Airline climate change group outlines at UNFCCC talks how aviation emissions can be tackled post-Kyoto on GreenAir Online

Tue 7 Apr 2009 – The Aviation Global Deal (AGD) Group yesterday presented UN climate change negotiators with a draft policy framework for addressing CO2 emissions from international aviation that could help provide the basis of an agreement at the UNFCCC Copenhagen summit in December. The group, which comprises British Airways, Cathay Pacific, Air France/KLM, Virgin Atlantic, BAA and international NGO The Climate Group, has come up with a number of proposals, some controversial, that include setting a global emissions target and the setting up of a sectoral emissions cap-and-trade scheme.

The proposed framework, which the AGD Group describes as “ambitious, equitable and effective”, was presented at a side event at the UNFCCC climate change talks currently taking place in Bonn, Germany. The group claims this was the first time that aviation sector companies have made direct recommendations to UN climate change officials on how their sector’s CO2 emissions should be accounted for.

The European Commission was also due to make a presentation at another side event on how to effectively reduce international aviation and shipping emissions post-2012.

The AGD Group’s presentation aimed to build on its launch communiqué issued in February (see story) and explain its current thinking on a global approach that will maintain a level-playing field for airlines, provide revenue to support climate change activities in developing countries and accelerate alternative fuel and technology development and uptake.

· International aviation CO2 emissions should be addressed through a global sectoral agreement, rather than a patchwork of regional initiatives, in order to avoid carbon leakage and maintain a level playing field.

· An airline’s CO2 emissions is based on the carbon content of its annual fuel purchases and the use of sustainable, lower life-cycle carbon alternatives are incentivized.

· Any revenue generated from auction of a proportion of CO2 allowances is used for climate change adaptation and mitigation activities in developing countries and also research into greener aviation technology.

The setting of a global emissions target for the sector is a more ambitious approach than that currently being undertaken by ICAO’s Group on International Aviation and Climate Change (GIACC), which is considering only ‘aspirational goals’ based on improved fuel efficiency across the international airline fleet. A proposal for a global sectoral cap-and-trade mechanism is highly unlikely to emerge from the GIACC process, with little enthusiasm for the measure from major countries like China and the United States. Within Europe, governments have shown an unwillingness to earmark auction revenues from its own EU Emissions Trading Scheme for environmental purposes.

The AGD Group says it has recently consulted various government, industry and NGO stakeholders on its proposals and claims widespread support for the approach.

Dominic Purvis, Cathay Pacific’s General Manager, Environmental Affairs, speaking to GreenAir Online ahead of the Bonn meeting, said the purpose of the presentation was to stimulate further debate and discussion. “We don’t say we have the only solution, we have a solution. What we are trying to do is take a phased approach in which we initially presented the basic principles of a scheme we think could work and to get views on them. Our earlier principles document has been shown to IATA, who has accepted and modified it so that their version pretty much includes most of our own proposals.

“The second stage is to get out some of the key design elements and that’s what we hope to put forward in Bonn. Although we have now done a fair amount of work there are still some details that still need sorting out but we don’t want to put out a scheme that might get derailed because someone disagreed with a small part of it.”

Mark Kenber, Policy Director with The Climate Group, told GreenAir Online: “For an ambitious proposal such as this, the response has been surprisingly positive. A number of airlines have expressed interest in either joining the AGD Group or supporting from the outside.”

Damian Ryan, Senior Policy Analyst with the NGO, said the group remained hopeful that one or two US airlines might yet get on board. “Obviously, their government is essential to any agreement but we recognize they have certain concerns. However, we hear from our airline partners in the group that US airlines are certainly engaging far more now on the issue, even on market-based measures.”

The AGD Group is keen to stress that their thinking is aligned with IATA’s four-pillar strategy, including its fourth pillar on economic measures. The group recently presented their ideas to IATA’s environment committee.

“IATA was pleased to discover that was a much greater acceptance by the airlines of the need to come up with a position,” says Purvis. “The comments that were made previously were quite negative and defensive. Airlines have now realized the importance of the issue, especially those from the US who have been exposed to European public opinion and the ETS. IATA has rapidly been able to come up with a set of principles that can be used as a platform for its own scheme and has considerable in-house resources at its disposal to model various scenarios.”

Mark Watson, Manager, Environmental Affairs for Cathay Pacific, adds, with a note of caution: “Before, we heard nothing from the airlines themselves and there was no coherent position. The different trade associations in the different regions – AAPA, ATA, AEA – have all started to lobby IATA. The challenge for IATA is how to bring them all together to achieve consensus, which can then inform the GIACC process and then be taken forward to Copenhagen. In my opinion, we are still a long way off from that position.”

The Climate Group’s Kenber acknowledges there has been resistance to the EU Emissions Trading Scheme from parts of the aviation industry but says that carbon market measures of one kind or another are amongst many of the proposals being put forward elsewhere at the Bonn talks. “I would be exceptionally surprised if the Copenhagen agreement, or what follows from it, does not include a carbon market as a central policy instrument.”

“Aviation is a technical industry used to solving problems through technology,” says Purvis. “That’s all well and good but this isn’t one of those challenges. We aren’t recognizing the gap between the growth in the industry and the rate of technological progress and efficiency gains. Biofuels and other new technologies may get us there in the long term but that’s why in the shorter term we believe market-based measures are needed.”

Kenber says there is a recognition amongst many airlines that aviation emissions are going to be a part of the post-2012 agreement. “Therefore, it is much better for airlines to engage and come up with proposals that are consistent with what the environment needs but are also best suited to how their industry works. The intention of the group is not to go behind anyone’s back. If our proposals could persuade IATA or GIACC to adopt them into their own then that would be half the job done. If our initiative then withered away, so much the better.”

On the question of what global targets should be set for the sector, Kenber says the group is not proposing any numbers at this stage as it would be premature and counterproductive. “However, being consistent with other sectors and to have a reasonable chance of keeping global temperature rises to below two degrees and a 450ppm concentration target, then 2020 emissions targets have roughly to be around the 1990 level. If we cannot manage that we will shut off the possibility of reaching the 2050 target and it becomes considerably more expensive the longer we delay it. It’s something we are discussing within the group at the moment.”

Overall, Kenber says the industrialized countries will need to set binding commitments on the level of emissions reductions they will make. “Ideally, you would want that divided up by country but that might not happen by Copenhagen and actual numbers might have to be put on the table in the follow-up process, linked to what kind of contribution developing countries can make. That will then determine what will be expected from international aviation.”

Ryan does not see the developing countries giving up the principle of common but differentiated responsibilities (CBDR) on aviation and will not show their cards until the last moment when the final negotiations take place. The AGD Group has come up with a possible solution on the issue but accepts that in the end it will be a political decision.

“No one has said our scheme does not work,” says Cathay Pacific’s Mark Watson. “The people we have showed it to – within the industry, academics and others with experience of this issue – have all said it’s simple, logical, clear and it could work. It gives as a lot of hope but political acceptability is our number one challenge. Without that political commitment the whole thing breaks down.

“We know that it’s intellectually rigorous, we think the costs stack up, and it has really good benefits for developing countries and for the environment. But unless you get a high-level political buy-in then none of this works.”

Damian Ryan says there is no political appetite to let international aviation and shipping off the hook a second time. “They can’t get away with another ten years of not producing anything.” He says the Danish environment minister, who will be president of the UNFCCC Copenhagen conference, has already made it clear that if ICAO and IMO (the International Maritime Organization) do not deliver on emissions reductions then she will ensure the responsibility is taken away from the two agencies.

“By participating in discussions within the UNFCCC process, we can raise awareness of the challenges facing the industry and explain why we are different from, say, the cement industry and other fixed-base emitters, and why it requires a different solution,” says Purvis. “We have already seen the unintended consequences of the EU ETS where it might seem a great policy for one type of industry but doesn’t necessarily work for international aviation.