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Policy Pulse

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Policy Pulse - 16 December 2019 - George Anjaparidze


Veteran negotiators say that more time is rarely a recipe for better outcomes. That is certainly true for this year’s annual UN climate talks, which concluded in Madrid on 15 December 2019. The negotiations ran 2 days into overtime, setting a new record for the longest session since the start of the UN climate convention 25 years ago. Despite the extra time, the talks delivered very little in terms of tangible outcomes.


Most disappointing was failure to agree on the rules for international cooperation on mitigating climate change – known as Article 6 negotiations. These rules are a prerequisite for properly functioning international carbon trading. Not having these rules will impact the climate agreement on international aviation – known as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which addresses CO2 emissions above 2020 levels. The absence of clear rules will likely delay implementation of the aviation climate agreement or worse partly “nationalize” CORSIA. Both developments would have negative consequences for the airline industry.


A delay in implementation of CORSIA will erode confidence in the scheme’s ability to stabilize net CO2 emissions from international aviation. This may prompt some ambitious states to impose measures not envisioned under CORSIA. Another danger is that in the absence of international offsetting rules, states may require airlines to purchase national carbon offsets. Requirements for sourcing offsets nationally will hinder the development of a global carbon market and lead to competitive distortions in the airline industry.


In response to these risks, the aviation industry should:

  1. Deepen collaboration with leading institutions that have policy expertise in designing carbon markets. The aim should be to pilot approaches that will demonstrate how CORSIA compliant offsets could be generated under prevailing policy uncertainty. Existing carbon market catalyst programs, such as the one managed by the Asian Development Bank, can be used to support such initiatives with technical assistance.

  2. Scale-up climate action within the sector. About 20% of CO2 reductions, needed to achieve net carbon neutral growth from 2020, can be generated cost-effectively from within the aviation sector. However, these opportunities are not being realized because of “non-price barriers” or non-financial factors. Industry needs to support interventions that target the barriers that are preventing the implementation of these measures (See op-ed: Change of CORSIA).

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Policy Pulse - 14 November 2019 - George Anjaparidze


The Harvard Project on Climate Agreements published a Veritas Global policy brief providing rare insight into the inner workings of the airline industry. The brief, The Extraordinary Agreement on International Aviation, explains the key role played by the airline industry in the design of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).


The scheme addresses the growth in total CO2 emissions from international aviation above 2020 levels. CORSIA will save the aviation industry tens of billions of US dollars each year by avoiding a costly patchwork of overlapping and distortive measures. The worst-case patchwork scenario estimated that climate-policy costs would be equivalent of about 10% of industry revenues in 2030. In comparison, carbon neutral growth from 2020 would cost the industry less than 1% of industry revenues in 2030.


For CORSIA to function effectively, there is an urgent need to secure a credible source of carbon offsets. ICAO is currently working towards an agreement on emission unit criteria. Offsets used by aviation need to be consistent with the broader climate-policy framework under the UNFCCC Paris Agreement and ensure no unintended double-counting of emission reduction efforts. In the medium term, it may be necessary to introduce adjustments to CORSIA.


Although challenges remain, CORSIA represents an extraordinary achievement. A key focus of industry and policy makers needs to be on ensuring that CORSIA is fully implemented with the broadest possible participation. This will enable international aviation to address its CO2 emissions while continuing to deliver a critical service for the modern economy.



 
 
 
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