September 04, 2013
A compromise solution on a global market-based measures (MBM) scheme to tackle aviation emissions appears to be nearing ahead of this month’s International Civil Aviation Organization (ICAO) assembly.
According to several people familiar with the negotiations, a preliminary proposal for such a scheme could be agreed in principle as early as the end of this week.
Whether a global emissions trading system can be brought forward is the most important issue to be dealt with at the upcoming ICAO Assembly, which is being held Sept. 24-Oct. 4. The European Commission has suspended the non EU-part of its own Emissions Trading Scheme (EU ETS) until the assembly, but is threatening to reinstate the condition if negotiations over a global deal fail.
Countries such as China and India, meanwhile, have threatened to enter into a trade war with the EU should the scheme be upheld or resurrected.
As part of the negotiations, the European Commission is understood to have offered a bridge solution, provided that other countries commit to a firm schedule that will lead to a global scheme by 2020. According to the sources, the Commission has proposed to continue EU ETS until 2020, but will only apply it to intra-European flights and the part of flights to and from third countries that occur in European airspace.
That step would take away one of the main issues: China, India and the U.S. have criticized the EU for acting extraterritorially when implementing EU ETS on the part of an international flight that does not occur inside EU airspace.
The European Commission, which will only say it is committed to reaching the best possible outcome for a global deal, appears to be willing to accept the bridge solution only if the ICAO Assembly comes up with a firm commitment. While details of a global solution are not expected to be confirmed this year, the EU apparently is pushing for a schedule that will lead to an agreement on MBMs from 2020 at the next ICAO Assembly in 2016.
This approach is not guaranteed. Inside the EU, critics warn that third countries might still oppose EU ETS after the Commission has agreed to concessions. However, international opposition seems to be easing, with insiders saying that the U.S. and China could be willing to come to a negotiated solution, especially if China is able to name the next ICAO Secretary General succeeding Raymond Benjamin, whose second three-year term ends in 2015.
A major concern is India, which has been reluctant to move any closer to a compromise.