Tue 25 Oct 2016 – While welcoming the adoption of a global market-based measure (GMBM) by ICAO member nations to address fast-growing international aviation carbon emissions, environmental NGOs say its coverage falls short of the UN agency’s own target of capping the sector’s net emissions from 2020 and is not aligned with the temperature goals of the Paris climate agreement. They call on ICAO States to use a three-year review provision to ratchet up ambition of the new carbon offsetting scheme. Speaking at an aviation industry conference in London last week, the NGOs’ lead representative at ICAO, Tim Johnson, said the ICAO Assembly outcome had been a hard-fought political compromise but was just a first step and critical work remained to ensure the environmental integrity of the scheme. Coverage had to be expanded in the initial six-year voluntary phase beyond the current 66 countries so far agreeing to participate, he added.
The ability of technology and operational measures to fill the emissions gap was limited, said Johnson, Director of the Aviation Environment Federation (AEF), which is one of six members of the International Coalition for Sustainable Aviation (ICSA), the only NGO accredited as an observer at ICAO. To rely on sustainable alternative fuels alone would require around 170 new biorefineries at a total capital cost of $15-16 billion every year, according to ICAO’s own estimates, he said.
Although it would play an important role in minimising the sizeable gap, the GMBM should be seen though as an interim solution rather than an open-ended means to meeting the industry’s climate goals and no longer having to focus on in-sector reductions, he told delegates at the Royal Aeronautical Society’s annual Greener by Design conference.
“A market-based measure wouldn’t be our first choice – we would prefer the aviation industry to reduce its own CO2 emissions,” he said. “Every tonne you save as an industry is preferable to a tonne another industry saves elsewhere. However, we are pleased that the GMBM starts to put a price on carbon.”
How well MBMs make a contribution to climate goals depended on their design, he said. “If you can get scarcity value through only using high-quality offsets, prices increase and it then makes more sense over time for the industry to reduce its own emissions. It must also have a cap stringency, ambition and coverage,” he explained.
Now the green light has been given to implement the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), as outlined in ICAO A39 Resolution 22/2, the next two or three years will be spent in deciding key details and making sure it is implemented on time, along with the challenge for States to transpose it into national legislation.
“By 2018-19, airlines will be required to record and submit their relevant data so here we are in late 2016 with still a lot to work out, and we probably only have little over 15-18 months before some of this scheme becomes operational,” said Johnson. “It has to be full steam ahead to get this work completed.”
A big issue will be over the type of offsets to be used, which Johnson said had to be real, additional, permanent and verifiable. “We have to look at the carbon markets and ask which of these deliver against these aims. It’s not true to say that every tonne of carbon reduced is the same. Some of them have much better governance and some deal with this criteria better than others.”
Johnson, who is a member of the ICAO technical task force (GMTF) sub-committee focusing on offsets, reported the group was currently building on the actual criteria and developing the methodology to be used in defining which offsets would be permitted under the scheme. He said a technical advisory board made up of State nominations would then be set up to make recommendations to ICAO’s governing Council, with a decision likely in 2018. Johnson said it was possible that the aviation industry may be allowed to also purchase allowances from existing emissions trading schemes such as, but not only, the EU ETS.
“The question is whether there is enough ‘good stuff’ around,” he said. “We think there will be enough initially but get more demanding as time goes on, although carbon market people tell us that if the demand exists, there will be supply. The message is that if we set the bar high, the industry will not be left with a deficit in the future.”
He said it was important the GMBM resolution states that offset criteria and emissions monitoring, reporting and verification (MRV) are developed as ICAO standards (SARPs) and so harmonised between States. This was particularly so in the case of offsets as States may well have different ideas on what they wish to see on the approved list. “We want to see decisions over offset use be centralised and taken by ICAO, not by States.”
ICSA member Carbon Market Watch said UNFCCC credits would be eligible under CORSIA provided they met additional quality criteria that is currently under debate by the GMTF. “This will be essential for avoiding poor CDM and JI credits that have been proven to not represent real emission reductions,” it said in a policy brief. “An even bigger potential risk would be to allow credits from the voluntary market that have varying standards and limited transparency.”
One of the positive elements of the resolution as far as NGOs are concerned is explicit text on the importance – although not mandated as they had wanted – of avoiding double-counting of UNFCCC emission reductions. “This doesn’t get mentioned very often but to us it is part and parcel of the ICAO scheme,” said Johnson. “There will be States reporting their emission reductions under the Paris Agreement that are potentially going to be selling units to aviation and we want to ensure those emissions don’t get counted twice.”
The use of high-quality offsets, says ICSA, is fundamental to the environmental integrity of the scheme but, points out Johnson: “We all say we want environmental integrity but we haven’t yet defined what that is.”
A major disappointment of the Assembly outcome to the NGOs is that the GMBM fall short of delivering carbon-neutral growth (CNG) from 2020, with the measure only covering an estimated 75-80% of international aviation emissions growth during the 15-year lifetime of CORSIA (2021-2035) as a result of the voluntary phase and other exemptions for the least developed countries.
“We accept the voluntary phase has some form of political necessity about it and has actually provided a wider coverage than under the previous mandatory proposal,” said Johnson. “But we do need to think how the overall CNG goal is going to be delivered.”
The agreed three-year review process – the first is to be held in 2022 – was therefore a highly important element of the scheme, he said. “We see CNG as a starting point and clearly not the end point in respect of Paris ambitions. We want to ensure the GMBM is not frozen in time for 15 years but is an opportunity for us to revisit and potentially to increase the stringency of the cap to bring it into line with what needs to happen. We also managed to link some of the language in the text to the temperature goals.”
However, although mentioned in the preambular text of the Assembly resolution (22/1), that link is not as strong as NGOs had anticipated as text was removed very late from an operative paragraph (9) of the resolution at the request of some unrevealed countries. The paragraph in question refers to exploring the feasibility by ICAO of long-term aspirational goals and had previously linked them to the 2⁰C and 1.5⁰C temperature goals of the Paris Agreement.
“This deal was the world’s first opportunity to test whether the Paris Agreement would change the way we do business and rally the world towards its new goals. Yet just hours after celebrating the Paris Agreement’s early entry into force, countries at ICAO are sending mixed signals about their ambition to reduce emissions by weakening the link between the aviation mechanism and the long-term goals set in Paris,” said Lou Leonard, SVP Climate & Energy for ICSA member WWF.
“Going forward, countries need to build on this ICAO deal and create new policies to ensure global aviation does its fair share and doesn’t undermine our ability to deliver on Paris’ global temperature goals.”
Brussels-based Transport & Environment, another ICSA NGO, said further measures over and above CORSIA would be required “if we are to have any hope of limiting global warming to 1.5⁰C.” With only 20% of total aircraft CO2 emissions between 2021 and 2035 likely to be offset, the burden would be shifted to other sectors to do more, it warned.
“It is not mission accomplished for ICAO, Europe or industry,” said T&E Aviation Director, Bill Hemmings. “The world needs more than voluntary agreements. Without robust environmental safeguards the offsets won’t cut emissions, leaving us with a deal that amounts to little more than adding the price of a cup of coffee to a ticket.”
However, fellow ICSA member Environmental Defense Fund (EDF) said the ICAO agreement sent a powerful signal to the world on the urgency of climate action.
“Achieving CNG2020 is a significant step in its own right,” said Nathaniel Keohane, VP Global Climate. “And with robust implementation, the MBM can serve as a springboard to greater ambition, not only for the aviation sector, but – through market linkages worldwide – also for emitting sectors more broadly.
“The agreement is not perfect – few are – but it does provide a vital basis for moving forward. The first key step will be developing strong standards to ensure transparency, environmental integrity and even broader participation.”
He said the participation could be broadened through immediate capacity building to help implement the scheme in developing countries and the scheme could also spur finance for low-carbon development.
AEF’s Tim Johnson said he hoped that having heard and considered the ICAO outcome, countries attending the forthcoming UNFCCC COP22 in Marrakech that had not already signed up may announce their participation. “We will keep the pressure on them to do so,” he promised.
The International Council on Clean Transportation (ICCT), an environmental research non-profit and ICSA member, estimates coverage under current commitments and scope would promote offsetting of about three-quarters of international traffic growth after 2021 (see graph below).
EDF has designed an interactive tool to see how additional countries’ support for the MBM can boost coverage of international aviation emissions. Based on results from the tool, the graph below shows the amount of forecasted cumulative emissions above 2020 levels that could be covered in the voluntary phase, the mandatory phase and the combined phases (2021-2035) from the 66 countries that have so far indicated their participation.
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