UN deal sets emissions reduction scheme in motion, but EU trading scheme crushed in series of vitriolic negotiations
Souce: Flickr / Vyacheslav Bondaruk
By Sophie Yeo
The UN’s aviation body voted on a resolution today that lays the foundations of a market based mechanism (MBM) to curb emissions, at the same time as laying waste to the EU’s own emissions trading scheme.
After a heated debate in Montreal yesterday, ICAO resolved on a text that instructs states to develop a global market based mechanism to be brought to the next General Assembly, which will take place in 2016.
This was finally approved today after a week of intense negotiations, which observers have called “unprecedented” within ICAO.
Many consider this a positive step forward: the issue of how to implement an MBM has been one of the central points of contention since the Kyoto Protocol instructed the UN aviation body to come up with a way to regulate the emissions of the industry back in 1997.
Despite on-going discussions and long term efforts by the EU to broker an environmentally effective deal, there are countries on the other side of the debate that have shown scant willingness to compromise.
The resolution states that, if an agreement on a global MBM is decided upon at the next Assembly, it must be implemented by 2020 – the year after which any growth within the industry must be carbon neutral. It is a deadline which puts added pressure on ICAO to reach an agreement by 2016.
Annie Petsonk from EDF, speaking from Montreal, emphasises that in many ways this is a step forward for the agency.
She tells RTCC, “They’ve set upon a timetable for the negotiation of it. They’re gone quite a way with developing a set of principles of it. We think all those things are very significant.
“Are they a giant leap? No, because it’s just initiating talks and we’ve seen talks be initiated in ICAO before, but these have a time-bound deadline of the next ICAO assembly and there’s been quite a lot of technical work done, so they have a good foundation on which to proceed.”
For some, this deadline of 2016 isn’t soon enough. Emissions from aviation are responsible for 4.9% of manmade climate change, and these are growing faster than any other mode of transport. If unmitigated, these emissions are projected to double or even triple by 2050.
A recent paper by David Lee from Manchester Metropolitan University showed that implementing a market based mechanism quickly was the best way to minimise global warming.
Jean Leston, Transport Policy Manager at WWF-UK, tells RTCC: “There is nothing in this resolution that guarantees an MBM. All we’ve got is a decision to develop one over the next three years and then that has to go to Assembly for agreement in 2016.”
Bill Hemmings, aviation manager at Transport & Environment, said, ““The EU put its faith in the ICAO process, and because of unacceptable weakening and delay, this faith has now been shattered. The science is crystal clear – we can no longer afford to procrastinate if we want to reverse the effects of man-made climate change.”
Negotiations began on Thursday last week, but when countries failed to reach a consensus they were pushed forward to recommence last Wednesday, after a weekend of informal bilateral conversations.
Those speaking to RTCC from the sidelines of the negotiations in Montreal highlight that it has not been an easy week. Emotions have been running high, with the EU in particular taking a beating from countries that are opposed to its regional emissions trading scheme (ETS) proposal.
The final agreement was a considerable blow to the EU’s regional scheme, reducing it to the bare minimum, and going beyond the compromise that the EU had already put on the table last month.
Under the new resolution, the EU may only impose its ETS on flights that both depart and land from within its own airspace.
If it wants to trade the emissions emitted over its own airspace by aircrafts that have come from outside of the EU, it may now only do so with the consent of the other country.
“Certainly yesterday morning saw scenes here I don’t think ICAO has ever seen before,” says Leston. “There was just an incredible outpouring of dislike of the EU ETS, very aggressive interventions from a lot of states, and an almost overwhelming antipathy towards the ETS. You could really smell blood in the room.”
Petsonk adds: “There is clearly an effort to try to push back on a state’s ability to implement a national and regional MBM, and we regarded that as half a step back.”
Leston says that, although this is a blow to the EU, she believes that it will have much to contribute as the global MBM is developed.
She says, “We’ve seen the environmental leader brought down by the pack, but I think once the dust has settled the EU still has a lot to offer in international negotiations.
“This is the only system that’s up and running, and proves that cap-and-trade can work. In the next three years there’s going to be a lot of work to design and develop an MBM, and the EU experience is going to be vital in helping to deliver an MBM.”
Another reservation to the final text was the concern shown for “common but differentiated responsibilities” shown within the resolution, which excludes states with less than a 1% share of total civil international aviation activities – a principle enshrined within the UNFCCC, but excluded from the Chicago Convention, which established the modern aviation industry.
Excluding these countries would ultimately make an aviation deal less effective, as it would exempt all but around 20 of the world’s countries from taking part in the global trading scheme.
The large scale disagreement over the issue of equity bodes ill for negotiations between developed and developing states at the upcoming UN climate talks in both Warsaw this November and Paris in 2015, for which the ICAO discussions are an important precursor.
Leston told RTCC, “I think we would have really liked to see more progress on the ground here in Montreal, going forwards into the COP in Warsaw through to Paris, because a positive outcome from ICAO would have been a really positive force for the good going into the UNFCCC climate talks.
“The fact that we’ve had such a tiny step forward and we’ve seen so much division between developing and developed countries over highly politicised issues such as common but differentiated responsibilities really does not bode well for the future climate talks.
“International negotiations really must move beyond entrenched positions if we’re ever to solve climate change. The more states act out of self-interest and seek not to take action, the more trouble we’re headed for in the future.”
By contrast, Connie Hedegaard, EU Climate Commissioner, tried to put a brave face on a bad result:
The European Commission today welcomed the decision by the UN Assembly responsible for International Civil Aviation (ICAO) to decide on a global mechanism to tackle emissions from aviation. The Assembly has agreed to develop by 2016 a global market based mechanism to tackle emissions, which can come into force in 2020. The market based mechanism will be accompanied by a series of technical and operational measures to reduce emissions. With this deal, the aviation industry becomes the first international transport sector to apply a global market-based mechanism to reduce their emissions.
EU Climate Change Commissioner Connie Hedegaard, said: ”The EU’s hard work has paid off. After so many years of talks, ICAO has finally agreed to the first-ever global deal to curb aviation emissions. If it hadn’t been for the EU’s hard work and determination, we wouldn’t have got this decision today to create a global market-based measure. What matters to us is that the aviation sector also contributes to our efforts to reduce emissions. While we would have liked more countries to accept our regional scheme, progress was made overall and we will now factor this in when, together with the member states and the European Parliament, we decide on the way forward with the EU ETS.”
The UN Assembly has agreed to develop, by 2016, a global MBM for international aviation that can start in 2020. Until then countries or groups of countries should – within certain parameters – be able to deploy MBMs.
The market based measures will go hand in hand with new procedures to promote more advanced technology, including the use of better alternative aviation fuels and to promote better procedures, including in the area of air navigation.
The agreement also puts in place a fair and equitable solution that respects the special circumstances and respective capabilities in which a number of countries find themselves.
Aviation accounts for 3% of global CO2 emissions but ICAO statistics show that international aviation CO2 emissions are forecast to increase between 4 and 6 times by 2050 from the levels of 2010.
What happens next?
In the light of this agreement, the European Commission,, in coordination with the European Parliament and the EU Member States, will now assess the decision taken today at ICAO in more detail before deciding on the next steps with respect to the EU ETS.
U.N. Aviation Body Agrees on Emissions Deal
By Valerie Volcovici and Barbara Lewis MONTREAL/BRUSSELS (Reuters) – The United Nations’ civil aviation body has reached outline agreement on a global scheme to curb airline carbon emissions, casting a shadow over a rival EU plan to lower pollution from planes.
By Valerie Volcovici and Barbara Lewis
MONTREAL/BRUSSELS (Reuters) – The United Nations’ civil aviation body has reached outline agreement on a global scheme to curb airline carbon emissions, casting a shadow over a rival EU plan to lower pollution from planes.
The executive committee of the International Civil Aviation Organization (ICAO) agreed late on Thursday on a roadmap to create the world’s first global, market-based scheme by 2020.
The full assembly of ICAO delegates still has to vote later on Friday on the plan, which would also need agreement on further detail at the next ICAO general assembly in three years.
The European Union had sought a much more robust agreement as well as a framework to shore up its own Emissions Trading Scheme (ETS) which is central to its climate policy and requires all airlines using EU airports to pay for emissions.
Analysts say the European Parliament, which is opposed to a weak deal, could reject the Montreal package, risking an upsurge in trade war threats that pitched the European Union against the rest of the world last year.
The United States, together with emerging powers such as India and China, have been the most critical of the extension of ETS to airlines, saying it is a breach of sovereignty and a global alternative is needed.
U.S. climate envoy Todd Stern welcomed the Montreal deal.
“After some very challenging discussions, including compromises by all parties, ICAO has made a strong commitment in favor of taking multilateral action to tackle climate change,” he said.
European Climate Commissioner Connie Hedegaard said the deal showed “the EU’s hard work is paying off”.
“We will now look at how to proceed up to 2020 with our EU ETS,” she said in a statement.
Speaking on condition of anonymity, one EU official admitted its negotiating delegation in Montreal was bruised.
Analysts said the deal limited the ETS to intra-EU flights, reducing its coverage by about 60 percent, and risked more legal challenges to the scheme on competition grounds.
Low-cost airlines, operating almost exclusively EU flights, have already begun legal proceedings.
“It would appear that none of the EU red lines, spelt out unequivocally at the time of granting the ‘stop the clock’ derogation (suspension), will be met by the outcome,” John Hanlon, secretary general of the European Low Fares Airline Association, told Reuters.
“The EU compromise offer of inclusion of emissions from international flights in EU airspace looks to be rejected in its entirety. This leaves intra-EU ETS totally ineffective environmentally, capturing only a fraction of EU aviation emissions of CO2.”
TRADE WAR THREATS
When the European Union suspended its aviation law for a year, it said the requirement for all aviation, not just internal EU flights, to pay for emissions would be reimposed automatically unless the ICAO agrees a robust market-based measure.
The ETS, which covers big polluters such as power generators and heavy industry, as well as aviation, has sunk this year to record low levels under a burden of surplus allowances.
It was trading down 0.4 percent at 5.18 euros a tonne by 9:22 a.m. ET.
Traders said the market impact was modest because the aviation sector’s inclusion in the ETS was already reduced, but it sent a very weak signal on any potential to extend the ETS.
The European Parliament will have to act quickly if it is to endorse any extension of the European Commission’s decision to “stop the clock” on its law in time for an April 2014 deadline when the European Commission would resume demanding carbon allowances.
German Christian Democrat politician Peter Liese, who steered the original law through the European Parliament and led the debate on the “stop the clock” law, said he could not comment immediately on Friday.
(Additional reporting by Tom Koerkemeier in Brussels, Gerard Wynn and Ben Garside in London; Editing by Christopher Wilson and David Cowell)