Failure at UN climate talks increases risk of grounding CORSIA

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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About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economics and infrastructure. 

#COP25 #UNFCCC #COP25Madrid2019 #climatechange #climateaction #aviation #ICAO #CORSIA #airlines #climateactionnow #offsetting #carbonmarkets #carbontrading #article6

The extraordinary climate agreement on international aviation

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.

Full text of "The Extraordinary Climate Agreement on International Aviation: An Airline Industry Perspective"

#climatechange #aviation #corsia #economics #ICAO #IATA #Harvard

Next wave of opportunities for climate action are in agriculture and forestry

Policy Pulse - 15 August 2019 - George Anjaparidze

Last week, the International Panel on Climate Change (IPCC) released a report on land. Highlighting that land is a critical resource. The report indicates that about 23% of all human-caused greenhouse gas (GHG) emissions are attributed to land, or those related to agriculture, forestry and other land uses. However, agriculture and forestry are even more important to climate policy than their relative share of global GHG emissions. The next wave of opportunities for scaling-up climate action are in agriculture and forestry.[i]

Achieving the current targets communicated through Nationally Determined Contributions (NDCs) implies reducing the 2030 GHG emissions trajectory by 4.8 Gt CO2e or about 8%.[ii] Countries can largely achieve this trajectory by focusing on win-win solutions, where GHG abatement measures create cost savings. Within the basket of such cost-effective measures, agriculture and forestry can contribute about 11% of all GHG abatement potential. However, if countries start raising the level of ambition, they will increasingly need to rely on agriculture and forestry. A more “ambitious NDC” scenario that targets reducing the 2030 GHG emissions trajectory by 9.6 Gt CO2e or about 16%, would result in 49% of all cost-effective abatement potential to be in agriculture and forestry (see chart above). In fact, nearly 70% of all additional cost-effective abatement measures, beyond those in the NDC scenario, would be in the agriculture and forestry sector.

Even the more “ambitious NDC” scenario, presented above, falls short of the effort needed to limit global warming to 1.5° to 2°C. The “1.5° to 2°C” scenario would imply reducing the 2030 GHG emissions trajectory by 27 Gt CO2e or about 44%. Under this scenario, agriculture and forestry would also be a major source of abatement potential, with over 33% of all cost-effective abatement measures.

Targeting agriculture and forestry for GHG emission reductions is also attractive because approaches used generally rely on proven technology and are relatively less capital intensive.[iii] This means that these measures are more conducive to be taken up in developing countries and can more rapidly be deployed at scale. In many cases, there are also significant co-benefits that could be generated beyond climate change mitigation.

The IPCC report on land concludes that, despite human activity, this sector managed to on net remove 6 Gt CO2e from the atmosphere between 2007 and 2016. Increasing international support for mitigation measures in agriculture and forestry, channeled through development banks and others, can serve as a catalyst to realizing potential opportunities. Companies involved in producing agricultural products and managing large areas of land would stand to benefit from this additional support. The world as a whole would also benefit. Agriculture and forestry offer an opportunity to scale-up action on climate change by leveraging a natural advantage.

[i]SeeMcKinsey analysisof global GHG abatement costs (version 2.1).

[ii]See earlier analysis from Veritas Global Paris Agreement: the inconvenient gap between ambition and reality

[iii]SeeMcKinsey analysisof global GHG abatement costs (version 2.0).

About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economicsand infrastructure. 

#climateaction #climatechange #forestry #agriculture #economics