Neutralizing Emissions from International Air Travel — On Project CORSIA and its Shortcomings
If you were to take a flight from India to the United States, to which country would the carbon emissions produced be attributed to? To India, since that’s where the flight took off? An equal split between the two countries? Or to all the countries along the route that the flight takes?
This is not just a hypothetical question. It matters, because it informs graphs like this:
And these graphs are in turn important, because they tell us where the clock on the metaphorical time bomb of climate doom stands. They determine the targets that each country needs to achieve to keep temperature rise below 2 degrees.
So which country is it? The answer is … drumroll … neither!
The norm, I was shocked to find, is that emissions from international air travel is not counted towards countries, but instead to a UN body known as the ICAO (International Civil Aviation Organization). This is an organization that isn’t directly beholden to any citizen group, but whose decisions can be decisive in our battle against climate change. Aviation accounts for 2.5% of global emissions, and could rise to 25% by 2050 according to some estimates, so it’s important that we have a solid plan to manage aviation emissions.
The primary approach to tackling international aviation emissions is known as CORSIA — Carbon Offsetting and Reduction Scheme for International Aviation. This is market based mechanism which requires airline companies to offset their emissions through carbon reduction projects in developing countries, for routes involving countries that sign up to the accord. For nuances on when the programme shifts from its voluntary to mandatory phase, see the graphic below.
The idea is that airlines measure their CO2 emissions as per a set standard, and negate the impact of these emissions through UN approved projects. This allows them to maintain their growth (unlike cap and trade programmes that set hard upper limits), while staying carbon neutral, a potential win-win for aviation businesses and the environment.
A lot rides on how this programme is implemented, not least the guilt that I feel each time I board an airplane. So in this article, I’d like to look at the CORSIA programme through a critical lens and highlight the shortcomings that I foresee in this initiative.
Distortion in International Markets
Market conditions in which regulations don’t apply uniformly to all players are undesirable. Companies that are favored by the regulation will receive an unfair advantage, and use the margin gained to their benefit to distort market prices. This will, in turn, lead to those who are at a disadvantage to clamour for the regulation to be changed or dropped.
Since international aviation is effectively a global market, airlines that fly through countries that don’t sign up for CORSIA will be at a relative advantage to all others. This could put airlines from nations that comply with the programme at risk of losing valuable business, especially for transit travel, to competing countries.
Already, countries like India and China have expressed their unwillingness to join the programme. What’s more, the United States has already set the precedent of pulling out of the Paris Agreement. If any of the major countries fail to join, or drop out of the programme, the resultant asymmetry in the market may cause the entire house to come crashing down.
If CORSIA raises the costs of plying international routes considerably, airlines may take to altering their routes to maximize the number of non CORSIA miles travelled. CORSIA applies only to international travel — domestic aviation is managed by countries themselves — so airlines may schedule hop-overs in domestic border cities to avoid emissions costs. Such contrived altering of routes may reduce the emissions covered by the programme, but inadvertently increase the amount of emissions produced in aggregate.
Margins and Solvency
Air travel is a low margin business. The technology behind air travel has been commoditized, so there’s very little that airlines can do to differentiate among themselves. This leads to competition that drives prices low, so to survive, airlines have to keep costs low and maximize the volume of traffic that they service.
The state of the industry is highlighted by the fact that there is no airline company in the Fortune 50, and the largest airline company in the world, Delta Airlines, is only worth USD 37 billion. What’s more, it’s not uncommon to see airlines go bankrupt if they can’t manage their finances properly — we’ve seen a few examples of this recently, notably the Icelandic low-cost carrier WOW airlines.
Against this backdrop, it’s very possible that CORSIA regulations might make the difference between an airline’s survival and continued existence. Now, air travel is a labor intensive job; if a large airline were to find itself in a battle for survival, it will be interesting to see if politicians stomach thousands of job losses and keep to their commitments to CORSIA.
Isolating Additional Value
Protection of the environment usually has economic utility, even outside of the scope of climate change. Somebody always stands to benefit from the implementation of environmental projects — the fact that these projects have not already been implemented means that either the capital or the resources required to build the project haven’t yet come together. Or perhaps these projects would have been implemented given enough time, in which case the arrival of climate capital only serves to accelerate the date of implementation.
In such cases, the value of the offsetting project should be calculated not in absolute terms, but rather in terms of the relative additional benefit delivered by either pushing the project above the activation threshold, or accelerating the timeline of implementation. As Lisa Song writes in her eye opening article about deforestation in the State of Acre, Brazil — “environmental gains are only real if the solar farms or windmills would never have been built without the credits”. However, the way CORSIA is setup, the full benefit of implementing the project is likely to be factored into emissions calculations.
Carbon leakage is the phenomenon by which emissions in one area increase due to a reduction in emissions in another. Offsetting projects to protect the environment in one region could result in polluters shifting their attention elsewhere and inflicting a greater magnitude of destruction in a different region. If this were to happen, no real gains would accrue to the environment. And since it’s difficult for ICAO to account for every first or second order effect of initiating a new project, this is a tangible concern.
A key issue with offsetting is that the gains made over a period of time can be reversed in an instant if the flow of funding stops.
Consider the example of afforestation and deforestation. It takes decades to plant trees, and requires significant effort to keep forests away from the reach of commercial interests that want to take them down. During this period, the trees that grow help further the fight against climate change by capturing and storing CO2 from the environment. Note the operative verb “storing” — trees only store CO2, they don’t make the CO2 disappear altogether. If these trees were to be taken down, a majority of the CO2 captured over the preceding years will be released into the atmosphere, reversing years of conservation efforts.
This means that environmental initiatives can’t be viewed through the lens of annual contributions, the way CORSIA accounting is done. The emissions offset in one year can easily be undone in future years if the effort is not sustained, or left to fall by the wayside.
The emissions reduction from a carbon offsetting project can count both towards the airline that paid for the project, and the country in which the emissions reduction was realized. Since countries have their emissions reduction targets too under the Paris Agreement, the concern is that these efforts will be double counted towards both targets. This in an accounting loophole that might deliberately be exploited by nations that wish to limit their liabilities.
Moral Justification to Overcome Flyksgam
Flyksgam or flight shame is a growing phenomenon that has had environmentally inclined consumers make conscious efforts to minimize their air travel. Movements like this have the potential to make a tangible impact on emissions through sheer reduction of demand.
The fear with CORSIA is that it might give conscious consumers the moral permission to resume flying without any guilt for their actions, thereby raising demand to levels higher than it would originally have been. This will result in an increase in emissions, which, if not meaningfully countered by CORSIA, could engender an outcome that is worse than the one we would originally have found ourselves in.
Scope and Timing
CORSIA only becomes mandatory in 2027, which by some measures could be too late. According to a recent UN report, we might only be 12 years away from the point of no return. Coupled with the fact that 2027 is a full decade after the Paris Agreement was signed, it seems that the CORSIA timeline should have been more aggressive. While the phased ramp up is understandable given the number of stakeholders who need to be convinced for this to come together, this doesn’t make up for the fact that our time to act is limited.
There is also an argument that the scope of CORSIA should extend beyond carbon emissions. Air travel produces a whole host of other pollutants, including carbon monoxide, nitrogen oxides, sulphur oxides and water vapor, none of which are addressed by the CORSIA initiative.
At the Cost of the Poor
The programme allows wealthy people to pay for the luxury of international air travel. Given that humans have a limited quota of permitted emissions before the tipping point is reached, this effectively means that the rich are paying to use up poor people’s quota of emissions. Increasing carbon footprints through economic development is the best way humanity knows for lifting people out of poverty, so it isn’t fair that the rich get to encroach on this territory by simply paying for it. A carbon cap on emissions would’ve been a more fair outcome.
Human Rights Issues
The need for supplying offsetting projects could create conditions for human rights abuses at the ground level. There have been multiple instances in the past in which well intentioned carbon neutralization projects have destroyed native communities. For example, the need to build the Santa Rita dam in Guatemala to service the needs of EU emission credits resulted in the displacement of the local community there and the killing of six indigenous people.
All of these shortcoming notwithstanding, CORSIA is still a commendable initiative that carries the potential to make a much needed difference. Finding consensus amongst businesses and governments across hundreds of countries is no mean task, especially since the ICAO does not have the authority to impose its will on stakeholders. CORSIA has its flaws, but something has to be done and we have little time on hand. I believe that our collective focus should be on building upon the consensus that we’ve already secured. Activist groups and citizens should continue pushing their countries to be more ambitious with their targets; concurrently, and perhaps more critically, policy makers should ensure that the regulations and programmes enacted are free of loopholes and effectively service the mandate that countries agree to.