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Greenhouse gas emissions from international aviation and allocation options

3 Summary

This chapter gives a summary of the main findings of this report discussing greenhouse gas emissions from international aviation and allocation options. This report is part of the outcome of a project funded by the Danish Environmental Protection Agency (DEPA). The steering group consisted of Lars Olsen Hasselager and Thorbjørn Fangel, both DEPA, and the author of the report, Stefan Krüger Nielsen, ECOtransport Consulting (external consultant).

3.1 Background

The project was initiated to update the DEPA on ongoing developments in the field of air transport and environment. The background for starting up such a project is that aviation, due to the prospects for future growth in demand for air travel and freight volumes, may become a more significant source of emissions of greenhouse gases in the future.

Another reason for the DEPA to take up the subject is that the DEPA need an update on why the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) have not yet been able to agree upon a methodology to allocate emissions of greenhouse gases from international aviation between countries. Only emissions from domestic air transport are included in the national inventories on annual national greenhouse gas emissions reported by Parties to the UNFCCC while emissions associated with fuel used for international aviation activities are to be reported separately. Consequently, emissions from international aviation are not included under the so-called Kyoto Protocol that sets out targets for reductions of national emissions of greenhouse gases to be fulfilled by the period 2008-2012.

Parties to the UNFCCC and the UNFCCC Subsidiary Body for Scientific and Technological Advice (SBSTA) have been discussing different possibilities for allocating emissions from international aviation to Parties, but so far no agreement has been reached on this subject. A main problem seems to be that if emissions are allocated to the country where the fuel is sold some Parties that have large sales of fuel for transit passengers will have to bear a larger burden than countries where there are no large hub airports. The basic problem seems to be that an airline registered in one country can carry passengers and freight originating from another country to a third country.

Article 2.2 of the Kyoto Protocol states that "the Parties included in Annex I shall pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from international aviation and marine bunker fuels, working through the International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO), respectively" [UNFCCC 1997]. As yet, the ICAO Assembly has not agreed upon new initiatives specifically aimed at reducing greenhouse gas emissions, but ICAOs Committee on Aviation Environmental Protection (CAEP) is investigating several options. Some of these options may have implications for the airlines' reporting requirements as well as the allocation issue.

For example, CAEP is currently discussing the possibility of negotiating with the airline industry on options to set up a voluntary scheme for improving the fuel efficiency of airlines. Such a scheme may involve the need for airlines to engage in a reporting scheme for fuel consumption and emissions. CAEP is furthermore discussing the possibility of setting up an emissions trading scheme based on a system where airlines are allowed to buy emission quotas in other sectors included under the Kyoto Protocol. Such a framework may involve the setting of a cap for aviation emissions and allocation of emission permits to airlines and probably also the allocation of the emissions of CO₂ from international aviation to Parties as well as the need for airlines to engage in a reporting scheme for fuel consumption and emissions. Therefore, the discussion on data availability and requirements seems to be closely connected to the issues of options for allocation and control. This explains why this report focuses broadly on all these issues.

3.2 Project objectives

One aim of this project is to describe the current status of the quality of the reporting by Parties to the UNFCCC of emissions from international aviation activities. The background for this is that the issue is scheduled for discussion at the 18th meeting of UNFCCCs Subsidiary Body for Scientific and Technological Advice (SBSTA). SBSTA has noticed that the reporting by Parties to the UNFCCC on fuel consumption and emissions from international aviation are currently not always consistent with the methodological guidelines set out by the Intergovernmental Panel on Climate Change (IPCC) in its "Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories". Especially Parties to the Climate Convention are having difficulties in separating fuel consumption and related emissions from domestic and international aviation. This distinction is necessary because emissions from international aviation are not to be included in the national emission inventories of Parties, but are to be reported separately.

Another aim of this project is to describe which methodologies for allocation of emissions from international aviation to Parties that are being discussed within the European Union (EU) and UNFCCC and elsewhere and to assess the data requirements and the data availability for the different allocation options.

A third aim of this project is to give an updated description of recent developments within the UNFCCC, EU and ICAO relevant to future efforts aiming towards reducing emissions of greenhouse gases from international aviation.

3.3 The environmental impact of aviation

Air transport, being the fastest growing transportation mode, is currently a much smaller energy consumer than road transport, but may become a relatively large source in the future if the sector continues to grow at current rates. In 1990, road transport emitted around 75% of the CO₂ emissions from transport activities, while around 12% was attributable to air transport and 7% to international shipping and around 6% to rail and inland waterways [IPCC 1999]. Air transport is currently estimated to emit approximately 3% of the total CO₂ emissions associated with combustion of fossil fuels [IEA 2001].

Aviation's contribution to climate change has been described by the IPCC in a comprehensive special assessment report "Aviation and the Global Atmosphere", requested by the International Civil Aviation Organisation (ICAO) and the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer [IPCC 1999]. The IPCC report concluded that aircraft engine emissions at high altitudes are considered to change the atmospheric composition by altering the "concentration of atmospheric greenhouse gases, including carbon dioxide (CO₂), oxone (O₃) and methane (CH₄); trigger formation of condensation trails (contrails); and may increase cirrus cloudiness - all of which contribute to climate change" [IPCC 1999, p. 3].

According to the IPCC, the current knowledge about commercial civil air transport's overall contribution to climate change suggests that the total positive radiative forcing (warming) effect might be 2-4 times higher than that of CO₂ emissions from aircraft alone. However, there is a high degree of uncertainty connected to this estimate, because the current knowledge about some of the atmospheric processes induced by high altitude aircraft engine emissions is relatively weak. Among the major uncertainties is the potential of persistent contrail formations to trigger the formation of cirrus clouds.

3.4 Aviation indicators and trends

In the period between 1960 and 1998 passenger air travel, measured in revenue passenger kilometres², has grown more than 20-fold. At the same time the fuel efficiency of the aircraft fleet has been substantially improved, mainly as a consequence of the use of more fuel efficient aircraft combined with an improvement of the average load factor. However, still these technical and operational improvements are overridden by volume growth. For example, in the period 1973-1997, the American air carriers reduced their fuel consumption per revenue tonne kilometres³ by 55%, but the amount of revenue tonne kilometres carried increased by a factor of 3,8 resulting in an increase in fuel consumption of a factor 1,7. In the next decades air traffic, measured in revenue passenger kilometres, and fuel consumption is estimated by the IPCC to grow by 5 percent and 3 percent per year respectively [IPCC 1999, p. 5 and p. 329]

On a global scale passengers and their baggage accounts for 70% of the revenue tonne kilometres transported by commercial airlines while freight accounts for the residual 30%. The amount of freight transported in aircraft grows stronger than passenger transport. The major flows of passengers and freight are transported between North America, Europe and Asia and within North America. 29% of the World's passenger transport by air is generated on domestic routes within North America. Average European and American citizens travel around 1200 and 3400 kilometres per year in aircraft respectively while people living in developing countries generally travel less than 100 kilometres. This does not only have implications for distributional concerns, but also exemplifies the growth potential represented by developing countries that may be on their way towards adapting Western consumption patterns.

3.5 Options for reducing aviation greenhouse gas emissions

In principle, there are several ways the GHG emissions from aviation could be reduced, see Figure 1.

Figure 1:
Examples of options for reducing greenhouse gas (GHG) emissions from commercial civil air transport. Source: [Nielsen 2001].

First of all, a reduction of the growth in commercial civil air transport could be part of a strategy for reducing emissions. Such a strategy would benefit from people adapting their lifestyles towards fewer holiday and business trips and towards travelling less by air, for example by choosing less remote destinations as well as by choosing to travel in transportation modes that are less greenhouse gas intensive than aircraft. Furthermore, the aerospace industry could produce aircraft that are less greenhouse gas intensive and the airlines could optimise load factors and operational procedures and scrap or re-engine their oldest and most fuel intensive aircraft. The improvement of operational procedures could, for example, involve investments in more efficient air transport management systems based on satellite navigation to allow the aircraft to choose more direct routings, thereby saving fuel. Another strategy would be to operate the aircraft at lower speeds and altitude. On the longer term it may be possible to substitute current fossil jet fuel by more environmentally benign fuels, based for example on renewable sources of energy.

It should be noted that the theoretical options for reducing the emissions of greenhouse gases from commercial civil air transport described in Figure 1 are to a large extent interdependent, and therefore not fully separable and addable, and furthermore to some extent counteractive.

3.6 Possible government incentives and control options for reducing GHG emissions from aviation

In principle, most of the options for reducing aviation GHG emissions described in section 3.5 could be promoted by different types of government incentives and control options.

The commercial civil air transport industry has until now not been subject to international regulations aimed specifically at reducing aircraft greenhouse gas emissions. Rather, standards issued by the International Civil Aviation Organisation (ICAO) set limits for aircraft noise and engine emissions in and near airports. However, the industry may soon be facing new environmental policies that can to some extent contribute to reduce the GHG intensity as well as the growth in passenger air travel.

ICAOs Committee for Environmental Protection (CAEP) is currently in the process of studying how a voluntary scheme for reducing the fuel intensity of airlines could be set up [CAEP 2002a]. This initiative is likely to be implemented within a relatively short timeframe because the industry itself seems to acknowledge the need for such a voluntary scheme. However, in a recent status report CAEP acknowledge "…voluntary measures alone could not achieve an ambitious emission reduction target. They would have to be used in conjunction with other measures. In addition, these voluntary measures allow industry to enhance its ability to undertake activities related to "capacity building". They are primarily looked at as transitional measures. A key issue is the need to ensure that any such action would be to the advantage of the participants if marketbased or other regulatory measures were imposed at a later date" [CAEP 2001n]. The main reason why voluntary measures are not considered sufficient is that the growth in aviation is expected to override the technical and operational improvements that could be part of a voluntary emission reduction scheme. However, as noted by CAEP in the citation above, if carefully designed, a voluntary scheme could be used to streamline airline environmental reporting, potentially improving the data material that may also have to be available if other market-based measures, such as a kerosene tax or an emissions trading scheme, are implemented at a later date.

In its assessment of a range of market-based measures CAEP recently concluded that an "open emissions trading scheme" allowing the commercial civil air transport industry to buy emission quotas in other energy consuming sectors would be a better and cheaper solution than for example a tax on emissions or fuel [Wickrama 2001] [CAEP 2000a and 2000b]. This is because it appears that less costly reductions are possible in other sectors (than aviation) because the aviation sector faces higher abatement costs, and hence the potential savings from trading with other sectors would be substantial. However, CAEP considers emissions trading a long-term solution because the design of an emissions trading regime would have to be agreed upon before trading can begin. Some of the key issues here are the setting of a cap for aviation emissions and the distribution of emission permits between airlines (i.e. grandfathering, based on past or current use, or auctioning through a bidding process) and possibly also the allocation of CO₂ emissions to Parties to the Climate Convention.

Another important issue for the design of an emissions trading scheme for aviation is whether the scheme should only consider CO₂ or if emissions of NO_x and water vapour at cruise altitude should be included. The last mentioned solution would mean that the aviation industry would have to buy more GHG emission permits than the before mentioned solution. For example, the UK Royal Commission on Environmental Pollution states in a recent report that an aviation emissions trading scheme ought to take into account that the total radiative forcing of aviation is about three times that of the carbon dioxide emitted [Royal Commission on Environmental Pollution 2002].

In Europe, the European Commission has been investigating the possibility of introducing European market-based control options for reducing GHG emissions from aviation, but until now, the European Community has not yet implemented any such measures.

3.7 Availability and quality of the reporting by Parties to the UNFCCC on emissions from international aviation

A few studies have been conducted aimed at describing the methods used to collect data and estimate and report emissions from aviation bunker fuels⁴. These studies report that aviation emissions are complicated to estimate because the statistical basis is relatively weak. Especially the distinction between fuel used for domestic and international purposes is difficult [IEA 2001] [Velzen 1999] [UNFCCC 1999b and 1999f]. Another problem is the separation of fuel consumed by military aircraft from fuel consumed by civil aircraft. According to the UNFCCC guidelines Parties should report fuel consumption for military aviation under the Source/sink category 1A5, "Other" while this is included under domestic aviation under IEA reporting guidelines [IEA 2001].

Of the 32 Annex I Parties to the UNFCCC, 12 Parties report to the UNFCCC their CO₂ emissions from domestic aviation in all the years from 1990-1999 while 16 Parties report CO₂ emissions from international aviation in the period. Fewer Parties report the other emissions species from aviation for the whole period 1990-1999 [UNFCCC 2002c]. Thus, currently there seems to be an inadequate geographical coverage of the data reported to the UNFCCC by Annex I Parties.

The UNFCCC Secretariat has requested CAEP to explore opportunities to examine and improve the quality of data reporting and comparability of aviation bunker fuel data [UNFCCC 2002a]. CAEPs Steering Group Meeting in September 2002 agreed that the ICAO Secretariat should take the necessary steps to organize a "scoping meeting", involving the UNFCCC Secretariat, the rapporteurs of some of CAEPs working groups and experts on emissions inventory and data reporting [CAEP 2002a]. This initiative may bring new insights of relevance on the topic, but the deadline of work lies beyond the deadline of this report, and the initiative is therefore not described further here.

Eurostat and the International Energy Agency are preparing a joint manual on annual energy statistics to help Member States' statistical authorities in filling in the energy statistics questionnaires. Eurostat also organises training workshops for officials from these authorities to discuss problems in data collection and reporting.

In a recent ECAC initiative European countries that participate in ECAC are encouraged to begin using the Detailed Corinair Methodology for calculating aircraft emissions. This may improve the ability of European countries to separate better emissions for international air transport from emissions for domestic air transport [ECAC 2002a and 2002b].

Another recent European initiative has been launched in a cooperation between the European Environment Agency, Eurocontrol and Eurostat to improve the data availability involving the use of a database supplied by Eurocontrol on actual flights performed in Europe and the use of the detailed Corinair emission calculation methodology. This effort may offer the opportunity to compare the data reported to the UNFCCC by European Parties to ECAC to the data calculated by EEA, Eurocontrol and Eurostat. At the time of writing this report the final results of the work has not yet been published [Eurostat 2002] [Lock 2002].

Eurostat finances specific projects in the Member States that aim at eliminating differences in energy data reported to Eurostat and those used for the calculation of CO₂ emissions reported to the UNFCCC. This work will also improve reporting of fuel consumption for international aviation. The projects will examine the energy data used in the submissions for the years 1990, 1995 and 2000, identifying and explaining the differences. The projects furthermore aim at establishing a procedure at national level that will eliminate diversions of different reporting mechanisms in the future and also aim at providing the updated energy data in the form of annual questionnaires for the period 1990-2000.

Besides the need to improve the methodologies for separating emissions from international aviation from emissions from domestic aviation there is another related question that is applicable to the reporting of aviation emissions in the European Union: Since the European Union has ratified the Kyoto Protocol the question arises whether the EU inventory should merely represent the sum of national inventories or if international intra-EU flights should be regarded as "domestic" in the EU inventory. If it is decided that the EU inventory should include international intra-EU flights as domestic these emissions have to be separated from the emissions reported as international by EU Member States. The emission calculation work currently under way in the cooperation between the European Environment Agency, Eurostat and Eurocontrol may be used to produce the data needed for that process.

Another problem that may remain in Europe is whether countries that have overseas territories should include flights to these areas in their national inventories or if these emissions should be reported as domestic emissions. According to the IPCC/UNFCCC reporting guidelines, administered territories should be included in national inventories, but for many countries they are not at present.

3.8 Availability and quality of inventory models

Currently Parties to the UNFCCC can use different methodologies of varying detail in their reporting of aviation emissions to the UNFCCC. A recent ECAC initiative aims at encouraging European countries that participate in ECAC to begin using the Detailed Corinair Methodology for calculating aircraft emissions [ECAC 2002a and 2002b]. This may increase comparability and accuracy in the reporting from these countries to the UNFCCC.

Another recent initiative from the European Commission, Eurostat and EUROCONTROL, the so-called TRENDS project, may also improve the data material and may also give the European countries the possibility to crosscheck their reporting to the UNFCCC to the data from Eurostat. The TRENDS initiative also opens the possibility of calculating fuel use and emissions separately for intra-EU flights. Such data may be needed for the EU emission inventory submitted to the UNFCCC [Eurostat 2002] [Lock 2002].

In the current situation only Annex I countries report emissions from aviation to the UNFCCC, but around one third of the CO₂ emissions from international aviation bunkers in 1999 relate to fuel sold in non-Annex I countries that have not yet agreed to reduction targets under the Climate Convention. Much of the fuel sold in non-Annex I countries may be consumed by airlines registered in Annex I countries or may be consumed by airlines transporting passengers and goods originating from Annex I countries. In case CAEP/ICAO intends to set up an emissions trading scheme the development of a yearly updated global inventory may be useful for calculating the total emissions from aviation, and more exact figures than those available today may also be needed to set up the system. A few global inventories have been conducted, but only for the year 1992, and these inventories are neither as detailed as for example the detailed CORINAIR methodology in their use of aircraft categories and emission indexes and neither do they contain accurate data on flights actually performed by all airlines globally.

A working group "Alternative Emissions Methodology Task group" has been set down by CAEP aiming at providing a better understanding of cruise emissions from aviation. Similarly, the European Commission is currently funding a programme in this area called "NEPAIR". At this time, both projects are seeking to establish methodologies, but not standards, that could be used for certification of aircraft engine cruise emissions, that may be ready by 2003. Currently, the ICAO Emissions Databank only contains certificated data for Landing and Take Off (LTO) emissions but these new initiatives may in the future lead to recommendations for the development of standards for engine emissions at cruise [NEPAIR 2002].

3.9 Availability and quality of airline data

The airlines that currently report their fuel intensity in environmental reports do not use a common standard. The fuel intensity estimates reported by different airlines are not directly comparable because of the differences in reporting methodologies. One example is that some airlines subtract a part of the fuel consumption which is attributable to freight transport in passenger aircraft, whereas others include this use in the estimate for the specific fuel use per revenue passenger kilometre. The division of fuel use between passengers and freight is not straightforward.

In the United States all airlines of a certain size are required by law to report their operating statistics to the Department of Transportation (the socalled "Form 41" arrangement). Therefore, in the United States, a comprehensive database exists with data for the fuel consumption of airlines and their aircraft spanning back several decades. This type of data can be used to make comparisons between airlines and for indexing their fuel efficiency. Such data are currently not being systematically reported to the same detail to governments, ICAO or elsewhere by airlines in other countries, although most airlines almost certainly gather such data for internal purposes.

One interesting question is whether it would be possible to establish some sort of global reporting requirement for all the World's airlines in line with the US "Form 41" establishment. Since ICAO and CAEP are currently investigating possibilities for setting up voluntary agreements with airlines on reducing their specific emissions of CO₂ that process might involve setting up a scheme for airline reporting of fuel consumption and emissions. Furthermore, ICAO and CAEP are currently investigating the possibility to set up a global system for emissions trading. Such a system may come to involve the setting of an emission cap and the allocation of certain emission quotas to airlines and may also involve new reporting requirements for airlines.

Even though airline fuel consumption could be estimated using bottomup modelling, for example using the Corinair-model, actual fuel consumption data from airlines may be needed because airlines might not be likely to accept being accredited for modelled fuel consumption data. At least at present, the models that have been constructed to calculate emissions from air traffic on a global scale do not contain a comprehensive database on flights actually being performed and furthermore relies on calculating fuel consumption and emissions by using less detailed aircraft categories than those used in the detailed CORINAIR methodology. Furthermore, all the models constructed to date are disadvantaged by not containing detailed information on the actual passenger loads and freight loads transported by the aircraft. These loads may become relevant for example in the case that airlines should become required to reduce their emissions per passenger kilometre and per freight tonne kilometre in a voluntary scheme. Detailed data on the passenger and freight loads may also become necessary for some of the more sophisticated models for allocating emissions from international aviation to Parties. However, these sophisticated models of allocation currently do not seem to be the most likely to be chosen if Parties to the Climate Convention should agree upon implementing an allocation option.

3.10 Allocation of emissions from international aviation

Parties to the UN Climate Convention have not yet been able to agree upon a methodology for allocating emissions from international aviation to Parties. Therefore, these emissions are not included in the national emission inventories that are to be reported to the UNFCCC by Annex I countries, but are reported separately under international bunkers in conjunction with emissions from international marine transport.

SBSTA has considered the following options for allocating emissions from international aviation [UNFCCC 1996a]:

1. No allocation
2. Allocation in proportion to national emissions of Parties
3. Allocation to the country where the fuel is sold
4. Allocation to the nationality of airlines
5. Allocation to the country of destination or departure of aircraft. Alternatively, the emissions related to the journey of an aircraft could be shared by the country of departure and the country of arrival
6. Allocation to Parties according to the country of departure or destination of passenger or cargo. Alternatively, the emissions related to the journey of passengers or cargo could be shared by the country of departure and the country of arrival
7. Allocation to the country of origin of passengers or owner of cargo
8. Allocation according to emissions generated within each party's national space

In 1996 SBSTA 4 concluded that options 1, 3, 4, 5 and 6 should be the basis for the further work and that with respect to option 1 (non-allocation) the responsibilities of the international community to address issues related to international bunker fuels should be recognised. Options 2, 7 and 8 were discarded by SBSTA for different reasons. The main reason for discarding option 2 is lack of equity because emissions are not allocated in proportion to the amount of aviation activities performed by each Party. The problem with option 7 is that the data needed on the origin of passengers and freight simply is not generally publicly available. Finally, option 8 was discarded because of its inadequate global coverage since all emissions above international waters are not allocated to Parties under this option.

By 1999, in a statement to SBSTA, the European Community stated that any decision on the inclusion of emissions from international bunker fuels in the national inventories of Parties (i.e. on allocation) should enter into force during the second commitment period. Based on the conclusions of SBSTA 4, the EU proposed a twin-track approach (main options I and II). Option I is not to allocate emissions from international aviation in the national inventories of Parties as in the current situation. Limitation or reduction of emissions from international aviation would be under the general responsibility of the international community to be pursued through ICAO. The EU may consider option 1 (no allocation) further, if ICAO makes demonstrable progress, taking into account the overall emission reduction target of the Kyoto Protocol. Option II is to include emissions from international aviation in the national inventory of the Parties. With regard to the allocation options (options 3, 4, 5, and 6), EU propose that SBSTA should compare and discuss these with a view to being in a position to reach agreement on one option by 2005. The remaining question seems to be whether it may be possible to reach an agreement on the allocation issue before 2005.

Furthermore, recent developments suggest that ICAO may be heading towards investigating further the potential use of an open emissions trading scheme for aviation, allowing the aviation industry to buy emission permits in other sectors. It has recently been pointed out by the UK Royal Commission on Environmental Pollution that if an emissions trading scheme is implemented, emissions from international aviation would have to be included in national greenhouse gas inventories of Parties to avoid double-counting of emission reductions attained in other sectors [Royal Commission on Environmental Pollution 2002]. Therefore, on the longer term, it seems that emissions from international aviation may have to be allocated to Parties also in the case where emissions reduction is pursued through ICAO.

SBSTA and the European Commission seem to agree that any allocation option chosen should be consistent with the 'polluter pays' principle and therefore should be equitable. The problem is that, in the case of international aviation activities, it is not always clear who should be considered as the 'polluter'. Furthermore there is the problem that it should be possible to ensure the availability and accuracy of the data required for allocating emissions. Option 3, allocation to the Party where the fuel is sold, seems to be the easiest way to allocate emissions from aviation because the data are to a wide extent already available. Furthermore, a comparison of options 3, 5 and 6 show that, for most countries, the different methodologies used for each option do not produce radically different results. The main problem with the data reported by Parties to the UNFCCC on fuel consumed for international aviation, is that Member States are having difficulties in separating fuel consumed for domestic and international purposes. The separation of fuel sales into domestic and international does not seem to be necessary if emissions from international aviation are to be included in national totals according to where the fuel is sold. However, option 3 does not take into account that aircraft can tanker extra fuel for a given trip. Some countries that sell aviation fuel at relatively low prices may therefore be disfavoured by option 3 as compared to options 4 (allocation to the nationality of airlines), 5 (allocation to the country of destination or departure of aircraft) and 6 (allocation to Parties according to the country of departure or destination of passenger or cargo). Option 5 may solve the tankering problem but would require that Parties use bottom-up models to calculate fuel consumption. Option 6 is disfavoured by the fact that it would require even more complicated models and data details than option 5. Options 3, 5 and 6 disfavours countries with a high level of aviation activities (for example countries that house large international hub airports) and this can cause equity considerations in cases where a large portion of the passengers and the freight is transported through the country in transit. Option 4 is disfavoured by the fact that countries do not currently gather data on the fuel consumption of national airlines. However, such data may be relatively easy to collect. The main disadvantage of option 4 seems to be that it does not necessarily always apply the 'polluter pays' principle because countries with large national airlines would be held responsible for a large proportion of global aviation emissions, even if many of the flights does not depart or arrive within the country itself. However, option 4 may involve that a higher share of the emissions from international aviation will be allocated to Annex I countries than what is the case for options 3, 5 and 6. From an equity point of view option 4 could be considered more equitable for non-Annex I countries due to the fact that much of the fuel sold for international aviation in these countries may actually relate to air travel performed by people living in Annex I countries. Finally it should be mentioned that option 7 (allocation to the country of origin of passengers or owner of cargo) is probably the option which is most in line with the "polluter pays" principle and would most likely be favourable to non-Annex I countries and to countries that house large international hub airports, but this option has been discarded by SBSTA due to its substantial data requirements.

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