ICAO Seeks ETS Compromise as PwC Calls For More Action

 - December 17, 2012, 1:40 PM
A new ICAO group has started talks aimed at establishing a global alternative to Europe’s emissions trading scheme. (Photo: Fotolia)

The “high level group” formed by the International Civil Aviation Organization (ICAO) to develop a global agreement on reducing carbon emissions from the air transport industry convened for the first time on December 12. The group aims to draft a plan for adoption at the next ICAO Council, scheduled for September and October 2013. Last month, the European Union agreed to suspend the application of its controversial emissions trading scheme (ETS) to international flights in and out of European airports to allow time for application of an alternative global scheme. The new ICAO group consists of officials from 17 nations, including all the major opponents of ETS, namely the U.S., Russia and China.

As ICAO began work on an eagerly anticipated compromise over the highly divisive ETS row, consultants PricewaterhouseCoopers (PwC) issued a report concluding that existing air transport efforts to reduce emissions in line with requirements to limit global warming to 2 degrees Celsius will prove insufficient without new impetus and support from governments. “Efficiency improvements of 1.7 percent [which air transport achieved on average each year between 2001 and 2011] will not be enough [to achieve the goal set by IATA of halving the industry’s net emissions by 2050],” said PwC partner Roger de Peyrecave. “Governments will need to get behind this or airlines will miss their own targets. Ultimately, they will need to accelerate advances in fuel efficiency beyond business as usual and scale up biofuel production.”

PwC has concluded that the introduction of a carbon pricing mechanism such as the envisioned global alternative to ETS will achieve only “incremental” reductions in emissions. Furthermore, the company’s environmental experts have called for ICAO to do more to coordinate improvements in air traffic management and for governments to introduce meaningful incentives to develop biofuel production as well as to reinvest revenues from carbon pricing in supporting the industry to meet its goals. The report, titled Fasten seat belts: the future of aviation emissions regulations, says that improvements to ATM, aircraft design and engine technology will account for approximately one-third of the carbon reduction goals for airlines. The use of biofuels could cover another third by 2030, “provided that the substantial barriers to large-scale production can be overcome.” PwC argues that between now and 2030, the industry will also need to increase its use of carbon offsets to achieve its objectives.