental impacts that aviation makes.

Q578 Chairman: Do you think that aviation does pay for its environmental impacts?

Lord Adonis: We think that with air passenger duty as it currently stands it broadly does so, but of course as the shadow price of carbon changes that judgment will change over time.

Q579 Mr Clelland: Does that mean that that levy is going to be ring-fenced to use for reducing carbon in that area?

Lord Adonis: All levies of this kind, of course, go into the general pot so far as the Treasury is concerned.

Q580 Mr Clelland: The objective of the levy is to deal with the impact of air travel on the environment but the actual levy is not going to be necessarily used for that purpose.

Lord Adonis: The Chairman said what is the primary purpose; I said the primary purpose was to meet the environmental impacts of aviation but it is also a contribution to the wider cost of public services and of course the Treasury would not accept a case for ring-fencing it given the wider role.

Q581 Chairman: Would you be concerned if air passenger duty was seen to threaten the viability of some regional airports?

Lord Adonis: We do not believe that it does so.

Q582 Chairman: Has a case ever been put to you that it does and hoe many representations have you made?

Lord Adonis: We think it is appropriate. I will be quite frank, Chairman, I do not think aviation has a credible future unless it is able to make a bigger contribution to meeting its environmental costs and we therefore stand by decisions we have taken in respect of air passenger duty.

Q583 Graham Stringer: Do I understand the primary purpose of air passenger duty as being to pay the environmental cost for aviation, because when Kenneth Clark introduced it, it was to get over the last recession, it was just a tax?

Lord Adonis: I do not have his explanation to hand but I believe when he introduced it his explanation of the purpose was in terms of the environmental benefits that it would bring about, if aviation met a larger share of the cost of the impacts that it creates on society.

Q584 Graham Stringer: I heard him say the opposite but we can check the record.

Lord Adonis: I am happy to produce the words at the time but it is certainly our view that it is important that the taxation ensures that the aviation industry does meet its environmental costs.

Q585 Graham Stringer: The latest increase will take it well past its environmental costs, will it not?

Lord Adonis: That is not our judgment, our judgment is that it about meets its environmental costs.

Q586 Chairman: The aviation industry is extremely worried about air passenger duty.

Lord Adonis: In my experience all industries are always worried about taxes on them, that is just a given I am afraid in any industry. All industries would dearly love taxation to be reduced on them and of course they quite appropriately make representations to ministers to have those taxes reduced.

Q587 Chairman: Do you see the Government having any role in relation to taxation in the current economic climate?

Lord Adonis: It is not the Government's intention to reduce air passenger duty but future taxation policy of course is not for me, it is for the Chancellor.

Q588 Chairman: What would you be recommending the Chancellor does?

Lord Adonis: That is a matter for the Chancellor; I do not think I can comment on decisions he might take.

Q589 Chairman: You must be making some kind of recommendation.

Lord Adonis: I do believe it is right that aviation should meet its full responsibilities in terms of its environmental impacts.

...

Q593 Mr Wilshire: You said you did not think air passenger duty would have any harm and it seemed to cover the costs. Does that mean that you consider our continental competitors, who have either frozen their tax or reduced it or abolished it - do you think they are all wrong and we are right?

Lord Adonis: These are decisions that every government has to make for itself. I certainly would not dream of criticising fellow European governments, they have to take these decisions in respect of their own circumstances.

Q594 Mr Wilshire: But they have done what you consider to be wrong for this country?

Lord Adonis: They do not take decisions in respect of Britain, just as I do not take decisions on their behalf.

Q595 Mr Clelland: Is there not a big problem with this because at the moment air passengers can voluntarily pay a carbon offset when they travel. They pay an additional fee and that money specifically goes to reducing carbon emissions. If we put on a new air passenger duty is that not going to encourage passengers not to pay their carbon offset, yet the air passenger duty is not going to go for the purposes of reducing carbon so we are actually going to lose the benefit for the environment.

Lord Adonis: The funding from air passenger duty like all sources of income to the Treasury goes on all of the purposes of government. One of the principal purposes of government, as we have seen today in Ed Miliband's statement, is carbon reduction. In my Department we very recently announced a £250 million fund to incentivise motorists to buy ultra low carbon or electric vehicles.

Q596 Mr Clelland: But how is it going to help if passengers now say "I am not going to pay the voluntary levy because you have put this additional tax on us"; how is it going to help the environment?

Lord Adonis: There are many different sources of funding for carbon reduction. The Government is responsible for the public funding and that public funding goes into a pot, one of the principal objectives of which is carbon reduction so it is perfectly sensible what we do now. The decisions that individuals make on their account thereafter are a matter for them.

Q597 Chairman: Thank you very much for coming.

Lord Adonis: I would be happy to provide any more information that would be helpful for you."

I note in particular Q578 from the Chairman and Q585 from Graham Stringer, Labour MP for Manchester, Blackley, and the replies from Lord Adonis.

The proposed increases in the air passenger duty are the subject of an e-petition on the Number10.govt.uk web site.

Argentina in air rights dispute with Uruguay

On 23 July 2009 Airline Business reported on an air rights disagreement between Uruguay and Argentina that is seeing the Urguayan carrier, Pluna, switch its attention to Paraguay where it plans to create a mini hub.

Argentina has recently renationalised Aerolineas Argentinas.

Emirates Airline accuses Transport Canada

On 25 July 2009 the Toronto Star carried a report about the views Transport Canada has about Emirates Airline and the Emirates response which states that the department is making "slanderous" allegations. This story is being discussed in an aviation forum on Airliners.net. On 4 June 2009 the Financial Post reported Emirates CEO Tim Clark as saying the the Canadian government's approach was "ludicrous" and "protectionism of the worst kind." The Star carried an earlier report about lobbying by Emirates on 28 February 2009.

My read of the situation is that my Canadian counterparts are grappling with one of the more fundamental aeropolitical dilemmas of the last decade - how should governments (it is governments that exchange the air rights on a reciprocal basis) respond the spectacular rise of airlines from the Gulf region? They are not alone.

The home countries of the Gulf carriers are putting together an impressive number of air services arrangements that the carriers can utilise, taking advantage of their geographic location between Europe, Asia and Africa, to exploit the sixth freedom opportunities that as a consequence become available.

Many of these Gulf carriers seem intent on gaining global market share at the expense of profitability, although financial information is simply not disclosed by airlines such as Qatar Airways and Etihad. Not having to pay tax and enjoying some of the cheapest landing fees in the world at their home airports no doubt helps, as does the fact that reciprocal rights for other airlines to serve the Gulf region are often of limited value.

As a consequence the Gulf carriers and their home airports now play a much larger role in their respective economies than is typically the case of international airlines in other countries.

Emirates currently operates 28 wide-body flights into New Zealand every week (see previous post).

Canada signs "Blue Sky" agreement with New Zealand

On 21 July 2009 at an APEC trade ministers' meeting in Singapore a new "blue sky" air transport agreement was signed by Hon Tim Grosser for New Zealand and Hon Stockwell Day for Canada. Both the Canadian and New Zealand governments have released media statements announcing the signing (see also previous post).

The new treaty removes capacity and capacity restrictions, and opens up fifth freedom opportunities for the airlines of both countries. It also includes an exchange of seventh freedom opportunities for freighter services.

I led the New Zealand delegation at the negotiations.

General aviation in the USA responding to criticism

The Aircraft Owners and Pilots Association (AOPA) in the United States has launched a web site, GA Serves America, to publicise the role of general aviation. Its activities, such as flight training, are vital for the health of the airline industry.

The business aviation sector was hit even harder by the global economic recession than other sectors when US Congressmen and others criticised automobile industry chief executives used their business jets to travel to a hearing in Washington DC about the financial troubles they were facing. The CEOs had appeared at a hearing of the US Senate Banking Committee on 18 November 2008. This was covered in reporting on 19 November 2008 by ABC.

One has to wonder whether the critics even thought of the number of layoffs in the aviation industry that would be caused as a direct consequence of their remarks. One also has to question whether it would be good use of his time for the Ford CEO paid US$28m per year to be standing around in queues for check-in, aviation security and boarding!

Ironically Fox News reported on 18 February 2009 that the US fiscal stimulus package included tax breaks to buy business jets. This is done by allowing accelerated tax depreciation.

There is also a New Zealand AOPA.

Web site on Erebus disaster created by NZALPA

The forthcoming 30th anniversary of the crash of TE901, when an Air New Zealand DC-10 aircraft hit Mount Erebus in Antarctica killing 257 people on 28 November 1989, has been remembered by the New Zealand Air Line Pilots' Association (NZALPA) with the launch of a dedicated web site.

The subsequent investigations (the reports are available on the web site) have been controversial ever since, but have helped lead to a more comprehensive understanding of why aviation disasters occur and what can be done to prevent them.

I still remember the day when we heard the news that the aircraft had gone missing. I was a student attending the University of Otago in Dunedin at the time.

Sudan signs "liberal" air services MoU with the UAE

On 11 June 2009 the Emirates News Agency reported that the United Arab Emirates had signed a "liberal" Memorandum of Understanding on international air services with Sudan.

Estonia negotiates "open sky" air services agreement with the UAE

On 14 July 2009 the Emirates News Agency reported that Estonia had negotiated and initialled an "open sky" air services agreement with the United Arab Emirates.

Recent trends in New Zealand domestic air passenger numbers

Since the economic deregulation of New Zealand's domestic air transport market in the 1980s that, among other things, permitted ninth freedom cabotage, the government has not collected passenger movement statistics directly from the airlines. The three major airport companies, however, have been obliged to publish total domestic passenger numbers and this should give a comprehensive picture of trends. With the exception of an Air New Zealand Hamilton (HLZ) - Palmerston North (PMR) sector, virtually all major domestic airline services in New Zealand originate, terminate or pass through Auckland (AKL), Wellington (WLG) and/or Christchurch UPDATED (CHC) airports.

With a wish to see what impact the 10 June 2009 switch from Qantas to its subsidiary Jetstar will have on the overall New Zealand domestic passenger market, I have completed a couple of graphs through to May 2009 as a benchmark.

Note that Pacific Blue commenced domestic operations on 12 November 2007 (see previous post) which, as the following graph shows, clearly stimulated the market.

The second graph compares the percentage change between the month concerned and the corresponding month for the prior year.

The data sources for these graphs are available here for AKL, here for WLG and here for CHC. Unfortunately AKL and CHC airport companies have not made historic monthly data available on their web sites.

Fuel prices bouncing back up

Around six months ago I posted graphs of the Singapore spot prices converted to New Zealand dollars of aviation jet fuel and residual fuel oil (RFO) used in ships. The updated graphs through to June 2009 that follow illustrate how these spot prices have been rising in recent months.

Again I have used monthly data from the Reserve Bank of New Zealand for the foreign exchange rates and from the US Energy Information Administration for the fuel spot prices.

New Zealand to help Cook Islands underwrite air service to LAX

On 10 July 2009, during a visit to Rarotonga, the New Zealand Prime Minister, John Key, announced that this financial year New Zealand will support the Cook Islands Government’s decision to underwrite any loss on Air New Zealand’s weekly Los Angeles-Rarotonga-Auckland route, with a capped $1 million contribution from the aid programme (see previous post).

Virgin Blue and Delta seeking approvals for joint venture

On 9 July 2009 Virgin Blue Airlines Group and Delta Air Lines announced that they would be seeking regulatory approval for a joint venture between the United States, and Australia and the South Pacific. The airlines are looking to collaborate "... on route and product planning, codesharing on their respective networks and extending frequent flyer program benefits and lounge access to customers of both airlines."

Regulatory filings are being made with the Australian Competition and Consumer Commission (ACCC) and the US Department of Transportation (DoT). It will be possible to follow the ACCC process here NEW on its Authorisations Register and the US DoT process here UPDATED on Regulations.gov UPDATED

As announced on 23 March 2009, Virgin Blue long-haul subsidiary V Australia is already interlining with Delta. V Australia announced on 3 June 2009 that it would also be also be interlining with Virgin America.

V Australia commenced operations from Australia to Los Angeles (LAX) on 27 February 2009, having had its start up delayed by the Boeing strike. Delta commenced operations from LAX to Sydney (SYD) on 1 July 2009.

Given the ACCC's January 2009 rejection of a tie up between Air New Zealand and Air Canada (see previous post) and the US Department of Justice submission on the application of Continental Airlines to join the Star Alliance and cooperate on trans-Atlantic services (see Docket), this new case should be an interesting one to follow. On 10 July 2009 the Sydney Morning Herald carried a story on the prospects.

Singapore, on behalf of Singapore Airlines, has long been seeking fifth freedom rights from Australia to enable it to compete on the Australia-US route. It already has the necessary rights with the US under the MALIAT.

Tourism Australia research on 26 aviation markets

Tourism Australia has published 26 aviation market reports on its web site, including a May 2009 profile for the New Zealand (trans-Tasman) market (see previous post).

Unlike New Zealand, Australian official sources make available comprehensive airline market share and seat capacity data.

Switzerland and Japan increase air services opportunities

Following negotiations held between Switzerland and Japan on 1-2 July 2009, on 3 July 2009 Japan's Ministry of Land, Infrastructure, Transport and Tourism NEW announced (in Japanese) that the routes and capacity for air services by the airlines of the two countries have been expanded (see previous post). Airline Route Updates provided a summary NEW in English.

US GAO reports on Aviation and Climate Change

On 8 June 2009 the United States Government Accountability Office (GAO) published a 95-page report entitled Aviation and Climate Change: Aviation Emissions Expected to Grow but Technological and Operational Improvements and Government Policies Can Help Control Emissions (.pdf)(see previous post).

The Report includes an Appendix 1 on Legal Implication of European Union Emissions Trading Scheme.

Korea and Japan expand air services opportunities

In a 10 June 2009 post the Airline Route Update weblog reports that Japan and Korea have again expanded the opportunities available under their air services arrangements (see previous post).

This would seem to again point to a willingness on the part of Japan to open up Osaka and Nagoya to fifth freedom services by foreign carriers as part of a new policy approach (see previous post).

Thanks to a link from Airline Route Update I have discovered where to find the official press statements NEW from the Japanese aeronautical authorities at the Ministry of Land, Infrastructure, Transport and Tourism NEW on the outcomes of their air services negotiations. Unfortunately they are only available in Japanese but a rough translation NEW is possible using Google Translate NEW. I will endeavour to update my previous posts that used secondary sources.

Five hundred posts on this weblog

This post is the 500th I have made on this weblog since my first post on 26 November 2006.

I deliberately decided at the outset to use my own name rather than a nom de plume. It has meant that I have been somewhat guarded in any comments that I have made, trying to appear to be the neutral public servant that my day job requires.

The weblog has probably been more focussed on subjects related to my work on international air services than I originally intended, but I hope that it has provided a useful set of pointers to sources on the web for aeropolitical matters. It is a fairly arcane subject so I have not been expected a mass readership, but I have been pleasantly surprised by the number of visitors I have had from around the world. Some posts attract much more attention than others, usually not because of what I have to say but the quality of the work of others that I have linked to.

Also, I have not tried to post every day as some of the more dedicated bloggers do, so sometimes it may take a few weeks for "news" to appear on this site, and I make no claims that the coverage is comprehensive. Some of the weblogs listed down the right-hand side of my weblog do a much better job of that than I do and I am a regular reader of many of them.

At the beginning of this month I placed a Flag Counter widget in the right-hand column that will give an further indication of the many countries visitors to this site come from. This is in addition to the Feedjit map and listing.

I have continued to try to keep my home pages up to date with over a thousand web links, many related to my work, and have been trying out Twitter, Facebook and Flickr (click for my material) for more personal material.

Turkey and Japan agree to expand air services opportunities

In a 10 June 2009 post the Airline Route Update weblog reports that Japan and Turkey have expanded the opportunities available under their air services arrangements.

Expanded air services arrangements between Japan and Italy

In a 19 June 2009 post the Airline Route Update weblog from Canada reports that Japan and Italy have expanded the opportunities available under their air services arrangements.

ICAO Group on International Aviation and Climate Change Final Report released

After four meetings held in 2008 and 2009, the 24-page Final Report (.pdf) of the International Civil Aviation Organization's Group on International Aviation and Climate Change (GIACC) dated 1 June 2009 has been released (see previous post).

The GIACC Report sets out a 21-point Programme of Action which was adopted by consensus. The Report, however, makes clear that there were a number of points on which no consensus was reached.

The report will now be considered by an ICAO High-Level Meeting to be held later in 2009.

Report from CANSO highlights air traffic management inefficiencies

The Civil Air Navigation Services Organisation (CANSO) web site, which has be revamped, contains an important new report ATM Global Environment Efficiency Goals for 2050 (.pdf) completed in December 2008.

The report highlights the inefficiency of air traffic management (ATM) in Europe. A key finding is that the European air traffic control system is estimated to be 89-93% efficient compared with the Australian system at 98-99%. Reducing this inefficiency has an important role to play in reducing aircraft emissions.

"Efficiency" of 100% in this context is defined as aircraft being able to take the shortest (great circle) route between A and B at the most appropriate altitude and speed for fuel efficiency, and not be delayed. The report says that safety, weather and noise considerations mean that 100% efficiency is virtually impossible to achieve.

The global ATM efficiency is estimated to be 92-94%. It is good to have some hard facts that show the number used by UK official sources, whilst about correct for flights within Europe, is not appropriate in a global context (see previous post).

The CANSO report also features what is being done to improve ATM performance with SESAR in Europe, NextGen in the United States, and ASPIRE (see previous post) in the Asia-Pacific region.

Air New Zealand and Air Canada concerned about Middle East airlines

On 9 June 2009 the Nation carried a report of an exchange between the Chairman of ACE Aviation Holdings, Robert Milton , the Chief Executive of Air New Zealand, Rob Fyfe, and the Chief Executive of Etihad, John Hogan, at a panel discussion at the IATA 2009 AGM in Kuala Lumpur.

European 2009 election results map

On 8 June 2009 the Guardian published an interactive map of European 2009 election results.

Profiles of New Zealand's international visitor markets released

In June 2009 the New Zealand Ministry of Tourism released 4-page market profiles of nine of New Zealand's key inbound international visitor markets together with an overall profile.

Eight of these key markets provide 77% of New Zealand's visitors, while 69% of all visitors arrive at Auckland International Airport (AKL).

The profiles also highlight the seasonality of the travel patterns and, with the exception of the Australian market, the significance of dual destination travel (visitors stopping in another country enroute to or from New Zealand).

Australia reviewing air carriers' liability regime

As part of the Australian Government's Aviation Green Paper released on 2 December 2008, the Minister for Infrastructure announced a comprehensive review of Australia’s air carriers’ liability and insurance arrangements.

A discussion paper has been released with 30 preliminary findings. The deadline for public submissions is 26 June 2009.

"Towards a Low Carbon Travel & Tourism Sector" from the World Economic Forum

The World Economic Forum with the support of Booz & Company has produced a 36-page report, Towards a Low Carbon Travel & Tourism Sector. The report was released by the UN World Tourism Organization at the beginning of June 2009.

"Aviation: The Real World Wide Web" from Oxford Economics

A June 2009 120-page report from Oxford Economics (the summary includes the contents page of the full report) looks at the social and economic impact of aviation, including on international trade and tourism (HT to Plane Talking). This follows a shorter report on the same subject that Oxford Economics prepared for ATAG and published last year (see previous post).

As well as regional summaries, the full report includes a number of case studies from around the world about the impact of aviation.

The report was funded by Airbus, British Airways and easyJet.

Life-cycle research suggests aviation may cause less environmental impact than rail

Environmental life-cycle research done by Mikhail Chester and Arpad Horvath from the University of California, Berkeley questions the assumptions being made about the climate-change impact of the various passenger transport modes. The research includes the climate change impact of construction of the necessary infrastructure and vehicle manufacture (HTs to SciTechDaily and Transport Gooru).

The researchers have established a web site http://www.sustainable-transportation.com/ NEW that has links to the 8-page results summary of the research published on 8 June 2009 in Environmental Research Letters and some of the media coverage their work has received.

There are parallels in this research to that being done on so-called "food miles" (see previous post).

Will the Bishop of London now change his attitude to rail versus air transport (see previous post)? Perhaps not given that the 9 June 2009 BBC coverage of the research failed to include the conclusions on heavy rail!

Boeing 2009 Current Market Outlook published

Just in time for the Paris Air Show this week, Boeing has published the 2009 edition of its Current Market Outlook. The interactive web-based version gives full details of the aircraft manufacturer's forecasts.

An 11 June 2009 posting on the Boeing weblog Randy's Journal has a short summary.

Aviation Deal Group membership growing

On 5 June 2009 Australian-based Virgin Blue became the latest airline to join the Aviation Global Deal (AGD) Group. The AGD so far includes The Climate Group, BAA and the following other airlines: Air France-KLM, British Airways, Cathay Pacific, Finnair, Qatar Airways and Virgin Atlantic (see previous post).

The AGD has issued a revised 9 June 2009 version of its 17-page proposal directed at ICAO and the UNFCCC on how to address aviation and climate change.

Aviation causing 4.9% of man's climate change impact?

Among the papers presented at ICAO's fourth GIACC meeting held in Montreal on 25-27 May 2009 was one by the International Coalition for Sustainable Aviation (co-ordinated by the European Federation for Transport and Environment). At the back of this information paper is an abstract of a scientific journal article currently in press, Aviation and Global Climate Change in the 21st Century by Lee, Fahey, Forster, Newton, Wit, Lim, Owen and Sausen.

The abstract of the new scientific paper suggests that in 2005 the figure for aviation was around 3.5% of total anthropogenic forcing or, if aviation-induced cirrus cloud formation is taken into account, around 4.9% but there is not a high degree of confidence in the latter number.

The formation of cirrus cloud by aviation activity is more common in parts of the northern hemisphere where the bulk of aviation activity occurs.

Note that the abstract states that in the period 2000-2005 total air traffic increased by 22.5% while total aviation fuel use went up by 8.4%. The total increase in aviation-induced radiative forcing over the same period was estimated to be 14%, excluding the cirrus cloud formation.

To date one of the most widely quoted sources on aviation's impact has been the IPCC's 1999 Report Aviation and the Global Atmosphere.

Positive results from Air New Zealand biofuels test flight

On 28 May 2009 Air New Zealand announced that its experiment with using jatropha-based biofuel in a B747 had been a success with the prospect of significant fuel savings (see previous post).

I was amused to read the 29 May 2009 coverage in the Daily Mail which headlined its report "Flying on fruit juice: Jumbo Jet powered by 'plum' biofuel takes to the skies." As I have previously noted, an alternative name for jatropha is black vomit nut (see previous post)!

Dubai approaches Fiji for air services arrangements

On 27 May 2009 Radio New Zealand International reported that Dubai has approached the Fiji Government with a view to putting in place the necessary arrangements to allow Emirates to serve Fiji. This followed a 25 May 2009 report in the Fiji Times quoting Fiji Director of Civil Aviation, Akuila Waradi, who stated that this would be given priority over air services arrangements negotiations with India, China, Canada, Australia and the United States.

On 28 May 2009 Arabian Business reported the airline as stating that “Emirates continues to be in regular dialogue with various governments. However, at this stage we have no immediate plans to operate to new gateways in the South Pacific.”

I recall being surprised to see how much advertising for Emirates was around Apia, Samoa, when I visited not that long ago.

Macau negotiates with Japan airline access to Tokyo

On 22 May 2009 the Macau Daily Times reported on a new Air Services Agreement and Record of Discussions that will give the airlines of Macau scheduled access to Narita (Tokyo) three times per week from March 2010. A couple of weblogs report (here and here) further details on the new air services arrangements negotiated between Macau and Japan on 18-19 May 2009.

Like Hong Kong, Macau has autonomy from the Chinese mainland with respect to its air rights.

Spain concludes new air services arrangements with the Philippines

On 21 May 2009 the Philippine Daily Inquirer reported the conclusion of a new air services agreement between the Philippines and Spain following negotiations in Madrid.

Canada concludes new air transport agreement with Turkey

On 20 March 2009 the Canadian Minister of Transport, John Baird, announced the conclusion of the first air transport agreement between Canada and Turkey.

Margaret Thatcher - "climate change pioneer"

In a 20 February 2009 weblog posting Richard Willis, a Reading Conservative Councillor, writes about the concerns the former UK Prime Minister, Margaret Thatcher, had voiced in 1988, 1989 and 1990 about global warming. Willis reminds his readers that she is a research chemist by training (HT to Iain Dale's Diary).

Actually we could do with a little global warming here today - as I write this it is hailing again!

The world's most liveable cities

Every year Mercer produces a global ranking of the world's most liveable cities. The Mercer 2009 Quality of Living Survey suggests that I am fortune to live and work in the 12th ranked city in the world. Auckland comes in at 4th equal with Vancouver this year. Vienna, Austria topped this ranking.

Perhaps more interesting from a transport perspective is that Auckland ranks a not so impressive 43rd and Wellington ranks 47th for infrastructure. The top cities on this measure are Singapore and Munich, Germany, and having used their public transport systems I have to agree. A feature of the New Zealand Government's 2009 Budget is a substantial increase in infrastructure spending, including on roading.

The Forbes coverage of this year's results has caused me minor amusement. Choosing one photo for each of the 20 top cities, they somehow managed to feature for Wellington, New Zealand a photograph of Apsley House, the former home of the Duke of Wellington in London, England (ranked 38th for liveability)!

Treat emissions on air routes to developing countries differently?

On 18 May 2009 GreenAir Online carried a very interesting article by Chris Lyle, formerly with ICAO but now Chief Executive of Air Transport Economics and an adviser to the UN World Tourism Organization. He suggests that if the principle of Common But Differentiated Responsibilities (CBDR) is to be applied to international aviation it should be based on air routes rather than the status of an airline's home country.

What Lyle proposes would partially solve the problem that Australasian airlines, such as Qantas and Air New Zealand, would face if emissions from major competing airlines such Emirates, Singapore Airlines and Cathay Pacific were treated differently because they come from "developing" countries.

New Zealand's economic growth held back by distance from major markets

A 2008 Organisation for Economic Co-operation and Development (OECD) working paper, The Contribution of Economic Geography to GDP per Capita by Hervé Boulhol, Alain de Serres and Margit Molnar, includes econometric analysis that suggests New Zealand and Australia's economic (GDP per capita) growth over the five years 2000-2004 was over 10% less than it might otherwise have been relative to the OECD average because of lower access to markets. Belgium and the Netherlands, on the other hand benefited some 6-7% as a consequence of their favourable location.

This analysis has been picked up in the summary of the OECD's 2009 Economic Survey of New Zealand which describes the country as "... a small nation on the world’s periphery ..." and having a "... geographic handicap ..." The Survey summary comments that "The small size and remoteness of the economy diminish its access to world markets, the scale and efficiency of domestic businesses, the level of competition and proximity to the world’s technology frontier."

Even before the sharp rise in oil prices last year and signs of protectionism resurfacing with the global economic recession, distance and remoteness do not seem to have died with globalisation (see previous post).