International Aviation and Climate Policy: Summarizing Current Developments

Last week, the European Union Council signaled its intent to continue blocking the inclusion of GHG emissions from flights to and from the European Economic Area (EEA) within the EU Emissions Trading Scheme. The press release comes after the EU Commission expressed its support for the restriction back in February, and is also expected to align with a EU Parliament proposal due in July. Ever since this so-called “Stop the Clock” legislation was implemented in 2012, only flights operating entirely within the EEA have been subject to the emissions reduction obligations under the EU ETS.

Yet, this seriously undermines the bloc’s Intended Nationally Determined Contribution (INDC) to the Paris Agreement submitted in 2015. As Carbon Market Watch reports, the EU’s goal of reducing GHG emissions by 40% below 1990 levels by 2030 assumes that “extra Europe” flights will be covered by the ETS after 2020. If only “intra Europe” flights are covered, the chance that the EU achieves its emissions reduction goal will be jeopardized.

The EU’s reluctance to include extra-European flights in the ETS (in opposition to its original intent) comes as a new aviation-based climate policy is set to begin in 2020. The International Civil Aviation Organization (ICAO) unveiled its Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA, in October 2016. As of May 31, 2017, 70 states will enter CORSIA’s voluntary phase in 2021, while all other countries, save for least developed states, will be included from 2027 onwards in the mandatory portion. Ultimately, the ICAO intends to provide for “carbon neutral growth” in the sector starting in 2020, and the EU and all other participating countries have put their faith in CORSIA to cost-effectively reduce global aviation emissions.

However, even in this very early stage, CORSIA has proven divisive as a strategy to substantially and equitably mitigate climate change. To understand why, it is useful to gain an overview of how the aviation industry has contributed to climate change, how CORSIA attempts to reign in these emissions, and where critics say the ICAO’s efforts fall short of decarbonizing international air travel in a rapidly shrinking timeframe.

The Climate Implications of Aviation

Usually, the aviation sector is portrayed as a growing but still relatively small contributor to climate change. At the moment, the consensus is that international aviation is responsible for roughly 2% of CO2 emissions globally. However, when factoring in the contribution of non-CO2 emissions such as nitrous oxide, black carbon, and water vapor, aviation more precisely contributes to 4.9% of global warming. At the moment, the interaction of these non-CO2 emissions with the atmosphere — like the formation of contrails — is still being researched to discern their exact warming effects.

Importantly, the most concerning aspect about aviation-related GHG emissions is how rapidly they have grown in the past few decades. The higher income, developed countries that formed the “Annex I” parties to the UN Kyoto Protocol saw their airline emissions increase by 76% from 1990 to 2012. Remarkably, in 2014, GHG emissions from international aviation matched the total emissions of the 129 lowest-emitting countries combined.

The problem is only slated to get worse as international air travel booms in popularity. Transport & Environment reports that passenger growth is expected to rise by 5–6% per year over the coming decades. If this demand keeps up, even the ICAO predicts that aviation-based emissions could increase by 300% by 2050. A Carbon-Brief study also shows that if these business-as-usual emissions were to continue, the aviation sector would take up over a quarter of the remaining 1.5°C carbon budget by 2050, the available amount of GHG emissions that can be released without exceeding the temperature target. If this prediction holds, surpassing the 1.5°C threshold will lock in catastrophic climate change effects well into the future, like the erasure of Small Island Developing States from sea level rise.

International Strategies to Reduce Aviation Emissions

Although global efforts to rein in GHG emissions have been underway for roughly 30 years now, it is only recently that the aviation sector has played a somewhat notable role in international climate conferences and treaties. For instance, when the UN Kyoto Protocol was signed in 1997, the aviation sector was omitted from coverage under the treaty. Instead, the ICAO was tasked with reducing emissions in the sector and set out to accomplish two targets. The first was to increase global fuel efficiency by 2% every year between 2010 and 2020. The second was to achieve carbon neutral growth in the sector from 2020 onwards.

Over a decade later, the EU decided to preemptively cover emissions within its own jurisdiction before a more comprehensive policy was laid out by the ICAO. Beginning in 2012, the EU would include aviation as one of the capped sectors within its ETS. However, heavy pressure from countries like the US and China blocked the inclusion of international flights in the scheme, leading the EU to significantly downscale its proposal and only include intra-European flights. Moreover, airlines that operate intra-European flights that are still capped receive about 85% of their allowances to emit GHGs for free in the ETS, which fails to incentivize cutbacks in flying or stimulate investment in low-carbon development that could be had with allowance revenue.

Finally, the ICAO’s long-awaited market-based mechanism to reduce global aviation emissions, CORISA, arrived in October 2016. CORSIA promises carbon neutral growth in international aviation from 2020 onwards, which the ICAO foresees occurring through a combination of airlines switching to lower-carbon fuels, a CO2 standard for new aircraft, route efficiency improvements, and the usage of carbon offsets. (Importantly, domestic flights, which are responsible for 40% of aviation-related emissions worldwide, are incorporated under a country’s emission reduction commitment to the Paris Agreement). 7o nations will engage in CORSIA’s voluntary phase from 2021–2026, while all but the least developed states and those with minimal airline emissions will be incorporated beginning in 2027. According to the ICAO, the 70 nations participating in the voluntary phase will contribute to 88% of the expected growth in CO2 emissions in international aviation from 2021–2035.

Action or Inaction? Critiques of CORSIA

Since its introduction, CORSIA has been promoted by many industry groups, environmental NGOs, state governments, and others as the best international plan to reduce emissions. Similarly, the EU Commission, Council, and Parliament have all in some form signaled their reluctance to re-include extra-European flights within the EU ETS, sighting the need to avoid overlapping policies with the implementation of CORSIA.

However, this is problematic for several reasons. The first, perhaps most obviously, is that CORSIA will not begin until 2021, meaning that airlines can continue ramping up their GHG emissions until then. In so doing, rapid emissions growth from aviation threatens the 1.5°C and 2.0°C goals of the Paris Agreement, a necessary policy alignment which the ICAO threw out from the text of CORSIA before its release last October.

Second, there have been numerous concerns about the environmental integrity and social effects of carbon offsets ever since their popularization in the 1990s. Importantly, a carbon offset must represent a captured or reduced tonne of carbon dioxide equivalent (tCO2e) made possible by the emitter’s investment. If, for some reason, that reduction was going to happen anyways without the project finance, then the offset does not represent a “real” reduction in emissions. A recent EU-funded study, in fact, found that a massive 73% of potential offsets from 2013–2020 within the UN’s Clean Development Mechanism offsetting scheme were likely to be non-additional, that is, occurring in the absence of market payments. Additionally, any reversals in GHG capture or reductions at a point in the near future would also compromise the environmental integrity of the offset. And of course, an offset merely amounts to canceling out existing emissions, not reducing them overall (since an airline would emit one tCO2e for every offset credit it receives).

Although a decision on the exact type of offset projects used in the scheme is not expected until 2018, many in the industry are banking on the inclusion of Reducing Emissions from Deforestation and Forest Degradation (REDD+ projects) within CORSIA. Essentially, in a REDD+ scheme landowners, governments, or forest users can earn market payments for preserving their forests, as opposed to a baseline scenario where trees would be felled and GHG emissions would be released. Due to both concerns regarding both environmental integrity and local rights, however, REDD+ offset credits have been only traded in the Voluntary Carbon Market (VCM) that exists outside of government policies and regulations. However, the ICAO has commenced discussions with the World Bank’s Forest Carbon Partnership Facility (FCPF) about including REDD+ offsets in CORSIA, which would make it the first compliance-based carbon market to do so.

Whatever offsetting methodologies are included, though, should not obscure the fact that going by the present legislation, CORSIA will not achieve carbon neutral growth in the sector. A study by the International Council for Clean Transportation (ICCT) finds that CORSIA’s mandatory phase will only offset 75% of forecasted growth in international aviation. Furthermore, CORSIA does not cover non-CO2 pollutants like nitrous oxide and black carbon, undermining roughly half of the sector’s contribution to global warming.

Another environmental integrity problem to look out for in the usage of offsetting is double counting, where the country hosting the offset project and the airline purchasing the offset count the emissions reduction as their own. Complicating matters is the coexistence of CORSIA and a likely market-based mechanism under the Paris Agreement post-2020 (the latter currently referred to as the “Sustainable Development Mechanism), which poses a possible accounting issue if a country were to claim its emissions reduction generated or purchased for both policies.

All of these concerns have led to backlash from a variety of environmental human rights groups about the ICAO proposal. Perhaps more than any other sector, international aviation represents the highest concentration of luxury-based emissions on the planet. Only about 5% of the world’s population has ever flown, signifying the much higher degree of wealth possessed by countries in the Global North and rapidly industrializing (or industrialized) pockets of the South (China, Brazil, India). Therefore, it is imperative that solutions to aviation emissions fully commit to tackling the global elite’s disproportionate contribution in using up the remaining carbon budget.

Tightening the Emissions Gap: Potential Solutions

Currently, there several proposals that would lower the carbon intensity of international aviation from either the supply or demand side. First, there is the goal of scaling up the use of sustainable aviation jet fuels (SAFs or AJFs) in the sector, displacing fossil fuels from the energy supply. Groups like the International Air Transport Association (IATA) in particular have big hopes for this, believing that particularly sustainable fuels derived from the likes of algae and wood or waste biomass can reduce emissions by 80% over the course of their lifecycle when compared to traditional fossil fuels.

At the present, though, the prospect of scaling up AJFs to fulfill the carbon neutral growth platform in CORSIA alone is a daunting task. As the ICCT reports, feedstock availability, cost, and time constraints needed to grow AJFs at a level and margin to be competitive with conventional fossil fuels are nowhere close at the present time to aligning with carbon neutral growth. Without increased subsidies, investment, and infrastructure by state governments, the inclusion of only AJFs will hardly make a dent in the projected emissions growth of international aviation. Furthermore, it is important to keep in mind that conventional biofuels like palm oil can have actually have a higher carbon intensity when adding in indirect land use effects, like deforestation and the release of CO2 from sinks like peat moss.

Regardless of what fuel is used, more robust taxes on both airlines and fliers can be used to depress skyrocketing demand. Aviation fuel in the EU still remains tax free, and implementing a tax on this would combat the artificially low prices by making air travel more expensive. Other ideas like a frequent flyer tax would also confront the issue that a mere 15% of air travelers make up 70% of all flights, highlighting how airline emissions are an incredibly class-based issue, as businesses and the wealthy use up the carbon budget that disproportionately will effect the poor and marginalized, particularly in the South.

For too long, aviation emissions have escaped regulation under domestic and international climate pacts and treaties. While tackling these emissions through measures like CORSIA and the EU ETS is a step in the right direction, the policies themselves must hold the sector accountable for its massive and luxury-based contribution to the climate crisis. Hopefully, the tenets of environmental integrity and climate justice will be incorporated into the progression of aviation-based climate policy moving forward.

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