Countries agree international aviation emissions pact

14 October 2016

The UN’s civil aviation body has approved a ground-breaking international scheme to help offset some emissions from air travel. The so-called “Carbon Offsetting and Reduction Scheme for International Aviation,” or CORSIA for short, is a market-based mechanism that will address any annual increase in carbon dioxide emissions above 2020 levels.

The news was announced on Thursday 6 October following nearly two weeks of meetings in the Canadian city of Montreal, which is the headquarters of the International Civil Aviation Organization (ICAO). The UN agency holds its highest level of meetings – the ICAO Council – every three years.

Under CORSIA, countries can choose to take part in a pilot phase starting in 2021. Afterward, they can opt into a first voluntary phase, which will kick off in 2024. A second phase will then apply from 2027 to 2035 to all states with the exception of countries claiming a minimal share in the aviation industry, as well as least developed countries (LDCs), small island developing states (SIDS), and landlocked developing countries (LLDCs), unless they wish to participate. 

During the pilot phase, countries will calculate airline operators’ offsetting requirements based on data for the overall sector. The first and second phase will then look at emissions by individual airlines. The text also stipulates that new entrants into the industry will be exempt from participation in the CORSIA for three years. Operators with a very low level of activity, along with humanitarian, medical, and firefighting operations, will be permanently exempt.

 “It has taken a great deal of effort and understanding to reach this stage,” said ICAO Council President Dr. Olumuyiwa Benard Aliu in a press release last week. “We now have practical agreement and consensus on this issue backed by a large number of states who will voluntarily participate.”

As of last Thursday, 65 states representing more than 86.5 percent of international aviation activity had indicated plans to participate in the new scheme from its outset. This includes big emitters such as the EU, US, Canada, and Japan, but does not yet include Russia or India.

 

Emissions from air travel currently account for about two percent of the global total, but these are growing rapidly. While ICAO has set a target of carbon-neutral growth from 2020, some stakeholders argued last week that the new offsetting scheme was not ambitious enough to meet this goal.

According to the Environmental Defense Fund (EDF), current participants in the various phases should cover around 77 percent of air travel emissions growth between 2021-2035. 

A long journey

The CORSIA decision comes after ICAO members agreed in 2013 to outline an aviation emissions reduction platform within three years. The move also followed hot on the heels of ratification of the new international Paris Agreement on Climate Change last Tuesday. (See Bridges Weekly, 6 October 2016) [Editor's note: Bridges Weekly is ICTSD's flagship publication for trade and sustainable development news]

The Paris Agreement does not cover emissions from either international aviation or shipping. Assigning responsibility for tackling emissions from both sectors has long been considered a tricky subject given the cross-border nature of these activities.

For example, slow progress on the subject at ICAO had prompted the EU in 2012 to include international aviation emissions in its flagship Emissions Trading System (ETS). This required the surrender of permits of the entire duration of any flight landing in the bloc – even for those parts which took place outside the EU. The rule provoked a strong backlash by over two dozen countries including China and the US, who claimed that this amounted to a breach of sovereignty, would alter competitiveness, and could potentially be in violation of international trade rules.

The high-profile spat eventually saw the EU modify its ETS rules to require the submission of carbon permits only for intra-European flights. The bloc maintained at the time, however, that it would revisit this decision depending on whether this year’s ICAO Council was able to reach a satisfactory agreement. (See BioRes, 7 April 2014)

European officials have confirmed that this review will go forward, with the EU’s executive arm to examine the ICAO scheme and present their findings to the bloc’s parliamentarians and the European Council next year.

Several industry voices welcomed the recent ICAO outcome, having backed the push for a global scheme, as opposed to a patchwork of national measures that could be both costly and create an uneven playing field.

“The CORSIA agreement has turned years of preparation into an effective solution for airlines to manage their carbon footprint,” said Alexandre de Juniac, Director General and Chief Executive of the International Air Transport Association (IATA), in a press release last week.

ICAO estimates that the scheme could cost the airline industry between US$1.5 to US$6.2 billion in 2025, assuming carbon prices range between US$6-10 per tonne of carbon dioxide equivalent (CO2e) to US$20-33 per tonne of CO2e. The UN agency also predicts that this could go up to between US$5.3 to US$23.9 billion in 2035, assuming carbon prices are at between US$12-40 per tonne of CO2e. Carbon prices will be determined by the various offsetting projects selected. 

Details in progress

According to experts, several key details will need to be clarified in order to bring the scheme into operation. These include developing systems for monitoring, reporting, and verifying emissions and determining the type of projects that qualify for offsets. 

“Viewed globally, this is a landmark deal that addresses a gap in the plan to deliver the Paris Agreement, namely how to tackle the soaring emissions from international aviation. But there are gaps in coverage and many issues still to be decided that will determine its effectiveness,” Tim Johnson, representing the Aviation Environment Federation, told journalists last Thursday.

Starting in 2022, the ICAO Council will also review the implementation of the CORSIA every three years, making adjustments as appropriate. While the scheme is not currently linked to global temperature limits enshrined in the Paris climate deal, the review process would consider ways to improve the scheme that could support these objectives.

Emissions units generated by mechanisms under the UN Framework Convention on Climate Change (UNFCCC), under which the Paris pact sits, would be eligible for use in the CORSIA.

The UNFCCC has had several offsetting schemes in place under the existing Kyoto Protocol. The new Paris deal envisages the development of a mechanism that could include offsets, along with the development of provisions for the use of emissions sinks and reservoirs, such as through forest conservation.

Various experts consider that scaling up carbon pricing efforts around the world will be crucial for ensuring a timely transition to a low-carbon economy in order to avoid the worst impacts of climate change. They have therefore commended CORSIA for its potential spillover effects on carbon markets more broadly.

“Achieving carbon neutral growth from 2020 is a significant step in its own right. And with robust implementation, the market-based measure can serve as a springboard to greater ambition, not only for the aviation sector, but – through market linkages worldwide – also for emitting sectors more broadly,” said Nathaniel Keohane, Vice President of the EDF, commenting on the possible links between different market-based climate action initiatives.  

Next emissions deal in line

Another emissions-related agreement may be announced by the end of this week, with a UN meeting underway in Kigali, Rwanda, to finalise talks on an amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer.

The amendment would involve phasing down the production and consumption of hydrofluourocarbons (HFCs), a potent greenhouse gas used in air conditioners and refrigerators as a coolant. The use of HFCs has grown in recent years, particularly as a substitute for an ozone-depleting substance that is covered under the Montreal Protocol.

The Kigali meeting is due to conclude on 14 October, with negotiators currently grappling with topics such as when to “freeze” their levels of HFC production and consumption, along with the pace of the so-called “phase-down” and how to handle the costs of adapting to more sustainable coolants.

Over 100 countries had already signed on to a statement backing a draft version of the amendment by the time the meetings began. In anticipation of a successful accord, various countries and private donors have already started putting money toward a multilateral fund aimed at facilitating the transition toward using different coolants.

ICTSD reporting; “Reaction: Aviation climate deal agreed in Montreal,” CLIMATE HOME, 6 October 2016; “Over 190 Countries Adopt Plan to Offset Air Travel Emissions,” THE NEW YORK TIMES, 6 October 2016; “Why a UN Climate Deal on HFCs Matters,” CARBON BRIEF, 10 October 2016; “EU airline pollution curbs stay in the air until next year,” REUTERS, 11 October 2016.

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