Is a global aviation emissions deal quietly being prepped for takeoff?

Could September see the delivery of the second historic international climate change deal in less than 12 months? That is the hope shared by a growing band of businesses and NGOs who are increasingly optimistic the Paris Agreement could be followed later this year by a long-awaited deal to tackle aviation emissions.

The U.N.-backed International Civil Aviation Organization (ICAO) is to meet in September to discuss a series of proposals for tackling emissions from the global industry, including a recently published Draft Resolution for a Market-Based Measure which could usher in a global carbon market for aviation.

Previous attempts to deliver a credible international deal for curbing aviation emissions — which under business-as-usual scenarios are expected to triple by 2050 — have faltered as the same divisions between industrialized and developing nations that for so long undermined international climate change negotiations again blocked any hopes of an agreement.

However, there are several reasons why business and NGO observers are starting to think this time could be different.

Firstly, the pressure on ICAO to deliver an ambitious new agreement never has been so intense. Aviation controversially was excluded from the final Paris Agreement on the understanding ICAO would deliver a sufficiently bold agreement of its own this year.

Failure to deliver such an agreement would lead to calls for aviation to be reintegrated back into the U.N.’s climate change treaty, especially when the ICAO Assembly takes place on a three-year cycle, meaning a deal could be deferred until 2019 if an agreement is not reached this autumn.

Similarly, the EU only suspended its legislation bringing flights in and out of the bloc into its emissions trading scheme on the understanding a new international agreement would be reached. If the talks this autumn falter the EU would be obliged to start requiring international carriers to begin purchasing carbon allowances again, reigniting a major trade row with the U.S. and China in the process.

Moreover, ICAO looks to be better prepared for delivering an agreement than it has done in the past. The recently unveiled Draft Resolution for a Market-Based Measure confirms plans for some form of international emission pricing mechanism is being seriously considered, even if flaws remain.

Meanwhile, one of the group’s technical committees quietly approved a carbon dioxide standard for new aircraft recently, essentially providing a fuel efficiency standard that can be ratcheted up over time in much the same way as the auto industry has faced ever-tighter emissions rules.

Then there is the growing support for a deal from the political community, the aviation industry, the wider business community and civil society.

The recent climate change agreement between the U.S. and Canada specifically referenced President Barack Obama and Prime Minister Justin Trudeau’s “strong commitment to addressing aviation emissions, both bilaterally and through the International Civil Aviation Organization (ICAO).” Observers said the deal was significant given both the U.S. and Canada have in the past been accused of being less than constructive at ICAO meetings on climate change.

Meanwhile, last autumn 28 airline bosses signed a joint letter underlining their support for a global market-based mechanism for tackling emissions as part of a wider package of support to help deliver cleaner aviation.

“This support must take place through a range of actions: air traffic management investment and reform; continued support for research into new technology, operations and sustainable alternative fuels; improved intermodal transport planning; and the right policy framework to help accelerate the availability of sustainable alternative fuels for aviation,” the group said.

British Airways’ owner International Airlines Group (IAG) offered a similar take earlier this year, with CEO Willie Walsh declaring “a fair, uniform system will give aviation a clear and direct financial incentive to develop cleaner aircraft, switch to low-carbon fuels and introduce more efficient air traffic systems that eradicate unnecessary flying.”

In addition, this week saw the launch of a new campaign to help ensure the U.N.-backed ICAO delivers on its promise to tackle airline’s fast expanding carbon footprint. Called FlightPath 1.5, the campaign is backed by Aviation Environment Federation, Carbon Market Watch, Environmental Defense Fund, the International Council on Clean Transportation, Transport & Environment and World Wildlife Fund.

Significantly, several of its core goals — ensuring aviation emissions peak in 2020, introducing market-based mechanisms to help curb emissions and driving investment in fuel efficiency improvements and clean technologies — are shared by many within the aviation industry.

“My understanding is the aviation industry is responding positively to the Flightpath 1.5 campaign,” Annie Petsonk, international counsel at Environmental Defense Fund, told BusinessGreen. “We won’t agree on everything, but there is a growing consensus around the need for a market-based measure.”

Shared responsibility

As the name suggests, the primary aim of FlightPath 1.5 is to push for a more ambitious ICAO climate treaty that would be compatible with the Paris Agreement’s goal to limit temperature increases to 1.5 degrees Celsius above pre-industrial levels.

“World leaders committed to a 1.5 Celsius target in Paris to safeguard families and communities from the impacts of climate change,” said Brad Schallert, senior program officer for international climate change policy at WWF. “Now, countries need to fulfill their Paris promises by ensuring that the aviation industry does its fair share. ICAO’s draft global market-based measure is an important step in reaching agreement in October, but the text does not currently align with the environmental goals of the Paris Agreement. Governments should come together over the coming months to improve it.”

It is a decidedly ambitious goal, but Petsonk is optimistic ICAO can deliver, not least because the alternative is incompatible with now internationally agreed climate goals.

“This industry is predicted to grow enormously,” she observed. “The emissions from aviation are slated to treble over the coming decades. Boeing and Airbus forecast some 30,000 new large aircraft going into the sky in the next dozen years — that’s a lot of planes. Even if we are flying more efficiently, that growth is still going to increase total emissions.”

She also stresses a cap on carbon emissions enforced through a market-based mechanism would be in line with what the international aviation industry itself has called for.

“The airline industry came up with a target of its own to have ‘carbon neutral’ growth from 2020,” she observed. “Capping emissions from flights at 2020 levels would provide a tremendous incentive to fly more efficiently and look at how to cut emissions.”

Were ICAO to deliver an international emissions trading scheme for aviation it would have a huge impact, not just on the aviation industry but also the wider global carbon market and the financing of emissions reduction projects in developing countries.

As Petsonk argued, ICAO and the 10,000 rules and standards it has imposed over the past 50 years have been critical to the success of the international aviation industry, improving safety and efficiency around the world — the group’s standards have immense reach and influence and the hope is they can be used to drive environmental performance.

Moreover, requiring airlines to cover some emissions costs in a market-based mechanism could help tackle one of the great unresolved challenges in the Paris Agreement: Where do the finance flows come from to help developing countries cut emissions and adapt to climate change? A system where airlines effectively purchase emission allowances under a capped market that incorporates developing economies would see finance flow to projects that can curb emissions cost effectively.

“Part of the reason we are putting so much in to this is if ICAO gets this right, it could put a path forward for the world,” acknowledged Petsonk. “It would be the first large global carbon market since Kyoto and this time it’s a chance to get it right.”

However, despite growing support for an aviation emissions market an ICAO climate agreement is still anything but a done deal.

Petsonk highlights three potential challenges FlightPath 1.5 and its partners are keen to address.

Firstly, any aviation carbon market would be reliant on the transparent release of information that some airlines remain reluctant to publish, citing commercial confidentiality concerns. Petsonk is confident industry fears can be addressed, arguing worries about confidentiality are common whenever industries are first required to submit to emissions trading, but are typically quickly alleviated.

Secondly, any new market-based mechanism would have to be structured to avoid concerns about double counting or dubious offset credits.

The INDC climate action plans put forward in Paris feature a lot of countries promising to reduce emissions by X percent, but Petsonk warned that if those emissions reductions are then delivered by airlines funding offsetting, it could be construed as double counting. She argued the Paris Agreement sets out new proposals for addressing double counting concerns and predicts ICAO should be able to tackle the issue by focusing on cap-and-trade models.

Finally, the ICAO negotiations are subject to the same arguments about the level of responsibility borne by industrialized and developing countries that hampered the wider U.N. climate talks for decades.

“The tough question is how do you allocate responsibility between countries?” Petsonk admitted. “Airlines have agreed to cap emissions from 2020 levels, but if you are an airline serving U.S. to EU flights you may see some growth on those routes from 2020, but it will not be much compared to the growth airlines serving Mumbai to Beijing will experience.

“That means you get back into the shared but differentiated responsibility arguments. One way to solve it would be everyone brings their own commitment to the table, like at the Paris Summit, but the whole basis of ICAO is universal standards. The Chicago Convention [that governs international air travel] actually states you can’t discriminate between carriers on the same route.”

FlightPath 1.5 is putting forward an alternative proposal whereby the aviation sector is divided into 11 regions and the emissions obligations for each region are based on their share of global aviation traffic at a given point, most likely 2018.

The respective shares then could be re-calibrated every five years to reflect the growth in different regions. That way the overall cap the industry has said it wants to honor from 2020 remains in place, but different regions have differing levels of responsibility for curbing their emissions.

Delivering a sufficiently ambitious international aviation emissions deal will be at least as challenging as delivering the Paris Agreement. But for the first time in years, a flight path towards an agreement looks possible.