Aviation needs a global agreement on market-based measures

The International Air Transport Association (IATA) called for governments to agree on a global approach to market-based measures (MBMs) to help aviation manage the 2% of global manmade carbon emissions for which it is responsible. IATA also stressed the need for governments and industry to align on all four pillars of the aviation industry’s strategy on climate change: investment in new technology, more efficient operations, better infrastructure and positive economic measure or MBMs.

The aviation value chain—airlines, airports, air navigation service providers and manufacturers—has agreed to three sequential targets on climate change: a 1.5% average annual improvement in fuel efficiency to 2020, capping emissions with carbon neutral-growth from 2020 (CNG2020), and cutting net emissions in half by 2050 compared to 2005 levels. It is the only global industry to have set such ambitious targets.

“A lot of progress has been made on aviation and the environment. The European Union Emissions Trading Scheme (EU ETS) was a roadblock to establishing a global approach to MBMs. With that roadblock removed we are well positioned for a breakthrough on MBMs. Governments are fully focused on the International Civil Aviation Organization (ICAO) to agree upon a global solution at their upcoming Assembly. And the industry is united and working hard to support that by finding an equitable way to share the burden of achieving CNG2020. A lot of hard work lies ahead but we are committed to achieving a positive result,” said Tony Tyler, IATA’s Director General and CEO, speaking at the Greener Skies Conference in Hong Kong.

ICAO has identified three options: carbon offsetting, carbon offsetting with a revenue-generating component, and a full global emissions trading scheme. “Whichever option is chosen, the devil will be in the details. And it is critically important to ensure that the agreement preserves fair competition,” said Tyler.

The attention of governments is focused on MBMs in the wake of Europe stopping the clock on its unilateral and extra-territorial plans to include aviation in its ETS. “Finding a global approach to MBMs is important. But attention is needed on all four pillars of the industry’s united strategy. Moreover, MBMs will be a temporary measure. The long-term solution for aviation’s carbon emissions requires progress on technology, operations and infrastructure,” said Tyler.

Tyler specifically cited the need for greater attention to be focused on the commercialization of sustainable biofuels and improvements in air traffic management:

Sustainable Biofuels: “More than 1500 commercial biofuel flights have been completed since certification was granted in 2011. But the cost is too high and the supply too limited. Governments can help us by making biofuel production a strategic priority, and following an action list to foster research and development, de-risk investment, agree to global sustainability criteria, and support supply chain collaboration. This is the same way that governments have promoted alternative energy sources such as solar or wind generated power,” said Tyler.

Air Traffic Management: “Flying efficiently saves fuel and improves environmental performance. That is why airlines have invested significantly in new avionics. But progress building efficiencies in the air is often hampered by politics on the ground. For example, each year, the failure to implement a Single European Sky costs the industry EUR 5 billion and wastes over 8 million tonnes of CO2. It’s encouraging that the Seamless Asian Sky—an initiative by governments to look beyond political borders to avoid bottlenecks in the air—is gaining momentum,” said Tyler.

“Our license to grow is contingent on our ability to do so sustainably. That means managing our emissions and other environmental impacts effectively. The implications of our success go well beyond the aviation industry. Three billion people will travel by air this year and nearly 50 million tonnes of cargo will reach its destination on a plane. Worldwide, this activity supports 57 million jobs and $2.2 trillion in economic activity. A lot is riding on our success. And that will only come if governments and industry are aligned and moving in the same direction,” said Tyler.

Read Tony Tyler’s full speech