Aviation emissions – can the world agree?

A year or so ago I wrote about a scheme that the European Union was planning to introduce that would levy a form of environmental tax on aviation.

This controversial scheme, which involved the inclusion of aviation into the EU’s wider emissions trading scheme as of 1 January 2013, has so far, however, proved to have no effect on travellers or governments. This is because the carbon credit based licensing scheme, under which all airlines entering EU airspace would have had to purchase or trade licences to emit above an agreed amount of carbon dioxide, is currently suspended for a year, awaiting the outcome of global discussions on limiting aviation emissions, when the 191 member UN specialist agency, the International Civil Aviation Authority (ICAO,) next meets.

What this means is that in September, when the tri-annual ICAO Assembly gathers in Montreal, governments attending are expected to consider whether some form of market-based measure can be applied globally to aviation.

If no decision is taken at that time and the matter is as a consequence delayed until the next ICAO assembly in 2016, then an international confrontation is expected over how best to address aviation emissions. This is because the EU has made clear that failure by ICAO to introduce a global scheme will cause it to reintroduce aviation into its emissions trading scheme, which in turn will result in a number of nations including China, the US, Russia, India, Japan and others who oppose the European and other unilateral schemes, refusing to comply and possibly going as far as taking an action at the World Trade Organisation against the EU.

That said, however, there are some recent developments that may offer a way out of the potential for gridlock at the ICAO meeting.

In June, airline members of the International Air Transport Association (IATA) meeting in Cape Town adopted a resolution at their annual general meeting on what they describe as an Aviation Carbon-Neutral Growth Strategy.

The resolution provides a set of principles that IATA hopes governments meeting at ICAO will adopt. These include recommendations on a single market-based mechanism for carbon emissions for aviation, and clear, if complex, suggestions as to how this might be applied to individual carriers.

In outline, IATA members are proposing a scheme that will fill the gap until new technology in the form of sustainable low-carbon alternative fuels or changes in operations and aviation infrastructure come to pass. Instead of developing a global scheme like the EU-ETS that generates revenue for governments, airlines are suggesting a system that would deliver real emissions reductions post 2020, the date by which aviation globally is required to cut emissions.

In outline IATA’s proposal involves: setting individual carrier baselines that will establish average annual total allowable emissions over the period 2018-2020; allowing for adjustments for airlines that have been ‘early movers’ on reducing emissions by using a 2005-2020 benchmark; and special provisions for new market entrants in their initial years of operation as well as for fast growing carriers. In order to prepare for this IATA suggests it will be necessary to have as of now an accurate emissions reporting and verification system.

All of this is breaking new ground, as aviation is, it seems, the first industry to propose a global cap on its carbon emissions. Irrespective, the idea may prove controversial with those governments who see environmental taxation as a revenue raising measure.

As for the Caribbean, all of its aviation ministers need to attend the ICAO meeting to ensure that nothing is done that might add more to the already high cost of travel to a region that remains the most tourism dependent in the world.