The general assembly of the International Civil Aviation Organization (ICAO) this week will debate proposals for a global market-based mechanism (MBM) to control the increase in carbon-dioxide emissions from air transport. As an interim measure aimed at reaching consensus, negotiators for the 28-state European Union (EU) have offered to alter its existing emissions trading scheme (ETS) so that it would apply only to flying activity within EU airspace and not to all stages of intercontinental flights.
Delegates to the 38th triennial ICAO assembly, which begins on September 24 and runs through October 4, plan to begin discussing draft resolution A37-19 on September 26 and conduct a final vote on October 2. The proposals call for ratification of the envisioned MBM by the 39th assembly in 2016 and full implementation in 2020. In the meantime, the EU-ETS would remain in force, although with a more limited scope. On September 18, lobbying groups the Environmental Defense Fund, the World Wildlife Fund and Transport & Environment called for ICAO to bring forward ratification of the new plan to 2015 and implement it in 2016.
Although all sides of the sometimes fractious debate seem ready to compromise to avoid a trade war that threats of retaliatory sanctions from leading opponents of EU-ETS could spark, some significant complications remain in terms of what form the MBM would take and how the EU would have to amend its established ETS legislation to take account of the revised terms. For example, it remains unclear whether the MBM would amount to a full-blown emissions trading scheme, or whether it might instead take the form of a simpler carbon-offsetting program (as favored by IATA) or a revenue-generating carbon offsetting program through which credits sold at elevated rates would divert some funds into climate-change-mitigation programs. Quite apart from wider objections to ETS, the system has drawn criticism for being excessively bureaucratic and disproportionately burdensome for smaller operators.
Another potential sticking point centers on a proposal that exempts some developing countries from MBM if their air transport emissions defined in revenue ton kilometers amount to less than 1 percent of the global total. Environmental groups also have expressed concern that the MBM might not apply to portions of flights conducted in international airspace (i.e. more than 12 nm from the boundary of national airspace).
Assuming adoption of the draft resolution, for EU officials to fulfill their commitment to stop applying ETS to flying activity outside EU airspace they will need to change the existing ETS regulation, which would involve returning to the European Parliament to ask for a retroactive “rubber-stamp” of any deal reached through ICAO. As things stand, the EU has suspended ETS for flights outside its airspace under the “stop the clock” initiative, which stands contingent on the implementation of a global alternative. ETS would go back into full force beginning January 1 next year unless a plan acceptable to the EU becomes final.