Emissions Trading Will Dominate ICAO Assembly

By Jens Flottau, Cathy Buyck
Source: Aviation Week & Space Technology
September 23, 2013

No issue in aeropolitics is as contentious as the introduction of charges for carbon emissions. The European Union almost caused a trade war over its Emissions Trading System (EU ETS), but it seems a global deal is in sight.

Agreeing on the basics and a schedule for the introduction of a global structure of market-based measures (MBM) to limit aviation's greenhouse gas emissions will be the most important topic at the International Civil Aviation Organization's (ICAO) 38th General Assembly, which begins Sept. 24 in Montreal.

While it is clear no agreement on the details of a concrete global system will be sealed, progress has been made on a compromise solution that would commit ICAO to develop a method for tackling aviation's carbon emissions and decide its details by 2016. The global MBMs would be fully implemented from 2020 as part of a basket of measures involving technology and operational improvements (including adopting a global CO2 standard for aircraft by 2016) and sustainable alternative fuels. They are intended to achieve carbon-neutral growth beginning in 2020.

The proposal, endorsed by ICAO's governing council on Sept. 4, accepts the principle of regional or national MBMs, such as the EU ETS, until the global system is in place. At the request of the EU, which is not a member of ICAO, the council's draft resolution recognizes that states (or groups of states) may choose, before the full implementation of a global MBM, to implement systems that apply to flights to/from third countries, which depart or arrive at airports in that state, for the portion of those flights within the airspace of that state, and which would fully cover all emissions from flights that both depart from and arrive in that state.

Negotiations on the compromise accord were difficult. Several states on the 36-member council, including Argentina, Brazil, Cuba, India, Saudi Arabia and the U.S., had strong reservations, yet they did not raise formal objections. Whether ICAO's 191 contracting states will support the deal at the pending Assembly is unknown, but “it seems unlikely that delegates will wish to reopen substantive debate on such a hard-won consensus text,” says Chris Lyle, chief executive of Canada-based Air Transport Economics. “The question is how meaningful and committing the resulting, formally adopted Assembly resolution will be,” he adds.

This will be key for the EU, which has demanded that the Assembly agree “meaningful” international action on a global MBM. Last November, the European Commission (EC) agreed to “stop the clock” on the application of the ETS to routes beyond Europe for a year to give ICAO time to devise a global solution. Until the end of this year, operators (regardless of their nationality) must surrender emissions allowances only for air traffic between European airports.

As part of the compromise, and only in return for a global deal, the EC has pledged to extend the moratorium to 2020, although the scope will be slightly amended to include emissions from all arriving or departing flights (also to third countries) using European airspace. Overflights will not be included. For example, a London-New York flight will be included in the plan for the segment using European airspace, comprising EU-member states plus Iceland, Liechtenstein and Norway.

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