Report Pushes ICAO Towards Market-Based Measures to Address International Aviation Emissions

As we have previously discussed, the 38th Session of the International Civil Aviation Organization (ICAO) Assembly is set for September 24 – October 4, 2013. On the agenda is how and when to address international aviation emissions. In preparation for this meeting and to provide information to policymakers, Manchester Metropolitan University’s Center for Aviation, Transport, and the Environment (CATE) released a report, Mitigating Future Aviation CO2 Emissions: Timing is Everything, on August 27, 2013. This paper concluded that market-based measures, rather than alternatives such as biofuels or efficiencies, are the most cost-effective methods of mitigating emissions and climate impacts. This is because market-based measures, such as carbon emissions trading, have the potential for immediate reductions in emissions while the world must wait for improved technologies. If such market-based measures can be successfully implemented by ICAO, it would avoid reinitiating the battle between the European Union (EU) and other countries over the regulation of all flights originating or landing in the EU by the Emissions Trading System (ETS).

The CATE report can be found here. As this issue progresses, please check back to this blog for future posts.

U.S. House of Representatives Approves European Union Emissions Trading Scheme Prohibition Act of 2011

Last week, the United States House of Representatives approved the European Union Emissions Trading Scheme Prohibition Act of 2011 , which would allow aircraft operators to dodge participation in the European Union Emissions Trading Scheme (”EU-ETS”).  The EU’s cap-and-trade policy has been the subject of much discussion and controversy over the last few years because many industry leaders say that the policy is a unilateral tax on the American aircraft industry and a violation of international law. As we posted on this blog before, the U.S. Senate passed a similar bill (S. 1956) in September 2012.  After reconciliation, the bill heads to the desk of President Obama for his signature.

The passage of this bill comes on the heels of a surprising suspension of the ETS provisions for a year. The International Civil Aviation Organization (“ICAO”) recently  announced that it would work to develop a plan to reduce global emissions of the aviation industry, thus prompting the EU to delay the inclusion of the aviation industry until after the ICAO General Assembly meeting in fall 2013. If ICAO fails to resolve the issue or make substantial headway, the recent suspension will only serve to postpone the controversial measure.  

As this issue progresses, please check back to this blog for future posts.

FAA Outlines the Environmental Risks to the Aviation Industry

The United States Federal Aviation Administration (“FAA”) recently released its Aerospace Forecast for Fiscal Years 2012-2032. In the Forecast, FAA identified several risks to the aviation industry, including aviation’s impact on the environment and the uncertainty surrounding the European Union’s Emissions Trading Scheme (“EU ETS”).

Aviation sector operations are expected to grow to meet expanding national economic and mobility needs. With this growth comes increased noise pollution, air quality, and water quality concerns, especially around new construction and expansion of existing airports. Global carbon emissions from the fleet are also expected to rise, unless mitigated by new cleaner aircraft technologies, renewable fuels, operational improvements, and market based measures. If the aviation industry does not address these issues and make significant progress, tighter restrictions via environmental standards and operating limitations will be imposed, thus potentially depressing industry growth.

The report also notes that the effects of market based measures, such as the EU ETS, are unpredictable. Implementation of the EU ETS has the potential to increase costs for U.S. airlines, which in turn, could reduce the funds available for investments in new emissions reduction technology. However, the reverse could also be true. In the face of increased operating costs, U.S. airlines could hasten the development of more fuel efficient technologies. Most likely, U.S. airlines will face a short-term increase in operating costs that will soon be reduced through the adoption of cleaner technologies and fuels. Such an outcome would only be hastened by the uncertainty and recent increase in oil prices.