Tue 24 Sept 2013 – Working paper submissions by ICAO Member States for consideration by this year’s Assembly show a divergence of opinions on the issue of market-based measures (MBMs) and highlights the difficulty in forming a consensus around the climate change resolution to be discussed this Thursday (26th). Whilst the majority of the working papers show some support for a global MBM, many States remain unhappy with national or regional schemes such as the EU ETS, which, they say, should only be implemented on a mutual consent basis. Although the principle is generally opposed by others, African countries are also seeking a de minimis exemption from such schemes. Russia goes even further and opposes MBMs in principle, arguing that they are unlikely to result in real reductions in aviation emissions. Instead, it proposes a global aviation fuel tax and the offering of economic incentives.
African States say they would prefer a global MBM rather than a ‘patchwork’ of national and regional schemes on the understanding that it would be a transitional measure and complement technical measures. The global scheme would have to take into consideration the CBDR/SCRC principles regarding developing states, they add. Setting themselves at odds with the current wording of the resolution, they say States or regions implementing an MBM before the global scheme comes into force should be required to seek the consent of affected third States. Such schemes should also grant exemptions on routes to and from developing States where total international aviation activity is below a 1% RTK threshold. This would have the effect of exempting all African carriers from the EU ETS.
This de minimis threshold was included in the previous Assembly’s climate change resolution (A37/19) but was challenged by many States afterwards, with the ICAO Council President receiving an unprecedented number of reservations. It is back in this year’s draft resolution but it is likely to be generally opposed once again.
In its paper, the United Arab Emirates (UAE) says there is a need to move away from the de minimis concept as it is in conflict with ICAO’s long-standing principle of non-discrimination and was not feasible to implement. It says the wording of the draft resolution is imprecise and inappropriate as it does not make it clear whether it seeks to exempt States or operators, or that there is reassurance that aircraft flying on the same route will be subject to the same rule, which could lead to significant market distortions. The UAE is also concerned that a de minimis exemption could set a dangerous precedent for other aviation-related issues and pre-judge any future exclusion threshold for a global scheme.
As long as the principle of non-discrimination is fully observed, however, the UAE says it is not opposed to excluding those participants with insignificant levels of emissions.
The UAE also challenges the African insistence on the principle of mutual consent. It maintains that as long as an interim MBM is in compliance with the ICAO Framework – a set of guiding principles – mutual consent should not be required. “Given that the proposed resolution follows the airspace approach, the Framework should not dictate which aircraft operators should be excluded from it,” says the UAE paper. “This contravenes the long-standing principle of exclusive sovereignty over a State’s airspace.”
However, Russia is firmly of the opinion that States or regions should only implement MBMs with the consent of third countries and have requested in their paper (WP/275) that the wording of the Framework and also the paragraph (17) allowing States to implement an interim MBM be changed to reflect this. Saudi Arabia and Vietnam too call for mutual consent to be applied.
The issue was raised at the special meeting of the ICAO Council earlier this month (see article) and was largely set aside in order to reach a compromise draft resolution but it is likely, along with de minimis, to feature when the resolution is put before the Assembly this week.
Russia has submitted two papers to the Assembly (WP/250 and 275) in which it expresses general opposition to MBMs, whether national, regional or global, and is seeking rewording of a number of paragraphs in the resolution. It believes that a global MBM could prove to be a costly and ineffective way to ensure real reductions in carbon emissions from aviation, and has little faith in carbon markets – emission allowances, for example, are referred to as “indulgences”. Russia considers the case for a global MBM unproven and not necessarily feasible so is calling for further work to be undertaken and be reflected in a rewording of the paragraph (20) dealing with a global MBM.
In its place, Russia – surprisingly – is calling for a 1% global tax on aviation fuel. Instead of international aviation contributing to the UNFCCC’s Green Climate Fund, it suggests ICAO sets up a mobile fire-fighting force to tackle forest fires around the world since they contribute to climate change. Russia is also not overly keen on alternative aviation fuels because of the potential impact on global food security.
It is also calling for ICAO to revise – it does not say whether up or down – the aspirational global goals agreed at the last Assembly, create economic incentives to achieve real reductions in emissions and examine the possibility of an ICAO climate fund.
Rather than focusing on the divisive issue of MBMs to reduce emissions, Saudi Arabia (WP/176) says more should be done on operational measures, modernising of fleets and the improvement of air navigation systems, “as there is unanimity on such measures.”
On behalf of 44 EU and ECAC States, Lithuania – which currently holds the rotating EU presidency – holds the view in its submission (WP/83) that operational and technical measures, and national or regional actions, on their own will not be sufficient to meet the challenge the aviation sector faces, and a global approach encompassing MBMs is required to meet ICAO’s emissions reduction goals.
The United States (WP/234) agrees that MBMs are an important complementary element in reducing emissions from aviation and achieving ICAO goals. Welcoming an ICAO expert group’s assessment that MBMs are technically feasible, the US believes that it is now necessary to build on the ICAO work already completed and “to work towards the development of a global MBM scheme, with the Council making a recommendation on such a scheme at the 39th Assembly in 2016. Future work would include, but not be limited to, development of a common approach to the monitoring, reporting and verification of emissions, establishment of acceptable types of carbon credits that would be eligible for compliance with a market-based measure, and development of approaches to address special circumstances and respective capabilities.”
In addition, it says, ICAO should continue to pursue a comprehensive approach, including efforts to encourage development of new aircraft technology, implement operational improvements, complete development and adoption of an aircraft CO2 standard, develop and deploy sustainable alternative fuels, and work towards enhancing State action plans.
ICAO 38th Assembly Working Papers (Agenda Item 17)
ICAO 38th Assembly draft resolution
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