July 26, 2016

International Aviation and Climate

Martina Simpkins

On July 20, Martina Simpkins briefed the Washington, D.C. Aviation Assembly, a group of foreign embassy officials, on the ongoing international negotiations on aviation and climate within ICAO, the International Civil Aviation Organization.  ICAO, a UN-level organization with over 190 member states and a seat in Montreal, is working to design and implement a market-based mechanism that will require airlines to offset greenhouse gas emissions from international flights.  The ICAO General Assembly is expected to take a decision on the scheme at its next triennial meeting in Montreal this October.

The global market-based mechanism is intended to help make a reality the aviation industry’s ambitious commitment to “Carbon-Neutral Growth by 2020”, also known by its acronym CNG 2020.  While CO2 emissions from international aviation are currently estimated to contribute approximately 2% to global greenhouse gas emissions, that share is expected to increase significantly based on the sector’s growth expectations, in particular in Asia and other emerging markets.

The global market-based mechanism is envisioned as one of four pillars (along with improvements in technology, infrastructure and operations) that will help curb aviation emissions.  In a nutshell, airlines will be required to purchase emissions credits to offset emissions beyond the industry’s CNG 2020 mark.  The devil is in the details, however, and the negotiations are complex and highly political.  A dynamic similar to that in the larger international climate negotiations can be observed, with China and other emerging markets demanding “differentiation” for their fast-growing airlines, while legacy U.S. and European airlines seek to avoid bearing offsetting burdens without firm commitments from other ICAO member states.

The biggest question a few weeks before the General Assembly is:  Do we have enough political will among the key players to come to an agreement?  The global aviation industry supports a solution.  The U.S. government, along with its neighbors Canada and Mexico, also reiterated its commitment to reaching a deal at ICAO at the recent North American Leaders Summit in Ottawa in late June.

European ICAO member states are also firmly committed to reaching a deal.  In 2013, the EU narrowly avoided a potential trade war with the U.S. and China over the application of the EU Emissions Trading System to international flights when it agreed to allow ICAO time to set up its own mechanism.  ICAO’s failure to deliver could put the Europeans into a difficult spot of having to decide whether to follow through with extending its emissions trading system internationally – at a time when Brexit and other economic challenges already have Brussels preoccupied.

China is the wildcard.  U.S. government negotiators are in direct bilateral discussions with China, and most observers expect that an ICAO deal will be based on the U.S. and China finding common ground – as they did prior to the Paris climate summit last December.

What is at stake?  The aviation sector views its commitment to CNG 2020 as its “license to grow”.  If one thing is clear – the sector will grow, and despite significant research and investment in alternative fuels, the sector’s CO2 emissions will rise even as aircraft meet increasingly stringent emissions standards.  A pragmatic and workable mechanism will not only provide certainty to airlines, manufacturers and others in the supply chain, and allow the flying public to reap the benefits of travel while helping curb greenhouse gas emissions.  The adoption of an ICAO market-based measure with mandatory offsetting targets for the majority of international flights would be an enormous step toward reaching global political solutions to combat climate change.