Greenhouse gas emissions from international aviation and allocation options

6 Some recent policy developments

6.1 UNFCCC developments
6.2 EU developments
6.3 ICAO developments
6.4 The position of environmental NGOS and industry

The commercial civil air transport sector has until now not been subject to international regulations aimed specifically at reducing greenhouse gas (GHG) emissions from aircraft engines. Rather, standards issued by the International Civil Aviation Organisation (ICAO) set limits for aircraft noise and engine emissions in and near airports throughout the so-called landing and take-off (LTO) cycle [ICAO 1993a and 1998f]. However, some recent developments within the United Nations Framework Convention on Climate Change (UNFCCC), the European Union (EU) and ICAO indicate that aviation GHG emissions may be subject to new regulation in the near future. These recent developments within the UNFCCC, the EU and ICAO are briefly summarised in this chapter.

6.1 UNFCCC developments

Following recent international commitments to reduce global GHG emissions, the aviation sector has come under increasing pressure to reduce energy use and GHGs. In Article 2, Paragraph 2 to the 1997 "Kyoto Protocol to the United Nations Framework Convention on Climate Change", it is stated that "The Parties included in Annex I shall pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from aviation and marine bunker fuels, working through the International Civil Aviation Organization and the International Maritime Organization, respectively" [UNFCCC 1997, article 2b]. ICAO has therefore agreed upon a working programme in this area, see section 6.3.

UNFCCC and its 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.

The allocation issue is currently not scheduled for discussion at SBSTA 18. However, United Nations Framework Convention on Climate Change's (UNFCCC) Subsidiary Body for Scientific and Technological Advice (SBSTA) has noted that the quality of reporting by Annex I Parties on bunker fuel emissions needs to be improved. At its 16th session in June 2002 SBSTA "recalled its invitation, at its fifteenth session, to International Civil Aviation Organization (ICAO) and International Maritime Organisation (IMO), in consultation with the secretariat, to explore opportunities for examining and improving the quality of data reporting and comparability under the relevant provisions of the Convention and the Kyoto Protocol, and under ICAO and IMO. Noting the relevant provisions of the Convention and of the Kyoto Protocol, in particular its Article 2, paragraph 2, it decided to consider the methodological aspects related to the reporting of emissions based upon fuel sold to ships and aircraft engaged in international transport at its eighteenth session. It invited ICAO and IMO to report on their activities in this regard at that session" [UNFCCC 2002a]. Therefore, currently a main priority of UNFCCC seems to be to find ways to improve the quality of reporting by Annex I Parties on bunker fuel emissions, and this subject is currently scheduled for discussion at SBSTA 18 [UNFCCC 2002a].

6.2 EU developments

In recent years, the European Commission has pushed for international agreements for introducing measures to reduce the environmental impact of commercial civil air transport. Most notably, in a December 1999 Communication, "Air Transport and the Environment - Towards meeting the Challenges of Sustainable Development", the European Commission describes a list of measures that might be taken into consideration. The Commission proposes more stringent international standards and rules to reduce aircraft engine emissions and noise and for improving air traffic management efficiency. These should be accompanied by market incentives such as aviation charges, emission trading, voluntary agreements and research and development into new and more efficient aircraft technologies [CEC 1999a]. The main objectives of the Commission's December 1999 Communication were updated and re-iterated in a December 2000 Communication, "Community objectives for the 33rd Assembly in the International Civil Aviation Organisation (ICAO) and ICAO Council decisions prior to this Assembly in the field of environmental protection" [CEC 2000d].

Furthermore, in a Communication on "Taxation of Aircraft Fuel" issued March 2000, the European Commission states that the European Union member states, in co-operation with the Commission, should intensify their work within the ICAO framework for the introduction of taxation on aviation fuel and other instruments with similar effects on the global level [CEC 2000a]. Besides focusing on a global jet fuel tax, some European countries as well as the European Commission and the European Parliament have been discussing the possibility of introducing a jet fuel tax in Europe. This is also discussed in the above-mentioned Communication. One idea is to allow EU Member States to tax domestic and intra-EU flights [CEC 2000a].

6.3 ICAO developments

In September/October 2001 ICAOs 33rd Assembly adopted resolution A33-7 "Consolidated statement of continuing ICAO policies and practices related to environmental protection" The resolution consists of an introductory text and a number of Appendices concerning different aspects relating to the environmental impact of aviation. For example, the resolution introduces a new "balanced approach" to noise management and a guidance on "landuse planning and management". Of main relevance to this report the resolution also contains a new working programme concerning greenhouse gas emissions aiming at improving the understanding of their impact and of investigating possible means of limitation.

In Appendix H "Environmental impact of civil aviation on the atmosphere" to resolution A33-7 the ICAO Assembly Requests the ICAO Council:

  1. "to continue to co-operate closely with the IPCC and other organizations involved in the definition of aviation's contribution to environmental problems in the atmosphere, and with organizations involved in policymaking in this field, notably with the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC);
      
  2. to continue to study policy options to limit or reduce the environmental impact of aircraft engine emissions and to develop concrete proposals and provide advice as soon as possible to the Conference of the Parties of the UNFCCC, placing special emphasis on the use of technical solutions while continuing its consideration of market-based measures, and taking into account potential implications for developing as well as developed countries; and
      
  3. to promote the use of operational measures as a means of limiting or reducing the environmental impact of aircraft engine emissions [ICAO 2001a]".

Furthermore, in Appendix I "Market-based measures regarding aircraft engine emissions", to resolution A33-7 the ICAO Assembly

  1. "Requests the (ICAO) Council to develop guidance for States on the application of market-based measures aimed at reducing or limiting the environmental impact of aircraft engine emissions, particularly with respect to mitigating the impact of aviation on climate change; and to develop concrete proposals and provide advice as soon as possible to the Conference of the Parties to the UNFCCC;
       
  2. Encourages States and the Council, taking into account the interests of all parties concerned, to evaluate the costs and benefits of the various measures with the goal of addressing aircraft engine emissions in the most costeffective manner and to adopt actions consistent with the framework outlined below, with States striving to take action in a consistent manner to both domestic and international aviation emissions:
  1. Voluntary measures
  1. Encourages short term action by States and other parties involved to limit or reduce international aviation emissions, in particular through voluntary measures; and
      
  2. Urges the Council to facilitate actions by developing guidelines (e.g., for quantifying, monitoring and verifying emission reductions or actions) for such measures, including a template voluntary agreement, as appropriate, and to work to ensure that those taking early action would benefit from such actions and would not subsequently be penalized for so doing;
  1. Emission-related levies
  1. Recognizes the continuing validity of Council's Resolution of 9 December 1996 regarding emission-related levies;
      
  2. Urges States to follow the current guidance contained therein;
      
  3. Urges States to refrain from unilateral action to introduce
    emission-related levies inconsistent with the current guidance; and
      
  4. Urges the Council to carry out further studies and develop further guidance on the subject;
  1. Emissions trading
  1. Endorses the development of an open emissions trading system for international aviation; and
      
  2. Requests the (ICAO) Council to develop as a matter of priority the guidelines for open emissions trading for international aviation focussing on establishing the structural and legal basis for aviation's participation in an open trading system, and including key elements such as reporting, monitoring, and compliance, while providing flexibility to the maximum extent possible consistent with the UNFCCC processs [ICAO 2001a]."

Thus, ICAOs Committee on Aviation Environmental Protection (CAEP) is investigating these issues further. One of the main findings of CAEPs studies until now is that voluntary measures alone cannot achieve an ambitious emission reduction target, but would have to be used in conjunction with other measures. ICAO is about to publish a circular describing "Operational opportunities to minimise fuel use and reduce emissions". Furthermore, CAEP is currently examining a template for a voluntary programme for reducing CO2 emissions from aviation [CAEP 2002a]. These currently unpublished efforts unfortunately cannot be described further within this report.

Another main finding of CAEPs work until now is that, among the marketbased options considered, an open emission trading system would likely be the most efficient and effective measure to meet Kyoto Protocol targets [Pulles 2000b]. On this background CAEP has recently decided upon requesting from a consultant a further investigation of how an emission trading system could work [CAEP 2002a]. At the current time of writing these efforts are at an early stage of the process and therefore unfortunately cannot be described further within this report.

6.4 The position of environmental NGOs and industry

Recently, a network of NGOs around the World formed the International Coalition for Sustainable Aviation (ICSA) that has been granted the role of observer within CAEP. Likewise, the aviation industry, represented by the International Air Transport Association (IATA) and the International Coordinating Council of Aerospace Industries Associations (ICCAIA) has observer status within CAEP. The views of the environmental NGOs and the industry towards the use of market-based measures to reduce the emissions of greenhouse gases from aviation can be seen from Boxes 1 and 2 below.

One main disagreement between the environmental NGOs and the industry is whether the total emissions of CO2 from the commercial civil air transport sector should be allowed to grow or if they should be reduced in accordance to the goals set up in the Kyoto Protocol, as suggested by the NGOs. The industry seems to prefer voluntary agreements for improving the fuel efficiency and an open CO2 emission-trading scheme that will allow the industry to buy emission permits in other sectors [IATA/ICCAIA 2001]. The environmental NGOs seem to prefer a tax that considers all types of emissions in all phases of flight. If no agreement can be reached the NGOs furthermore urge the UNFCCC to take over ICAOs obligation to introduce measures that can contribute to reduce emissions from commercial civil air transport [T&E/ICSA 2001]. Note that the statements in Boxes 1 and 2 were made at CAEPs fifth meeting (CAEP 5), before ICAOs 33rd Assembly.

Box 1:
The position of the International Coalition for Sustainable Aviation (ICSA) towards market-based options to limit or reduce emissions.

CAEP has mainly been focusing on possibilities to reduce emissions of CO2. ICSA therefore suggests that ICAO and CAEP should urgently develop a strategy that addresses all greenhouse gas emissions.

Voluntary agreements are not considered sufficient to respond to the provisions laid out for commercial civil air transport in the Kyoto Protocol and ICAO is therefore urged not to develop this concept further.

ICAO is furthermore urged to establish a CO2 target that is consistent with the Kyoto Protocol and aiming at a reduction of 5% in the period 2008-2012 as compared to 1990 levels.

ICAO should introduce an emission charge (on both the LTO and the cruise cycle) by its 34th Assembly at the latest. If the charge is not adequate for achieving the 5% reduction target, it should be supplemented by an emission-trading scheme that would begin no later than 2008.

ICAO should establish a NOx cruise standard and a marketbased mechanism to control all emissions during the cruise phase, including potentially weighing CO2 emissions to fully reflect the total radiative forcing.

If no appropriate solutions are decided by at the next ICAO Assembly, COP7 of the UNFCCC should decide on a workplan and immediate implementation plan, by COP8 at the latest.

Source: [T&E/ICSA 2001].

As can be seen from Box 2 the commercial civil air transport industry hopes to avoid taxes, and proposes instead the adoption of voluntary agreements for future emission reductions. Such proposals are brought forward by for example, the Association of European Airlines [AEA 2000b] and the European Association of Aerospace Industries [AEA and AECMA 1999], the British Air Transport Association [British Air Transport Association 2000] and the International Air Transport Association [ATAG 2000] [Dobbie 1999 and 2001] [IATA 2000a, 2000b and 2000c]. Some airlines have similarly adopted future efficiency targets, which are to be met mainly by continually buying new and more efficient aircraft [Lufthansa 1999] [All Nippon Airways 1999].

To sum up, in general the position of the commercial civil air transport industry is that technical measures to mitigate the emissions of greenhouse gases would be preferable from measures that are aimed at reducing demand, and among the market-based measures the industry seems to prefer an open emissions trading system.

Box 2:
The position of the International Air Transport Association (IATA) and the International Coordinating Council of Aerospace Industries Associations (ICCAIA) towards market-based options to limit or reduce emissions.

Compared to environmental charges or taxes the combined use of open emissions trading and voluntary mechanisms is likely to be more conducive to the development of a sustainable commercial civil air transport sector. A CO2-related charge is likely to be less economically efficient than an open emission trading scheme and the industry would have to carry an unacceptable cost burden and severe demand reductions, for relatively little environmental benefit.

Emissions trading is likely to provide the most promising and cost-effective option for maximising the contribution of commercial civil air transport to the reduction of global CO2 emissions. ICAO should therefore investigate further the key issues concerning the design and implementation of an open emissions trading system, such as the reporting of emissions, the establishment and distribution of emissions caps and permits and the monitoring, verification and enforcement of the system.

Voluntary mechanisms could help to establish the basis for future emission abatement at lower costs than marketbased options. IATA member airlines have adopted a fuel efficiency goal that aim at improving the fuel efficiency by 10 percent over the next ten years. This goal could serve as a basis for a voluntary mechanism. IATA is also prepared to agree upon fuel efficiency goals to be delivered from improvements in CNS/ATM systems.

Source: [IATA/ICCAIA 2001]