IATA economist warns expected growth in air travel “major challenge” to carbon reduction (ie. not possible)

Date added: 17 May, 2014

Air transport has proved to be one of the fastest growing industries over the past 20 years, with passenger traffic nearly tripling in terms of revenue-passenger-kilometres (RPKs) and increasing at an average of 5.4% per year since 1994. However, though there have been improvements in fuel use per revenue-tonne-kilometre (RTK), the industry’s carbon emissions increasing by 150% since 1994. With a similar rate of increase in air traffic expected over the next 20 years, the emissions can only go up. The increase in air travel had been helped by a halving in its cost over the period. The future cost of jet fuel is unknown but IATA hopes the price of jet fuel will be stable, and the cost of flying will get even lower – justifying huge expansion predictions. IATA says curbing demand for air travel is not realistic. ( Why ?) IATA knows its aim of so called “carbon neutral growth” cannot be achieved, but hopes ICAO will come up with something to enable aviation emissions to be traded, so the industry can buy carbon cuts in other sectors, while it continues to emit more.
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With air traffic likely to triple over the next 20 years, decoupling emissions growth will be a major challenge, warns IATA economist

Tue 13 May 2014 (GreenAir online )

Air transport has proved to be one of the fastest growing industries over the past 20 years, with passenger traffic nearly tripling in terms of revenue-passenger-kilometres (RPKs) and increasing at an average of 5.4% per year since 1994. However, despite strong efficiency gains that have seen fuel use per revenue-tonne-kilometre (RTK) decline by nearly a half, this has led to the industry’s carbon emissions increasing by one-and-a-half times over the same period, reported IATA’s Chief Economist, Brian Pearce (right), at the ATAG Global Sustainable Aviation Summit in Geneva. With a similar rate of increase in air traffic expected over the next 20 years, industry and governments will need to overcome the challenge of decoupling it from the growth in emissions, he said.

Pearce told delegates the global spend on air transport had closely followed the upward trend of global nominal GDP since 1994 and if forecasts were correct, that spend would increase from currently around $7 billion a year to $2.5 trillion by 2034. The world spent around an annual average of 0.9% of GDP on air transport over the past 20 years, he said. Although outstripped by the growth in passenger traffic, air freight (measured in FTKs) had increased by an average of 4.2% per annum, compared to a 2.8% annual average increase in global GDP.

The increase had been helped by a halving in the cost of air transport over the period. “Much of that reduction has been achieved by manufacturers giving us much more fuel efficient aircraft and engines,” he said. “And the reduction has come during a period when jet fuel prices have tripled – an amazing efficiency record.”

With jet fuel forming around a third of all airline costs, the future trend over the next 20 years would be determined by fuel prices. The ‘peak oil’ view would see much higher prices but economists, by contrast, foresee a reduction in energy costs as a result of a stimulation in innovation and efficiency caused by the rapid increase during the past 20 years. “The consensus is that we are likely to see stability in fuel prices,” said Pearce. “Therefore, I think we should probably bet that we will see air transport continuing to become cheaper.”

Air travel would be in strong demand over the next 20 years, supported by the growth of large cities and the need to connect those cities, particularly in the Asia-Pacific region, forecast Pearce, with the growth in passenger traffic outstripping that of air cargo.

Despite the rising levels of carbon emissions, Pearce said curbing that demand in order to achieve the industry’s carbon-neutral growth target was not a realistic option. “Air transport is critical for economic development. Do we really want to suppress the travel needs of, say, India and China? Because that is what we’re talking about here,” he questioned.

“But it illustrates the challenge that we, the industry, and governments need to overcome. We do need to decouple the growth in air transport from the growth in emissions. The industry has been thinking a lot about this and how it is possible to design a mechanism that can address those differences sufficiently and fairly. The challenge we have over the next three years at ICAO is to make sure that thinking is reflected in the discussions by governments.”

Pearce said a study carried out by IATA and consultants McKinsey had showed there was scope to make a range of cost-effective reductions amounting to around 215 million tonnes of carbon emissions per year by 2030 (the industry emitted around 689 million tonnes in 2012). However, he said, most of those reductions would need to come from infrastructure measures that only governments could act on, such as air traffic management improvements in Europe and the United States.

“But even with implementation of all these measures, the demand for air travel, and to a lesser extent air cargo, means there is going to be tremendous pressure on the industry because of the inevitable rise in emissions. Carbon-neutral growth, therefore, is going to be critical for us and for the wider economy in order to deliver the benefits from the industry that we have seen over the past 20 years.”

During the conference, ATAG released a new report ‘Aviation Benefits Beyond Borders’ that shows the industry’s economic impact was worth $2.4 trillion, with 3.4% of global GDP and over 58 million jobs supported by aviation. In 2013, 3.1 billion passengers were carried around 5.4 trillion kilometres on 36.4 million commercial flights that served nearly 50,000 routes.
http://www.greenaironline.com/news.php?viewStory=1858

Links:

Brian Pearce’s slide presentation

ATAG Global Sustainable Aviation Summit

ATAG Global Sustainable Aviation Summit Video Channel

‘Aviation Benefits Beyond Borders’

IATA Fact Sheet – Climate Change

https://www.iata.org/pressroom/facts_figures/fact_sheets/pages/environment.aspx

IATA ‘s “Industry Goals”:

An average improvement in fuel efficiency of 1.5% per year to 2020
A cap on net aviation CO2 emissions from 2020: carbon-neutral growth [NET not gross]
Cut net CO2 emissions in half by 2050 compared to 2005 [by carbon trading with other sectors that actually make the carbon cuts, allowing aviation emissions to grow.]

Carbon-Neutral Growth 2020 (CNG2020)

CNG2020 means that aviation’s net CO2 emissions will not increase beyond 2020 levels even as demand for air transport continues to grow
The industry is working hard to deliver CNG2020 (Four Pillar strategy), but it is also contingent upon action by other stakeholders, notably:
- The International Civil Aviation Organization (ICAO) needs to adopt a CO2 emission standard for new aircraft types
- Governments and fuel companies need to support and scale up the production of sustainable biofuels for aviation
- Governments and air navigation service providers need to improve air traffic management, and live up to their commitments to deliver the Single European Sky in Europe and NextGen in the United States
- At its Annual General Meeting in June 2013, IATA members adopted a resolutionproviding a set of principles on how governments could integrate a single global market-based measure as part of an overall package of measures to put a cap on net aviation emissions from 2020

Four Pillar Strategy to Address Climate Change

Technology

Short-term: enhancements and modifications to existing in-service fleet
Medium-term: accelerate fleet renewal, introduce latest technologies, including drop-in biofuels
Long-term: radical new technologies and aircraft designs
IATA Technology Roadmap identifies technologies that could reduce fuel burn per aircraft by up to 30%

Operations

Improved operations can save fuel and CO2 emissions by up to 6% per year (IPCC)
IATA helps fuel conservation by compiling best practices, publishing guidance, visiting airlines and training
IATA will extend fuel conservation programs and promote airline environmental management systems

Infrastructure

Governments and infrastructure providers could avoid up to 12% of CO2 emissions by addressing airport and airspace inefficiencies (IPCC)
- Some 4% of this has already been achieved since 1999 (according to the Civil Air Navigation Services Organisation – CANSO)
- Single European Sky (SES), US NextGen Air Transport System and flexible use of airspace would contribute to these savings

Economic measures

To the extent that the industry’s climate change objectives may not be achieved through the first three pillars alone, a cost-effective single global market-based measure is needed to bridge the gap
Considering the international nature of aviation, a global approach to aviation emissions must be preferred over a patchwork of individual and uncoordinated policies:
- A market-based measure should be cost-effective and administratively simple
- Airlines should only be held accountable once for their emissions
- A patchwork of measures may lead to the same emissions being covered by more than one mechanism.
A global mechanism is needed to prevent market distortions and carbon leakage

At its 38th session, the ICAO Assembly decided to develop a global market-based measure for international aviation. It requested the ICAO Council to finalize the work on the technical aspects, environmental and economic impacts and modalities of the possible options for a global MBM scheme. The results of the work of the Council will be reported to the next Assembly in 2016 for approval.

Updated: December 2013