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Allocating international aviation CO2 emissions: the airspace-based approach and its alternatives

Allocating international aviation CO2 emissions: the airspace-based approach and its alternatives

Mon 21 Jan 2013 – The ICAO Council established a High-level Group (HLG) last November to consider political questions relating to a global market-based measure (MBM) for international aviation and a Framework for MBMs. The Framework basis should harmonise state/regional MBM schemes that could build over time into a global scheme. Provisions for geographic scope in the Framework and global architecture should be consistent in order to avoid duplication. The Framework should presumably contribute towards a workable resolution of the dispute over the EU ETS. However, some states see the Framework as merely intended to ‘contain’ the EU ETS, in which case the two architectures – Framework and global – might not be compatible. So a key question for ICAO is how geographic scope is to be treated in the national/regional MBM Framework. However, argues Bill Hemmings (right), basing it on airspace – as becoming increasingly favoured by some major states – is unrealistic.

The EU stopped the clock on enforcing the aviation ETS for flights to/from Europe last November in order, according to the European Commission, to give ICAO time to decide a global measure at its 2013 triennial Assembly next September and agree a Framework that would presumably enable the clock to be restarted on accepted terms. Opponents of the EU ETS reject their carriers being unilaterally subject to regulation and want ‘mutual agreement’ by governments. They allege infringement of sovereignty because emissions allowances must be surrendered for flight emissions outside EU airspace and over their territory and reject unilateral measures in favour of a global ICAO solution.

The EU, supported by the European Court of Justice, argued that full flight fuel burn was merely the basis for calculating an obligation as a condition of landing in the EU.

The HLG is considering three alternatives based on:
    1. all departing international flights from a state;
    2. all international flights carried out by operators registered in a given state; and
    3. international flights on the basis of the nationality of airspace travelled through.

The first option is possibly the fairest and most straightforward for a global measure, as recommended by Dave Southgate, the former Australian representative on ICAO's Committee on Aviation Environmental Protection (CAEP), in a recent blog. He recommends the UNFCC reporting method to determine emissions – via fuel sales by country. Figures would need to be apportioned to carriers if required. There is a standard conversion factor for fuel burn to emissions. The EU ETS holds air operators responsible for all emissions of all flights both departing from and arriving in Europe and uses actual fuel burn not fuel sales.

For a global scheme countries would account for the emissions of all their registered operators worldwide. Carriers would presumably report their fuel burn including that from fuel uplifted in foreign countries.
For a national/regional scheme, all registered carriers would report their fuel burn to their national authority. Whether global or regional fuel burn is unclear. If regional, what is the definition of regional? Regional airspace (option 3) or departing flights (option 1)?

This option effectively requires mutual agreement – attractive to developing country concerns. If no or only some states agreed, potential competitive distortions, carbon leakage and evasion (indirect routings) would render the whole scheme unworkable. Industry rejects schemes involving competitive distortions.

Under global airspace, countries would be responsible for all flight emissions over their national territory – or to their 12-mile territorial sea limit. Emissions of overflights (aircraft not landing in their territory) would be included.

National/regional schemes would capture emissions over sovereign territory although Flight Information Regions (FIRs) could be the basis. If foreign carriers were only required to surrender permits for pollution created over European airspace, the ETS sovereignty dispute would presumably be resolved.

Longstanding and contentious

How to allocate responsibility between countries for the CO2 emissions generated by international aviation is a longstanding and contentious issue that has eluded negotiators for more than 15 years. Countries’ carbon obligations can vary significantly depending on the option.

In 1996 SBSTA considered 8 allocation options, ruling out 4 as impractical but failing to agree on the other allocation options:
    •  the country where the fuel is sold;
    •  the nationality of airlines;
    •  the country of destination or departure of aircraft. Alternatively emissions could be shared by the countries of departure and arrival; and
    •  parties according to the country of departure or destination of passenger or cargo. Alternatively, the emissions related to the journey of passengers or cargo could be shared by the countries of departure and arrival.

SBSTA never deemed airspace-based allocation of CO2 emissions as a viable option. The other two approaches now being considered by the ICAO HLG were on its shortlist.

The 2006 IPCC Guidelines for National Greenhouse Gas Inventories defined international emissions as “Emissions from flights that depart in one country and arrive in a different country, including take-offs and landings for these flight stages.” Most UNFCCC Annex 1 countries report international emissions (as a footnote) based on fuel sales as a proxy for flight fuel burn of departing flights.

In 2004 ICAO baulked at developing global emissions trading, concerned about acting in a regulatory capacity as scheme administrator. The Assembly did, however, recommend that states/regions could implement emissions trading – the origins of the EU ETS – and asked that guidance be developed. Initial text put to the 2007 ICAO Assembly identified the pros and cons of the route and airspace based options without necessarily drawing conclusions. Non-EU States called for mutual agreement if a state wished to include foreign carriers in its scheme – an issue that had not been discussed in 2004. Forty-two states lodged reservations against this view, but ICAO’s Council subsequently agreed additional text in the final document published in 2008: “States that wish to incorporate emissions from international aviation into their emissions trading schemes consistent with ICAO A36-22 (Appendix L) should not implement an emissions trading system on other Contracting States’ aircraft operators except on the basis of mutual agreement between those States.”

The 2010 Assembly Resolution recognised that some member states may take more ambitious action on GHG prior to 2020 yet those opposed to the EU ETS continue to argue that the EU’s move should have been decided in the ICAO context of a global solution. The earlier formulation on mutual agreement was superseded in the 2010 resolution by text urging “States to respect the guiding principles listed in the Annex, when designing new and implementing existing MBMs for international aviation, and to engage in constructive bilateral and/or multilateral consultations and negotiations with other States to reach an agreement.”

Limitations of airspace scheme

The limitations of a global airspace scheme were set out 13 years ago by Wit and Velzen. Emissions were allocated to 23 selected countries according to the original eight SBSTA options. Emissions that remained unallocated to any other country above oceans and seas in an airspace approach were found to represent 52.09% of total global emissions in 2010. Emissions based on airspace averaged 0.54% of total domestic emissions for the 23 countries, whereas those based on the other seven SBSTA options averaged 1.14%. There were dramatic variations in some countries’ allocations – the US share of global emissions under departing flights in the 2010 scenario dropped from 17.44% to 4.26% under airspace, the UK’s from 6.48% to 1.31%, while the former Soviet Union share rose almost fivefold from 0.78% to 3.75% under airspace.

Including overflights is problematic and complex (ICAO Guidelines) and enforcement is complicated if aircraft do not land on the regulating territory. Southgate argues that such emissions more properly belong to the country benefitting from the flight itself – the country of departure/arrival. Overflight charges have caused many disputes in the past, particularly involving states with large airspaces. Retaliation is one danger. Excluding overflights from EU airspace reduces emissions currently regulated to 35%.

Under the EU ETS, initial fuel on board is recorded – a known quantity for obvious safety reasons – and measured again on arrival to calculate flight fuel burn (APU consumption included). Per flight data is collated and an annual airline report is validated by an approved verifier. Verified reports of actual fuel burn are more accurate than using fuel sales as a proxy for fuel burn.

An alternative to using actual fuel burn figures would be to apply fuel burn modelling which is well developed and widely used. During the drafting of the EU ETS Directive, industry rejected modelling since the incentive to reduce actual emissions was at the heart of emissions trading.

Determining airspace fuel burn requires a measurement when aircraft leave national airspace. In Europe there is no agreed definition of EU airspace; sovereign airspace of the EU-27 is a legal concept but presumably a suitable definition of EU airspace could be found. Defining national airspace elsewhere encounters territorial disputes such as over the Spratly and other islands in the South and East China Seas. China’s declaration of its sovereign airspace out 200nm to its EEZ has already been disputed.

To determine fuel burn when exiting airspace, aircrew could manually read the fuel tanks (a routine safety measure) but these readings could not be the basis of a statutory obligation to surrender emissions permits since no verification would be possible to underpin enforcement. A tamperproof electronic system, verified prior to installation on the aircraft would be needed. Instantaneous instrument readings of fuel tanks would require flight management systems upgrades synchronised with autopilot systems. Modifications would need to be certified by authorities, and probably an ICAO technical standard agreed under Annex 16 of the Chicago Convention. The whole procedure including fleet installation could easily take up to a decade.

Financial and administrative burden

A global airspace system could subject such flights as London/Singapore, Helsinki/Cape Town, or Toronto/Buenos Aires to 10-15 jurisdictions. The cost of a global system to log and verify all cross border movements can only be imagined. Would industry bear the financial and administrative burden?

Monitoring regional airspace would be problematic even for the EU as outlying territories such as French Guiana, Guadeloupe, Martinique, Reunion and St Martin are included in the ETS. Would excluding them out of administrative difficulty be feasible for, say, the Falkland Islands?

Perverse outcomes due to evasion would be a problem; airlines already deploy sophisticated routing systems to minimise overflight charges. Diversions from direct routings to minimise carbon charges would mean increased emissions.  

Airspace as the basis for a global or national/regional Framework MBM is unrealistic as the ICAO guidelines recognise, yet it features high in the current ICAO discussions. Manoeuvring which sunk the SBSTA work nearly 20 years ago seems to have reappeared as serious proposals. Wit and Velzen suggest the carbon emissions liability of the US/A4A carriers under airspace in 2010 would be slashed more than 75% compared to the departing flights or nationality of carrier options to a mere 4.26% of global aviation emissions. The US share of assessed contributions to ICAO’s budget, based on national income per head and involvement in civil aviation, is set at the maximum 25% capped by Congress. Applying airspace to Singapore’s 710 sq km, home to Changi, Asia’s seventh busiest (ACI) airport, would confront flight crew with the ludicrous prospect of having to report fuel burn while still trying to get the wheels up.
An effective ICAO Framework implemented by all states should achieve 100% coverage of international aviation emissions and be consistent with the guiding principles for MBMs agreed at the 2010 Assembly: MBMs should be transparent, administratively simple, cost-effective, minimise carbon leakage and market distortions, and fairly treat international aviation in comparison with other sectors. Airspace fails on all these grounds. Only 50% of emissions would be covered. Less actually – ICAO is not presently planning to account for the non-CO2 effects of aviation emissions which are double or triple those of CO2.

The nationality of carrier Framework option is hardly workable as it depends entirely on a web of mutual agreements. An agreed Framework which falls at the first hurdle because states do not agree, is not in fact an agreed Framework. Would states opposing the EU ETS today start helping administer it tomorrow?

Route-based option

That leaves us with the route-based departing flights option – where the EU started, and which just so happens to be the basis upon which ICAO is now developing its new CO2 Reporting and Analysis System (ICORAS) to enhance modelling, trend work and UNFCCC CO2 reporting. It will also track progress towards ICAO global aspirational goals. India’s 2011 report on its domestic/international carbon footprint also uses this emissions methodology as do the forecasts in the Climate Change Action Plans of the USA, Canada, China, Australia and EU countries published on ICAO’s website.

A variant to departing flights could be the SBSTA and ICAO 50/50 option: carriers in a national/regional scheme would account for 50% of their emissions on both incoming and outgoing legs. At least emissions on the runway of the other state would be left untouched.  

If ICAO is not ready to agree a global MBM this year then issues like the cap may take precedence over questions of global allocation. Yet the 2010 Assembly resolution calls for agreement on the Framework by 2013, in which case questions of geographic scope and mutual agreement become central. The HLG is a political, not technical body. But political solutions having no basis in practicality merely serve to kick the can down the road, fuelling continued dissension.

Does ICAO have the political will and capability to discharge a responsibility handed to it 16 years ago? The position of one ICAO member may be key. As US Senator Kerry said last June at a transportation committee hearing:  “The Europeans are right to question the motives of those who oppose their efforts, including India and China, and they’re right to question whether the United States is serious about this issue, because we haven’t been…the only way to deal with this is through global consensus, through hard outreach and I would urge our Europeans friends to follow it, and I urge us to follow it. Global emissions belong to all of us, not to anyone’s single airspace.”

Bill Hemmings is Programme Manager Aviation and Shipping with Brussels-based Transport & Environment

A full version of this article is available here

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