ICAO's pressure to deliver a global emissions scheme

Washington DC
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Pressure continues on the International Civil Aviation Organisation to create an architecture for global emissions trading to introduce at its 37th assembly in September. But sceptics doubting ICAO's ability to deliver a united framework by that deadline abound as various regions press on with plans to create and enforce their own schemes.

Complexities of folding in greenhouse gas emissions from international aviation and shipping that emerged when the Kyoto Protocol was created were largely ignored at the highly anticipated meeting in December of the United Nations Framework Convention on Climate Change (UNFCCC), giving ICAO some breathing room to deliver its comprehensive draft resolution for managing climate change in the aviation sector.

Some could argue ICAO is late in forging global guidelines. During a February 2009 meeting of ICAO's designate Group on International Aviation and Climate Change (GIACC), the International Coalition for Sustainable Aviation gave ICAO this reprimand: "Despite calls for a global ETS, ICAO rejected an opportunity to work on such a scheme in 2004."

Can ICAO deliver as it seeks to manage climate change in the aviation sector? Picture: John Hartman/Rex Features
ICAO does have the unenviable task of forging consensus among its broad span of 190 member states to not only forge a global framework for emissions trading, but to finalise its overall climate change plan for aviation. One of ICAO's priorities, and one item it denotes specifically as a "political challenge", is developing a framework for market-based measures to manage emissions.

ICAO's ability to get consensus on a unified framework in September is both ambitious and seemingly improbable.

"Emissions trading remains a key weapon in the policy mix to achieve emissions reduction, but a uniform global scheme is a long way off," said Canadian director of the International Emissions Trading Association, Katie Sullivan, during the recent ICAO environmental colloquium in Montreal.

Of course, airlines prefer to allow existing and emerging technologies to support the bulk of their emissions reductions, and are sounding alarms that a patchwork of overlapping and conflicting regulations is an international airline's worst nightmare, according to Andy Kershaw of British Airways and Mark Watson of Cathay Pacific, who each manage environmental policies for their respective carriers.

But one philosophy introduced at the colloquium trumpets the development of regional schemes to ensure there is no net increase in aviation emissions while the organisation hashes out the elements of a global emissions trading network.

"While we put the necessary architecture of a global scheme in place - including its administration - we should also encourage what is happening at a regional level," says Tim Johnson of the International Coalition for Sustainable Aviation and a rapporteur of the ICAO Aviation Carbon Calculator Support Group.

Johnson believes emerging regional schemes could supply a knowledge base as ICAO undertakes the task of creating guidelines for a global framework. Nevertheless, he says, "identifying the key elements of a global scheme should be a high priority for ICAO in order that any regional schemes can, as far as possible, be complementary".

The European Union says that once aviation is folded into its emissions trading scheme from 2012, flights from third countries will only be covered in the absence of equivalent measures by other states. But Nancy Young, vice-president of environmental affairs at the Air Transport Association of America, says the EU legislation is structured to allow the EU to make the final determination of compatibility and eligibility for exemption.

Australia has expressed strong concerns about the EU's emissions trading programme for aviation, says head of the consultancy Air Transport Economics Chris Lyle. Being charged from the last airport of departure in Australia's view "is ultimately discriminatory", he says. Other major concerns for airlines as these regional schemes emerge are being charged multiple times for the same sector, competitive distortion triggered by the schemes and how the revenue collected from auctioning of alliances is allocated.

Research by the EU presented at the colloquium by Philip Good - who is responsible for managing the implementation of legislation to include aviation in the EU ETS - on the economic effects of including aviation into its ETS shows a small increase in the price of fares, estimated at €4-40 ($5-50) in 2020 depending on journey length and carbon price.

Aviation's inclusion in the EU ETS scheme will "have limited impact on demand growth", says Good. The EU forecasts that traffic growth might fall from what it identifies as "business as usual" levels of 142% to 135%.

The EU also stresses that exemptions from its aviation emissions trading scheme include many operators from the least developed countries. But one of ICAO's most complicated and long-standing challenges in both developing global emissions trading guidelines and its overall climate change policy is resolving its own non-discriminatory principle with the UNFCC's common but differentiated responsibility.

Common but differentiated responsibility recognises that developed and developing countries have differing economic and technical capacities to address aviation emissions, but that is counter to the cornerstone of equal and fair opportunities of ICAO's mandate.

The problem in resolving those divergent issues is that existing powerhouses Brazil, China and India are considered developing countries. As developed countries settle into more mature growth, those regions will see their air traffic explode during the next 20 years. China alone will account for 33% of global revenue passenger kilometres by 2013, says the United Arab Emirates's permanent representative to the ICAO Council, Capt Aysha Al Hamili.

As those developing countries continue to build their stature on the global stage, they are also starting to flex their muscles in ICAO, says Lyle of Air Transport Economics.

"Developed countries should take up their responsibility and take the lead to reduce emissions due to their historic emissions," says Ma Xiangshan of China's Civil Aviation Administration. "Full consideration should be given to the fact that developing countries are in their development stage and are facing a great shortage in terms of finance, technology and capability."

Ma also cautions that "careful pre-studies" for market based measures are necessary to gauge effects of the evolution of international civil aviation in developing countries.

He stresses that in light of developing countries requiring financial and technological support, "the fuel efficiency goal [ICAO's annual 2% fuel efficiency goal to 2020] will be the most appropriate since it focuses on both development and emissions control. And some other goals are in fact neither practical nor reasonable if they pose hindrance to the development in a one-sided pursuit of emissions reductions".

One of the objectives to which Ma could be referring is ICAO's declaration of possibly pursuing carbon neutral growth for the aviation sector.

During ICAO's high-level meeting on international aviation and climate change in October 2009, it was highlighted that "while there was no consensus, some GIACC members were of the view that it would be necessary and feasible to achieve carbon neutral growth in the medium term, relative to a baseline 2005, and to achieve substantial carbon dioxide emissions reduction for the long term for global international aviation".

The lack of consensus among the 15 members of ICAO's highly regarded GIACC body could be a telling sign for the challenges the organisation faces in September.

At the close of the symposium, ICAO president of the council Robert Koeh Gonzalez said: "We have the willingness of our 190 states and the industry to achieve the sustainability of aviation.

"ICAO's challenge remains how far and how fast we can go while tackling one of the greatest and most pressing challenges ever to face our global society."

European Union Emissions Trading Scheme - mandatory cap and trade (three phases)

  • 12,000 industrial installations in 27 member states
  • Covers roughly half of EU emissions
  • International aviation to be included in 2012.

New Zealand - staged implementation of an ETS (2010-15)

  • Linking to other countries' systems expected
  • On 1 July 2010, entities that import fuel or remove fuel from a refinery greater than 50,000 litres (13,190USgal) a year will be included.
  • Purchasers of more than 10 million litres of aviation jet fuel can opt into the scheme. So far, Air New Zealand is the only carrier to opt in. New Zealand authorities say the price of emission units is likely to be passed on to operators and consumers through higher fuel prices.

Switzerland - voluntary cap and trade as an alternative to a CO2 tax.

Japan - voluntary cap and trade, to gather experience. Proposals are in the country's parliament for mandatory ETS.

USA - federal cap-and-trade proposals are facing difficulties. The Regional Greenhouse Gas Initiative (RGGI), a grouping of 10 Northeast and Midatlantic states in the USA, became functional in January 2009. RGGI was preceded by the Western Climate Initiative (WCI) in 2007. The WCI is a partnership between seven US states and four Canadian provinces. Aviation is not covered in the RGGI. Residential, commercial and fuel combustion and transport fuel combustions from gasoline and diesel are included in the WCI scheme from 2015, says the World Resources Institute. Carbon neutral biomass and biofuels are not covered.

Canada - Canadian director of the International Emissions Trading Association, Katie Sullivan, says Canada is likely to "jump in whatever Washington DC does". Provinces participating in the WCI are British Columbia, Manitoba, Ontario and Quebec.

Australia - cap and trade bill consideration postponed.