CARBON CONSTRAINT : Potential impact on the aviation sector

Published : Saturday 28 April 2012
Agnès Levallois
Since 1 january, aeroplanes landing or taking off from european airports have been subject to a controversial emissions trading scheme.

The Rio+20 conference, scheduled to take place from 20 to 22 June, provides an occasion to review the sustainable development agen?da initiated at the 1992 Earth Summit in Rio. The conference two decades ago led to the adoption of Agenda 21 and the United Nations Framework Convention on Climate Change, and then the Kyoto Protocol, by which developed countries committed themselves to reducing their CO2 emissions.

At a meeting in October 2010, 174 countries from the International Civil Aviation Organization (ICAO) adopted a resolution aimed at reducing CO2 emissions in their domain. Although aviation’s contribution to greenhouse gas emissions is only around 2%, it is going up as traffic increases. European countries set up a European emissions trading scheme in 2005 obliging over 10,000 industrial installations to conform to this market mechanism.

The aviation sector is no exception, and since 1st January 2012, all international airlines whose aeroplanes either land or take off from a European airport have been subject to the European Union Emissions Trading Scheme (EU ETS). The International Air Transport Association (IATA) is opposed to the move, claiming that the decision is illegal because it infringes sovereignty. But a judgement passed by the European Court of Justice dated 21 December 2011 esteemed that the EU ETS conforms to international law. The impact will kick in from 2013.
 
So how are airlines in Europe and South of the Mediterranean already reacting to this restricting mechanism? There is a significant risk that traffic will be diverted towards non-European platforms, leading to carbon leaks and competition issues. To avoid infringing on global competition in the sector, Air France and Tunisair, like most other airlines, are for setting up an international emissions trading scheme, overseen by the ICAO, which respects the principle of shared but different responsibilities and avoids the difficulties of multiplying regional ETSs.

At a meeting in Doha on 12 April, Arab airlines, including Qatar Airways, criticized the European commitment and said that they wanted a global agreement on the means to reduce CO2 emissions. The Arab Air Carriers Organization (AACO) called on the European Union to work with the ICAO to establish a global, rather than European, agreement. The AACO, which represents the interests of twenty-seven companies from the Arab world, esteemed that “The European measure contravenes the Chicago Convention and state sovereignty and risks resulting in conflict and trade wars that will help neither the environment, the passengers nor the airlines.”

The Air France-KLM group welcomed the trading scheme because of its impact on the environment. It said that in addition, income from the auction of quotas by states could be used to improve the performance of air transport. However, the group intends to remain vigilant that the scheme is applied fairly to all international airlines and is consequently participating in work done by IATA. The aim is to propose workable solutions for reaching the environmental targets set by the General Assembly in 2009. These include improving energy efficiency by 1.5% per year, stabilizing and reaching neutral growth of CO2 emissions by 2020, and reducing CO2 emissions by 50% by 2050 in relation to 2005 levels.
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