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Airline chief warns governments not to squander opportunity for a global sectoral solution for aviation

Airline chief warns governments not to squander opportunity for a global sectoral solution for aviation | Orient Aviation, Cathay Pacific, AAPA, Singapore Airlines, Herdman, Tony Tyler, Asia

Tony Tyler, CEO of Cathay Pacific
Thu 8 Oct 2009 – Ahead of the ICAO High Level Meeting in Montreal and the Copenhagen climate summit, airline leaders from the Asia-Pacific region meeting this week at the Greener Skies 2009 conference called for governments to back the industry’s global sectoral approach towards tackling aviation emissions. Tony Tyler, CEO of Cathay Pacific and Chairman of the IATA Board of Governors, said it was vital not to squander this chance to integrate international aviation into a global, well-designed solution to the climate change challenge.
 
 “Our industry is in a chronic state of fragility and vulnerable to economic and other shocks. It is against this gloomy backdrop that we face a fierce battle on the environment front,” he said. “We continue to be strongly criticized by the environmental lobby, who wrongly charge aviation with being the ‘bogey man’ of climate change. There appears to be some on the more radical fringe who seem intent on stopping people flying altogether. Well, try telling that to the emerging middle classes of China and India.
 
“We also face more pressing and complex regulations from government policy-makers who seek to see aviation as a ‘cash cow’ for much-needed revenues so that they themselves can cope with the global downturn.”
 
He said the industry was facing up to its environmental responsibilities, adding: “We are doing something about it now and we are committed to doing even more in the future. This really is a landmark year for the industry and with Copenhagen in December, we have a unique opportunity to demonstrate the aviation industry is serious about reducing its carbon footprint. Copenhagen provides us with a platform to spell this out, but will it provide the panacea that we and the rest of the world are hoping for, or will it be another false dawn in finding a solution to the challenge of reducing emissions in a post-Kyoto world?”
 
He said the aviation industry was calling for its emissions to be included under a fair, pragmatic and environmentally effective global policy solution that was enforceable and easy to implement. Any scheme, he maintained, must allow for the sustainable growth of the industry and balance the urgent need to address climate change against aviation’s significant socio-economic contribution.
 
“This is the industry’s wish list – but achieving these goals won’t be easy,” he said. “Aviation is clearly caught up in a complex, high stakes geopolitical game and it remains to be seen what emerges from Copenhagen.
 
“While the industry would most like to see a landmark agreement for a global sectoral approach for tackling emissions, other less desirable outcomes are possible. The nightmare scenario is a ‘quick fix’: having failed to deliver something meaningful at Copenhagen, the parties agree that a global adaptation levy represents an easy way to deal with the aviation emissions problem. This would seek to squeeze yet more dollars from a beleaguered industry but do nothing to reduce carbon emissions.
 
“A third scenario represents nothing at all being achieved. This could pave the way for nation states imposing their own emissions targets on aviation and lead to the emergence of more regional trading schemes and taxes aimed at driving down emissions. The result – a patchwork of overlapping taxes and charges – would add considerable cost and complexity to an already struggling industry, and would inevitably lead to the travelling public, or taxpayers, shouldering some of the burden.
 
“For all our sakes, it is vital that we capitalize on the opportunity that Copenhagen presents. The international airline industry is calling on politicians and heads of state not to squander this chance to integrate international aviation into a truly global, well-designed solution to the climate change challenge.”
 
Other airline CEOs from the Asia-Pacific region, including Chew Choon Seng of Singapore Airlines and Emirsyah Satar of Garuda Indonesia, lined up during the conference, organized by Orient Aviation magazine, to join the call for a global solution for tackling aviation emissions post-Kyoto.
 
Rob Fyfe, CEO of Air New Zealand, however, attacked the climate change debates over emissions targets as being “interminable” and “a travesty” as there had been a failure to take even the basic steps, he said, to reduce actual emissions and they were a distraction from the more important focus of taking action.
 
“To my mind, the UN climate change discussions amplify all that is wrong with global politics. Whether under the Framework Convention on Climate Change, ICAO or elsewhere – it’s the same procrastination; multiple conferences of many thousands; and turgid presentations and inequitable, albeit politically acceptable, backroom deals determining the shape of unwieldy global agreements at a glacial pace.
 
“From our small country alone, hundreds of long-haul hour sectors will have been flown this calendar year by government officials to take part in UN climate-related talks. Frankly, I would rather forgo the revenue we get from this bureaucratic circus.”
 
“I am very happy to see a price on carbon – it should be applied equitably across geographies; uniformly across all industry sectors; and it should incentivize improvement and investment in new green technologies rather than simply penalize all activity.
 
“I look forward to the day when we all stop protecting our respective butts in the endless policy debates and start focusing, globally, on concerted action. Just imagine what we could achieve if a tenth of the global bank bailout funds from the past 12 months were directed towards the environment instead.”
 
Fyfe said prioritizing emissions reductions for his airline was a “no brainer”.
 
“First, there is the direct link between burning fuel and greenhouse gas emissions. Fuel is our largest cost. For an airline that made a normalized profit of NZ$143 million ($105m) in our last financial year, our fuel bill was NZ$1.7 billion ($1.25bn). We have an enormous financial incentive to reduce our fuel consumption and therefore our carbon emissions,” he explained.
 
“Secondly, New Zealand is one of the most pristine, youngest and least spoilt environments in the world. Food production and tourism are the foundation of our economy and both are dependent on sound environmental management and maintaining our country’s environmental credibility so we can continue justifiably to market ourselves as 100% Pure New Zealand.
 
“And third, our airline is a large employer in our small country and is an integral part of our country’s economy. Consideration for future generations comes naturally in this context.
 
“These are the reasons why, at Air New Zealand, we spend only a small fraction of our time on the interminable climate change policy debates and instead we invest our efforts into actions that are making material differences in terms of the environment.”
 
He said he had challenged his team to position Air New Zealand as the most environmentally responsible airline on the planet. Initiatives had been identified that could make the biggest contribution in reaching that goal, he said, and its approach was constantly evolving as new opportunities and technologies came along.
 
Air New Zealand’s efficiency programme, he claimed, had delivered a 10% fuel burn saving, lowering emissions by over 350,000 tonnes of CO2 compared to the previous year.
 
“Our emission intensity improvements since 1995 are approximately 10% and we expect another 15% on our jet fleet over the next 10 years. I challenge other airlines and industries to come up with like or better intensity improvements” said Fyfe.
 
In a video presentation, IATA Director General and CEO Giovanni Bisignani urged airline chiefs to ensure the industry’s call for a global sectoral approach to aviation emissions was heard at the highest levels of government. Bisignani pledged to take the same message to upcoming meetings with UN Secretary-General Ban Ki-moon and IPCC chairman Dr Rajendra Pachauri.
 
He criticized taxes like the UK’s Air Passenger Duty, which he said did nothing for the environment, and the proposed international adaptation levy proposed by smaller developing nations like the Maldives. Instead, he said, governments should focus on solutions that lead to reductions and take advantage of the aviation sector’s ability to deliver global results.
 
“This means delivering emissions reductions by accounting for emissions at a global level and as an industrial sector, not within national targets; ensuring that airlines pay for their climate cost once not several times over; driving change with global standards on a level playing field; and monitoring progress through ICAO with the help of IATA,” said Bisignani.
 
“This will be the most effective and responsible way for aviation to secure its future and meet its environmental commitments. And it will be a role model for industry cooperation with the United Nations in driving important change.”
 
Andrew Herdman, Director General of the Association of Asia Pacific Airlines, said the region’s carriers were fully behind the aviation industry’s short, medium and long term goals on reducing emissions.
 
“These are challenging and ambitious targets, but certainly achievable,” he believed. “However, as an energy intensive, globally competitive industry, we need to build political support for a global sectoral approach for international aviation.  The alternative of a patchwork of uncoordinated schemes and arbitrary levies would not achieve the desired environmental objectives in a cost effective manner.  These are the key messages industry will be delivering to the ICAO High Level Meeting on Climate Change in Montreal in preparation for Copenhagen.”
 
In a panel session, he said the underlying UNFCCC principle of common but differentiated responsibilities compared with ICAO’s equal treatment principle had so far proved impossible to reconcile within ICAO, where there had been resistance to the setting of global targets. “We shouldn’t kid ourselves it’s going to be any easier in Copenhagen.”
 
The industry had missed some early opportunities to get to grips with the climate change issue and build a consensus, he said. “It was only when we got hit between the eyes by the EU ETS and the prospect of a proliferation of national schemes that the industry had finally mobilized behind a consistent, coherent position.”
 
During the panel session Chew Choon Seng, CEO of Singapore Airlines, said his airline was in favour of a global solution but some airlines in Asia were still in denial over the problem of responding to the climate change issue. Although there was a growing acceptance of the role airlines in the region had to play, there were concerns over commercial as well as environmental sustainability.
 
Herdman told GreenAir Online that although there was an industry consensus amongst his Asia-Pacific members for a global sectoral approach, this wasn’t necessarily reflected at national government level. “The difference in Asia is that the countries are very diverse compared to, say, Europe,” he said. “We’ve got two-thirds of the world’s population but it is only generating a quarter of total GDP. The region is therefore generally poorer than the rest of the world, but there is also a great variety of income levels from rich, developed countries to those living in real poverty.
 
“When it comes to climate change, policy very much reflects each country’s position under the Kyoto framework. So the region includes the richer, developed Annex I countries such as Australia, New Zealand and Japan, plus the non-Annex I bigger developing countries like China, India and others in South-East Asia, and then there are the smaller, less-rich countries.
 
“Discussions within forums such as ICAO – which, of course, is made up of governments and not industry – are therefore going to reflect this Kyoto criteria.
 
“Now whilst airlines may be supportive of an industry approach to a global deal, they are also mindful of how their governments view things, which might be very different. Most non-Annex I countries can see the benefits of a global deal but they don’t necessarily like how it cuts across the Annex I/non-Annex I divide, to the extent that it could jeopardize their status under Kyoto and their exemptions under binding national emissions reduction targets. So they are not altogether supportive and this was reflected in the ICAO GIACC process.”
 
Herdman was not optimistic this conflict could be resolved at ICAO level and said the industry would likely have to wait until Copenhagen, or even after, for a clearer outcome on its call for a global sectoral approach.
 
 
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