Critics Accuse Brown Govt. Of "Fantasy Economics" On Heathrow 3rd Runway Plan

[hatrack]

The government was accused of using "fantasy economics" to justify the expansion of Heathrow airport this morning, as a row erupted over the true financial benefits of a third runway.

Critics argued that the economic case for expanding Britain's largest airport underestimates the environmental cost of adding a maximum of 220,000 flights a year at the west London site. The government's economic argument for expansion centres on a total net financial benefit of £5.5bn to the UK economy. But an economic thinktank slammed the alleged financial windfall, saying it used an excessively low estimate for the cost of the carbon dioxide emitted by the enlarged airport.

The Department for Transport (DfT) said that construction of a third runway would generate an additional 210m tonnes of carbon dioxide over the 70 years to 2080, which it priced at £2.8bn – the equivalent of £13.33 a tonne. A further cost of £2.5bn would be generated by non-C02 emissions, the DfT said today. Despite these costs, it said the net economic benefit over 70 years would be £5.5bn.

However, the New Economics Foundation said that this estimate did not reflect the fact that aviation emissions can be up to five times more damaging than CO2 emitted at ground level. The thinktank put the carbon cost, conservatively, at £70 a tonne - a level which is at the mid-range of government estimates on the social cost of carbon emissions on any development. On an NEF calculation of £70 a tonne, the total emissions cost of climate impacts would rise to between £8bn and £20bn, over 70 years, and wipe out any economic benefits.

EDIT

http://www.guardian.co.uk/environment/2009/jan/16/heathrow-third-runway