South African tourism minister calls for two-year suspension of aviation EU ETS to allow global deal at ICAO

South African tourism minister calls for two-year suspension of aviation EU ETS to allow global deal at ICAO | Aviation & Environment Summit 2012,South Africa,Marthinus van Schalkwyk

South African Tourism Minister Marthinus van Schalkwyk addresses the A&E Summit in Geneva (photo: ATAG)

Fri 23 March 2012 – The creation of a legally-binding global sectoral cap-and-trade emissions trading scheme for aviation is long overdue, South Africa’s Tourism Minister Marthinus van Schalkwyk told delegates at this week’s Aviation & Environment Summit in Geneva. He criticised the “15 years of intransigence and doublespeak” at ICAO, where “too many vested interests” had frustrated the political process. However, he had sharp words for Europe’s Emissions Trading Scheme, the introduction of which, he said, had left a bitter aftertaste. He called on the EU to suspend the extension of the ETS to aviation for two years in order to give the ICAO negotiating parties a chance to conclude negotiations on a global scheme. The minister added slowing down aviation and tourism growth was in no-one’s interest but the two sectors shared a responsibility to address their growing carbon footprint.


Decoupling aviation growth from emissions growth was a challenge facing everyone in the industry, said van Schalkwyk. “If you do not succeed in decarbonising aviation, this industry will not remain competitive in a carbon-constrained world,” he warned industry leaders in a keynote address. “However, you cannot be expected to tackle this multi-decade challenge on your own. This intolerable status quo is the result of both a massive market and governance failure.”


He said the aviation industry’s emissions reduction targets were an important start but challenged it to take them more seriously and do more to realise operational and infrastructural improvements and accelerate uptake of market-ready technologies. “Many of these efficiency improvements do not require government intervention, but simply make good business sense: they reduce fuel bills,” he said.


Governments, he added, had a critical role to play in contributing to R&D, airspace redesign, optimised flight routes, more modern airport and air traffic management (ATM) infrastructure, and freeing up the skies for competition. “Also, given that we are faced with market failures of global proportions, introducing stringent CO2 standards as well as benchmarks for green certification may soon become unavoidable,” he said, and called on the EU and US to make substantial progress on their next-generation ATM initiatives.


However, he went on, once near-term carbon abatement opportunities had been optimised the only options that remained for the long-term were drop-in, second-generation sustainable biofuels and a global cap-and-trade scheme.


“For me, this is not an ‘either/or’ scenario – we need a market-based mechanism and drop-in biofuels,” said van Schalkwyk. “We cannot place all our eggs in the biofuels basket. The scalability is simply too uncertain. Therefore, an emissions trading scheme must provide offsetting opportunities for unavoidable aviation emissions but, even more importantly, must create a price incentive for new investment in low-carbon technology.”


The minister acknowledged governments had a critical role in de-risking the substantial investment required in kick-starting an aviation biofuels industry and creating research and demonstration partnerships, along with frameworks for feedstock production. Additionally, he argued, governments had a responsibility to introduce harmonised global sustainability standards and level the playing field with ground transport sectors, possibly through phased-in fuel blending mandates.


A global price on carbon, said van Schalkwyk, could be a game changer, with a global scheme providing disbursements from a multilaterally managed fund directed towards, for example, decarbonising infrastructure and sustainable biofuel projects in developing countries.


In order to resolve the current impasse between the clash of air transport and climate change principles, he suggested a global market-based mechanism should have ‘zero net incidence’ for developing countries, with a provision under the ICAO principle of equal treatment to apply at an operator level when revenues are raised.


In the meantime, he said, the current international dispute over the EU ETS had potentially dire consequences for trade and tourism, and a political solution was urgently required, but with stronger leadership from all sides it was possible to resolve outstanding issues.


“I believe a global deal is within reach, but we now need the EU to take a broader view ... by creating the space for bona fide multilateral negotiations to conclude by 2013,” he said.


“If the EU is committed to a global solution, which I believe they are, and if the rest of the world is seriously committed to providing new political momentum to negotiations under ICAO, which I believe they are, there may be very good reasons for the EU to suspend the inclusion of aviation in the EU ETS for two years.


“I believe the EU should go the extra mile and give the negotiating parties in ICAO, all of us, a fair chance to conclude negotiations on a global sectoral emissions trading scheme.”


Such a scheme, he maintained, should be underpinned by an ambitious long-term target and mid-term pathways, be legally binding and therefore consequences for non-compliance, and a cap that should become more stringent over time. Carbon pricing would have to be progressive yet foreseeable in order to allow the industry to plan over long time horizons.


On the other side of the coin, he said aviation’s burden should not be disproportionate to other economic sectors and to avoid the double counting of emissions a global scheme should replace current emissions trading and green taxation schemes “that are spreading like wildfire in Europe.”


What had started as a green tax, the UK’s Air Passenger Duty had become a pure revenue-raising mechanism and a substantial tax on international tourism, he told delegates. “And for those of us in the developing world that depend on eco-tourism, it is a tax on our green services exports.”




Full text of speech (pdf)

Aviation & Environment Summit 2012



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