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This month’s United Nations agreement to limit greenhouse gas emissions isn’t likely to have a major impact on airline ticket prices, according to IATA.
Meanwhile, the key provisions that will determine its effectiveness must still be mapped out.
“The devil is in the details,” said Fred Dahlmann, a professor at the Warwick Business School in England who has researched carbon emissions and the aviation industry.
The agreement will require carbon-neutral growth for the majority of the world’s air carriers, including commercial and cargo airlines.
Air carriers that see emissions rise above their average level in 2019 and 2020 will have to purchase carbon-offset credits to mitigate that increase. The regulations won’t apply to domestic air travel, which is regulated by individual countries.
The plan, which was finalized at the International Civil Aviation Organization (ICAO) meeting in Montreal on Oct. 6, will take effect in 2021 with a voluntary phase that lasts through 2026.
Some 65 countries, representing close to 85% of the international aviation activity, have so far agreed to participate in that phase, including the U.S., the member-states of the EU and China. The most prominent holdouts are India and Russia.
The mandatory phase of the emissions plan will last from 2027 to 2035.
Among the biggest supporters of the agreement were the airlines themselves. In a paper produced ahead of the ICAO assembly, IATA noted that implementing the agreement will be less expensive for airlines than what would likely have come in its place, a patchwork of carbon taxes and emissions schemes implemented on a country-by-country basis.
IATA’s estimates of the cost of the offset scheme are quite broad, coming in somewhere between $2.2 billion and $6.2 billion industrywide in 2025, then rising to between $8.9 billion and $23.9 billion in 2035.
Each airline will determine what portion of the cost of carbon offsets it will pass on to customers.
But in hypothetical calculations using high-end figures, IATA estimates that the cost to an airline would go up just $1,497 to fly a Boeing 787-800 Dreamliner on the 3,318-mile route between Frankfurt and Addis Ababa, Ethiopia.
Assuming a typical Dreamliner configuration, that would amount to $5.50 per passenger.
John Hansman, director of the MIT International Center for Air Transportation and a participant in a related ICAO initiative to develop emission standards for airline fleets, said the airline industry understands that it has much to lose if it doesn’t address climate change. Aviation accounts for approximately 2% of global greenhouse gas emissions.
“In my view, global warming is probably the biggest existential threat to global aviation,” Hansman said. “If it becomes socially unacceptable to fly because of concerns of environmental impact, that will significantly change the business.”
With international aviation expected to grow at approximately 5% per year after 2020, Hansman said that the ICAO chose to implement the market-based carbon offsets approach because stakeholders understood that the growth of emissions couldn’t be eliminated in the foreseeable future through improved fuel efficiency alone.
Carriers sometimes use aircraft for 20 years, so even as more efficient planes become available, they take over the market slowly. In addition, jet biofuel technologies are in their infancy, and even when more fully developed, use of biofuel will be limited by practical considerations. It would take 9% of American cropland, Hansman said, to supply U.S. aviation alone with biofuel.
Still to be worked out are the specifics of the offset scheme.
Brad Schallert, a deputy director for the International Coalition of Sustainable Aviation, which sat in on the Montreal negotiations this month, said it will be essential that rules are set in such a way that carbon offsets are properly valued and that only useful offsets are allowed.
For example, he said, it’s easy to track the carbon impact of a project in which trees are planted. But it is more challenging to track the value of a project in which an airline pays money in order to prevent land from being logged.
“It can be very difficult to prove they would have cut them down,” Schallert said.
As such, the criteria for offset projects must be carefully established.
The ICAO also has yet to set transparency guidelines related to offset purchases.
Schallert said he wants to be able to see online the specifics of each offset purchased by airlines.
“It has to be very, very transparent for the market to operate effectively,” he said.
Sоurсe: travelweekly.com
