UK: Climate Change: A Storm Cloud On The Horizon

Last Updated: 5 February 2003
Article by Aidan Thomson

Aviation is estimated to be responsible for around 3.5% of current man made global warming but, as a result of the predicted increase in air traffic in coming decades, this figure will increase. How will Governments and airlines reconcile the growth in the sector’s emissions with increasingly stringent targets for global greenhouse gas ("GHG") emission reduction?

The key international driver for GHG reduction in the United Nations Framework Convention on Climate Change ("UNFCCC"). Signed by over 160 countries in 1992, the UNFCCC contains an undertaking by developed countries to limit GHG emissions. The subsequent Kyoto Protocol develops this undertaking further by placing binding quantified emissions limitation or reduction commitments on a number of developed countries (the so called "Annex I countries") to be achieved by the end of the first period (2008-2012). It is anticipated that agreement will be reached on the emissions reduction commitments for subsequent periods at some time in the future.

The Kyoto protocol recognises the need for flexible mechanisms to enable Annex I countries to reach emissions reduction and limitation targets. "Emissions trading" is one such mechanism. Participants in an emissions trading scheme are issued with allowances permitting them to emit a certain quantity of GHG. If a participant wants to emit more GHG than its allowances will permit, it is allowed to purchase allowances from a participant that is expecting to emit less GHG than its allowances will permit. What does the UNFCCC and the Kyoto Protocol mean for the aviation sector? The answer differs for domestic and international aviation.

Domestic aviation GHG emissions are included in Annex I countries’ GHG emission inventories. Thus, where domestic aviation emissions form a considerable proportion of an Annex I country’s total GHG emissions, that country’s programme to implement the Kyoto Protocol may include measures to limit or reduce emissions from domestic flights. So far, individual Annex I countries’ programmes have not specifically targeted domestic aviation emissions for reduction, but there are signs that this could happen. In the UK, for example, the Royal Commission on Environmental Pollution ("RCEP") Report on the Environmental Effects of Civil Aircraft in Flight, published in 2002, encouraged a shift by the UK government from short haul flights to other methods of transport, eg rail. Perhaps to gain experience of the changing times ahead, some companies in the UK aviation industry have already volunteered to take part in the UK Government’s emissions trading scheme which commenced in 2002.

International aviation GHG emissions are not recorded in Annex I countries’ GHG emission inventories. This is because no system has yet been devised to allocate GHG emissions from international flights fairly between countries. International aviation GHG emissions will not therefore be curbed in furtherance of Annex I countries’ current limitation or reduction commitments. The Kyoto Protocol does not, however, completely ignore international aviation GHG emissions. It requests that developed countries pursue limitations or reductions through ICAO. The signs are that ICAO’s response will be to develop an international aviation emissions trading scheme. But it may take a decade or more to fine tune such a scheme. Taxing aviation fuel is another option for ICAO but this may not deliver any direct environmental benefit, and devising an international tax is a very complicated process.

The impact of the UNFCCC and the Kyoto Protocol on domestic and international aviation is therefore materialising slowly. It will be felt least in countries that have not ratified the Kyoto Protocol (most notably the USA). However, the aviation sector cannot afford to forget about climate change. The EU Commission has a long term policy to achieve improvements in the environmental performance of air transport operations that outweigh the environmental impact of growth. Accordingly, in the absence of positive moves in the short to medium term by Annex I countries and ICAO to curb aviation GHG emissions, the EU may decide to take unilateral action. Such unilateral action is most likely to take the form of an EU fuel tax or emissions charge (indeed, the RCEP has recommended that the UK Government press for this at EU level), but could involve including inter/intra member state aviation within an EU emissions trading program.

Climate change is not as immediately pressing as some of the issues currently affecting the aviation sector. Nevertheless, moves by the EU and then by Annex I countries and ICAO to combat GHG emissions from the aviation sector are likely to pose a long term challenge to the sector’s plans for growth.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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