CASE NUMBER: 344

CASE MNEMONIC: CHUNNEL

CASE NAME: The Eurotunnel, Trade, and Environment

• IDENTIFICATION
• LEGAL CLUSTERS
• GEOGRAPHIC CLUSTERS
• TRADE CLUSTERS
• ENVIRONMENT CLUSTERS
• OTHER FACTORS

I. Identification

1. The Issue

August 1994, the British Isles and continental Europe were linked together for the first time in 8,000 years. The Channel tunnel, or Chunnel as it is better known, is Europe's biggest infrastructure project financed wholly by private capital. Although the project is riddled with financial difficulties brought about by unexpected production costs, it must be considered a success on several levels. Eurotunnel, the company in charge of tunnel operations, has succeeded in connecting England and France, an idea that has been around for centuries. As a result, consumers, the tourism industry, commercial trade and the coastal towns of embarkment all are expected to prosper. Additionally, if projections are correct, the environment will benefit through reduced air pollution. There are still problems to overcome, but the tunnel itself is a monumental feat for Europe. It is a significant step toward European land-use planning and European integration.

2. Description

The desire to link Britain and France dates back more than 200 years. A French farmer named Nicolas Desmaret argued in 1751 in "A Dissertation on the Ancient Link Between England and France" that the two countries should once again be linked, "... either by bridge, tunnel or causeway."(1) Fifty-one years later Napoleon approved a plan drafted by Albert Mathieu, a French mining engineer, for twin tunnels with surface-reaching chimneys for ventilation. However, England and France went to war a year later and the plan died. Similar afflictions tainted the link devised by Thome de Gamond in the 1830s. The first serious construction attempt took place in the early 1880s. Tunneling had actually begun from both the British and the French coasts, but after a mere 2,000 yards the British became uneasy with the potential success of the project and called it off.(2)

Over the next 100 years, studies were taken, proposals were written and various holes were drilled. Harold Wilson's Labor Party government forfeited tunnel construction in 1975, opting to pursue the Anglo-French Concorde project instead. It wasn't until late in 1984 that the British and French governments reached an agreement to build the tunnel. The project became official with the signing of the Paris Agreement on March 14,1986.(3) This triggered the largest binational joint venture ever, as well as unprecedented cooperation between the two nations. As Dr. Brian Mawhinney, secretary of state for transportation, said: the tunnel "... is perhaps the greatest example of international collaboration in transport."(4) His statement was based on the cooperation fostered between British and French companies. Eurotunnel is the British company serving as the operators, and its partner is Trans-Manche Link, a French construction company. Cooperation also has been extraordinary between European Passenger Services and the French and Belgian rail companies, SNCF and SNCB, which run the Eurostar services among London, Paris and Brussels.

The architechtural result is a 50-kilometer (31-mile) tunnel connecting Folkestone, England and Calais, France. It consists of two parallel tunnels, allowing for traffic in both directions, and is linked by a third which provides air conditioning and technical services. Passengers are able to exit the highway on either side of the Channel, pick up a ticket at a tollbooth (no reservations required), and drive onto Le Shuttle which will deliver them on the other side. Crossing the Channel via the tunnel takes a mere 35 minutes compared with 75 minutes by ferry.

There also are through trains carrying passenger and freight services. These include an hourly service between London and Paris, taking three hours, and between London and Brussels, taking 2 hours, 45 minutes. Sleeper services are available from London to cities in Germany, Switzerland and other connections, between Scotland, Wales and cities throughout Europe.(5)

The tunnel is a small, yet expensive, piece of a much larger puzzle. It is the missing link in a plan which includes building a high-speed rail system across England and expanding France's Train de Grande Vitesse (TGV) system. The tunnel which is the vital component of future endeavors.

When Eurotunnel officials asked the European Commission for an opinion about the effect of the EU treaty s Article 85 (which covers anti-competitive agreements) the Commission decided not to object in the tunnel case. Its members stated the pact would contribute "to an improvement in the quality of transport services and greater productivity for the companies in creating new development possibilities for the railway industries; it will also help to promote technical or economic progress which will facilitate business links among all Community partners."(6) Karel Van Miert, then european commissioner for transport, added that the project was not merely of concern to the regions in the immediate vicinity of the tunnel, but for the whole of the single market.(7)

The Economic and Social Committee released a similar opinion in its "Own-initiative Opinion on the Channel Tunnel and its transport policy implications." It concluded that the Channel tunnel project is "of undoubted Community interest ... the tunnel is a good thing for Europe."(8)

The European Parliament expressed support for the project as well, stating that "a fixed link across the English Channel will stimulate and facilitate passenger and goods traffic -- generating positive direct and indirect effects -- not only between the United Kingdom and France but also with other Member States of the Community."(9)

While all these statements reflect a positive attitude toward tunnel construction, it cannot be said that the road to its completion was smooth; rather it was littered with safety and environmental concerns, harmonization regulations and cultural tensions. An intergovernmental commission was established under the terms of the channel treaty to supervise all matters concerning the construction and operation of the fixed link. It was this commission that dealt with matters of safety, security, defense and the environment. The environmental aspects of the project will be the focus of attention here.

Environmental concerns ranged from the effects of actual tunnel construction on the environment to the traffic build-up that was projected in the English countryside of Kent. Not much has been published regarding "green" opposition during the tunneling, but obvious arguments point to disturbing the sea floor and endangering sea life, as well as the problem of depositing the plowed-through chalk. The transport committee, acting under authority granted by the European Parliament, recommended "optimal preservation of the natural environment, eliminating ecological effects both in France and the United Kingdom produced by the large quantity of soil and rock from excavation work ..." It went on to add that work on the tunnel should be guided by the ecological objective of "the conservation of nature and preservation of the environment." However, the recommendation proved weak, as the committee ambiguously suggested that the thousands of tons of waste from the tunnel should be deposited in areas where the risk of harmful ecological consequences or degradation of the landscape does not arise."(10) Exactly where that would be is not indicated, although Eurotunnel intended to use some of the tons of chalk chippings to level the construction sites and devote the rest to land reclamation and landscaping.(11) The parliament also asked several other committees for their opinions, including the Committee on the Environment, Public Health and Consumer Protection, but only the transport committee opinion is included in the session documents. The environmental committee did not deliver one on this issue. At the end of that particular document, Parliament did voice a concern over the lack of any detailed environmental impact assessment of the project and called on the "committee responsible" to prepare such an assessment.(12) That was sought in 1988; to date, nothing meeting that description appears to be on record.

Environmentally, the tunnel is not one unrelieved negative note. There are positive consequences as well, though much of the information is from a speculative, pre-completion point-of- view. Britain has extremely high levels of air pollution, often exceeding international standards. Overcrowded roads contribute to it; traffic is the major source of air pollution in cities and towns.(13) It is hoped that the tunnel will help alleviate this problem. There is a fear among opponents in the Folkestone area that traffic bottlenecks will occur there; they point to a growth of traffic in Kent County by 66 percent during the 1980s, compared with growth averaging 49 percent elsewhere in the nation.(14) However the tunnel is in part aimed at boosting combined road/rail transport, or "piggy-backing," which could help curb traffic congestion. The commission pointed out the environmental benefits to be gained by such efforts, noting that some heavy truck traffic would be switched from the trunk and motorway roads to the railways.(15) (Specific data projections are supplied in the "Economic Data" section below).

Speaking at the annual conference of the Freight Transport Association (FTA) in February 1996, British Environmental Secretary John Gummer stated that the focus of the government needed to make more efficient use of the rail network. The theme of his speech concentrated on the relationship between transport development and sustainability, saying the two must go "hand in hand if we are to achieve the best results for the environment ... Our fundamental aim must be to break the link between economic growth ... and traffic growth."(16) In other words, the environment should not bear the brunt of development. This is the argument given to developing nations over the past several decades (see CHILEAIR case). Gummer proposed using the network (which includes the tunnel) to reverse the long-standing decline in rail freight. He wants freight prices to reflect externalities as well as real costs and commended the Sustainable Development Round Table, a joint project between the Department of the Environment and the FTA, for their success in achieving fuel savings of up to 20 percent among the best freight fleets. So while it appears that the environment is a part of the British government's transport policy, it is not possible to conclude at this time whether or not the tunnel has been successful in reducing road traffic.

An ill-fated solution to the overcrowding problem was proposed several years ago by Sir Alastair Morton, Eurotunnel chief executive. In 1991 he suggested introducing a pollution tax on existing projects to build up a $25 billion infrastructure fund. Led by the private sector and based on the polluter-pays principle, his scheme would have required projects to pay a sliding tax depending on the perceived environmental cost of its operation. The tax would be weighted based on the noxious emission involved, levels of noise, human casualties and the use of land [see ECCAR case for measures being taken within the EC to reduce emissions]. However, in a land where the treasury keeps a tight hold on the public purse strings (take, for example, the original National Oil Account, privately founded in 1976 and "retrieved" by the government five years later), the proposal never came to fruition.(17)

3. Related Cases

Air Pollution Specific

ECCAR case

USCARTAX case

SULFUR case

CHILEAIR case

CLEAN case

GERMANAUTO case

ECCARBON case

Air Pollution General

Air Pollution cases, especially in Europe

Keyword Clusters

(1): Trade Products = Transport

(2): Bio-geography = OCEAN

(3): Environmental Problem = Air Pollution [POLA]

4. Draft Author:

II. Legal Clusters

5. Discourse and Status:

The Channel Tunnel project was agreed upon in 1987 and opened for service in August of 1994.

6. Forum and Scope:

7. Decision Breadth:

The actual construction project was coordinated between Britain and France, but the potential and real benefits of the tunnel can be experienced by all using the service. The elimination of barriers between members of the European Union already has been beneficial for intra-EC trade, and the tunnel provides another means of efficiency for such activities.

8. Legal Standing:

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: EUROPE

b. Geographic Site: WESTERN EUROPE (WEUR)

c. Geographic Impact: FRANCE AND UNITED KINGDOM

10. Sub-National Factors:

11. Type of Habitat:

IV. Trade Clusters

12. Type of Measure:

13. Direct v. Indirect Impacts:

The impacts of the tunnel on air pollution cannot be said to be direct, although it is hypothesized that benefits to the air will occur. Any reduction in air pollution that might take place will more than likely be the result of other measures, such as those regarding emissions (see ECCAR case).

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: NO

b. Indirectly Related to Product: YES, TRANSport

c. Not Related to Product: NO

d. Related to Process: YES, Air Pollution [POLA]

15. Trade Product Identification:

16. Economic Data

The tunnel is expected to handle an ever-increasing amount of cross-Channel traffic. The traffic consultants hired by Eurotunnel correlate a yearly rise in British GDP, assumed to be 2.15 percent a year until the end of the century, with increased trips to the continent, both for business and for pleasure.(18) Based on such a rise, they predict that by 2003 the market should expand to 120 million journeys and 140 million tons of freight, up from an expected 80 million journeys and 90 million tons of freight in 1993. Eurotunnel is expected to account for one-third of this market. Additionally, additional use is expected as the convenience of the tunnel becomes understood. This is expected to be worth an extra 5.5 million trips and 0.5 million tons of freight a year soon after the turn of the century. Eurotunnel is expected to capture 18 percent of this cross-channel freight traffic, 55 percent of which will be carried by shuttle trains and 45 percent by the rail networks.

This shift in modes of transportation will obviously affect the traditional methods of transport supplied by the ferries and air. Writing in 1990, Eurotunnel concluded that the Chunnel "will give a new dimension to road and rail traffic (both passenger and freight), will not significantly affect air transport [a 10 percent switch from air initially predicted], but will significantly diminish the activities of ports and ferries on the Straits of Dover-Pas-de-Calais crossings, especially in respect to passenger traffic [the tunnel could take two-thirds of car and coach passenger traffic and 90 percent of passengers traveling without cars]."(19)

This could spur unemployment. The channel ports fear the loss of over 6,000 jobs over the next several years. However, the European Parliament's analysis predicted that such loses will be offset by the thousands of news jobs generated by construction, maintenance and operating the tunnel and infrastructure projects, not to mention the new businesses expected to spring up as a result of the link.(20) With an anticipated rise of just under 40 percent in goods traded within the Community by the year 2000, the tunnel represents a window of opportunity.

17. Impact of Trade Restriction:

18. Industry Sector:

19. Exporters and Importers:

Trade between the UK and continental Europe, as previously stated, is expected to increase significantly over the next decade. The tunnel will obviously play a role in transporting both goods and people between them.

V. Environment Clusters

20. Environmental Problem Type:

21. Name, Type, and Diversity of Species

Name: NA

Type: NA

Diversity: NA

22. Resource Impact and Effect:

23. Urgency of Problem:

24. Substitutes:

VI. Other Factors