This year alone, the world's airlines will chug 650 million tons of carbon dioxide into the atmosphere while transporting 2.8 billion passengers and 46 million tons of cargo. The amount of fuel required to accomplish the mission will be between 210 million and 220 million tons. These are the estimates that International Air Transport Association (IATA) CEO Tony Tyler presented at the Greener Skies Conference in Hong Kong in late September.
For a fifth consecutive year, the conference gathered aviation executives, industry experts, scientists and environmentalists from around the globe to discuss and find solutions for the climate change issues that the aviation industry faces in anticipation of its inclusion into the European Union's Emissions Trading Scheme (EU ETS).
But the aviation community, it seems, as was strongly reflected in the words of Tyler, cannot be more frustrated with the upcoming compliance program. According to him, the EU's "misguided determination to include international aviation in its regional emissions trading scheme" is not only ineffective, but also distractive for national governments, which could instead focus on designing a global emissions trading or compensation scheme under the leadership of the International Civil Aviation Organization (ICAO).
It is estimated that a total of 2 per cent of global manmade carbon emissions each year comes from the aviation industry. In an effort to limit GHG emissions caused by air travel, as of January 1, 2012, the EU trading scheme will impose emissions caps on airlines flying into Europe. This means airlines will have to pay up for carbon credits to offset every extra ton of CO2 over their EU-imposed limit.
In the first year of the initiative, more than 900 aircraft operators will be given 85 per cent of greenhouse gas emission allowances free of charge, so they will have to purchase only 15 per cent of their carbon credits through auctioning. The amount of free carbon credits will drop to 82 per cent between 2013 and 2020.
As strongly as the aviation industry opposes EU ETS, we find it the most reasonable and coherent way to greening the skies, and here is why.
The free allowances that the airlines will receive as a result of the EU program are estimated to add up to more than €20 billion ($27 billion) over the next ten years. What is more, airlines are expected to be able to pass on the financial burden of these carbon credits to customers, improving the financial situation of the airlines. Subsequently, this will allow the struggling companies to inject more money into purchasing new, more energy efficient carriers. They can also use the resources to invest in renewable energy, which, in the long run, will help them save money from rising fuel prices.
There are, of course, skeptics, who claim that travelers will have to pay too high of a price for these EU ETS allowances. That is not necessarily the case as, at current carbon credit prices, it is estimated that the individual plane ticket will see a €2 increase per passenger each way on a transatlantic or other long-haul flight - a price drastically lower than that of most airport taxes and charges! And considering that there will be no net cost increases to airlines, we just have to ask - why are aircraft operators so unhappy with the initiative? Isn't this a win-win approach to solving air travel-related emissions at low costs to the customer while generating new revenues for the cash-strapped airlines?
Last, but not least, in the absence of an alternative comprehensive scheme, which can enforce checks and balances on GHG emissions from air travel, the EU ETS, albeit regional and far from perfect, is the only solution for now. According to Tyler, the airline industry has been doing its fair share of efforts and is setting its emission reduction goals pretty effectively so far that it doesn't need the EU babysitting and monitoring its green projects. He also explains that member states of ICAO have agreed at their last Assembly to the "principles" for an international framework employing economic measures aimed at reducing GHG emissions. In fact, there is a ready program, which will be presented for approval at the ICAO Assembly in 2013.
Unlucky for Mr. Tyler, global warming isn't based on "principles," but on lack thereof. And while some entities, ICAO included, are still discussing and designing schemes to conform to, others, like the EU ETS are very much acting on already established ones. If climate change were able to be resolved through endless debates and planning, its environmental consequences would've faded into oblivion long ago. Alas, talks and negotiations are fruitless. And while we by no means deny the airline industry's technological and economic efforts in achieving better fuel efficiency and, thus, less CO2 emissions, compliance regulations at this point can only enhance these efforts.
For the above reasons, we suggest that airline pundits reserve their criticism until after an official working ICAO framework is approved upon and put in place. Until then, the EU ETS, as the only comprehensive and overarching program in-effect, is the most effective way to unite all industries under one green umbrella, airlines included. And instead of asking for a refund before they have even tried it, airline operators should just comply. After all, it is a matter of principle that pertains to all polluters, not to a chosen few.
Carbon Investments is an information portal keeping you up to date on carbon credits - facts, trends, news and investment opportunities. The value of carbon credit investments can go up or down according to market conditions.
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By Tonka Dobrev
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