IATA chief urges Australia to challenge Europe over the inclusion of aviation into the EU ETS
Giovanni Bisignani, IATA's Director General and CEO
Fri 22 Aug 2008 – Speaking to the Australian National Aviation Press Club in Sydney on Wednesday, Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA), said Australia had a responsibility to challenge Europe’s “unilateral and illegal” move to bring aviation into its Emissions Trading Scheme (ETS). He also called on the Australian government to reassess the “blunt” approach of its own domestic ETS proposals, in particular the plan to auction permits.
“The Kyoto Protocol gave the International Civil Aviation Organization (ICAO) the responsibility to deliver a global emissions trading scheme,” he said. “As a signatory to Kyoto, Australia has a responsibility to defend it. That means challenging Europe on its unilateral ETS. What right does Europe have to charge an Australian plane flying from Asia to Europe for emissions over Afghanistan.”
He said Australia should re-examine its own draft domestic ETS proposal, the Carbon Pollution Reduction Scheme. “The approach is blunt and focused only on economic measures. Where are the plans for operational efficiencies? As an international observer, I see some big concerns in the proposed economic mechanism. Auctioning permits would set a very bad precedent. And while airlines have been good at limiting our emissions with constant efficiency improvements, carbon-intense industries with less impressive records are given breaks that airlines are not. Why punish the good?”
Bisignani warned of the potential harm to the Australian tourist industry. “The cost could impact Australia’s competitiveness in tourism, which contributes 7.1% of GDP. Anything that makes an Australian vacation disproportionately expensive is an incentive for tourists to go elsewhere.”
The focus, he went on, must be on global solutions brokered through ICAO. “It is the only institution with the technical expertise.” He said its Group on International Aviation and Climate Change (GIACC) was building political momentum and, as a member of the group, Australia had an important role to play.
Bisignani also covered the wider problems of the global airline industry and forecasted the $5.6 billion profit it made in 2007 would be followed by a possible $6.1 billion loss this year.
“We are in a perfect storm of uncontrollable fuel costs and falling demand,” he said. “Already some 25 airlines have gone bust – greater than immediately following 9/11 – and we are bracing for more. Despite some relief in [the recent fall of] the fuel price, we are a fragile industry that is in a crisis.”