October 6, 2016

ICAO Adopts Historic Climate Agreement for the Aviation Sector

John Schmitz, Martina Simpkins

The international aviation industry made history today as the General Assembly of the International Civil Aviation Organization, ICAO, adopted a market-based mechanism that will regulate CO2 emissions for the aviation sector.

Key bilateral diplomatic talks between the US and China in recent months paved the way toward a workable and meaningful compromise, overcoming significant political opposition in particular from Russia and India.  Suspense ran high as details of the deal were hammered out until the last minutes of the General Assembly.  Climate experts and other observers are eager to see what lessons in successful diplomacy can be learned for the larger climate discussions.

ICAO’s decision, supported by a large majority of its more than 190 member states, the global aviation industry and a strong coalition of civil society groups demonstrates the exceptional leadership and commitment of the aviation sector in addressing climate change.  The “Carbon Offsetting and Reduction Scheme for International Aviation” or “CORSIA” as adopted by ICAO represents the first industry-wide mandatory and global climate measure.

The regime aims to stabilize international aviation CO2 emissions at 2020 levels, implementing an aviation industry commitment for carbon-neutral growth.  CORSIA’s adoption only one day after the announcement that the voluntary Paris Agreement on Climate has reached its threshold for entry into force signifies another momentous step forward in the fight against global climate change.

The adoption by an international body of a mandatory regime that will curb the increase of CO2 emissions from one of the fastest-growing industry sectors worldwide was made possible only by the sincere commitment of all of the key stakeholders in global aviation.  US and foreign government officials, industry experts representing airlines, manufacturers and suppliers, as well as a large number of civil society groups all worked tirelessly to find pragmatic solutions to the many complex questions raised in the design of a global market-based measure.

The regime will launch on a voluntary basis in 2021 and become mandatory for the majority of international aviation emissions by 2027.  More than 60 countries, including the US, China, 44 European states, fast-growing aviation hubs such as the United Arab Emirates, Qatar and Singapore, as well as developing nations such as Kenya, Burkina Faso and the Marshall Islands have already indicated that they will join during the voluntary phases of the regime.  Brazil, Russia, India and South Africa are expected to join the mandatory phase beginning in 2027.

Some of the momentum behind ICAO’s action was owed to the threat of a trade war between the US, EU and China that resulted from the EU’s attempt in 2012 to cover all international flights to and from Europe under its existing emissions trading scheme (ETS).  The international aviation industry is hopeful that the measure adopted by ICAO today will prove ambitious enough to European policymakers to permanently suspend the application of the EU ETS to international flights, avoiding a costly patchwork of regimes.

A significant amount of work remains to be done before CORSIA’s launch in 2021 with respect to its implementation, including on the types of carbon offsets that airlines will be allowed to purchase to cover emissions, as well as the related monitoring, reporting and verification requirements.  Successful and timely implementation of the global measure will require continued cooperation between all stakeholders.

Prime Policy Group advises Airbus Group, Inc. regarding strategic environmental issues, including the ICAO market-based measure.