The inclusion of aviation within Europe's emission trading scheme is unlikely to have a material effect on carbon credit prices, according to the International Emissions Trading Association. The IETA, generally supportive of the expansion of the scheme to new sectors, commissioned ICF International to study the impact on European Union allowance prices of aviation's entry in the first Kyoto compliance period, 2008-12.
"Analysis confirms that including aviation will not materially impact the price of allowances between 2008-12, except in a scenario where the carbon market is affected by extremely high gas prices, significant delivery problems associated with carbon credits, and a failure by market participants to anticipate the increased demand for allowances by the aviation sector at the end of the trading period," says ICF's Abyd Kamali.
Source: Flight International