Government responses to the climate threat and the consequences of climate change itself will have implications for every sector of the economy. These challenges will give rise to new infrastructure, technologies, operational practices and business models. Some sectors or individual organisations that cannot adapt will decline or disappear. Aviation is particularly exposed (politically and commercially) because of its reliance upon carbon fuels, the limited potential for technological change and the fact that aircraft emissions will rise at a time when Governments seek a massive reduction in CO2 across the economy. CO2 emissions associated with airport retail represent a small proportion of those from the industry, but this sector is still likely to come under scrutiny. This is important because of the significant value of this source of income both to airport retail partners and also airport operators. The challenge will therefore require that all sectors of the industry (not just airlines) carry out CC risk assessments and develop adaptation strategies.
This study is designed to quantify CO2 emissions associated with airport retail activities and to consider alternative (low carbon) business models that would enable the sector to adapt to CC so as to maintain income, employment and meet customer expectations in an increasingly carbon constrained world. In so doing it would underpin development of climate change policy, strategy and practice within Aldeasa/WDF.
The threat of global warming has prompted urgent action by Governments that have set stringent carbon reduction targets. The UK Climate Change Bill requires an 80% reduction in CO2 emissions over the period 1990-2050 to avoid ‘dangerous climate change’. At the same time, acknowledging that such action may not be successful, Governments are warning all sectors to plan to adapt to a changing climate. In 2010 DEFRA published an order requiring UK and Scottish airports to assess the risk of CC for their statutory responsibilities and bring forward adaptation plans.
Aviation faces a particular challenge because forecasts suggest CO2 emissions from this sector will not decline by 80% but will increase and, by 2050, may simply return to levels found in 2005. This suggests that aviation will remain in the political spotlight for the foreseeable future and against this background, every sector of the industry will have to demonstrate action to minimise CO2 emissions.
At the same time, emissions taxes, airline and airport CO2 limits, and emissions trading schemes will increase operating costs creating financial pressures for carbon reduction.
ACI Europe have recognised the importance of demonstrating that all appropriate action is being taken to reduce CO2 and for this reason have introduced the Airport Carbon Accreditation Scheme. About 95% of aviation CO2 emissions come from aircraft, with the remainder arising from ground transport access and airport terminals activities. Terminal emissions arise mainly from passenger handling and, importantly, from retail and commercial activities.
Significant CO2 reductions from Terminals can be achieved by purchasing renewable energy and developing energy efficient design and operations. However, the carbon reduction challenge for retailers is particularly acute because of high levels of energy required to support product promotion and sales.
Airport retail is particularly popular with the travelling public. Indeed many airports market themselves upon the quality of their shopping experience. Further, this part of the industry can be highly profitable and can generate significant income streams that in many countries are not subject to aeronautical price regulation. As a result there can be a direct conflict between an airports commercial and carbon reduction objectives.
A further consequence arises when products sold in retail outlets are taken onto aircraft, resulting in increased weight, fuel burn and CO2 emissions, the cost implications of which will increase due growing fuel costs, emissions taxes and the entry of airlines into the EU Emissions Trading Scheme. Airline weight reduction efforts are already impacting on passenger baggage allowances and hand baggage restrictions and this, in particular, could have direct consequences for airport retail. Given the size of airport retail sales (c. $30 billion / annum globally), it is likely that the sector is having a measurable impact upon aircraft CO2 emissions and fuel costs but there has been little research in this field.
Increasing scrutiny over aviation and CC will eventually focus on terminal activities and the high profile Duty Free sector. To the uninformed and politically motivated external observer (environmental NGOs), airport retail may be seen as ‘unnecessary and unacceptable’ as it does not directly deliver mobility (all be it that it does fund aviation development). For political reasons, therefore, the sector needs to assess and respond to the carbon consequences of its activities.
Public attitudes to the climate are changing, Governments acknowledge that delivering significant and rapid CO2 emissions reductions across the economy cannot be achieved without the engagement of the public, hence the emergence of ‘public information’ advertisements and websites in some countries. Such action is likely to sensitise the airport retail customer in the longer term and create a new market for ‘low carbon airport shopping’.
All of the above suggests a need to investigate the magnitude of CO2 emissions from airport retail and the development of alternative low carbon business models. It is likely that some changes can be introduced at little cost but that others will take time, either because the market is not ready for such action or because such action will require regulatory change, the redesign of airport terminal and passenger handling facilities, new equipment and handling procedures and even entirely new business models.
It should be noted, however, that there are significant opportunities that arise from the retail carbon challenge and new models for airport shopping that would give rise to greater passenger convenience, a much wider retail offering, improved passenger handling, reduced security and operating costs (especially the transfer of good and waste across the airside / landside border). New markets may even emerge amongst the growing sector of ‘green consumers’.
Clarify the implications of airport retail for climate change (CO2 emissions). Assess the implications of airport retail activities (CO2 emissions arising from airport retail outlets) for airport CO2 reduction aspirations. Assess the fuel, emissions and economic consequences of goods sold in airport retail outlets being taken on board aircraft. Review potential changes in regulation, airport, airline, public and political responses to climate change with implications for airport retail. Review existing retail sector efforts to address the carbon challenge in the high street and at airports outlets. Investigate customer (passenger) awareness, expectations, attitudes and willingness/wish to change retail experience at airports. Identify potential future business models and their implications for airports (e.g. terminal design) and retailers (e.g. home delivery). Identify related issues (e.g. safety/security, transfer of goods across airside / landside boundary) that support more ‘carbon friendly’ operational practices. Assess timescales over which changes are likely to take place.