Evaluating the case for expansion of Bristol Airport
The Campaign to Protect Rural England (CPRE) asked NEF Consulting, as part of the New Economics Foundation, to review the socio-economic case for the proposed expansion of passenger capacity at Bristol airport.
NEF Consulting focused on the Economic Impact Assessment, the Independent Review of that Assessment, and the Response from Bristol Airport to Comments Received. We also referred to the Environmental Impact Assessment.
The review raised key questions for policymakers and those seeking to assess the viability of expanding Bristol Airport. In particular these address the modelling results in the Assessment and the Review on the wider economic impacts, with concerns in the areas of productivity and tourism impacts.
We also assessed the proposals in the light of the recent commitment by the UK Government to accept a recommendation made by the Committee on Climate Change (CCC) that the UK Government adopt a target of net-zero greenhouse gas emissions by 2050.
Bristol Airport expansion is ‘out of sync’ with national demand forecasts
The Department for Transport’s (DfT) aviation sector model forecasts the future of UK aviation in relation to passenger demand, flights and carbon emissions. The model does not currently factor in expansion of Bristol Airport, so as a minimum, the proposed expansion should be reviewed by central government.
The economic modelling in the Assessment is based on anticipated passenger demand of 12 million by 2026, whereas the DfT model estimates that there will be demand from only 8.5 million passengers in 2030.
Compatibility of the proposed expansion with a net-zero commitment
Following the Government’s net-zero announcement it is almost certain that the UK Government will take steps to reduce growth in passenger demand. The DfT aviation sector model projects national growth in passenger demand of around 90% between 2005 and 2050. On this basis, DfT estimates passenger demand at Bristol Airport at 8.5 million by 2030.
In their ‘Net Zero’ report, the CCC estimates that demand should grow by no more than 60% between 2005 and 2050. This 30% discrepancy in passenger growth between DfT projections and the CCC modelling for net zero will almost certainly require some form of carbon tax, or other regulatory mechanism, to curtail demand with a likely fall in growth. Any such reduction is not factored into the 8.5 million passenger projection from the DfT.
Regional economic benefits of the proposed expansion
If demand growth does not exceed the current capacity of 10 million passengers or the DfT projection of 8.5 million passengers over the long-term, there is likely to be no economic benefit in the proposed expansion.
The primary area of concern relates to the issue of ‘displacement’- whether the proposal creates entirely new value, or simply moves value from one place to another. The Assessment estimates that by the year 2026 the expansion of Bristol Airport will be producing £190 million per year of newly created productivity to businesses in the South West and South Wales region. An assumption of zero displacement was applied to this value in the original Assessment. This assumption boosted the figures presented in the Assessment in favour of expansion.
Claiming zero displacement is extremely ambitious in a context where all other airports in the South West and South Wales region have significant spare capacity.
The Assessment assumes total displacement of carbon costs, claiming that all new flights at Bristol Airport would otherwise have left from another airport. This meant that the Assessment did not have to include the social costs of carbon in its cost-benefit ratio. It is our view that this undermines the credibility of the Assessment.
We identified further issues with the regional economic benefits claimed by the Assessment in regard to tourism impacts.
NEF Consulting estimates that a number of significant reductions should be made to the proposed 2026 values when considering the wider economic impact assessment.