Persuading governments to adopt global carbon scheme would be one of IATA's greatest achievements, says Walsh
IATA AGM 2016: Willie Walsh, Tony Tyler and Alexandre de Juniac
Thu 9 June 2016 – The new Chairman of IATA’s Board of Directors and CEO of International Airlines Group, Willie Walsh, told the media at the conclusion of last week’s AGM in Dublin that he was of “the firm belief” ICAO states will agree at their forthcoming Assembly a scheme to address international aviation’s carbon emissions. If so, he said, to have influenced governments to adopt the measure would be one of IATA’s greatest achievements. Outgoing IATA Director General Tony Tyler said the decision was in the hands of governments but airlines and the wider air transport community had played an important role in helping to focus their thinking. A resolution passed at the AGM was intended to send ICAO states during their ongoing negotiations a strong signal that industry wanted them to adopt the measure, added IATA Senior Vice President Paul Steele.
“This has been a fantastic example of how the industry can get on the front foot and influence the outcome in a positive way,” Walsh described the efforts. “The work that has gone on behind the scenes at IATA over the past five years has been phenomenal and Tony, Paul and the team deserve great credit for the leadership they have shown. The board has debated the issue at length and airlines have helped one another through very constructive debate.”
Tyler will be succeeded from September by current Air France-KLM CEO Alexandre de Juniac. Walsh, who represents British Airways on the board, starts a one-year term as Chairman. “I’m honoured to serve in this important role at such a critical time,” he commented. “Our top priority is getting governments’ agreement on a global market-based measure (MBM) to manage aviation’s carbon emissions at ICAO’s 39th Assembly later this year. This is a once-in-a-generation opportunity which is vital if our industry is to achieve carbon-neutral growth from 2020.”
Although the IATA resolution was passed “overwhelmingly”, support was absent from state-owned Chinese airlines, whose government has criticised the scheme’s proposals for not giving sufficient recognition to the position of developing countries, and Russia’s Aeroflot.
However, said Walsh: “Even where there have been reservations by some members over the resolutions we have passed, they haven’t been about the industry’s need to address climate change.”
Steele told a media briefing the ICAO negotiations were in a difficult phase in which individual states were coming up with their own positions.
“Over the summer there will be a large number of behind-the-scenes bilateral discussions to try and broker an agreement,” he said. “At this point in time, it is really important the industry sends a very strong signal that we want a global MBM. We are doing a huge amount of outreach ourselves, actively advocating for an agreement at ICAO. The cross-industry Air Transport Action Group (ATAG) is helping to amplify our message through collaboration with airports, air navigation service providers, business aviation and manufacturing. We have also held eight workshops around the world to help our members understand the issues and build knowledge.”
Despite the differences among ICAO member states on some key issues, Steele shares Walsh’s optimism that an agreement can be reached.
“Whereas at the last Assembly three years ago, a number of states were questioning why a global MBM was even needed, that isn’t the case now,” he said. “There is a much greater convergence of views and it’s down to arguing over the details such as how, for example, we can implement the question of differentiation and discussing the ‘nuts and bolts’ of how the scheme might work.”
On the failure of Chinese airlines to support the IATA resolution, Steele said it was important to recognise states were still formulating and reserving their positions. “China is symbolic of a group of countries that want to see how the differentiation issue is going to be resolved before they sign up to anything. Along with how offsetting obligations are distributed, it is one of the two fundamental challenges that will be taken up over the summer.”
One proposal that has so far largely escaped argument is that responsibility for international aviation emissions excluded from the scheme in order to take into account differentiation would not be passed on to those airlines that do take part. That would leave a gap of at least 20% – depending on the eventual metric agreed – of emissions left uncovered during the first phase of the scheme (2021-2025), with a smaller gap thereafter as airlines from other states join the second phase. This would leave the sector short of its full carbon-neutral growth goal, which Steele does not believe can made up by technological, operational or infrastructure advances.
However, Steele said airlines would be “radically opposed” to any attempt to divide up and reassign exempted emissions.
“In an ideal world, we would like 100% coverage but if governments decide otherwise then they shouldn’t hold the industry responsible,” he argued. “We are keen the amount of emissions excluded is as small as possible and we will do what we can to advance other measures, but we would love governments to help close the gap, for example through supporting the development of sustainable alternative fuels.”
One measure alone would not get the industry to its long-term goal of a 50% reduction in net emissions by 2050, he said, but a well-designed, single global MBM would be a final building block in the overall strategy.
On the carbon offsets that industry would purchase under the global scheme, Steele said IATA had been working with ICAO and the NGO community to ensure the right quality criteria was set. “We have to be very careful about the types of offsets that are used and there has been a huge amount of work undertaken on this looking at from one end of the scale UN-approved CDM credits to, quite frankly, credits that aren’t worth the paper they are written on.”
He revealed some analysis had been carried out at IATA into the potential costs of offsetting. On a flight from London to Beijing using an Airbus A380, for example, the cost of fuel would be in the region of $45,000 and the cost of offsetting the carbon emissions for the flight would be roughly 10% of that, therefore $4,500, at current fuel and offset prices.
“As an industry, of course we hate costs but we believe it needs to be built into the system,” he said. “It’s the right way to go.”