Divergent views among ICAO member states leaves substantive MBM agreement by 2013 hanging in the balance
(photo: Aéroports de Montréal)
Fri 24 May 2013 – Two conferences in Montreal last week provided an opportunity for ICAO Council members to publicly explain their respective country’s position on current attempts to form an agreement on the application of market-based measures (MBMs) to limit the growth of international aviation carbon emissions. With the high-level group process now formally ended, Australia’s representative on the Council and Chair of the Council’s Air Transport Committee, Kerryn Macaulay, told delegates at the industry’s Air Transport Action Group (ATAG) Workshop that very little progress had been made and there were significant diverging views. At the subsequent ICAO Aviation and Climate Change Symposium, Russia’s representative firmly rejected MBMs and even called for a reassessment of ICAO’s 2 per cent annual fuel efficiency goal. Other speakers, however, stated their optimism that some form of an agreement could be reached by the ICAO Assembly this coming autumn with further progress towards a global scheme being achieved by 2016.
Following a Council meeting last November, a decision was taken to establish the climate change high-level group (HGCC) of senior officials and negotiators to accelerate discussions and find compromises between states on MBMs. This was seen by the EU as a positive enough development to allow it to temporarily suspend the application of its emissions scheme to intercontinental flights to and from Europe.
However, it appears a number of differences between ICAO member states in key areas have not been resolved by the HGCC and time is running out for full consensus by the time of the Assembly.
“Unfortunately, we have seen very little progress,” reported Macaulay. “In some areas there has been the risk of re-opening old issues that the Council was reasonably settled on.”
Following the last meeting of the HGCC in March, a draft resolution for the forthcoming ICAO Assembly was prepared and although there were common areas of agreement, “many of the texts are in square brackets,” she said, reflecting the divergence.
She told delegates at the ATAG Workshop there were three main areas where opinions on the application of MBMs differed:
Geographic scope – a number of governments have sensitivities over the sovereignty issue;
Who the participants should be; and
Addressing the ‘special circumstances and respective capabilities’ of developing states principle.
Macaulay said a report from the HGCC and an amended version of the draft resolution would be discussed at the next meeting of the Air Transport Committee slated for June 4. She said the meeting would attempt to find more common ground, reduce the number of square brackets and make recommendations to the Council for its meeting at the end of June, but described her Committee role on the issue as “chief herder of cats”.
She was not optimistic that many of the differing views would be narrowed down by the conclusion of the Council meeting but, she said, “we will work on the resolution right up to the start of the Assembly if need be.”
Cautioned Macaulay: “It is possible the resolution may go to the Assembly with not all the elements settled.”
As no further meetings have been scheduled, the future of the HGCC was uncertain, she said, and depended on guidance from the ICAO Council President and the views of the Council itself.
The Council representative for Uganda, Kabbs Twijuke, agreed progress had been slow but said there was “light at the end of the tunnel”. He urged industry leaders “to keep knocking on the doors” of political leaders. He said there was a requirement to find ways of addressing the needs of developing countries, such as the transfer of technology and financial assistance.
“Developing countries are very much interested in protecting the environment,” he told the Workshop. “However, we have some concerns when it comes to market-based measures.”
He likened MBMs to administering medicine to a sick person but which carried the danger of killing the patient through its side effects. “MBMs could have a negative impact on our industries, particularly those that are aviation-related,” he said.
Explaining the United States position, Dr Lourdes Maurice, Executive Director of the Office of Environment and Energy at the FAA, said based on technical analysis carried out, it was possible carbon-neutral growth in the international aviation sector could be achieved through technology and operational measures. However, she added, this was based on aggressive assumptions over the potential impact of aviation biofuels in achieving substantial long-term emissions reductions and it was recognised there were barriers. Until these had been overcome, she said, “the US does believe that MBMs could indeed be a gap filler.”
Maurice said the US had played a very active role within ICAO both on progressing the structure of an MBM framework – a set of guiding principles on how states should apply MBMs in the period before a global measure can be introduced – and a future single global scheme, and had been constructive in moving the MBM issue forward. She acknowledged there were differences of opinion within the ICAO process and a lot of challenges to reaching a consensus. “But there is not a fundamental disagreement on the need to take action so I am cautiously optimistic,” she said.
A global MBM was but one of a host of measures, said Elina Bardram, Head of the Aviation and Maritime Unit, International Carbon Markets, at the European Commission. “We would like nothing more than for MBMs to become obsolete but this won’t happen without breakthrough technologies – that is just the reality,” she told delegates. “Also, these technologies may not be economically viable for the industry. MBMs do offer a flexible and effective mechanism for industry to contribute without compromising growth. That’s the beauty of an MBM and that’s why the EU introduced its emissions trading scheme.”
Macaulay said that following the 2010 Assembly resolution, work had been ongoing on the two-stream approach of developing both the framework and the single global mechanism.
“Notwithstanding the concerns of the industry over a patchwork quilt effect [of different national and regional measures], the original intention was that by stipulating to states guiding principles and design elements, a framework offered sufficient flexibility to accommodate various complementary MBMs that could have the potential in the longer term to transition to a single global scheme,” she explained.
Since then, she said, the emphasis had switched back and forth between the two streams, with the framework receiving more attention by the HGCC although not stopping work on the global scheme, which had been deemed feasible by most Council members. “What we haven’t resolved as yet is the diversity of views at a geopolitical level, which has very little to do with the core environmental issues.”
The area where there is the least agreement, said Macaulay, concerns the geographic scope of MBMs, which encompasses the complex issue of sovereignty. Applying the departing flights option in which flights are administered by the state of departure was preferable, in her opinion, as it provided the maximum global coverage in terms of capturing emissions, treated all operators equally on a given route, was less administratively complex and was consistent with UNFCCC reporting of international aviation emissions. But, she went on, it was very controversial because it contemplated the notion of exercising jurisdiction beyond national boundaries.
To avoid this, another suggestion – which had been discussed by the HGCC, the Air Transport Committee and the Council – was the national airspace option. She said this appeased the concerns over sovereignty but coverage of emissions was far from complete – “even if all states participated it would still only cover about 20% of emissions” – and there could also be market distortions and leakages, plus administrative complications where operators may need to report to a number of states on a given route.
There were pros and cons to both approaches, she said, but there was consensus building around the airspace option in the Council in order to avoid the sovereignty issue, at least as a starting point, although the debate had not yet finished.
Uganda’s Kabbs Twijuke foresaw that as general progress was made on reaching an agreed framework and the global MBM scheme, the issue of sovereignty would be resolved.
He said there were reasons to be optimistic about an agreement on a global scheme. “Even if it goes beyond 2013, I believe we will have something to implement by 2020.”
On the framework, Dr Maurice said the United States favoured the national or regional airspace approach as it created a ‘safety zone’ whereby a state abiding by the framework received an assurance that it was not going to be challenged. “This approach seems to us to be an area where folks [at ICAO] can coalesce around.”
Responding, Bardram said the EU’s position had been to gradually build a global MBM, although as an interim measure there would need to be a state or regional mechanism that would help build experience and then become obsolete as a global scheme was agreed upon.
“But we are not going to sit on our hands,” she stated. “This is a very serious issue. A discussion around a framework that is not very meaningful from an environmental integrity point of view is not what we expected when we stopped the EU ETS clock. We expected this was going to be a serious conversation about a political commitment by our partners to work towards a solution.
“If we talk about a national airspace approach, that is already provided for in the Chicago Convention. We don’t need a discussion on this as it’s pretty much redundant.”
Twijuke said the principle of special circumstances and respective capabilities of developing countries had been recognised in the discussions even though no consensus had been reached on how it should be dealt with. “What is good now is that everybody agrees that the issue must be addressed,” he said.
Macaulay said it would not be “the end of the world” if an agreement on MBMs was not reached at the 2013 Assembly as good progress had been made on other measures. “I believe at the very least we will hopefully achieve an agreement on a framework. It may not be a perfect framework but it will be in the context of a longer journey and there will be a commitment to keep working towards a global scheme.
“We will need to commit to specific actions over the coming years. We cannot deny or ignore that we are influenced by external factors such as the ongoing negotiations at the UNFCCC. We know that they are trying to broker an agreement by 2015, and if we can continue to work positively after 2013 that will provide further impetus to seal something by 2016 that will allow us to implement a global scheme by 2020.”
Twijuke said realistically a conclusive agreement on an MBM scheme may not be reached at the 2013 Assembly, nor a completely agreed framework, but “great progress will have been made. Come 2016 there is a huge likelihood that we will get some agreement. If we can agree on a global MBM there will be no need for a framework.”
On the EU’s expectations for the 2013 Assembly, Bardram said: “Our stopping of the clock on the EU ETS is a temporary one-year measure. It is crafted in a way that anticipates a more permanent amendment in the event of a meaningful outcome. The parameters of success are something on which that the EU co-legislators – the Council and the Parliament – have already expressed their views. We would need something meaningful under the framework and we would need, which I believe is within reach, a realistic timetable on a global MBM, and we would also need to see ambition on the other basket of measures.”
She added: “The EU has engaged quite intensely in the run-up to the third high-level group meeting. It has been an effort but not a good enough effort so far and much more needs to be done.
“The industry has provided a positive injection into the process – it can definitely add a dynamic in encouraging governments to take on the leadership to deliver in this window of opportunity.”
During the final panel session at the ICAO Symposium on Aviation and Climate Change, Belgium’s ICAO Council representative, Geoffray Robert, said progress in reducing emissions had been made since the last Assembly in areas such as operational measures, air navigation, state action plans and the CO2 standard, but the industry, NGOs and the ICAO Secretariat had demonstrated that MBMs were necessary in reaching the carbon-neutral growth goal.
“We are in a rare sector where the industry is leading the way on targets and a strategy for emissions reductions. Now it is time for ICAO member states to demonstrate that they are serious about the goal and they should be ready to act on this issue. We don’t have much time before 2020 and we need to agree now on a road-map with a realistic timetable to develop a global MBM. The industry is waiting, the NGOs are waiting, the next generation is waiting and the environment is also waiting.”
Englebert Etundi, the Cameroon representative, said aviation was important to developing countries but agreed an MBM could be used as a gap filler to achieve the emission reduction goals as part of a four-pillar strategy involving other measures. He added the special circumstances of developing countries should be respected.
Alberto Muñoz Gómez, Colombia’s representative on the Council, said aviation’s contribution of 2% to global CO2 emissions was symbolic but not significant. He said aviation’s environmental actions and achievements in fuel-efficiency improvements were exemplary and had set an example for other sectors.
In a reference to the EU’s emissions scheme, Gómez said measures should be global rather than regional. He was concerned that MBMs could instead of being a gap filler become a permanent fixture as it might prove to be cheaper and therefore more profitable for airlines to buy credits than to invest in technology and achieve real reductions in aviation emissions. Gómez, who is also coordinator of the Latin American group at ICAO, suggested that instead of a market in carbon, a market in oxygen might provide a better environmental outcome for the planet.
Malaysia’s representative, Yong Heng Lim, said there was great concern over the news that CO2 levels in the atmosphere had passed the 400 parts per million level for the first time in three million years and action was needed. He said the aviation industry would need the support of governments to meet their CO2 reduction commitments.
“ICAO recognises the need to reduce the greenhouse gas emissions of international aviation and it is important we set targets,” he said. “Whether we can achieve them is another issue – they have to be positive but at the same time realistic. From my perspective, the 2% fuel efficiency goal is achievable.”
Regarding the 2020 carbon-neutral growth ambitions, he said any shortfall from the basket of measures would have to be compensated by others means and MBMs could not be ignored as a gap filler, as long as they avoided leakages and market distortions.
Warning delegates that his views were unusual, Alexey Novgorodov, the Russian Federation’s Council representative, said ICAO’s aspirational goals were not realistic or practical and called for a reassessment and some different thinking on the issue. He questioned the aviation industry’s long-term assumptions and described its well-known Emissions Reduction 2050 Roadmap as a “graph of disappointed hopes”. Instead of taking money from the sector to buy carbon allowances in a market-based scheme, he said, it should be spent on technology improvements.
Although it had good intentions, he added he was against the EU ETS being applied to international aviation arguing it was unilateral and he doubted it would lead to real reductions in emissions.
Maryam Al Balooshi, representing the United Arab Emirates, said reducing carbon emissions from the aviation sector was a “noble objective” and felt the ICAO reduction goals were achievable but agreed there was a need for more practical and realistic solutions given the different capabilities of regions.
She stressed it was important that each of the measures being used should be properly assessed and quantified and called for more and better data to be made available. “What we can’t measure, we can’t manage,” she said, adding that there should be more focus on monitoring, reporting and verification (MRV) of aviation emissions, and that a global MRV standard should be defined.
Another issue that has proved a problem in the negotiating process on a framework is whether states or regions adopting MBMs should be expected to get the consent of other affected states before implementation, a move the EU states have strongly opposed.
Slide presentations from the ICAO Symposium are available for download from the link below.
ATAG Workshop's economic measures panel session with (L-R) Paul Steele, ATAG Executive Director; Kerryn Macaulay, Australia's ICAO Council representative; Elina Bardram, Climate Action DG, European Commission; John Wycliffe Kabbs Twijuke, Uganda's ICAO Council representative; and Dr Lourdes Maurice, Executive Director, Environment and Energy, US FAA (photo: ATAG):