What’s the cure for the EU’s aviation emissions headache?

By J Robert Gibson

On 9th November ICAO, the International Civil Aviation Organisation (ICAO), the United Nations body regulating international air travel, committed to deliver a global deal for tackling greenhouse gas emissions from aviation by next September.

The EU responded by ‘stopping the clock’ for one year on extending its Emissions Trading Scheme to cover flights between the EU and other countries.

This puts the spotlight on ICAO to solve the contentious issue of how to fairly put a price on international carbon emissions while leaving the competitive ‘playing field’ for airlines ‘level’.

The answer is simple, and comes in two parts:

1. Everyone who gets on an airplane should pay the same amount for their carbon emissions.

2. A significant amount of the money collected from payment for aviation emissions should go into the Green Climate Fund and be used for carbon emissions mitigation and climate change adaptation in the ‘developing world’.

In other words satisfy the principle of Common But Differentiated Responsibility (CBDR) by how the money is spent rather than differentiating how it is collected.

While this answer is simple getting agreement to it will not be. Developing Countries have long argued the CBDR principle, agreed at the 1992 Rio Summit, absolves them from paying for action on climate change. Other countries object to any arrangement they consider to be an ‘international tax’.

China’s government banned its airlines from complying with the EU-ETS in February this year

Let us consider these two points.

The dispute on CBDR arises from the wording of Principle 7 of the Rio Convention; namely:

States shall cooperate in a spirit of global partnership to conserve, protect and restore the health and integrity of the Earth’s ecosystem. In view of the different contributions to global environmental degradation, States have common but differentiated responsibilities.

The developed countries acknowledge the responsibility that they bear in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command.

In other words those who are better off have a greater responsibility to take action. Charging for all aviation emissions and using a substantial part of the funds raised to deal with climate change in developing countries is entirely consistent with this. Further consider:

1. Fairness: The great majority of those who use air travel are the better off members of society who can afford to pay for the damage emissions from aviation cause. The people who need the help are the less well-off members of society who have little or no air travel. A system which provides funding to help Developing Countries adapt to climate change will help the less well-off individuals.

2. Complexity: How would differentiation in paying for aviation carbon emissions work? Does it apply to the route, the home country of the airline, the nationality of the passenger or the country of residence of the passenger? Differentiation in how carbon emissions are charged would be complex to administer and ripe for abuse.

3. Competitive necessity: Profit margins in aviation are low. Any significant difference in charges for carbon emissions between airlines operating the same service would make it uneconomic for the airline with the higher charge to operate.

In the Cancun Agreements countries committed to mobilise US$100 billion per year by 2020 to address the needs of developing countries. The question, therefore, is not that the international community should raise this funding but how it should do so.

Raising some of the money from aviation applies the burden to those members of our society who can best afford to pay. Further, as the world economy evolves, and the amount of air travel changes the burden sharing will be automatically adjusted.

The big picture

With each year that passes the threat of climate destabilisation becomes clearer. Keys to mitigating this problem include:

• Putting a price on carbon emissions to motivate reduced activity, increased fuel efficiency and switching to biofuels.

• Providing money to the Green Climate Fund so that it can help developing countries reduce carbon emissions and adapt to climate change.

By embracing a global price on aviation emissions the airline industry and its passengers will become an important part of the solution to avoiding climate destabilisation.

It will also bring closer the day when biofuels, on which its long term future depends, are viable.

J Robert Gibson teaches energy and environment policy at City University of Hong Kong.   He is a qualified accountant with a degree in Engineering Science and Economics from Oxford University.

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