The International Civil Aviation Organization (ICAO) took further steps in developing the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
In February the Committee on Aviation Environmental Protection agreed on a methodology to assess emissions reductions from alternative fuels and requirements for Sustainability Certification Schemes.
In March, the ICAO Council agreed on the Terms of Reference for CORSIA's Technical Advisory Body and approved Emissions Units Criteria.
In other news, the World Bank and Partnership for Market Readiness presented guidance on Verification and Approval Systems for Carbon Pricing Instruments.
6 March 2019: International aviation is a major emitter of greenhouse gas (GHG) emissions, however reducing these emissions is both technically and economically challenging. This carbon markets update provides an overview of recent developments under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and related efforts to assess emissions from aviation. It also reviews a report on Verification and Approval Systems for all types of Carbon Pricing Instruments.
ICAO Takes Further Steps Toward Implementation of CORSIA
If global aviation was a country, it would rank among the top 10 emitters, according to the European Commission. And yet only emissions from domestic aviation and not international aviation are considered as part of countries’ Nationally Determined Contributions (NDCs) under the Paris Agreement on climate change. To date, only the EU has included CO2 emissions from international aviation in its EU emissions trading system (EU ETS), but its application is limited to flights within the European Economic Area (EEA).
All parties to the climate regime pursue international aviation GHG emission limitation/reduction through the International Civil Aviation Organization (ICAO). ICAO member states have long worked together with industry towards voluntarily improving technologies, increasing the efficient use of airport infrastructure and aircraft, and adopting appropriate economic measures. But, as noted in the Fifth Assessment Report AR5 by the Intergovernmental Panel on Climate Change (IPCC), a large price signal is needed for aviation fuels to gain significant reductions in energy use and emissions. In 2016, ICAO adopted CORSIA to achieve its aspirational climate goals of increasing fuel efficiency by 2% per year and carbon-neutral growth of civil aviation from 2020 onwards. The market-based mechanism aims to cap aviation’s future emissions growth by obliging airlines to buy offsets, rather than requiring airlines to reduce aircraft emissions.
In March, the Council of ICAO in Montreal, Canada, took further decisions toward the implementation of CORSIA. The Council agreed on the Terms of Reference for the operationalization of the Technical Advisory Body (TAB), a group of experts nominated by states with a mandate to make recommendations to the Council, regarding “eligible emissions units” for use by airlines in CORSIA. The Council also approved the Emissions Units Criteria, to be used by the TAB in the assessment of emissions unit programmes.
These decisions complement previous steps in the development of CORSIA. In 2018, ICAO adopted standards and recommended practices for member countries and aviation operators to reduce emissions from international aviation, including in the areas of: monitoring, reporting and verification (MRV); CO2 offsetting requirements and emissions reductions from sustainable aviation fuels; and emission units. In February 2019, the meeting of ICAO’s Committee on Aviation Environmental Protection reached agreement on: default values and the methodologies for calculating actual values needed to assess the life-cycle CO2 emissions reduction benefits of different feedstocks for aviation fuels; and the requirements for Sustainability Certification Schemes (SCS) and a process to evaluate and recommend a list of eligible SCS.
The TAB’s initiation of work toward recommendations to the ICAO Council regarding eligible emissions units are widely anticipated. The EU ETS for aviation will be reviewed in the light of the operationalization of CORSIA. Consideration will be given to implementing the global measure in EU law through a revision of the EU ETS legislation; and in the absence of a new amendment, reverting the EU ETS back to its original full scope by 2024 to include not only fights within the EEA but also flights to an from the region.
Robust eligibility criteria are essential for ICAO scheme
Environmental integrity matters, as voiced in ongoing negotiations on the rules for market mechanisms under the Paris Agreement on climate change, and seen in lessons from the past that show how several factors influence the global GHG emissions outcome from using offset credits. “If the ICAO scheme allows airline operators the unlimited use of offset credits from already implemented projects, it will result in no notable emissions reductions beyond those that would occur anyway and neither offer incentives for new investments nor reward previous investments in offset projects.” This caution was stated in an article published in March in Nature, entitled ‘Robust eligibility criteria essential for new global scheme to offset aviation emissions.’ Based on their research, the authors recommend limiting the eligibility to new projects or by excluding projects that are at risk of discontinuing GHG abatement without further support.
Assessing the global warming potential of aviation services
Focus on the aviation sector’s CO2-emissions alone is insufficient, given the global warming potential (GWP) of non-CO2 gases. UNEP’s latest Global Environment Outlook, GEO-6, confirms that aviation is a small but growing contributor to global CO2 emissions, accounting for less than about 2 per cent of global anthropogenic CO2 emissions from fuel combustion. Yet, aircraft contribute to global warming in other ways. The GEO-6 shows that planes also emit water vapour, other gases and aerosols at high altitudes that trigger cloud formation, modify natural clouds and alter ozone and methane concentrations in the upper troposphere and lower stratosphere. The report states that the impact of these emissions on global warming may be higher than that of CO2 emissions from aviation, but notes that the effects of these changes on climate forcing are not yet well quantified.
Methodologies for calculating emissions reduction benefits therefore matter as well. A revised 2018 paper entitled ‘Aviation and Climate Change: Best practice for calculation of the global warming potential’ details accounting approaches using radiative-forcing-index (RFI) factors ranging from 1 to 2.7 that can be multiplied with the direct CO2 emissions to calculate the total GWP of aviation services. The authors, from ESU-services Ltd., a consultancy firm based in Switzerland, identify an RFI of 2 on total aircraft CO2 (or 5.2 for the CO2 in higher atmosphere) as best-practice based on available scientific knowledge. Without the application of an RFI factor, the authors suggest, short distance flights would have about the same emissions per person as average passenger cars.
Designing Verification and Approval Systems for Carbon Pricing Instruments
Monitoring Reporting and Verification (MRV) is crucial for any type of carbon pricing instrument to be sufficiently robust. The World Bank and its Partnership for Market Readiness published a guide on designing verification and approval systems for carbon pricing instruments, with focus on emissions trading schemes, carbon tax systems, and offset crediting mechanisms. The guidebook provides regulators with an overview of available options in designing verification system tailored to their specific needs and discusses the implications on resources and credibility of a system. The authors present design elements of verification and approval systems, explain trade- offs and show how systems can develop over time. The guidebook highlights commonalities and differences between existing verification and approval systems; outlines steps needed to design legislative and institutional frameworks for verification and approval; and provides guidance on what is needed to design and implement a verification system, as well as to design and implement a system to approve and qualify those who conduct verification. [Guidebook Designing Accreditation and Verification Systems – a Guide to Ensuring Credibility for Carbon Pricing Instruments]
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The SDG Knowledge Hub publishes monthly climate finance updates, which largely focus on multilateral financing and cover, inter alia, mitigation and adaptation project financing news and lessons, institutional events and news, and latest developments in carbon markets and pricing. Past IISD climate finance updates can be found under the tags: Finance Update: Climate Change; and Finance Update: Sustainable Energy.