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Comment: Carbon Credit

At IATA's annual general meeting in Kuala Lumpur airline leaders took another big step on the environment by agreeing on capping emissions growth by 2020. Next comes the even tougher task of influencing the global debate on carbon trading

This year's IATA annual general meeting had a green theme. On the one hand there was talk of when the industry is going to see the first green shoots of recovery. The answer is don't be too optimistic. It could be well into 2010 before traffic growth returns and even then it could be a slow upward climb.

The other green theme was, of course, the environment. IATA turned the heat up on green matters in a big way two years ago at its annual meeting in Vancouver. Then it won plaudits for pushing the environment to the top of the industry agenda. The big headline was zero emissions from air transport in 50 years. While this goal appears fanciful today, as it did then, it had the desired effect: the industry began to focus in on its environmental responsibilities and commitment.

IATA and its member airlines have come a long way in just a few years. As British Airways chief executive Willie Walsh commented in Kuala Lumpur; "Even in 2006 the debate in IATA was relatively immature [on the environment]." Not any longer. Following the Vancouver meeting, Airline Business wrote in its leader column that an airline's green manifesto should contain elements like these:

•Take the issue seriously no matter what you think the science is

•Concentrate on your own industry

•Fight the public relations battle on as many fronts as possible

•Don't be afraid of making a point out of self-interest

•Join the green lobby

•Engage with emissions trading.

Most if not all of these elements are now embedded into how airlines do business and how they talk about the world.

In Kuala Lumpur, IATA director general Giovanni Bisignani wanted to push his members further on green issues, even in a recession. His aim was agreement on so-called carbon neutral growth. This means that aviation emissions will cease to grow in absolute terms beyond a certain date, allowing the industry to grow without increasing its carbon footprintor, put another way, without increasing its impact on climate change.

This is hard, but as the tireless Italian observed: "My job is to find consensus." Bisignani's own carbon footprint mushroomed over the past few years as he travelled the globe trying to persuade airline leaders to sign up to a target. In countries like China, India, Africa and the USA the message was not well received. The first two were still in a steep growth phase, perhaps 25 years behind the mature western markets. Why should they be penalised? Africans said that they only represented 2% of world traffic. How relevant was it for them? The USA said itsgovernment had not even signed the United Nation's Kyoto Protocol on climate change, so why should itengage?

In the lead-up to the 2007 Vancouver meeting Bisignani admitted that a consensuswas impossible. So, rather than shrug and withdraw, he took the risk of announcing the vision on zero emissions and working together to become carbon neutral.

The lobbying continued. A target date on carbon neutral growth was proposed for the 2008 meeting in Istanbul, but that was buriedby the fuel crisis. This year the industry did agree on a date: 2020. "To get to a consensus view of carbon neutrality by 2020 is a very big step forward by IATA," says BA's Walsh. Bisignani called it a monumental decision and a bold commitment. Asit is. For instance, getting US carriers to agree to a target is remarkable, and reflects areactionto the change in mood in the Obama administration, rather than a sudden moral U-turn.

In real terms this means that the industry works on improving its efficiency, such as cleaner engines and better air traffic control. Nobody believes these improvements alone will be enough for carbon neutral growth by 2020. So, as IATA chairman and head of Royal Jordanian Samer Majali noted in Kuala Lumpur: "Finally, in the end, if we have not achieved carbon neutral growth we will be buying [carbon] credits."

At December's United Nations Copenhagen Climate Change Conference there is the prospect of aviation emissions being included in the negotiations for the first time. This could see the first steps towards a global emissions trading scheme, which the industry supports and wants.

This is IATA's next battlefield. It has won the internal fight, now the external one begins in earnest. The association and its members know they have to significantly raise their game to push ICAO and engage governments on delivering fair and effective emissions trading schemes. Their influence in these lobbies has been weak so far. That has to change. Another hard ­campaign lies ahead.

Click here to read the Airline Business comment following the Vancouver IATA AGM


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