As ‘stop the clock’ passes into law, EU piles on the pressure for a meaningful ICAO agreement on MBMs

As ‘stop the clock’ passes into law, EU piles on the pressure for a meaningful ICAO agreement on MBMs | HGCC,STC,stop the clock,Peter Liese,Jos Delbeke

L-R: Peter Liese, David Lee, Jos Delbeke, Paul Steele and Satu Hassi MEP
Tue 30 Apr 2013 – An agreement in principle on a framework to allow states and regions to immediately implement market-based measures (MBMs), together with a roadmap and timetable towards a global mechanism, are essential EU requirements from the ICAO Assembly in September, according to Jos Delbeke, Director General of the European Commission’s climate directorate and the EU’s chief representative in the ICAO negotiating process. He added the EU would also like to see more ambitious ICAO goals on technology and operational measures. Delbeke was speaking at a Brussels seminar organised by Peter Liese, the European Parliament’s rapporteur on the inclusion of aviation into the EU ETS. Aviation industry representative Paul Steele told the seminar the sector wanted a single global MBM and not a “free for all” framework that allowed every state to implement its own measure.

Liese successfully steered the ‘stop the clock’ derogation proposal through the Parliament, which last week formally entered into law. He told delegates the suspension of intercontinental flights from the EU ETS would only last for one year unless very clear expectations were met at this year’s Assembly. “It is not an option to wait another three years,” he said. “I could not defend this in the Parliament.”

He accepted that a global scheme would probably not be in place before 2020 but an MBM solution for the time in between had to be found, he said, even if the EU ETS had to be modified as a result. “We trust the ICAO leadership will accept no excuses and will hammer out an agreement,” he added.

Delbeke said the ‘stop the clock’ proposal had been adopted in record time and had resulted in a new level of commitment in the ICAO negotiations. He revealed the issue had been raised in “useful discussions” with US Secretary of State John Kerry in his Brussels meeting last week with José Manuel Barroso, President of the European Commission.

“We want a global rather than a regional regime,” said Delbeke. “We are ready to talk but we cannot wait forever.”

He outlined the EU’s “clear agenda” of three elements it wishes to get out of the Assembly: an enabling framework for states and regions to go ahead with MBMs immediately afterwards; a decision in principle on a global mechanism together with a roadmap, to be finalised at the 2016 Assembly; and more ambition on technological and operational measures.

Delbeke said the framework would obviate the need for mutual recognition between states on applying MBMs, a strongly contentious issue within ICAO – many states, particularly those in the developing world, believe MBMs should only be enforced through mutual consent. “Mutual recognition in aviation terms is a bilateral agreement and in ICAO we are discussing a system in a multilateral context,” he argued. “We in Europe are a strong defender of the multilateral solution.” Delebeke said its opposition to mutual recognition on the application of MBMs was a ‘red line’ issue.

The geographic scope of MBMs has become another source of disagreement in the ICAO negotiations, with most states, including the United States, favouring an airspace limitation to get around the sovereignty issue and only the EU and Australia supporting a system based on departing flights. In a presentation at the seminar, Prof David Lee of Manchester Metropolitan University said arriving and departing flights within national airspace would only cover 22% of total international aviation emissions if all states implemented measures compared with full coverage if the departing flights principle was adopted.

Both the EU and industry are strenuously opposed to the airspace concept. Delbeke acknowledged that the departing flights principle had met heavy opposition. “I do not understand why,” he said. “The argument, of course, is extra-territoriality, but this is an international business and nearly half of aviation emissions take place in international airspace that is not covered by any nation.

“The airspace approach is going to be damn difficult to implement and if I was a business I would be deeply worried. We are open to the discussions but we want answers to the alternatives that are being put on the table.”

Peter Liese described the airspace concept as “a complete nonsense” but said if there was an environmental integrity to the proposal then it could be considered for a limited transition period.

Executive Director of the Air Transport Action Group Paul Steele said the industry was also extremely concerned about the concept as it would be a “slippery slope, even as an interim measure, and would be very problematic.” He said it would be extremely difficult to administer on a global basis and would create competitive distortions, and added that the industry did not believe the approach could be implemented without the mutual consent of states.

“For these reasons, we believe the global scheme is the right way to go because then you don’t need mutual consent because everyone is doing the same thing and it resolves a lot of issues,” explained Steele.

Three or four months ago, many governments had focused on the framework because the idea of a global scheme was seen as too difficult but latterly things had started to swing back towards a global mechanism because, he believed, it had been recognised that a lot of the issues were easier to resolve than under a framework.

At the meeting of the High-level Group (HGCC) last month, said Delbeke, the EU had proposed a roadmap towards the implementation of a global mechanism that should be agreed by the 2013 Assembly and completed by the following Assembly in 2016.

“We appreciate not everyone is ready to move ahead immediately but we would then have a decision in principle and a timetable, which would be an important achievement,” said Delbeke. “The industry should have a voice on this and if the industry brings forward alternative schemes then we would welcome that. If this was done before the Assembly we would definitely incorporate it into our assessment.”

Steele said a global scheme should have environmental integrity, minimise competitive distortions and must be administratively simple. He said the big questions were over the type of measure and how it was applied.

“We are very keen to have a global solution because we see the alternative as having a patchwork of measures around the world,” he said. “A free for all where every state implemented its own measure would be a complete nightmare for a global industry like ours.”

Steele’s view was that of the three post-2020 global MBMs under consideration – a carbon offsetting scheme, a carbon offsetting scheme with a revenue generating component and an emissions trading scheme – the first was the simplest way forward and then converting to a trading scheme over time. He said the revenue component had run into considerable opposition at ICAO. “Within the three options there is a solution that is workable,” he added, “and we in the industry want to see that solution adopted as soon as possible.”

Our biggest concerns are the discussions around an enabling framework, said Steele. “On the one hand we can see there is a potential role for such a framework as a stepping stone mechanism but we are concerned it stops there and it doesn’t go on to deliver the global scheme that we believe is absolutely essential.”

He said that despite the very difficult negotiations taking place he remained optimistic. “The big question mark is how many states are negotiating for something as opposed to negotiating against the EU ETS. We have been pressuring many states that we do want a global solution.”

Steele said the industry “seriously welcomed” the EU’s decision to stop the clock on the inclusion of intercontinental flights in the EU ETS to allow negotiating room, “although we don’t believe that’s gone far enough and it should have been stopped altogether for a year as there are issues of competitive distortion.”

He added: “We do not want to go back to the situation we were in last November before the derogation, when we were on the edge of a trade war. There is a huge problem if the EU ETS ‘snaps back’ after the Assembly as that will put us straight back to where we were. Our impression is that third states have not backed away from their position over this.”

An angry Peter Liese responded that the sector had lobbied governments against the EU ETS rather than for a global agreement. “If this doesn’t stop, you, the airlines, will be guilty for the trade war – not me, not the Parliament and not the Commission. Please take on this responsibility from today onwards.”

Jos Delbeke said the EU was ready to engage on the thorny issue of ‘common but differentiated responsibilities’ (CBDR), in which developing countries see the main responsibility for dealing with emissions being shouldered by the developed economies. “There are good ideas out there on how to take a pragmatic view on differentiation,” he said. “We recognise it as an issue that needs to be sorted out but we refuse to go into dogmatic discussions.”

Whilst recognising the importance of CBDR, Steele cautioned that when exemptions or exceptions were made, elements of competitive distortions were introduced. “Any attempts to exclude or provide thresholds, even though we believe that politically they may be necessary to some extent, will prove problematic.”

Delbeke said work must continue on progressing from mere aspirational goals on measures other than market based, which he said were “not very engaging”. He said the quality of the state action plans, a product of the last Assembly in 2010, had been shown to be variable but they could prove to be very useful tools in the future. The adoption of an aircraft CO2 standard could also be “very good news”, he said, but this was a long-term measure to be phased in for new aircraft and questioned whether this could be advanced in some way.

Concluding, Delbeke said the EU was fully engaged in the ICAO negotiations. “We have gone there with an open mind but we expect, of course, a meaningful outcome.

“ICAO is responsible for the aviation sector and this is a wake-up call for the organisation. If it can’t sort this issue out now, it won’t be able to do so in the future. The political energy that has gone into this process is significant.

“We have gone through a co-decision process, the toughest procedure in the European Union, to put our legislation on hold for a year. We don’t do that too often. If that’s not a signal to the international community that we are serious about talks, I don’t know what is.”

No further meetings of the High-level Group on International Aviation and Climate Change (HGCC) have so far been scheduled and comments and proposals are due to be considered at the ICAO Council’s June meeting.



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