How Will Measures to Reduce Carbon Emissions Impact Operators? The International Civil Aviation Organization (ICAO), an agency of the United Nations (UN), formalized a resolution earlier this year that puts global market-based measures into effect that will help curtail CO2 emissions from aviation. But, what will this mean for aviators?
There is an ongoing push to put meaningful controls in place by some UN member states. Specifically, European Union (EU) members and the U.S. are anxious for reforms to help manage aviation’s impact on climate change. Though domestic and international aviation contributes only 2 percent of the world’s total carbon emissions, that percentage is expected to rise significantly between now and 2040.
This was the finding per an environmental assessment from the Committee on Aviation Environmental Protection (CAEP) at the 39th Session of the ICAO Assembly held in Montreal, Canada from September 27 to October 7, 2016. Moreover, aircraft fuel efficiency is expected to contribute a 1-to-2 percent reduction in emissions while fuel consumption from international aviation is expected to increase by 2.8 to 3.9 times, compared to 2010.
The goal was to settle on global market-based measures (MBMs) that would ensure a reduction despite the projected growth in air traffic. By design, MBMs are intended to be flexible policy tools for achieving environmental goals at a lower cost than their traditional regulatory counterparts. In theory, this would lessen the shock and financial burden for smaller companies and private aviators who must comply with the new standards.
Several countries have been patient in allowing CAEP, under the auspices of ICAO, to develop a global MBM scheme to facilitate the implementation of these new standards worldwide. For instance, the EU established the European Union Emissions Trading Scheme (EU-ETS) as a cap-and-trade approach to governing emissions in Europe. The EU decided to hold off on its full implementation, however, in hopes of a more comprehensive global approach from the UN. (See the EU-ETS Stop-the-Clock blog for more details.)
The new resolution to come out of the 39th Session of the ICAO Assembly is expected to be a genuine step in the direction of carbon-neutral growth by 2020 and onwards for international aviation. The global MBMs agreed upon, known as ICAO’s Carbon Offset and Reduction Scheme for International Aviation (CORSIA). This will augment the non-MBM mitigation measures that resulted from the 38th Session in 2013. CORSIA should help harmonize the global effort and foster efficiencies, which would be far preferable to results achieved from regional and localized approaches.
CORSIA is slated for a voluntary pilot phase from 2021 to 2023; a voluntary Phase 1 from 2024 to 2026; and a mandatory Phase 2 from 2027 to 2035. Exemptions will be given to developing countries and countries with low levels of international aviation. Agreement to this required a significant concession on the part of the EU, which wanted mandatory participation starting in 2021. In turn, the EU lobbied for a greater number of voluntary participants to adopt the measures from the outset. Sixty-six nations or 86 percent of the ICAO member states have signed on voluntarily for the early phases. China, India, and Russia, however, remain holdouts at this point for achieving a global agreement with ICAO. Even if they do agree to comply with the resolution, it’s uncertain whether they would be prepared to implement it during the early voluntary phases.
The other shoe to drop is what shape and form the governance element of the scheme will take. In practical application, what will it look like? Who will define it? The resolution draft does not address governance nor does it rule out those decisions being sorted out behind closed doors over the next three years.
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