This is an article from BusinessGreen, with a good and clear explanation of why Tim Yeo is utterly wrong with his pronouncements on aviation and the ETS. You would have thought someone who is Chair of the Energy and Climate Change Select Committee should know this. The ETS cannot and will not prevent aviation emissions from rising, because of the current weakness and failures of the ETS, meaning it does not work properly, largely as the carbon price is too low and dubious credits are imported from outside. However, supposing the ETS did work perfectly, it would drive up the cost of flying hugely as permits become scarce and expensive as carbon cuts are harder and harder for other sectors to make. There would then be no need for more runways as demand would fall greatly. So no need for a new Heathrow runway, or a new airport. Unless planes could become virtually zero carbon – of which there is no current prospect. Also an explanation from The Carbon Brief below.
The environmental case for Heathrow expansion remains as weak as ever, regardless of Yeo’s attack on the Prime Minister
29 Aug 2012 (James Murray’s blog from Business Green)
There are many reasons why Tim Yeo is wrong about the need for a third runway at Heathrow. But let us focus on just one of them, the assertion that aviation’s inclusion in the EU emissions trading scheme (ETS) means the environmental objections to expansion at Heathrow are “disappearing”.
This is manifestly untrue, as evidenced by the angry response to his plea for a third runway from green groups, but even if the European ETS was working perfectly (which it isn’t) it would do little to strengthen the case for more airport capacity.
ETS explanation:
Yeo’s argument that the inclusion of aviation in the European emissions trading scheme means “we could cover the whole of Surrey with runways and not increase emissions by a single kilogram”, makes a certain kind of sense: the emissions cap imposed by Brussels should ensure emissions do not rise regardless of new infrastructure investment. But the argument is fatally flawed on two fronts (and that is before you even look at issues such as air and noise pollution).
In practice, there are too many weaknesses in the ETS that still need to be addressed to suggest aviation’s inclusion in the scheme magically resolves the sector’s environmental problems.
As EU officials have repeatedly admitted, the carbon price is currently too low, there are too many credits in the market, and the emissions caps are too high. In addition, it is too easy to import questionable carbon credits from outside the bloc to help meet those emissions limits.
The EU ETS can work effectively and aviation’s inclusion is a step in the right direction, but until the current deadlock over the future of the scheme is resolved and the various flaws in the market are corrected it is impossible to say with any real confidence that airports can expand across whole counties without posing any threat to UK and European emissions targets.
However, the real flaw in Yeo’s argument would apply even if the ETS was working perfectly.
Aviation’s inclusion in the ETS is effectively a means of putting a carbon price on flying. As such, if the number of flights increases airlines have to buy in more emission allowances to cover their carbon footprint, driving up costs and therefore ticket prices.
The only way this cost would be manageable is if other sectors of the economy deliver such deep and rapid reductions in emissions that they are left with a glut of allowances that they would then sell to airlines at a knock-down price. But you’d be hard pressed to find a single credible expert who believes emission reductions of this pace and scale are on the horizon.
The expansion of Heathrow would allow more flights, which would result in increased carbon costs and higher ticket prices, which in turn should result in reduced demand for flights. If the ETS works as Yeo says he wants it to work then it is a mechanism for curbing demand for aviation that should inherently preclude the need for more aviation capacity.
The price of carbon determined by the ETS is expected to rise over the coming decades as emissions caps are tightened and carbon targets increased. This is why there is an increasingly compelling financial argument against the construction of new carbon-intensive infrastructure, regardless of whether that infrastructure comes in the form of coal-fired power stations or new runways. It is an argument Yeo used to adhere to.
As I have argued many times before, there is only one environmentally credible argument for airport expansion, and that is the prospect of low or even zero carbon flight. Sadly, despite billions of dollars of investment and plenty of interesting research avenues, the prospect of genuinely green aviation is decades away at best, meaning there is currently no case for airport expansion in industrialised countries that is consistent with their stated goals to reduce emissions.
Sensible businesses are already adapting to this new reality and developing green travel policies that reduce their reliance on business flights through a combination of videoconferencing, rail travel, and new working practices.
Yeo’s intervention is easy to understand given recent attacks from right-wing newspapers who have finally noticed his properly declared involvement with a number of green businesses could be seen as a conflict of interest with his chairing of the Energy and Climate Change Select Committee (for what it’s worth, it is clear the problem here lies more with our parliamentary system than it does with Yeo – if we kicked out every MP and peer with business interests that could be seen as conflicting with their parliamentary work both chambers would be virtually empty).
But Yeo must now ask himself whether he is man or mouse. His place in history is assured as the Tory MP who has arguably done more than any other to promote the concept of a greener economy, an achievement that eluded hundreds of MPs before him. But does he want to be another opportunistic and inconsistent backbencher, presiding over a dignified slide towards insignificance? Or is there somewhere inside his heart – an organ that still remains impenetrable to most Britons – a trace of the environment minister he once was, determined to protect the UK’s green credibility?
There is also a good explanation from AEF (Aviation Environment Federation) of why Tim Yeo is wrong, and how the ETS works for aviation, at http://www.aef.org.uk/?p=1404
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The Carbon Briefing:
Is Tim Yeo right to claim a third runway won’t make any difference to UK emissions?
The Carbon Brief,
29 Aug 2012,
by Ros Donald
Energy and Climate Change (ECC) Committee chair Tim Yeo has argued that a third runway at London airport Heathrow will not lead to extra greenhouse gas emissions due to the aviation sector’s inclusion in the EU Emissions Trading Scheme (ETS) this year. Could he be right?
Yeo was originally against the plan to increase Heathrow Airport’s capacity because he said a new runway would lead to an increase in greenhouse gas emissions. But now, he’s changed his mind.
As he wrote in a Telegraph column this weekend, he thinks the European Union’s decision to include aircraft emissions in the overall EU emissions cap in January means that as long as other industries continue to cut their emissions, the UK can afford to increase its aviation capacity. He writes:
“Even if we covered the whole of Surrey and Berkshire in new runways it wouldn’t actually lead to a single kilogram of extra greenhouse gas emissions taking place.”
Yeo also suggests that that if the UK were to increase its airport capacity, carriers would be more likely to send their newer, more efficient planes to Heathrow.
The UK’s Institute of Directors (IoD) agrees with Yeo. In a submission to the Department of Energy and Climate Change’s consultation on new airport capacity, it says:
“[I]nclusion of aviation in the ETS does allow aviation to grow without worrying about carbon emissions, given that emissions from air transport are now part of the overall cap. The logic of the ETS is to reduce emissions where it is most cost-effective to do so, which is unlikely to be in aviation. So the inclusion of aviation in the ETS should allow a long-term growth in air transport while the UK meets its emissions targets overall.”
All aircraft operators became subject to the ETS in January this year. This means that airlines receive emissions permits from the government of the EU member state they’re based in. On the 30th of March every year, they have to report their emissions, and from 2013 they’ll have to surrender enough allowances to cover them. They can emit more than their allowance by buying permits from the market or, if they emit less than the allowance, they can sell their leftover permits.
The ETS aims to reduce emissions from aviation in the EU every year by increasing the amount of emissions permits that must be bought. This year, the ETS cap on airline emissions is set at 97 per cent of average emissions from the sector in 2004 – 2006.
Eighty-five per cent of the emissions allowance is free of charge to airlines this year, leaving airlines to bid for the remaining 15 per cent of emissions at auction – a number that’s set to increase as time goes on. Airlines will be able to buy and sell allowances across the EU. They will be able to buy credits from other industries, but they’ll only be able to sell them to other airlines.
Will the ETS be enough to limit the UK’s emissions?
But not everyone agrees that the ETS will be enough to ensure extra Heathrow capacity doesn’t push up overall UK emissions. Commenters have pointed tohigh emissions caps, aloophole that allows carbon offset credits from outside the EU to be traded on the scheme and legal challenges against the inclusion of aviation in the ETS scheme from non-EU countries as reasons why the scheme isn’t enough on its own to keep emissions down if the UK keeps building runways. And that’s if the ETS manages to weather the current slump in emissions prices – critics have also pointed out that the scheme could fail altogether, as it already has - twice.
The Aviation Environment Federation (AEF) produced a response to Yeo’s claims in March, pointing out that cap and trade systems need complementary legislation to keep them stable. The federation claims that if the government decides to go ahead with the runway believing the ETS will iron out emissions problems, it could face a future crunch point if the price of emissions permits goes up. It says the UK would have to either cut down on aviation demand or overstep its emissions cap. AEF claims that the latter situation is much more likely, given that the government would make itself rather unpopular if it decided to limit aviation activity by closing runways or rationing air travel.
But this argument assumes that the ETS will function according to plan in the future, with emissions prices rising as the EU tightens the emissions cap next year as part of the scheme’s third phase. ETS expert Michael Grubb wrote a piece for the BBC after the second market crash in 2009, calling on the EU to step in to ensure the carbon price stops plummeting. Since he wrote the piece, of course, no such thing has happened. The carbon price crashed a third time this July, meaning it’s currently too low to drive emissions reductions – a low carbon price means it’s cheaper to emit greenhouse gases than invest in greener alternatives.
Improving the ETS
But could the ETS be strengthened to the point where we can be confident it will constrain aviation emissions? The EU released a plan in late July to bolster the market by delaying some carbon auctions, but this is unlikely to address the problem of oversupply.
The UK Parliament’s ECC Committee produced a report in January, which outlines a variety of mechanisms that could be used to raise the carbon price again. These include allowing countries to set aside emissions allowances aside, ensuring there aren’t as many available. Another possible solution could be to further tighten the emissions cap. But opposition from Poland appears to be holding these proposals back. The country has lobbied against set-asides and recently blocked a proposal for firm emissions milestones to be set in the lead-up to 2050 targets under the ETS.
The Committee on Climate Change – which advises the government on how to cut its emissions in line with the Climate Change Act – wants the government to add its own cap on aviation emissions in addition to the ETS. It says the government should formally include aviation in its carbon budgets, which are set every five years and place legally binding ceilings on the level of permitted UK emissions.
But what if emissions trading started to expand to include other countries? Australia and the EU announced today that they would start carbon trading from 2015, potentially laying the groundwork for a global scheme. The architects of the deal say that it will create greater certainty in carbon pricing. Critics have pointed out, however, that the EU is likely to dictate the level of pricing, which seems a bit risky given that the EU’s carbon price is looking so shaky at present.
Better planes
And then there’s Yeo’s claim that airlines will send their most efficient planes to the UK if it increases its capacity. This argument doesn’t seem to have much to do with the ETS. As the scheme also applies to other European countries, there doesn’t seem to be any reason why the cap would necessarily mean airlines would send their newest planes to the UK over other EU destinations.
But it doesn’t seem to be a serious argument in favour of the third Heathrow runway, either.Justine Greening, the current transport secretary, says the new runway won’t be a full-size one so it won’t be able to “take the new planes”.
So has the ETS fixed it?
Both Yeo and the IoD seem to think that the inclusion of aviation into the ETS has solved any question of whether increased capacity at Heathrow will have a negative effect on the UK’s carbon emissions. Unfortunately, this seems like a risky bet to make.
The ETS could start to work better, and the extra aviation capacity could become much more expensive, or the ETS may just give up the ghost again and leave aviation emissions unregulated. There may be other arguments in favour of a third runway, but claiming that the ETS has removed any cause for concern about emissions seems a bit weak.
A Cambridge University researcher has given the opinion that nations which retaliate against the EU ETS may fall foul of international trade rules and the WTO. The researcher, who is a lecturer in WTO and international law, said: “If a World Trade Organization member restricts EU flights over its territory, or landing slots for EU flights in its territory, it is likely to violate WTO obligations ensuring non- discriminatory treatment of trade in goods, as well as freedom of transit.” They noticed the irony of Russia, which only joined the WTO yesterday, immediately trying to use trade restrictions for political purposes. The researcher said the WTO permits measures that are necessary “to protect human, animal or plant life or health,” and a successful WTO complaint against the ETS would have to show that the EU could have achieved the same goal another way that is “both reasonably available and less trade- restrictive than the measure adopted. This is notoriously difficult to assess”.
Retaliation On Airline Carbon May Breach Law: Researcher
By Mathew Carr (Bloomberg)
Aug 23, 2012
Nations that retaliate against the European Union’s decision to include airlines in its carbon market from this year may fall foul of international trade rules, according to a University of Cambridge researcher.
“If a World Trade Organization member restricts EU flights over its territory, or landing slots for EU flights in its territory, it is likely to violate WTO obligations ensuring non- discriminatory treatment of trade in goods, as well as freedom of transit,” Lorand Bartels, a lecturer in WTO and international law at the U.K. university’s Trinity Hall, said Aug. 21 in a phone interview from Buenos Aires.
The U.S., China and India have criticized the EU market, which requires all aircraft landing in and departing from Europe to surrender enough carbon dioxide allowances to cover emissions.Russia, which yesterday became the 156th member of the WTO, may consider limits on European flights over Siberia, Valery Okulov, Russia’s Deputy Transportation Minister, said Feb. 22.
“Retaliation in this way would be an ironic way for Russia to begin its membership of the WTO,” Bartels said. “The multilateral trading system was designed to prevent countries from using trade restrictions for political purposes.”
Delta, American Airlines
Delta Air Lines Inc. (DAL) and American Airlines owner AMR Corp. (AAMRQ) are among U.S. carriers that oppose the European rules. United Continental Holdings Inc. (UAL) this year imposed a $3 one-way fee on flights from the U.S. to Europe, matching an earlier charge by Delta to help pay for the cost of EU emission permits.
The EU has already started distributing 2012 carbon allowances to airlines, 85 percent of which will be free of charge, according to figures cited by Jos Delbeke, director general of climate action at the European Commission, who spoke at a U.S. Senate hearing in June. Additional permit needs can be bought at auctions expected later this year or in traded markets.
Extending the cap-and-trade system to the airline industry as of the start of this year builds on the market began in 2005 to cover greenhouse-gas emissions from power plants and manufacturers in 30 countries; the 27 EU nations plus Iceland, Liechtenstein and Norway. Airline carbon-dioxide discharges in Europe doubled over two decades and aviation now accounts for about 3 percent of global emissions.
Nations Protest
Officials from 29 countries, including the U.S., signed a declaration protesting the EU law in February and said they would consider retaliatory actions, including barring their air carriers from participating in the market, challenging the system at the WTO and imposing additional charges on EU carriers.
While expanding the system to aviation probably violates global trade rules, the WTO permits measures that are necessary “to protect human, animal or plant life or health,” according to Bartels.
A successful WTO complaint against the market’s expansion would have to show that the EU could have achieved the same goal another way that is “both reasonably available and less trade- restrictive than the measure adopted. This is notoriously difficult to assess in the abstract,” Bartels wrote in a study for an April conference in Geneva.
The EU and other nations are pressing for a global program to cover airline emissions being considered by the International Civil Aviation Organization, Delbeke said. Such a system, if it’s “meaningful” enough, may supersede the European market, he said.
‘Under Pressure’
ICAO said in November it wants to strike a deal this year to create a global carbon system for the airline industry.
“I’m under great pressure because of the EU emissions trading system,” Raymond Benjamin, secretary general of the United Nations-overseen regulator based in Montreal, said at the time.
Some developing nations may retaliate against the EU by cutting the bloc’s access to landing slots or imposing flight curfews, he said.
WTO rules give the ICAO jurisdiction over some disputes affecting aviation, Bartels said. “They also guarantee free transit for goods exported to other countries.”
Trade disputes must be resolved using the WTO dispute- settlement system, he said. Most passenger flights also carry freight, making them subject to WTO rules, the researcher said.
To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net
A Senate committee has passed a bill authorising the transportation secretary to bar US airlines from complying with the ETS if he or she deems this to be in the public interest. It will now be sent to the full Senate for a vote. The 19-member panel voted to approve an updated version of a bipartisan bill authored by Republican Senator John Thune and Democratic Senator Claire McCaskill. They want this to apply more pressure on the EU to stand down from what they say is “a misguided and unlawful tax” and claim the money spent in paying for carbon emissions could “otherwise be invested in creating jobs and stimulating economic growth in our country.” It will require the secretary to hold a public hearing before implementing any ban, and also “to pursue a worldwide approach” to address aircraft emissions (ie. the glacially slow, and so far utterly ineffective ICAO process).
Congress may order US airlines not to pay the emission charge. Photograph: Justin Lane/EPA
Congress threatened to bring chaos to European Union airports on Tuesday, moving towards a vote on a measure that would ban US carriers from paying for their carbon emissions.
In Washington’s deeply divided political climate, opposition to the EU’s aviation scheme remains one of the only areas where Republicans and Democrats agree.
Both parties supported the moves in Congress, and the Obama administration has also been putting pressure on Europe to back down and leave it to the International Civil Aviation Organisation to take measures to reduce carbon emissions.
The Department of Transportation on Tuesday began two days of talk with 16 other non-European countries opposed to the EU law, aimed at trying to get the ICAO to enact a global solution.
American and Asian airlines have said the European emissions scheme is unfair because it counts the entire time the aircraft is in the air – not just the time over European countries.
A senior administration official briefing reporters on Monday said, however, that any overall solution must involve setting aside the application of the European Union scheme.
“If the EU can go and impose their own system around the world in this way, there’s nothing to say that five or 10 or 20 other countries wouldn’t do the same thing, and I think that creates a risk which is very much a concern, I think, of airlines around the world, that you end up with a kind of patchwork system of different mechanisms, different taxes, and different kinds of policies.”
However, the ICAO has only until next April to come up with an alternative before the EU begins enforcing payment on emissions.
John Kerry, who had fought the measure on Tuesday, warned that the US was risking a trade war unless American carriers take steps to reduce emissions. “Other places are going to say we don’t want your planes to land here if you are not doing anything,” he told the hearing, according to The Hill newspaper.
“We can sit here literally at our economic and security peril, succumbing to the idea that saying the word climate change is a bad idea to American politics,” Kerry went on.
“The effect of that is to have stalemated the United States to our loss in the market place and to a our loss in the forefront of energy policy and other things that matter to us.”
A Senate committee passed a bill on Tuesday 31st July authorising the transportation secretary to bar US airlines from complying with a European Union law that requires them to pay for carbon emissions on flights to and from Europe.
The measure approved by the Senate Commerce Committee will be sent to the full Senate for a vote.
The 19-member panel voted to approve an updated version of a bipartisan bill authored by Republican Senator John Thune and Democratic Senator Claire McCaskill.
Thune called on the Senate to pass the bill immediately to apply more pressure on the EU to stand down from what he called a misguided and unlawful tax.
“More than USD$ 3.1 billion will be wrapped up in new taxes between 2012 and 2020 that could otherwise be invested in creating jobs and stimulating economic growth in our country,” Thune said.
Democratic Senator Barbara Boxer, a long-time advocate of mandatory curbs on carbon emissions and author of several cap-and-trade bills, said she and fellow Democratic Senator John Kerry would back the measure after Thune included compromise language.
The Thune-McCaskill bill directs the secretary of transportation to prohibit US airlines from participating in the EU trading scheme to curb carbon emissions if he or she deems it in the public interest.
Thune added compromise language that would require the secretary to hold a public hearing before implementing any ban. It would also require the secretary and other relevant transportation officials to conduct international negotiations “to pursue a worldwide approach” to address aircraft emissions.
“Initially I wasn’t going to support the Thune-McCaskill bill,” Boxer told the committee, noting that she and Kerry changed their minds after negotiating the text with the Republican senator.
“It (the bill) makes it clear that the place for dealing with this whole issue is an international organisation that is already set up,” referring to the ICAO, she said.
The US Department of Transportation and State Department are hosting talks on Tuesday and Wednesday with 16 other countries that oppose the EU’s trading scheme to find a global alternative under ICAO.
Kerry, who also announced his support for the bill, warned if ICAO does not come up with an alternative solution soon “we are headed for a trade war.”
Senator Kay Bailey Hutchinson of Texas, the senior Republican on the committee, said the EU trading scheme represents the “unilateral taxation of US companies and citizens.”
She said the bill is a “consensus plan that takes into account economic realities.”
Annie Petsonk, international counsel at the Environmental Defence Fund, said although the bill made some compromises and encouraged international cooperation, the work of ICAO has been too slow.
“We’ve been in hot pursuit of this (an ICAO framework) for 15 years, so what makes the Senate think this is any different?”
Senate Panel Clears Revised Bill to Shield US Airlines From EU Carbon Trading Scheme
By Dean Scott (Bloomberg)
31.7.2012
WASHINGTON, D.C.—The Senate Commerce, Science, and Transportation
Committee July 31 unanimously approved a bill to bar the European Union
from extending its carbon caps to U.S. airlines after the measure’s Republican
author added language supporting a “worldwide approach” to curb the sector’s
greenhouse gas emissions.
The revisions essentially smoothed over any Democratic objections to a bill
(S. 1956) that attempts to shield U.S. airlines from having to purchase
emission allowances under the EU Emissions Trading System for U.S. flights
arriving in or departing from Europe.
The committee’s approval of the substitute amendment, offered by bill author
Sen. John Thune (R-S.D.), moves his European Union Emissions Trading
Scheme Prohibition Act of 2011 significantly closer to a Senate floor vote in
the months ahead.
Boxer Praises Compromise
Sen. Barbara Boxer (D-Calif.), who chairs the Senate Environment and Public
Works Committee and is a longtime advocate of global climate action, praised
Thune’s compromise effort, saying the change “makes it clear that the place
for dealing with this whole issue is an international organization that is
already set up” to negotiate an agreement on air sector greenhouse gas
emissions, the International Civil Aviation Organization.
Separately, a coalition of U.S. airlines and aviation industry organizations has
asked the U.S. government to take action to reverse the EU decision to
include aviation emissions in its cap-and-trade system.
Boxer called for quick Senate action on Thune’s bill. Even with Senate passage, Thune’s measure would still have to be reconciled with a similar bill (H.R. 2594) passed by the House in October 2011 (34 INER 1034, 10/26/11).
“I think moving it fast is critical because it will send the message to [ICAO] that we want to deal” with air sector emissions through it as soon as possible, Boxer said.
Thune’s substitute retained language in the bill directing Obama administration officials to engage in negotiations to ensure aircraft operators “are held harmless” from EU retaliation or penalties for failing to comply. But his substitute also directed U.S. negotiators to “use their authority to conduct international negotiations, including using their authority to conduct international negotiations to pursue a worldwide approach to address aircraft emissions”—a change that swayed committee Democrats to support the measure.
Hearing Would Be Required
The Senate measure is unlikely to be taken up at least until the chamber returns from its August recess. But Thune urged Commerce Committee Chairman Jay Rockefeller (D-W.Va.) to report the measure as soon as possible to enable floor consideration in the months ahead.
Thune’s substitute amendment also added language directing the transportation secretary to take several factors into consideration before shielding U.S. airlines from the EU carbon caps and requiring the secretary to hold a public hearing before acting.
Another change would have the secretary consider whether blocking the EU plan would be in the public interest, in part by determining how it would affect U.S. consumers and U.S. air carriers as well as impacts “on the economic, energy, and environmental security of the United States,” and on U.S. foreign relations and existing international commitments.
Environmental Groups Oppose Bill
Environmental groups oppose legislative attempts to halt the EU plan, noting that the air sector’s carbon dioxide emissions are projected to increase substantially over the coming decades. Fifteen environmental groups recently sent a letter to all U.S. senators urging them to reject the legislation, arguing that “action by the EU is a sensible first step” in the absence of a global agreement on aviation emissions.
But only one Democrat on the commerce panel, Senate Foreign Relations Committee Chairman John Kerry (D-Mass.), offered dissenting comments at the markup, although Kerry did vote along with all other committee members to report Thune’s measure.
Kerry, who led a failed effort to secure Senate passage of a U.S. climate bill in 2010, said he was “totally puzzled and confounded” that the Senate is now focused only on the narrow issue of how the EU Emissions Trading System impacts U.S. airlines and not on the broader threat of global climate change.
The United States continues to ignore the challenges of climate change at its own peril and is “succumbing to the complacency of saying that climate change is a bad word in American politics,” Kerry said.
U.S. Negotiator Urged to Act
Kerry and Boxer, in a July 31 letter to U.S. Special Envoy for Climate Change Todd Stern, called for renewed pressure to get ICAO to adopt a framework for a global aviation agreement by the fall of 2013.
Emissions from the air sector are expected to at least double by 2050, they wrote, while other projections show them quadrupling over that period.
ICAO has been criticized for failing to produce a global agreement to curb aviation emissions. Its slow pace was one reason the European Union took action to address air sector carbon dioxide emissions through its Emissions Trading System.
The Obama administration has not taken a formal position on the Senate bill, although top officials have urged the European Union to abandon its inclusion of foreign air carriers in its emissions trading program.
EU Says Costs Would Be Minimal
To comply with the EU Emissions Trading System—which extends a carbon trading system for power plants and manufacturers that was launched in 2005—airlines are to be awarded a free allowance of carbon dioxide credits but must purchase additional credits if their emissions exceed certain caps. Airlines are to begin surrendering allowances to cover their emissions in April 2013.
The European Union has said U.S. airlines would face minimal costs to account for their emissions. Because the EU plan will provide roughly 85 percent of the allowances to airlines for free, the bloc argues the additional cost for a flight from London to New York would be relatively modest at roughly $3 to $5 per flight (34 INER 768, 8/3/11).
Thune’s bill has significant support from U.S. industry groups, including the U.S. Chamber of Commerce, as well as the Airlines for America, which represents American Airlines, United Continental Holdings, and other domestic airlines.
Republican co-sponsors of the bill are Sens. John Boozman (Ark.), Michael Enzi (Wyo.), Johnny Isakson (Ga.), Mike Johanns (Neb.), Marco Rubio (Fla.), Roger Wicker (Miss.), Roy Blunt (Mo.), Kay Bailey Hutchison (Texas), and Pat Roberts (Kan.).
A group of 16 countries (so far un-named) are meeting in the US about the ETS, and how a global “solution” might be found to aviation emissions. The opponents of the ETS, even though it adds so very little to a trans-Atlantic flight ($3 or so one way) want ICAO to come up with some scheme that is global. However, if ICAO can ever agree a scheme, it will both take years to bring about, and is likely to be too weak to be effective. ICAO’s only target now is an “aspirational” one (meaning not binding at all) to keep global aviation emissions at 2020 levels, after 2020, by buying offsets for increases. Annie Petsonk of US NGO Environmental Defense Fund said yesterday the US airlines’ and their trade association’s motive was “to tie up ICAO so deeply in the ponderous process that it will never have time to work on a serious agreement on climate change.”
Change of direction promised by US as talks start in Washington of countries opposed to international aviation inclusion in EU ETS
31 July 2012 (Green Air online)
The third meeting of the ‘coalition of the unwilling’ – countries opposed to the inclusion of the airlines into the EU Emissions Trading Scheme (EU ETS) – starts today in Washington DC with a pledge by a senior US Administration official that the tone will different on this occasion.
Speaking to reporters yesterday, he said the purpose would be to try to explore whether there might be a basis for a global solution on aviation greenhouse gas emissions. He said an aspirational goal had been agreed at ICAO in 2010 of limiting the growth of emissions from 2020 and should a global solution be found, the EU would have to set aside its scheme in the near term.
The two-day meeting is expected to be attended by 16 so far unnamed countries, down from the 26 that attended the first meeting in Delhi last September. The EU’s Climate Commissioner, Connie Hedegaard, challenged the countries to come up with concrete proposals for a substantial reduction in aviation emissions. Meanwhile, a US Senate hearing today will decide the next step in progress of a bill to prohibit US carriers from participating in the EU ETS.
The Administration official said all the countries participating in the meeting, to be held at the Department of Transportation, were opposed to the EU’s application of its ETS to foreign carriers on both policy and legal grounds, with the previous meetings in Moscow and Delhi asserting that opposition.
“The purpose of this meeting is different,” he said in a press conference call. “I would not regard this as a third in the line of the Moscow and Delhi meetings. The purpose of this meeting is really to try to explore whether there might be a basis for a global solution to addressing greenhouse gas emissions from aviation and a global solution that would include the EU and would set aside the ETS as applied to foreign carriers.”
He said the discussions would be informal, adding: “We don’t anticipate any deliverable per se coming out of the meeting but we do anticipate having … an exploratory discussion to see if we can get on a path that could lead to a global solution that would then be considered in ICAO, which is the multilateral body that properly deals with international aviation, and go from there.”
Asked whether the United States would propose a cap on airline emissions from 2005 levels starting in 2020, the official responded: “I wouldn’t say exactly that. If you go back to the last ICAO Assembly resolution in 2010, there was an agreement to an aspirational goal of trying to limit emissions, I think starting in 2020, at 2020 levels. And I would expect goals of that sort will be part of the conversation we have in our meeting.
“That should not be taken to mean that we accept the ETS until 2020 and then it changes. That’s completely not on the cards.”
A global deal would be, by definition, include the EU, he said. “Such a solution would lead to the setting aside in the near term, not down the road, of the application of the ETS.”
He said potential market measures were under discussion at a technical expert level within ICAO but there was far from agreement on what type of measure and how countries or regions might use them. “It is not at all clear whether there will be buy-in by countries at a higher level.”
On the eve of the meeting, an open letter to Secretary of State Hillary Clinton and Secretary of Transportation Ray LaHood has been sent from a coalition of 19 aviation, travel, commerce and trade union organisations. The letter asks the US government to restate its opposition to, and continuing plans for overturning, the application of the EU ETS to international aviation.
“It has been seven months since US airlines and aircraft operators became subject to the scheme’s emissions allowances purchase, trading and surrender obligations,” said the letter. “It has been eight months since you sent a firm letter to EU officials urging them to halt or suspend application of the ETS. As each day goes by without an EU act to halt or suspend the ETS, the harm to US airlines and aircraft operators and the threat to US sovereignty grow while the US government’s credibility is weakened.”
The organisations urged the Administration to file an Article 84 Chicago Convention action “and to take all other action necessary to overturn this wrongful scheme.” This included support for the bipartisan bills before Congress to prohibit US carriers from participating in the EU ETS.
Annie Petsonk of US NGO Environmental Defense Fund (EDF) said yesterday the US airlines’ and their trade association’s real reason for the Article 84 push was “to tie up ICAO so deeply in the ponderous process that it will never have time to work on a serious agreement on climate change.”
She added the EU ETS prohibition legislation that the airlines were lobbying Congress to pass, was almost unprecedented in US history. “Last time we saw legislation blocking American companies from obeying the laws of the countries in which they do business was when Congress barred American firms from suborning apartheid in South Africa. So the airlines are acting as if a $6 ticket surcharge [to cover EU ETS costs] is the equivalent of a massive human rights violation. Just keep in mind airlines charge several times that much for a checked bag.”
Petsonk said the aspirational goals of ICAO Assembly 2010 resolution were “a reasonable place to start” the Washington discussions but pointed out that the resolution itself pointed out they were not enough to stabilise and then reduce aviation’s climate impact and that more ambitious measures would be required.
“The yardstick we’ll be using to measure any progress in the meeting over the next two days is: are countries speaking in terms of reducing aviation’s total emissions, with binding targets?” she asked. “Or are the talks backtracking to the industry’s lowest common denominator?”
A European Commission spokesperson said there would be no official comment on the meeting before it took place beyond Connie Hedegaard’s tweet yesterday that said: “The EU is eagerly waiting for countries meeting in DC to come up with CONCRETE proposals for SUBSTANTIAL aviation emissions reductions.”
By coincidence, the US Senate Committee on Commerce, Science and Transportation is due to hold a markup hearing later today to debate possible amendments of the proposed EU ETS Prohibition legislation and then decide whether to pass it out of the committee. This is seen as an important next step in the process before the Senate takes a full vote.
Last month, the committee held a full hearing on the proposed EU ETS prohibition legislation to hear testimony from witnesses that included Ray LaHood, Annie Petsonk, Nancy Young of A4A and Jose Delbeke, Director-General of the European Commission’s climate directorate (see article).
The U.S. State Department has released a transcript of a news conference held today during which a senior administration official says the starting point for this week’s talks will be the International Civil Aviation Organization’s (ICAO) 2010 resolution. In that resolution, countries set an “aspirational goal” of improving efficiency 2 percent per year through 2020, and then offsetting emissions above 2020 levels starting in 2021 (that’s what their phrase “carbon neutral growth” from 2020 means).
Above: the emissions-reductions proposal of the International Air Transport Association (green), and business-as-usual emissions (red).
We think that’s a reasonable place to start, as long as the talks move forward, not backtrack. The 2010 ICAO resolution itself recognizes the proposal is not enough. It says:
the aspirational goal of 2 per cent annual fuel efficiency improvement is unlikely to deliver the level of reduction necessary to stabilize and then reduce aviation’s absolute emissions contribution to climate change, and that goals of more ambition will need to be considered to deliver a sustainable path for aviation.
The industry’s proposal – the green line to the right – is weaker than the ICAO resolution, and allows emissions to continue to grow.
The yardstick we’ll be using to measure any progress in the meeting over the next two days is: are countries speaking in terms of reducing aviation’s total emissions, with binding targets?
Or are the talks backtracking to the industry’s lowest common denominator?
U.S. climate envoy Todd Stern will be in the hot seat tomorrow — in more ways than one.
Airlines are the world’s seventh largest planetary polluter.
Everyone from the aviation industry to governments to environmental groups says that the best way to deal with pollution from airplanes is through the Montreal-based International Civil Aviation Organization, or ICAO. (It’s pronounced “eye-kay-oh” or “ih-cow” … you say tomayto, I say tomahto…)
ICAO was tasked by world governments way back in 1997 to come up with a solution to this problem. Unfortunately, they’ve been dithering about it since your teenager was a toddler.
Meanwhile, in 2003, Europe suffered a climate catastrophe — a massive heat wave that killed more than 40,000 people.
Europe got serious about climate security after the 2003 heat wave. It enacted a law putting most of its industry under emissions caps.
Aviation basically got a ten-year grace period from that cap. But this year, for the first time, all planes landing or taking off from European airports will have to reduce their climate pollution. Those that don’t comply will face tough sanctions.
The law is causing a lot of complaining from the U.S.-based airlines, including United, American, and Delta.
To hear them squawk, you’d think Europe’s aviation law meant “The End Is Nigh.”
But let’s take a deep breath here.
The EU law only requires airlines to cut their pollution by 5 percent.
Economists commissioned by the U.S. Federal Aviation Administration to assess the impact on U.S. airlines found that the EU law might … I repeat, might … cost as much as $6 on a roundtrip ticket from the U.S. to Europe.
That’s the same as the cost of a beer on a Delta or United flight.
Oh, and the economists said “might” because they found that — ifthe airlines met the EU law by flying more efficiently — they could actually make money from it.
So why is this so controversial?
Because … while Stern’s meeting is aimed at coming up with new ideas for how ICAO can move forward, and while the EU’s law is actually nudging ICAO in that direction … the U.S. airlines have other ideas.
Aviation is the world’s seventh largest polluter , but U.S. airlines are still trying to get out of complying with Europe’s anti-pollution law. (Sources: International Civil Aviation Organization, International Energy Agency, United Nations Environment Programme)
United, American, Delta and their trade association are pressing to have the meeting focus on how to bring legal action against the EU, rather than focus on ways to make progress in ICAO. Specifically, they’re pushing for agreement to bring legal action under Article 84 of ICAO’s governing treaty.
Never mind that the airlines don’t have much of a wing to fly on for legal action. (They already brought and lost such a case in European courts.)
Never mind that Article 84 cases are cumbersome, time-consuming procedures that drag on for years and almost never reach a conclusion.
The airlines’ real game is to tie ICAO up so deeply in the ponderous Article 84 process that it will never have time to work on a serious agreement on climate change.
The airlines are also lobbying hard for Congress to pass legislation barring U.S. airlines from obeying the EU’s law.
So the airlines are acting as if a $6 ticket surcharge is the equivalent of a massive human rights violation. (Just keep in mind airlines generally charge several times that much for a checked bag.)
That’s what makes Stern’s meeting this week so hot.
Washington didn’t even invite any European countries to the table. Maybe it’s because the airlines fear that with Europeans in the room, countries might actually start talking seriously about how to reach an agreement in ICAO that’s as effective in cutting pollution as the EU law. (The EU has already said it will waive its law when — or if — ICAO does reach such an agreement.)
We’re hoping the talks will illuminate some new paths forward. But against the backdrop of all the wacky weather Washington’s had lately, the last thing we need here right now is “more heat than light.”
Efforts to tackle emissions from aviation have taken a hesitant step forward, with the news that ICAO has endorsed an expert group’s recommendation on the way to measure fuel burn in flight. The recommendation is for a ‘metric’ system and test cycle to be the basis for setting fuel efficiency standards for new aircraft. However, many concerns remain. In 2009, ICAO began work on a standard for new aircraft, and has now produced a methodology for measuring in-flight fuel burn and thus CO2 emissions. This will form the basis for a minimum standard of fuel efficiency that all new aircraft will have to meet on CO2 emissions. The ICAO proposal for the CO2 metric are not yet public. The environmental groups working with ICAO are working to ensure the standard set is stringent enough.
Icao proposes ‘metric’ but NGOs still worried whether work will have a real impact
Efforts to tackle emissions from aviation have taken a hesitant step forward, with the news that the International Civil Aviation Organisation (Icao) has endorsed an expert group’s recommendation on the way to measure fuel burn in flight. The recommendation is for a ‘metric’ system and test cycle to be the basis for setting fuel efficiency standards for new aircraft, but many concerns remain.
In 2009, Icao began work on a standard for new aircraft, and after three years’ work its group of experts has now produced a ‘metric’ or methodology for measuring in-flight fuel burn and thus carbon dioxide emissions. This will form the basis for a minimum standard of fuel efficiency that all new aircraft will have to meet. The standard will address only CO2 emissions.The environmental groups working with Icao, of which T&E is one, reluctantly endorsed the ‘metric’ as formulated, and are now directing their efforts towards ensuring the final outcome is a minimum standard set at a stringent enough level that leads to gains beyond business-as-usual. They say Icao has a record of setting standards that follow technological development rather than force it as is often the case in other sectors.
The Icao proposal for the CO2 metric are not yet public, and all parties to the process are expected to keep it confidential, hence it is impossible to fully assess it here.
But there has been criticism of the proposed ‘metric’ from outside the Icao process. The aeronautical analyst Dimitri Simos has written an open letter warning that the form of Icao’s metric is ‘fundamentally flawed, unfit for purpose, and carries great risks for both the environment and the industry if not challenged prior to formal adoption’. Simos adds: ‘Gross technical blunders are about to be incorporated into key global policies.’ He criticises in particular the suggestion that fuel consumption will only be measured in the cruise phase, not during landing or take-off, and the fact that the proposals do not reward lighter aircraft.
T&E aviation manager Bill Hemmings said: ‘This has been a tortuous process and the outcome is far from perfect, but it is definitely a much better outcome than would have happened without us, and the challenges in calculating and setting stringency will be crucial. The work goes to the heart of the way manufacturers design aircraft and of how airlines influence airplane design to maximise commercial advantage, so it’s crucial that the environmental voice in the negotiations is strong. At almost every turn there is a risk that the short-term commercial interests of the airlines and plane makers will win out over the importance of reducing greenhouse gases.
‘If anything meaningful is to come out of this process, the minimum fuel-efficiency standard must be set at a sufficiently high level of stringency to ensure that the aircraft of the future are more fuel efficient than if there had been no standard. The challenge here is for Icao to show it is relevant and to agree a standard that pushes industry beyond business as usual. Icao has now agreed that for CO2 the standard must go beyond ensuring best available technology – but what that actually means in practice for designing new aircraft is yet to be determined.’
Switzerland is to get all airlines using Swiss airports to record tonne-kilometre data from next January. The move is in preparation for linking the Swiss emissions trading scheme with the EU ETS, even though negotiations between Bern and Brussels still haven’t reached final agreement.
Aircraft energy efficiency has not improved in a decade
16.12.2009 (Transport & Environment)
A new study on aviation says the pace of improvements in aircraft energy efficiency is very slow, and no progress has been made in the last decade. It calls for a carbon dioxide emissions standard for aircraft already in production.
The International Council on Clean Transportation (ICCT) has examined emissions from more than 25,000 planes produced between 1960 and 2008. It shows improvements in fuel efficiency for the first three decades, but virtually no improvements in the last 20 years when there have been few new aircraft designs.
The International Civil Aviation Association recently proposed a CO2 standard for new aircraft designs, but rejected suggestions that designs currently in production should be subjected to a maximum level of emissions.
But Daniel Rutherford, a co-author of the ICCT’s report, says this will mean improvements will happen far too slowly. ‘Conventional wisdom holds that fuel prices drive constant improvements in new aircraft efficiency,’ he said, ‘but our analysis suggests efficiency improvements only tend to come with the introduction of new designs, which are much less common today.’
As a result, the ICCT fears that without a CO2 standard covering aircraft from both new and existing lines, airframe manufacturers could have a financial incentive to delay the introduction of more efficient engines in favour of older, unregulated models.
In a separate development, the head of the low-fares airline EasyJet has accused airframe makers of delaying delivery of cleaner, more fuel-efficient planes. ‘They are in no hurry to bring them out,’ Andy Harrison told a news conference, ‘because the cash flow they have from the Boeing 737 and Airbus 320 narrow-bodied planes is what they are interested in, and they want to keep that going.’
Responding to the accusation, a spokesperson for Airbus told Air & Business Travel News that technology to make planes quieter was available, as was technology to combat emissions, but that combined technology tackling both noise and emissions concerns was still in development and ‘would not be available for around another 10 years.’
Report Shows Fifty-Year Failure of Aviation Industry to Improve Fuel Efficiency
7.12.2005 (Transport & Environment)
Today’s commercial passenger planes are no more fuel-efficient than their equivalents of fifty years ago and aviation industry claims of a 70% improvement in fuel-efficiency are false. These are the main conclusions of a report by the Dutch National Aerospace Laboratory (NLR) published today by the European Federation for Transport and Environment (T&E) and released on this year’s environment-themed International Civil Aviation Day.
The new report was commissioned to investigate the claims of key industry groups such as the International Air Transport Association (IATA) who say, “Aircraft entering today’s fleets are 70% more fuel efficient than they were 40 years ago.” (1)
The NLR, a world-leading aerospace research institute, found that the original source of the 70% figure, the 1999 Intergovernmental Panel on Climate Change (IPCC) Special Report on Aviation and the Global Atmosphere (2), only examined improvements made during the jet era and ignored propeller-based planes of the 1950s. The report shows that the focus on speed that led to the introduction of jet engines in the 1960s caused a massive initial reduction in fuel-efficiency that is only now being recovered. For example, the Lockheed Super Constellation of the mid 1950s was at least twice as fuel efficient as the first jets, and as efficient as today’s aircraft.
The study also shows that even the efficiency gains made over the jet era have been exaggerated. The first reference point of the IPCC study was the most gas-guzzling passenger jet plane ever produced, the De Havilland Comet 4 which consumed much more fuel than other early jets. The second reference point, however, was the most fuel-efficient passenger aircraft produced to date.
Significantly, the report also casts doubt on industry forecasts of future fuel efficiency improvements saying “many studies on predicted gains in the future tend to be rather optimistic.”
Jos Dings, Director of T&E said, “The industry has deliberately misled the public to cover up its failure to improve efficiency. There is no reason to believe they will prioritise efficiency in the future unless governments step in with serious incentives to cut emissions.”
T&E published the report’s findings on this year’s environment-themed International Civil Aviation Day to highlight the failure of the International Civil Aviation Organisation (ICAO), the organisers of the event, to take action on reducing emissions – a responsibility they were given when the Kyoto Protocol was signed in 1997. (3) The last general assembly of ICAO in October 2004 effectively prohibited states from introducing emissions-related charges in a resolution that “urges contracting states to refrain from unilateral implementation of greenhouse gas emissions charges [before] the next regular session of the assembly in 2007”.
T&E cautiously welcomed the recent EU proposal to include emissions from aviation into the European Emissions Trading System (EU-ETS) after 2009 but warns that trading alone will not provide enough of an incentive to cut emissions to the required degree. (4) In addition to emissions trading, T&E is calling for a package of additional measures including fuel taxes and en-route emissions charges.
“With no VAT paid on international tickets, no taxes on fuel and billions of Euros in aid given to Airbus and Boeing, the aviation sector still operates in a parallel universe where direct and indirect subsidies are handed out with abandon. In the absence of international action, the EU must follow-up on its proposal to introduce emissions trading as soon as possible and also put forward a package of additional measures to bring about meaningful cuts in emissions” said Dings.
(1) See IATA Environmental Review 2004 – http://www.iata.org/ps/publications/9486.htm(2) For the full text of the 1999 IPCC report see: http://www.grida.no/climate/ipcc/aviation/index.htm(3) The international aviation sector (along with international shipping) was excluded from the Kyoto Protocol on Climate Change. Under the Kyoto agreement, responsibility for cutting emissions was handed to the International Civil Aviation Organisation (ICAO) http://www.icao.int/, a United Nations body. So far there has been no action whatsoever in spite of the fact that CO2 emissions from the sector are growing at 4% per year – faster than every other transport mode.
(4) The European Commission proposed in September that the aviation sector should be brought into the European Union Emissions Trading System (EU-ETS). This is unlikely to happen before 2009 and would require the approval of national governments and the European Parliament before such measures could be introduced. http://europa.eu.int/comm/environment/climat/aviation_en.htm
The real impact of emissions trading depends on how the system is designed. T&E is calling for measures that would result in maximum emissions reductions:
- All flights departing from and arriving at EU airports should be covered. Not just intra-EU flights.
- The system should account for the full climate impact of aviation. CO2 accounts for just 25-50% of greenhouse gas emissions from aircraft.
- Emissions reduction targets should be in line with current Kyoto targets for other sectors
- Emissions permits should be sold by auction, not given away to existing operators
The EU has moved to shore up the faltering price of CO2 emissions in the ETS as current low price is failing to encourage companies to reduce their greenhouse gas output. However, the changes are relatively minor, too minor to do much good, resulting in changes in the timings of auctions of carbon permits, rather than the large-scale reforms that campaigners and green businesses had urged. The current carbon price is about €7 (£5.40) per tonne of carbon, which is well below the price of €25-40 per tonne that analysts say is needed to encourage companies to change their behaviour. The price is so low due to the recession and lelss economic activity in the EU so there is a glut of excess permits.Some companies will be able to avoid paying for carbon for years to come. Sandbag says that 2.2bn allowances need to be removed to restore the scarcity envisaged before the recession. Tweet
EU moves to shore up price of carbon emissions
Changes to emissions trading scheme are not the large-scale reforms that campaigners and green businesses had urged
by Fiona Harvey, environment correspondent (guardian.co.uk(
The European Union moved to shore up the faltering price of carbon dioxide emissions on Wednesday, amid widespread concern that the current low price is failing to encourage companies to reduce their greenhouse gas output.
But the changes announced to the emissions trading scheme are relatively minor, resulting in changes in the timings of auctions of carbon permits, rather than the large-scale reforms that campaigners and green businesses had urged.
The current carbon price stands at about €7 (£5.40) per tonne of carbon, which is well below the price of €25-40 per tonne that analysts say is needed to encourage companies to change their behaviour. After the proposals were announced on Wednesday morning, the price of carbon dipped to €6.70, in an indication that analysts had been expecting bigger changes.
As Europe‘s economic activity has slumped in the past few years, the number of carbon permits available to companies for free has heavily outstripped the number they need. Many companies have been hoarding the permits they receive for free, with some now sitting on billions of euros’ worth of carbon allowances that will let them evade paying a price for their emissions for years.
Connie Hedegaard, climate chief at the European commission, said: “The EU [carbon market] has a growing surplus of allowances built up over the last few years. It is not wise to deliberately continue to flood a market that is already oversupplied. This is why the commission today has paved the way for changing the timing of when allowances are auctioned. This short-term measure will improve the functioning of the market.”
Even this modest step is not certain to be put into practice, however, as member states and MEPs must agree first, so that the changes can come into force early in 2013. Hedegaard promised that further, more sweeping reforms would be examined: “After the summer recess, the commission will also finalise the options for long-term structural measures.”
The changes to the carbon market have been the subject of a growing row between Hedegaard and her counterpart in the commission, the energy chief Günther Oettinger. The two have a history of disagreements, and Oettinger is understood to object to big reforms to the way the carbon market operates. The most effective way to raise the price of carbon under the scheme would be to reduce the number of permits available, and the easiest way to do this would be to cut the allocation of future permits scheduled for the next few years, by setting aside a large number. However, this would be legally and politically complex so the compromise proposed would allow for gradual changes that would not amount to a full set aside yet.
Bas Eickhout, a prominent Green party MEP, said the proposals did not go far enough: “Despite the urgent need to repair the misfiring emissions trading scheme, the commission is tiptoeing towards action. The emissions trading scheme is in need of serious surgery to address the current problems with the carbon market and ensure it can fulfil its purpose of delivering emissions reductions in the EU. Regrettably, the commission is riven by internal wrangling and has only set out limited proposals on the legal base today, merely preparing the ground for future steps and making it more difficult to shore up the emissions trading scheme before the end of the year.”
Damien Morris, senior policy adviser at Sandbag, an environmental campaigning group, said it was “unfortunate” that the plans to change the auctions were delayed until next year, but said that legal changes proposed by the commission would be helpful in reducing the number of permits available. He said: “With a clearer legal mandate, we hope the commission will move to withhold a quantity of allowances commensurate with the crisis facing the scheme: our research finds that 2.2bn allowances need to be removed to restore the scarcity envisaged before the recession.”
Scott McGregor, chief executive of emissions trader Camco, said: “It is essential that the proposed stakeholder consultation leads to firm proposals from the European commission on long-term structural measures to improve the scheme and which remove the uncertainty currently affecting the market.”
In the UK, the commission’s moves are likely to have limited impact, as the UK government is taking steps to ensure companies pay an effective minimum price for carbon whatever the EU price. Dorothy Thompson, chief executive of Drax, the coal-fired power station that is the UK’s biggest single source of emissions, said: “Because of the carbon floor price, any material amendments to the EU emissions trading scheme that tighten up the market do not make much difference here.”
BRUSSELS (Reuters) – The European Commission will outline a keenly-awaited plan on Wednesday to bolster the Emissions Trading Scheme (ETS) by reducing a massive burden of surplus allowances.
It is the latest of a string of efforts to fix a market, which is designed to be the mainstay of the EU’s climate policy, but in the past has been undermined by a series of scams and now is flooded with oversupply because of recession.
In April the price of carbon fell to a record low of 5.99 euros a tonne, far below levels needed to spur low-carbon investment and discourage polluters.
Early on Wednesday, the market was around 7 euros.
To tackle the surplus of carbon allowances, the Commission, the EU’s executive arm, has decided on a series of steps.
It is seeking clarification of an article governing the timetabling of auctions within the European Union’s ETS law. It is also making public a draft proposal on how to alter the auction timetable to delay the release of new allowances.
There will be no firm numbers in that draft proposal itself, although EU sources said debate had focused on withdrawing 400 million, 900 million or 1.2 billion allowances.
Environmental groups have made the case for 2 billion.
The aim of the timetable adjustment is to deliver a quick fix in time for the next phase of the ETS, beginning next year, while the legal clarification is an attempt to ward off any challenge that could derail the process.
Eurelectric, which represents the electricity industry, including giants such as E.ON (EONGn.DE), said it would welcome a first move from the Commission to “clarify the feasibility of a rapid, short-term adjustment”.
Other sections of industry are less favourable.
Europia, the European Petroleum Industry Association, said it opposed intervention.
“The EU ETS is responding to the economic conditions in Europe and therefore working as designed,” it said. “In addition, Europia has concerns as to the regulatory precedent that such an intervention would set.”
POLITICAL WILL
Whether the European Union can deliver a short-term solution over the coming months depends on the political will of its 27 nations, which have to endorse Commission proposals.
The prime EU opponent is Poland, which is dependent on carbon-intensive coal. Grateful for the economic reprieve provided by a weak carbon price, it opposes any intervention.
“What are the goals of the ETS? The goal is to reduce CO2 emissions. Nothing has changed. The ETS was never invented to create a price signal,” Polish Environment Minister Marcin Korolec told Reuters earlier this month.
By contrast, the biggest EU economy Germany, as well as Britain, are viewed as obvious supporters.
Britain has decided on a carbon floor price from next year and Germany needs ETS revenues to finance its shift to renewable power following its decision to withdraw from nuclear energy after Japan‘s Fukushima disaster in March 2011.
Debate will begin in earnest after the Commission’s August recess during which the EU institutions suspend business.
The Commission later this year is expected to publish a review of the ETS, which is being brought forward from next year.
That could also kick off a much deeper debate about the wider reforms many see as necessary, such as permanently withdrawing, rather than just delaying the release of permits.
The problem with more far-reaching reforms is that under complex EU processes, they could take years rather than months.
(Additional reporting by Nina Chestney and Jeff Coelho in London; editing by Rex Merrifield and Keiron Henderson)
The aviation industry, especially airlines abroad, have complained mightily about the cost of the ETS. Back in December, IATA estimated the cost could be as much as €900 million in 2012, based on an average price of €13 per tonne, rising to €20 or much higher in 2020. In practice, the cost is now only €7 per tonne, so the actual cost to a passenger on a flight from the USA to Europe is just about €2 – 3 per flight.
Such low carbon prices are ineffective in being a disincentive to flying, as the prices are too low by at least one or two orders of magnitude.
CERs (certified emissions reductions) are credits issued by the United Nations for reductions in emissions generated by emissions abatement projects in developing countries. ERUs (emissions reductions units) are also emission reduction credits issued by the UN but they represent reductions from projects in industrialised countries. One CER or ERU represents a reduction of 1 tonne of CO2 and can thus be surrendered by an aircraft operator to offset 1 tonne of its emissions. However, operators can only use CERs and ERUs for up to 15% of their compliance obligations in 2012 and up to 1.5% from 2013.
A global resolution to Europe’s battle with China and other countries over curbing aviation emissions is unlikely before October 2013, risking growing pressure from domestic airlines and trade partners. Senior EU officials say they will not retreat from enforcing obligations under the ETS, and a decision is expected shortly on how the EU will respond to defiant Chinese and Indian airlines that failed to meet a 31 March deadline. Officials say that an ICAO draft plan is not likely until March 2013 and that the full ICAO council – representing the international body’s 191 member states – would then not consider it until a meeting due in October 2013 – or if no decision is made, it could be 2016 before a resolution would be considered again.
A global resolution to Europe’s battle with China and other countries over curbing aviation emissions is unlikely before October 2013, risking growing pressure from domestic airlines and trade partners.
Senior EU officials say they will not retreat from enforcing obligations under the Emissions Trading System (ETS) that took effect in January. The law requires domestic carriers as well as any foreign airline landing in the EU to pay for their emissions under a cap-and-trade system.
A decision is expected shortly on how the EU will respond to defiant Chinese and Indian airlines that failed to meet a 31 March deadline to submit an annual emissions report to the European Commission.
A working group of the International Civil Aviation Organization last week proposed three market-based options, including cap and trade to cut aviation carbon dioxide emissions worldwide.
Officials say that an ICAO draft plan is not likely until March 2013 and that the full ICAO council – representing the international body’s 191 member states – would then not consider it until a meeting due in October 2013. The council meets every three years, meaning that if no decision is made, it could be 2016 before a resolution would be considered again.
Julie Oettinger of the Federal Aviation Administration (FAA) said Washington supported the European Union’s goals to cut aviation emissions but said global action should come through ICAO.
“This issue is not one that the EU and US can solved,” Oettinger, the FAA administrator for international affairs and the environment, told a Transatlantic airline conference in Brussels on 27 June. “To solve this problem is going to require serious multilateral engagement.”
EU vows to enforce ETS
Despite withering opposition from China and India, and a legal challenge from the US airline industry, Climate Action Commissioner Connie Hedegaard and other officials have said the EU would not retreat on the aviation ETS until there is an ICAO decision.
“The European Commission has a constitutional obligation to enforce the law, and we will do so,” Jos Delbeke, director-general for Climate Action, told the Transatlantic conference.
Non-compliant airlines face fines from EU member states, a spokesman for the EU executive said. For instance, maximum fines in Germany would be €50,000 this year, rising to €500,000 next year, while in Britain, the fines would be €1,560 rising next year to €15,600.
The American aviation industry challenged the ETS law before the European Court of Justice, contending that it applied extraterritorial regulations on airlines and violated the spirit of a 2004 ICAO call for to grapple with rising aviation emissions. The court on 21 December 2011 ruled that ETS did not violate international law or competition agreements.
World carriers resist
Since then, Chinese and Indian authorities have urged their airlines not to comply and have warned of a possible trade war with Europe if the law is not amended to exempt non-EU carriers. The US Congress is also weighing legislation condemning the EU rules after earlier efforts to pass a law banning American carriers from complying fell short of enough support.
Airline industry officials also say Russian authorities have threatened to ban Finnish flights over Russian airspace in a spat over the ETS.
“The airline industry is between a rock and a hard place,” Regula Dettling-Ott, the vice president of EU affairs for Lufthansa, told the Brussels conference. “At some point every European airline is going to be affected by this.”
But John Hanlon, secretary-general of the European Low-Fares Airline Association, said in an interview he supports ETS because it is a market-based way to reduce emissions and is preferred to a carbon tax.
“We’re very staunch supporters and probably alone in the airline industry” on ETS, Hanlon told EurActiv, but he said “we acknowledge that a global scheme would be even better.”
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POSITIONS:
“I don’t think Europe should be able to dictate to the world what the target is,” said Nancy Young, vice president for environmental affairs for the Airlines for America industry association.
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EU Commissioner for Climate Action Connie Hedegaard said following the council meeting of the U.N. International Civil Aviation Organization (ICAO) in Montreal from 26-27 June :
”By narrowing down the market-based options on the table, ICAO is making some progress towards the long-awaited global deal to curb aviation emissions. States supporting global solutions now have a unique opportunity to show how serious they are about it by choosing one of the three market-based measures in the coming months. The EU remains fully committed to reach conclusions in the November ICAO Council”.
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Sanjeev Kumar, senior associate of the London-based environmental group E3G, was disappointed by ICAO’s progress. “This just highlights the leadership the EU has taken on the issue. ICAO does not look like a forum capable of delivering,” he told Reuters.
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NEXT STEPS:
March 2013: ICAO secretariate expected to present a draft proposal on a global emissions scheme based on recommendations made by ICAO experts in June 2012.
October 2013: Next regular meeting of the ICAO Council.
It is possible that Carlisle City Council will decide on the redevelopment plans for Carlisle airport this week, but more likely it will be delayed. It has been due last July, but Stobart asked for it to be delayed. The upgrades are mainly for freight, but the local council and the tourism bodies want air passenger, not only freight. However, 92% of Cumbria’s visitors are UK-based, though Cumbria Tourism etc want to attract more international tourists, and year to get visitors from Brazil, China, India and Russia – as well as more from America. And for these to fly up from London. One problem with the application is that Stobart have now halved the number of passengers it thinks it can get by 2025, from its initial guess of 100,000 per year, to 50,000. This lower number will reduce the alleged benefits to the local economy, and so is not likely to be approved.
CARLISLE AIRPORT VITAL IF CUMBRIA TO CASH IN ON OVERSEAS TOURISTS
30.6.2012 (North West Evening Mail)
Carlisle needs to be ready with its new airport to capitalise on a predicted increase in overseas tourists holidaying in the UK, the county’s tourism chief has said.
Ian Stephens – Chief Executive of Cumbria Tourism
New forecasts suggest more overseas visitors will be packing their cases for UK breaks and will grow 5% over the next 5 years.
But the news was tempered by statistics which predict a massive 75% would fly directly into London airports – so Carlisle needs a revamped operation ready to allow internal transfers between the capital and Cumbria.
Ian Stephens was giving his annual address to the tourism industry in a presentation entitled: “Faster, Higher, Stronger – Cumbria’s growth potential.”
Earlier in the day, he said he had met with airport representatives and that return flights between Carlisle and Dublin have been mooted which also spelt “exciting prospects” for tourism.
“All this is particularly good news for Cumbria – particularly if and when Carlisle airport opens,” said Mr Stephens, alluding to the lengthy planning and political battle Stobart Air has faced which has stopped its multi-million pound development plans from taking flight.
He spoke as it emerged that the redevelopment of Carlisle Airport may get the go ahead next Friday
It is, however, more likely that city councillors will delay making a decision to allow consultation on new figures supplied by Stobart Group.
Stobart wants to build a 394,000sq ft freight distribution centre at the Crosby-on-Eden airfield and to resurface the runway for scheduled passenger flights and airfreight.
Its planning application was to have been heard last July but was delayed at Stobart’s request.
The firm’s latest submission appears to have won over planning officers who are on the cusp of recommending that councillors approve the scheme.
The sticking point is new figures from the company, predicting the airport will handle 100,000 passengers a year by 2025 – half as many as it said previously.
The council is worried that lower passenger numbers will reduce the benefits to the local economy. If Stobart can show that the economic benefits are unchanged, the scheme may yet be approved next Friday.
But if it cannot show this, or if it accepts that the benefits will be lessened, the development control committee will defer the item to allow fresh consultation on the basis of the new figures. Meanwhile, citing new forecasts from national tourism authorities Visit England and Visit Britain, Mr Stephens told delegates at his organisation’s meeting that tomorrow’s overseas tourists to the UK are likely to come from Brazil, Russia, India and China.
There is likely to be a recovery across the high-spending American market of visitors too, which often head to north Cumbria, Carlisle and Hadrian’s Wall for its history and heritage. [Hadrian's Wall can easily be reached, at its eastern end, from Newcastle airport, only about 45 miles away. Map].
He promised Cumbria Tourism would lobby agencies like Visit England and Visit Britain to spend more money on the advertising battlefields to help signpost overseas tourists north. Mr Stephens told the 120-strong audience: “We have to make sure marketing is not all focussed on the south and London.
“We will be lobbying London hard for that.”
One member of the audience suggested more attention should be given to UK-based tourists who make up 92% of all visitors to Cumbria.
Mr Stephens replied, however: “The staycation market is important. What I’m saying is that these areas (international visitors) offer a lot of growth potential and we want a share of it.”
A new discount card offering Cumbrian residents deals and money-saving days out is proving slow to take off.
The My Cumbria Card was unveiled last month by Cumbria Tourism offering residents who live in the county discounts on their days out.
It was devised to create a Cumbria version of the successful online discount websites like GroupOn and My Voucher Codes.
However, a progress report at the annual general meeting showed that just 246 people have signed up and less than 150 businesses are onboard.
Cumbria Tourism’s website is close to breaking through the five million visitors a year mark.
The www.golakes.co.uk site has won awards and is the official shop window for tourism businesses wanting to capture tourist bookings online. Cumbria Tourism’s annual meeting was told that Cumbria Tourism had also achieved 42,000 fans on Facebook, more than 7,200 followers on Twitter and hosted 155 press visits which had generated over £1m in equivalent advertising for the county and its tourism businesses.
The ICAO has narrowed its focus to 3 broad options to address aviation emissions, eliminating the baseline and credit system. ICAO’s governing council, meeting in Montreal this week, agreed to rule the scheme, where increases or decreases from an initial emissions baseline could be traded. It is being dropped as it is similar to another option being considered, global carbon offsetting. The 3 other remaining options are: offsetting with a revenue-generating mechanism, and cap and trade emissions trading. ICAO expects to have something agreed by March 2013, though environmental commentators are sceptical they can deliver anything effective. Connie Hedegaard would like to see progress by the November ICAO meeting. Tweet
ICAO Narrows Emissions Options
June 30, 2012 (Reuters)
The ICAO has narrowed its focus to three broad options to address greenhouse gas emissions, eliminating the baseline and credit system, a spokeswoman said.
ICAO’s governing council, meeting in Montreal this week, agreed to rule out a baseline and credit trading scheme, where increases or decreases from an initial emissions baseline could be traded, spokeswoman Stephane Dubois said.
In the working paper, a panel of experts said the baseline and credit system should be discarded only because it would be nearly identical to another option still being considered, global carbon offsetting. The other remaining options are: offsetting with a revenue-generating mechanism, and cap and trade emissions trading.
Stiff resistance from the United States, China and other nations over the European Union’s emissions trading scheme has the International Civil Aviation Organisation (ICAO) under pressure to devise a global alternative.
The paper did not recommend whether participants in the scheme should be states or airlines, or how the rules should be enforced.
Sanjeev Kumar, senior associate of environmental group E3G, was disappointed by ICAO’s progress.
“This just highlights the leadership the EU has taken on the issue. ICAO does not look like a forum capable of delivering,” he said.
ICAO Secretary General Raymond Benjamin said earlier this month that he expected the council to have a draft plan by March 2013, rather than the end of 2012 as had been previously thought.
Benjamin and others at ICAO have emphasised the difficulty of crafting a viable scheme. Any global system must approved by ICAO’s 191 members at its autumn 2013 assembly. The full assembly meets only once every three years.
Under the EU’s current system, airlines must buy permits for greenhouse gas emissions for planes operating in, to and from Europe. Opponents say that violates non-EU states’ sovereignty, and that ICAO is the right place to come up with an emission-reduction plan.
(Reuters)
The European Union is looking to the ICAO to decide on a global scheme for curbing airline emissions at its November meeting, the bloc’s climate boss said after inconclusive talks in Montreal this week.
Angry opponents of an EU law to make all airlines using EU airports pay for their carbon emissions have called on the ICAO to solve the dispute by coming up with an alternative way to tackle the rise in emissions from aircraft.
The extent of the row, which has stirred threats of a trade war, has increased pressure on ICAO to deliver a solution, but some say the high politics has also made it even more difficult to decide on one.
Talks this week at ICAO in Montreal eliminated only one of four market-based schemes under discussion.
“By narrowing down the market-based options on the table, ICAO is making some progress towards the long-awaited global deal to curb aviation emissions,” Climate Commissioner Connie Hedegaard said on Thursday in a statement.
But she said she was looking to ICAO “to reach conclusions” at its November meeting.
“States supporting global solutions now have a unique opportunity to show how serious they are about it by choosing one of the three market-based measures in the coming months,” she said.
ICAO’s secretary-general said earlier this month he did not expect to have a draft proposal ready until March 2013.
The Commission has repeatedly said the only reason for it to modify its law requiring airlines to buy allowances under its EU Emissions Trading Scheme would be if the ICAO can agree a global plan.
Alternative national measures to deal with airline pollution could also allow for exemptions from the EU law, the Commission has said.
The Irish Government has announced that it would consider Ryanair’s bid to take over their Irish rival , Aer Lingus. They want 50% of it. They also admitted that they would not rule out the sale of their 25% stake and are considering it. Ryanair - which already owns 30% of Aer Lingus – launched their third bit to take over Aer Lingus last week. They offered shareholders 38% premium to the market. This deal would require regulators to drop opposition to a merger and the Irish government to agree the price. The FT reports that Ryanair said, rather pompously this would be ….”clearly beneficial in the context of the current recessionary environment and will make a valuable contribution towards budget spending in such important areas as health and education.” The FT asks “Since when, one might ask, have airlines been advising governments how to raise money for social expenditure?”
Irish Government agrees to consider Ryanair’s bid for Aer Lingus takeover
Photo by Martin Keene/PA
The Irish Government announced on Tuesday that it would consider Ryanair’s bid to take over their Irish rival Aer Lingus. They also admitted that they would not rule out the sale of their 25 percent stake.
A spokesperson for the transport minister Leo Varadkar told Reuters: “The government is considering the offer.”
Ryanair launched their third bit to take over the iconic airline Aer Lingus last week. They offered shareholders 38 percent premium to the market. This deal would require regulators to drop opposition to a merger.
Michael O’Leary’s Ryanair, already Europe’s largest budget airline, owns 30 percent of Aer Lingus. Their aim is to secure at least 50 percent of shares.
The Government spokesperson said a decision would be made depending “on what the offer means for route options and air fares from Dublin, what price the government can get for its stake and whether competition authorities will allow the takeover.”
When asked whether the Government would sell their 25 percent stake the spokesperson said they would not rule that out.
Last week when O’Leary’s third bid was made public he said he planned to use the takeover of Aer Lingus to allow Ryanair to be more competitive in Europe.
According to BBC reports he said “Since the European Commission recently approved BA’s takeover of British Midland, and Etihad recently invested in Aer Lingus, and there are reports that it has a ‘strong interest’ to acquire the government’s stake, and since the Irish government has decided to sell this stake, we believe now is the time to focus on the right long-term strategic partner for Aer Lingus.” http://www.irishcentral.com/news/Irish-Government-agrees-to-consider-Ryanairs-bid-for-Aer-Lingus-takeover-160507035.html
…… The Irish government, which owns a 25% stake in Aer Lingus, stands to realise €174m if the acquisition goes ahead on Ryanair’s terms at €1.30 a share, plus another €4m from an Aer Lingus dividend.
“This,” Ryanair observed sententiously, “is clearly beneficial in the context of the current recessionary environment and will make a valuable contribution towards budget spending in such important areas as health and education.”
Since when, one might ask, have airlines been advising governments how to raise money for social expenditure?
The statement was a naked attempt to exploit the government’s sense of financial vulnerability after Ireland’s multibillion-euro rescue by its European partners and the International Monetary Fund. Mr O’Leary might as well have put all pretence aside and told the government: “You’re stony broke. I’m in the money. Sell up now.” …….
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