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Air Transport Research SocietySan Francisco
22nd March 2007
MIMENoise Trading
forAircraft Noise Mitigation
Peter HullahEUROCONTROL Experimental Centre
Brétigny sur Orge, France
EUROCONTROL
European Organisation for the Safety of Air NavigationEuropean Air-Traffic Management organisation
Currently 37 Member States
5 objectivesHeighten Safety
Increase Capacity
Reduce Delays
Enhance Cost-Effectiveness
Minimise Environmental Impact
4 activity pillars:Co-operative network design;
Pan-European functions;
Regional ATC services;
Regulatory activities and support to EC regulation.
EUROCONTROL Experimental Centre (EEC) entrusted with executing the Agency’s research, development and validation programmes
SocietySociety EnvironmentEnvironment
EconomyEconomy
SustainableDevelopmentSustainable
Development
Sustainable Air Transport
Noise Management
Noise Reduction at Source
Operating Restrictions
Land-Use Planning and Management
Noise Abatement Operational Procedures
ICAO Balanced Approach
The last option is a last resortIn theory!
It’s generally all that’s available
Current Noise-based Restrictions
128 1244Noise surcharges
15114Noise budget
367183184Engine run-up
1058520APU
52448Stage 3 restrictions
358168190Preferential runways
425228197Noise abatement procedures
483513Noise quotas
936033Noise limits
23015474Curfew
TotalRest of worldUSA
Growth in Airport Noise Restrictions
Internalisation of external effects
Fundamental principle of environmental economics:Any externality should be internalised as close to its source as possible
Three major types of “incentive” for internalisationPricing
PenaltiesFor deviation from standards
RationingBy quantity
Can be mixed
Recent Environmental Markets
Many current examples of use of market forces
CO2 emission reduction2005EUEuropean Union Emission Trading Scheme (EU ETS)
CO2 emission reductionWorldKyoto Protocol Greenhouse-gas emission trading
improve fuel efficiency of new cars by 25% relative to 1995 levels by 2008
EUEuropean car manufacturers (ACEA) voluntary agreement
speed up the introduction of electronic vehicles
ongoingCAZero Emission Vehicle Program
limiting pollution and noise from truck traffic
ongoingAustriaEcopoint Programme
targeted two gases, SO2 and NOX
LARegional Clean Air Incentives Market RECLAIM
N. CO / CATradable Water Abstraction Rights
Water-pollution controlNL & DEWater-pollution control
local air-quality controlUSEmission trading
phasing out lead in gasoline1980sUSLead Trading Program
ObjectDateWhereName
Operation of a Market-based System
Permits issued to meet desired measure of total impact across specified region
Allocated to sources of impact in regionfree or paid for by polluters
Number of permits allocated to a particular companybased on previous impact, declared future impact, or by auction etc.
Reducing impact leaves surplus permitsmay be traded
If impact limited, available permits will be limitedscarcity value associated with each permitencourages trading of permits.
Advantages of Market-based Systems
Departure from standards-based regulation easier than tax-based approach
more cost effective
Can be revenue neutralproducers don’t see them as “just another tax-collection scam”
initial permitscould be freely allocated up to the predefined limitsall financial transactions are between the companies themselves
Excess permits due to reduced pollutionsold to recuperate investment in less polluting equipment
cover pollution from increased production
Taxes, charges and fines restrict growth
Tradable permits encourage it
Noise Trading – An Example
2-hour Leq at a major international airport produced by ENHANCEEuropean Harmonised Aircraft Noise-contour Modelling Environment
Produces noise contours from 3D radar trajectories
Can be used to produce contours on a “per-airline” basis
Noise per Airline
Area of 24-hour 55dB(A) Leq Contour vs Mvts per airline
Major carrier is just less than 50% of all flights!
All other companies in bottom left sector
y = 0.0904x
R2 = 0.9909
0
20
40
60
80
100
120
140
0 200 400 600 800 1000 1200 1400
Number of Operations
LA
eq
-24h
55 d
BA
Co
nto
ur
Are
a (k
m^
2) All flights
Main “Hub” carrier
Noise per Airline
y = 0.0904x
R2 = 0.9909
0
1
2
3
4
5
6
7
0 10 20 30 40 50 60
Number of Operations
LA
eq
-24h
55
dB
A C
on
tou
r A
rea
(km
^2)
“QuietAir.com” 51 mvts with noise of
44 mvts
“Heavy Metal Airlines” 2 mvts with noise of 65 mvts
“Air Rightnoise” 22 mvts with noise of
22 mvts
Noise Trading vs Slot Trading
Recent Slot trading transactions
$110 113 National - 24 LaGuardia
National & LaGuardiaRepublic Holdings2005
$89.90 6 gates + slotsChicago airports - National and LaGuardia
SWA2004
$87.50 14 gates + 8 slots National - 19 slots LaGuardia
National & LaGuardiaAirTran2004
£20 2 pairLHRQantas2004€7.1 M 224 + Gandolf CoCDGAlitalia2004£12 4LHRBA2003£35 loan 8 slotsLHR (Swiss)BA2003£30 7LHRBA2003£3.44LHRBA2002€2.4 M 2GatwickVA2001$500 173TWAAA2001$215 (offer) 119 jet + 103 commuterLHRCO2000£2 per slot7GatwickVA1999£76Cityflyer purchaseGatwickBA1999$16.30 8LHRBA1997$150 40 + 3 gatesORDAA1992£18 per slot ?LHRAA1991$61 6NationalUSAirways1991$61 62 jet - 46 commuterLaGuardiaUSAirways1991$85 64 ÷ (6 A380)LaGuardiaCO1991$54 21 slots - 3 gatesORDUA1991$32.50 18Hatsfiled (Eastern)DL1991$3.50 7LaGuardiaDL1991$5.40 9NationalDL1991$7-14 14LaGuardiaAA1990$19.30 14NationalUA1990Cost (millions unless noted) Number of slotsAirportAirlineDate
Economic value
The UK’s recent £5 additional “environmental surcharge” on (economy!)passenger tickets
Average aircraft with 120 passengers = £300 = €450Imagine this as a noise permit value, instead of a tax
Say “QuietAir.com” has 51 movements per day, 365 days per yearSells 7 permits per day (only needs 44)7 x 365 x €450 = €1,149,750 per annum additional return on investment from this airport alone
Say “HeavyMetal Airlines” has 2 flights (= 4 movements) per weekIf they bought a new aircraft that produced “average” noiseWould free-up 2 x 63 = 126 permits per week126 x 52 x €450 = €2,948,400 per annum – just from this airport!
Permit definition
The previous example was just that – an exampleNeed good, usable, definition acceptable to airlines and residentsNoise contours are not easily addable - non linearDoes not take annoyance into account
More annoyance from many quiet flights than from a few loud onesWhy count noise where there aren’t any people?
What granularity is needed?How will permits be attributed?
Sale, grandfather rights, auction etc.How to combat restrictive practices?How will airports know if noise rading will work for them?What regulation is needed?
MIME will find the answers!Market simulationNoise technology
MIME partners
Industry: Boeing R&TE (Spain)
(Co-ordinator)
R&D: SINTEF (Norway)
QinetiQ (UK)
Universities: U. Leeds (UK)
TU Munchen (Germany)
SMEs: ENVISA (France)
EUROCONTROL Experimental Centre (France)
MIME
Thank you
Peter HullahEUROCONTROL Experimental Centre
Brétigny sur Orge, France