ICAO completes international dialogues with States on a market measure to address aviation CO2 emissions
Fri 1 May 2015 – A series of ICAO climate change seminars organised by ICAO during April in its five world regions was completed this week in Madrid. The aim of the Global Aviation Dialogues (GLADs) was to inform ICAO Member States on mitigation measures being undertaken to reduce carbon emissions from international aviation but in particular to explain and discuss with States a proposed market-based measure to cap the sector’s net emissions from 2020. Although no formal decision has been made, a carbon offsetting scheme is emerging as the preferred option by those States currently engaged in the development process at ICAO, and delegates to the GLADs, which also included representatives from industry and civil society, were encouraged to offer ideas and recommendations on the scheme. ICAO estimates that to achieve the carbon-neutral growth goal, the airline sector could be required to spend around $2.8 billion annually on carbon offsets by 2025, rising to $11.9 billion by 2035.
Aviation is responsible for around 2% of global man-made CO2 emissions and ICAO is mandated to address only the international element of those emissions, around 65% of the total. According to ICAO figures, CO2 emissions from international flights amounted to 448 million tonnes in 2010 as a result of fuel consumption of 142 million tonnes. By 2040, the UN specialised agency forecasts fuel consumption will increase 2.8 to 3.9 times this amount, with traffic (measured in RTKs) rising around 4.2 times. The international aviation sector’s CO2 emissions are therefore “sizable and growing”, it warns, and is addressing the problem through a three-pillar approach: quantification, identification of mitigation measures and implementation via State Action Plans, assistance to States and, finally, global action to implement reduction measures.
ICAO States have agreed a fuel efficiency improvement target for the sector of 2% per year but worldwide air traffic is growing nearer to 5% and in order to bridge the ‘emissions gap’ and achieve the carbon-neutral growth goal – so far aspirational at ICAO – a global market-based measure (GMBM) is required alongside a basket of other technology-based and operational measures, including the use of sustainable alternative fuels. ICAO estimates the total efficiency improvement derived from the future introduction of new aircraft technology is likely to range from just 0.57% to 1.5% on an annualised basis. In other words, an aircraft purchased in 2035 is forecasted to be between 13% and 31% more efficient than a new aircraft in 2010.
ICAO projections show that in 2020 around 3% of total international aviation fuel will come from sustainable alternative sources but the agency says there is still high uncertainty over a longer term level of production. An alternative fuels task force established by ICAO’s Committee on Aviation Environmental Protection (CAEP) is further assessing future production and life-cycle benefits. Another consideration by CAEP is to what extent provision should be made in the GMBM when accounting emissions from flights using alternative fuels
Other forms of MBMs, such as levies and emissions trading, have been looked at but largely discounted and carbon offsetting is considered a more simple, practical, less expensive and quicker to implement option. Offsetting compensates the emissions from one sector, in this case aviation, through reductions elsewhere, such as power generation or agriculture. To safeguard a scheme’s integrity, emissions reductions have to be ensured by robust verification and certification of the airline emissions to be included and the emissions units purchased.
Following the resolution (A38-18) adopted at ICAO’s last Assembly in late 2013, the ICAO Council established the Environment Advisory Group (EAG), comprising representatives from 17 Council members and IATA, to oversee the development of a GMBM. Technical support is being provided by the Secretariat and another CAEP task force, the GMTF, with sub-groups working on emission unit eligibility; monitoring, reporting and verification (MRV) requirements; and the assessment of MBM impacts. A GMBM framework is expected to be completed and agreed by the Council by mid-2016 for a decision by the 39th Assembly in the autumn.
To facilitate the development of the GMBM, the ICAO Secretariat produced for the EAG last year an outline proposal and key elements of a possible basis for a scheme that has since been further refined, called the Strawman. These incorporate, for example, adjustments to take into account fast-growing aircraft operators, new entrants and those ‘early mover’ operators whose individual fuel efficiency is already well above the industry average.
ICAO is currently placing increased priority on the assistance and capacity-building needed to help States meet its global standards, under the slogan “No country left behind”. In line with this objective, the GLADs were an opportunity for ICAO to inform its Member States on the principles behind an MBM and to exchange information and ideas for consideration at the mid-point in the ICAO three-year cycle. ICAO Secretariat members who had attended all five GLADs reported there had been a variable understanding of the issue but a high degree of commonality had emerged in what States wanted to see in the design of the GMBM.
Half of the two-day GLADs was devoted to ‘Dialogue’ sessions in which delegates were divided into small discussion groups that addressed questions concerning the most important considerations for an international aviation GMBM. Delegates from States, industry and NGOs were encouraged to express views and ideas, and the results were fed back into plenary sessions.
At the Europe and North Atlantic GLAD attended by GreenAir, there was a high degree of unanimity on a number of key issues:
An MBM should be easy to understand, simple to administer and cost-effective;
It must have environmental integrity and MRV robustness;
Avoid competitive distortions and be non-discriminatory;
It should not hamper the growth of aviation;
It should drive emissions reductions not revenue generation, and avoid double-counting of emissions;
Provide accessibility to a wide range of verifiable carbon units;
The GMBM development process should be more transparent with open communication and feedback to all States and stakeholders;
Technical assistance provided to States where needed along with capacity building;
A strong legal structure underpinning the implementation of the GMBM; and
A requirement for a better understanding of CBDR/SCRC principles and consideration of a route-based solution.
The feedback will be discussed at the next EAG meeting this month before being presented for deliberation by the ICAO Council in June. A second round of GLADs is expected to take place during March or April next year, which will be followed by a special High-level Meeting on the issue. ICAO will be presenting progress on its climate change activities at the UNFCCC COP21 summit in Paris later this year. The agency is also holding a two-day seminar in September on aviation emissions reductions, called E-GAP, which will include a session on carbon markets.
Analysis carried out by CAEP, and using IEA forecasts on carbon prices, shows the cost of offsets to the industry is likely to range between $1.9 billion and $6.2 billion in 2025 (mid-range $2.8bn) based on a carbon price assumption of between $6 and $20. This would rise to between $7.2 billion and $23.9 billion by 2035 (mid-range $11.9bn), based on a carbon price ranging from $12 to $40. At a mid-range carbon price, these costs would represent 0.3% of estimated total annual air transport revenue in 2025, rising to 0.9% of revenue in 2035. (See tables below)
By the time of the final GLAD in Madrid, over 350 participants from around 100 States had attended the five ICAO events. “We have been very encouraged by the level of turnout and it has been an extremely rewarding exercise,” Jane Hupe, Deputy Director, Environment, Air Transport Bureau, told GreenAir. “There has been a lot of commonality across the five GLADs in answers to the questions we asked in the dialogue sessions.”
She said before the GLADs, a number of developing States had been unclear about the purpose of an MBM and some had misconceptions. However, she added, States now recognised how MBMs fitted into the “big picture” as part of a basket of measures to achieve emissions reductions, and the use of UNFCCC CDM carbon credits to help projects in the developing world had been an important consideration for many States.
“It’s not that everyone desperately wants an MBM but there is an understanding that this is a measure that will help international aviation fill the emissions gap and reach the ICAO environmental goals. In turn, we now have a good understanding of what our Member States want from an MBM and consideration will now be given as to how ICAO can accommodate their requests.”
Presentations from the GLADs, the questions posed at the Dialogue sessions and relevant documentation can be downloaded from the ICAO GLADs website.
ICAO CAEP estimates of cost of purchasing offsets to achieve carbon-neutral growth goal:
ICAO CAEP estimates of cost of purchasing offsets relative to industry revenue:
ICAO video ‘The Road to a Sustainable Future for International Aviation’ presented at the GLADs: