Hopes are being pinned on ICAO's assembly in September resolving differences of opinion on aviation emissions and producing a road map for a global solution
Pressure is mounting on UN specialised agency ICAO to achieve global consensus on a single market-based measure (MBM) to address airline industry emissions at its triennial assembly in September.
Although it appears unlikely that a global agreement will be signed and sealed this year, hopes are pinned on the next best outcome from Montreal this autumn: a fully developed proposal which can be presented and ratified at the next assembly in 2016 and would take effect from 2020.
For the last 18 months, a group of experts at ICAO have been looking at two different approaches to tackling global aviation emissions: a framework approach, which would essentially involve a rulebook for individual countries to follow as they establish their own individual MBMs; and a global approach.
Given the international outcry that ensued when the EU attempted to impose its own emissions trading system (ETS) on the rest of the world, it is generally agreed that a global solution is preferable.
There are three options on the table to use as the basis for a global MBM to regulate aviation emissions. The first, which is favoured by IATA, is a simple carbon-offsetting scheme, whereby airlines would have to buy credits on the open market to compensate for growth in their emissions.
The second is a revenue-generating carbon-offsetting scheme, which would see a mark-up on credits to enable additional capital to be ploughed into funds to help developing countries tackle climate change-related issues.
The third option is an emissions trading system along the lines of the controversial EU ETS, which has been put on hold in the hope that a global agreement can be reached.
At its annual general meeting in Cape Town earlier this year, IATA put forward its own resolution, which will be presented for consideration at ICAO.
The resolution calls for a mandatory carbon-offsetting scheme to be applied to emissions growth post-2020.
IATA wants to use as the baseline for its scheme the industry's average annual emissions between 2018 and 2020. Its resolution includes provisions to recognise early movers, accommodate new market entrants while they get their operations off the ground, and take account of fast-growing carriers.
TOO LITTLE TOO LATE
However the fact that IATA is backing the simplest of the three options with an implementation date seven years into the future has drawn criticism from some quarters.
Jean Leston, transport policy manager at the World Wide Fund for Nature's UK branch, describes the IATA resolution as "a huge step forward that will create momentum for progress", but expresses disappointment that the industry body has opted for a non-revenue-generating offset scheme over a cap and trade-style system.
"It's a shame the aviation industry is taking the approach that mitigation has got to happen somewhere else," says Leston, adding that an emissions trading system "would have been preferable to offsetting". Leston also takes issue with the proposed 2020 start date. "I don't want to see seven years of inactivity," he says.
"Offsetting is a simpler solution without the governance issues surrounding cap and trade, but it can very easily lack environmental integrity. It depends on the kind of offsets purchased, and there are lots of bad ones," says Leston.
"I'm also disappointed that IATA is not thinking of any revenue generation, even though this has been recommended by a UN high-level advisory group. This is a missed opportunity not only to show climate leadership, by helping developing countries address climate change, but it could also have been used to fund biofuels."
However, IATA senior vice-president member and external relations Paul Steele counters that the simplicity of a straight carbon offsetting system means it is more likely to be approved and much quicker to implement.
"You don't need to create allowances or auctions like you would for an ETS so it's much simpler for states to implement in the short term. But that's not to say in the longer term we couldn't introduce ETS," he says.
On the lack of revenue generation in IATA's proposal, Steele says: "It would make it more difficult to agree if monies were involved." Questions over responsibility for raising the extra funds and deciding how the money could be used would mean that "we'd still be sitting here in 2040 trying to decide on this", he adds.
Both Leston and Steele agree on a major point: trying to persuade governments from 191 different states to agree on a single MBM that aims to regulate airline emissions on a global scale is going to be an uphill battle, to say the least.
"In an ideal world, I would like to see the assembly agree on a global offsetting scheme, but I think this is a step too far for this meeting," concedes Steele. "But ICAO should develop a full-blown proposal to be brought to the 2016 assembly for adoption."
He adds that ICAO "should start working now on the building blocks", including the development of a global standard for the monitoring and verification of offsets, a point on which Leston agrees: "If we must go for offsetting, it's critical that [ICAO] establishes some quality restrictions on what offsets the industry purchases; otherwise it's a race to the bottom with airlines looking for the cheapest offsets, which tend to be the low-quality ones."
CRUNCH TIME
Leston believes it is "essential to agree that MBMs are needed in principle and to detail what that could look like", adding: "The worst-case scenario is that there will just be a very weak text in the final round-up. This could restart the [EU] ETS clock ticking."
The EU dramatically announced in late 2012 that it was "stopping the clock" on its controversial decision to include inter-continental flights in its ETS, in order to demonstrate Europe's commitment to seeing "a meaningful outcome at the 2013 ICAO Assembly". In a consultation document seeking input from stakeholders on the policy options for MBMs, the EU says it "remains committed to seeking multilateral progress".
Pressure on ICAO to come up with a solution is building from all corners of the globe, not just Europe. At the 2013 G8 Summit earlier this year, the leaders of the world's eight most powerful countries had the following message for ICAO: "We call for the agreement at the assembly in September 2013 on an ambitious package related to both market-based and non-market-based measures to address rising aviation emissions."
The consequences for the airline industry if ICAO fails to come up with a global solution could be dire. "If ICAO can't agree and in the future each state just does its own thing, this would be extremely problematic for us," says IATA's Steele, pointing out that carriers would have to comply with "well over 100" separate MBMs.
Any agreement that can be reached during the assembly, which runs from 24 September to 4 October, is likely to come down to the wire, according to Steele: "Sideline discussions have gone on up until the last minute in the past, and I fully anticipate something like this happening here.
"From an industry perspective, I believe agreement in ICAO is absolutely crucial. We need it now because we need to know what to plan for and how best we can contribute to reducing our emissions," he adds. Recognising the severity of the challenge facing ICAO, he offers a parting quip: "As they say in French, bon courage."
Source: Airline Business
