Kyoto v. Chicago: ICAO debates how to apply the principle of Common But Differentiated Responsibilities to aviation
Chris Lyle, Chief Executive of Air Transport Economics
Mon 18 May 2009 –One of the key issues facing aviation and environmental policy makers in preparations for the climate change talks in Copenhagen in December to decide on succession to the Kyoto Protocol is the need to reconcile the divergence between the principles of non-discrimination amongst operators in aviation’s Chicago Convention and the principle of Common But Differentiated Responsibilities (CBDR) in the United Nations Framework Convention on Climate Change (UNFCCC), writes Chris Lyle.
The principle of CBDR, first adopted at the Rio Earth Summit in 1992, calls on Parties to the UNFCCC to protect the climate system “in accordance with their common but differentiated responsibilities and respective capabilities”. Accordingly, “the developed country Parties should take the lead in combating climate change and the adverse effects thereof”. Application of the principle led directly to the distinction in the 1997 Kyoto Protocol whereby ‘Annex I’ (industrialized) countries were set specific greenhouse gas reduction targets while other countries were not.
International aviation emissions, whether related to Annex I or non-Annex I countries, were excluded from the Kyoto Protocol targets because of the difficulty in allocating them amongst States. However, under Article 2, paragraph 2 of the Protocol, Annex I Parties are committed to pursue limitation or reduction of GHGs from international aviation, working through ICAO. This Kyoto remit has proved to have substantial constraints, particularly as far as market-based measures are concerned, because:
·ICAO’s geographic and policy ambit reflects its membership of 190 States, well beyond the 39 ratifying Annex I countries;
·there are significant barriers to applying a Kyoto Annex I/non-Annex I industrialized/other country type concept in relation to equality of treatment and certain other provisions in the Chicago Convention; and
·aviation is unable to benefit from application of the Kyoto CBDR provisions regarding Joint Implementation, the Clean Development Mechanism and Emissions Trading.
Unless the issues raised can be resolved, a substantive global treatment of mitigation of international aviation emissions will not be feasible, with the prospect of a potentially duplicative and conflicting patchwork of taxes, duties and emissions trading schemes, including some elements without demonstrable environmental benefit.
The Chicago Convention would seem to proscribe discrimination on the basis of nationality. Article 1 of the Convention recognizes complete and exclusive sovereignty of every State over the airspace above its territory; Article 11 states that the laws and regulations of a State relating to the admission, departure or operation of an aircraft shall be applied to the aircraft of all States without distinction as to nationality; and Article 15 (on airport and similar charges) states that conditions applied by a State must be uniform amongst both national and foreign aircraft.
The Convention is silent on sovereignty regarding airspace over the high seas, where it is recognized that no State should exercise sovereignty; however, Article 12 states that over the high seas the rules in force shall be those established under the Convention, and ICAO establishes such rules and delegates authority for the provision of air navigation services over the high seas.
ICAO has in practice taken a flexible approach to the basic equality of treatment of States (see ICAO Docs 9902 and 9587), for example:
·on the issue of air carrier ownership and control, ICAO urges States to recognize the concept of community of interest within regional or sub-regional groupings of developing countries in accepting airline designation in air services agreements;
·in defining the phase-out of ‘Chapter 2’ (noisier) aircraft, while avoiding specification of certain individual countries through surrogate language (for example, exempting “the operations of any wide-body aircraft or of any fitted with engines that have a by-pass ratio higher than 2 to 1”, designed in part to cover inter alia the otherwise unqualified Ilyushin Il-76), ICAO did include a qualified exemption that States “take into account the problems of operators of developing countries with regard to Chapter 2 aircraft presently on their register”;
·ICAO has issued guidance material on preferential measures for developing countries in the economic regulation of international air transport; and
·there are a few passing references to special account be taken of the interests of developing countries in some recommendations of various ICAO panels and conferences.
However, the implications of these exceptions are either less tangible or substantially less significant than giving some form of blanket exemption or different treatment to developing countries regarding emissions targets. Furthermore, only those decisions taken in the form of Assembly Resolutions (for example the first two above) have any form of binding international legal status (and the first of these has in effect been extended to cover any ‘community of interest’).
A way forward?
A more germane and interesting action by ICAO relates to a study initiated by the World Tourism Organization (UNWTO) and carried out jointly by the ICAO and UNWTO Secretariats on Essential Service and Tourism Development Routes (ESTDR). Thistook existing concepts such as Essential Air Services in the United States, Remote Air Services in Australia, and Public Service Obligations in the European Union, and applied them to routes to and from the least developed countries. The joint study showed that the approach is viable and provided guidance as to its implementation.
A critical feature of the approach is that it applies to routes rather than to air carriers, with regulatory and/or financial support available for any a carrier operating the route, whether from a developed, developing or least developed country. In this way the regulatory approach was felt to be consistent with the Chicago Convention.
A route approach to applying CBDR interestingly forms the basis of recent proposals by both the Association of European Airlines and the Aviation Global Deal Group (whose members include Air France-KLM, BAA, British Airways, Cathay Pacific Airways, Finnair, Qatar Airways, Virgin Atlantic and The Climate Group) regarding the integration of aviation emissions into a post-Kyoto agreement. The route concept has also been put forward independently in a current Discussion Paper prepared for the UNWTO on Climate Change Mitigation Measures for Air Transport. Routes would be classified according to the countries involved, reflecting the generic targets or exemptions in a post-Kyoto agreement, irrespective of carrier. Carriers would consequently be impacted to the extent they fly on specific routes.
The country classification would ideally be the generically applicable classification to be developed by the UNFCCC, for example, (i) industrialized (current Annex I); (ii) emerging; and (iii) developing. Routes would be classified correspondingly according to the countries that they touch, with flights between countries in different groups falling under the ‘lower common denominator’ in terms of target setting (for example, a flight between an Annex I country and a developing country would be classified according to the latter). Differing targets (absolute or intensity-based) and/or exemptions would apply according to classification.
This concept would still need to be carefully fenced to avoid carbon leakage (for example, multiple stage flights might need to be considered throughout according to the origin and destination of the flight, to avoid a flight between other countries taking in a developing country and qualifying for an exemption for the entire flight) but appears to be feasible. Any residual fuel bunkering effect should by definition benefit developing countries by adding air capacity to their territories.
In the absence of a global approach to mitigation of international aviation emissions, not only is there a prospect of rampant proliferation of market-based measures by an increasing number of countries which would impact the economics of carriers, there is the spectre of legal action where a measure by one or more States impacts another.
A State ratifying both the Chicago Convention and the UNFCCC (plus its Kyoto Protocol or successor) ultimately bears sovereign responsibility to ensure consistency between the two in its own laws and regulations. It has already been argued that Article 2, paragraph 2 of Kyoto obliges an Annex I State to work through ICAO to the exclusion of any other action which might impact operators of another State.
Other potential bases for legal action by States have been expressed as:
·the final sentence of Article 15 of the Chicago Convention, which states that “No fees, dues or other charges shall be imposed by any contracting State in respect solely of the right of transit over or entry into or exit from its territory of any aircraft of a contracting State or persons or property thereon”; and
·the first paragraph of the International Air Services Transit Agreement (currently ratified by 129 Parties) which begins “A contracting State which deems that action by another contracting State under this Agreement is causing injustice or hardship to it, may request the Council to examine the situation”.
The merits or otherwise of the application of these provisions to the case, for example, of the inclusion of non-European carriers under the European Union’s Emissions Trading Scheme are beyond the scope of this article. One channel for pursuing an alleged breach would be to invoke Article 84 of the Chicago Convention on the Settlement of Disputes. However, anyone who is familiar with the laborious, time-consuming and expensive proceedings will not wish that route to be taken (for example, as was the case with the hush-kitting controversy, whereby the European Union initially decided to reject application of phase-out for originally non-compliant aircraft retrofitted with engines to meet – marginally – Chapter 2 Standards).
So far in ICAO the issue has been deadlocked, with developing countries insisting on some form of CBDR and many developed States insisting on equal application. While the legal situation as outlined above has a bearing, for some States the position appears to be a matter of policy and others are challenged by the ‘Catch-22’ of waiting for a generic position on the future application of CBDR from the Copenhagen meeting. The stakes are high, for aviation and the climate, and a way forward needs to be developed urgently.
Chris Lyle, a former employee of British Airways and ICAO, is Chief Executive of Canadian-based Air Transport Economics and can be reached at firstname.lastname@example.org.