ICAO Deal to (Eventually) Reduce Greenhouse Gas Emissions from Aviation a Good First Step
On October 4th, the International Civil Aviation Organization (ICAO) agreed that, by 2020, it would implement a market-based mechanism (MBM) aimed at curbing greenhouse gas emissions from international aviation.
Aviation was responsible for 3.5% of total man-made contributions to increased warming in 2005. This may seem small, but if the aviation sector were a country its emissions would be on par with those of Germany.
By 2050, this share is expected to rise to 4-5%. These numbers exclude the effect of aircraft contrails, which is poorly understood. With contrails included, aviation could be contributing 1.3-10% now; and 2-14% by 2050.
The politics of cutting emissions from international transport - both aviation and shipping - has been difficult from the inception of the Kyoto Protocol. While nations are required to cut emissions from domestic transport in their own way as part of their commitments under the protocol, dealing with international transport was left to two United Nations agencies: the ICAO for aviation, and the International Maritime Organization (IMO) for shipping.
Progress at Both Has Been Slow
One of the reasons for this is an inherent tension in the guiding principles of the Kyoto Protocol versus ICAO and IMO. On one hand, the Kyoto Protocol recognizes common but differentiated responsibilities. Many developing countries have decided that this principle means that they are not required to make any legally binding commitments to rein in their contributions to warming. On the other hand, ICAO and IMO operate on the principle of non-discrimination. When these organizations adopt a measure, they expect all their members to implement it. Any ICAO agreement would have to apply equally to developed and developing countries.
So when the United Nations outsourced the issue of reducing greenhouse gas emissions from international aviation to ICAO, did it also agree that Kyoto’s common-but-differentiated credo would be replaced by the ICAO’s policy of non-discrimination? Developed countries such as the US argued that it did. Developing countries argued that it did not.
Yet, an Agreement That Exempts Developing Countries is Untenable
For instance, if a flight on a US airline takes off from New York and lands in Beijing, who should its emissions be allocated to? Should they be split between the two? How? If airlines from developing countries were exempt, that would also produce significant leakage: in 2012, two of the world’s ten biggest passenger airlines, and six of the ten biggest cargo carriers, were from the developing world.
These and other considerations have, to date, produced a stalemate and the ICAO deal, which seems (mostly) to uphold the economically and environmentally sensible principle of non-discrimination, may have broken this stalemate. We will only know for sure in 2016, by which time the ICAO has said it will reveal the details of its scheme.
What Will ICAO's Market-Based Mechanism Cost?
Climate Strategies analysed the effects, in 2025, of an emissions trading scheme (ETS) where 85% of the credits were given away, and 15% were auctioned at $30 per tonne of carbon dioxide. They concluded that such a tax would reduce global GDP in that year by less than 0.01%. Small island states whose economies rely heavily on foreign tourism would be hit somewhat harder. The revenues from auctioning the credits could be used to compensate such states.
The European Union (EU) has a controversial plan to include international aviation in its own ETS from 2012. A Congressional Research Service analysis of that plan estimated that a €10 (~$15) per tonne carbon dioxide tax with 15% auctioning would raise the price of a one-way New York-London ticket, which costs $500, by $1-2 per passenger. A $30 tax would raise it by $2-4. So, the estimated cost is relatively small.
In fact, reducing aviation emissions is often very expensive. What will happen in practice is that airlines will buy credits from other industries, in effect paying to make cuts in emissions where the cuts are cheapest to make. This suggests that a well-designed market-based scheme ought to be integrated with other, larger schemes, such as the EU ETS or the Clean Development Mechanism (CDM).
The ICAO Proposal is a Step in the Right Direction
All of us will have to get used to living within a carbon budget, an upper limit to how much we can pollute each year. Each flight represents relatively well-off people blowing a big chunk of that budget in a relatively short time. Simple fairness demands that they be asked to pay for the damage that this causes. For instance, a New York-London return flight produces about 1800 pounds of carbon dioxide per passenger, or about three times the annual per capita emissions of Bangladesh.
Politically, the successful implementation of a market-based mechanism would demonstrate that a United Nations-sponsored global effort to fight global warming can work. Developing nations are understandably worried that a global price on carbon dioxide emissions would hurt their poor populations. A price on emissions from aviation would spare the poorest, while allowing governments to demonstrate that they are willing to shoulder some part of the burden of fighting climate change.
The ICAO should work speedily towards detailing and implementing its scheme.
I am a doctoral student in engineering and public policy at Carnegie Mellon University, where I study the economics of reducing greenhouse gas emissions from international air and marine transport. I joined CMU after completing a master's degree in technology policy at the University of Cambridge in the UK, before which I worked on European natural gas strategy for Royal Dutch Shell in The ...
Other Posts by Parth Vaishnav
The Energy Collective
- Rod Adams
- Scott Edward Anderson
- Charles Barton
- Barry Brook
- Dick DeBlasio
- Simon Donner
- Big Gav
- Michael Giberson
- James Greenberger
- Lou Grinzo
- Tyler Hamilton
- Christine Hertzog
- David Hone
- Gary Hunt
- Jesse Jenkins
- Sonita Lontoh
- Jesse Parent
- Jim Pierobon
- Vicky Portwain
- Tom Raftery
- Joseph Romm
- Robert Stavins
- Robert Stowe
- Geoffrey Styles
- Alex Trembath
- Gernot Wagner
- Dan Yurman