ICAO’s CORSIA Emissions Plan Will Fail To Fly
The Australian June 2, 2017
Climate change mitigation involves reducing greenhouse gas emissions, with the aim of reducing the rate and magnitude of global warming. Many of the affects of climate change can be reduced or delayed by mitigation.
The main economic requirement for effective mitigation is a price on carbon. At the moment we still don’t effectively pay for current and future costs of our emissions. There remains, as Lord Stern famously stated, a climate change “market failure”.
Thanks to international efforts at the International Civil Aviation Organisation dating from last September, however, those people flying internationally will not face a realistic price for their use of carbon until well into the future — if ever. But more on this later.
In terms of policy instruments or systems to mitigate climate change there are, we think, a couple of principles — the simpler a system is, the more likely it is to work, and the fairer a system is, the more likely it is to last.
The question is whether to rely on quantity-based or price-based instruments. A quantity-based instrument is an emissions trading scheme. A price-based instrument is a carbon tax.
Economists agree the two most effective ways to address the emissions problem generally (and aviation emissions specifically) are through either of these instruments.
Neither of these options was chosen by the ICAO. Instead, it has chosen a carbon offset scheme — the Carbon Offsetting and Reduction Scheme for International Aviation — which, as a policy measure is ineffective, both generally and as against a tax or an emissions trading scheme.
As Flight International notes, carbon offsetting is central to ICAO’s plan, yet it involves paying somebody else to cut emissions (by buying their carbon credits), investing in schemes designed to reduce future emissions, or planting trees.
All these approaches are rightly criticised because they allow actual, measurable emissions in exchange for the hope that some technology will become viable or a few saplings will actually survive for decades.
The CORSIA has three phases: a pilot phase operates from 2021 to 2023 for states that volunteer to participate in the scheme.
Then a formal phase from 2024 to 2026 will operate with reference to states that (as with the pilot phase) voluntarily participate, and would offset with reference to options in the ICAO assembly resolution text. So, for the first six years, participation in the CORSIA is voluntary.
A mandatory phase would only operate from 2027 — 10 years away — to 2035 and would exempt a number of states on various bases.
The CORSIA also applies solely to international flights, that is, just 60 per cent of aviation emissions. For the first, voluntary 2021-2023 period, less that a third of all states will join.
Further, only flights between two participating states will be covered.
Put another way, the scheme will cover just under 40 per cent of global passenger capacity.
Six months after ICAO’s inauspicious start to international regulation of aviation emissions, what’s happened? In substance, essentially nothing.
The ICAO council has adopted a new global standard for carbon dioxide emissions from aircraft; the standard will be introduced gradually beginning in three years’ time after seven years of development. It will first apply to new aircraft types, and then — from 2028 — to in-production aircraft.
The ICAO president calls this “pioneering action”.
And while ICAO has set out principles with which carbon offsets would need to comply — avoidance of double counting, realistic baselines and permanency, for example — experience from the Kyoto Protocol’s Clean Development Mechanism and elsewhere suggests offsets do not provide climate benefits.
We like a carbon tax for aviation. It has a number of advantages over emissions trading schemes and, needless to say, offsets. Taxation is a proven instrument. Tax systems are mature and universally applied policy measures. Taxation is also more direct and more transparent than offsetting.
The chances of implementation of a direct tax? About as much as the CORSIA offering an effective solution to the aviation emissions problem.