Aviation Industry Could Be First Worldwide Cap-And-Trade

Update 10/8/13: 

The international aviation industry voted to have a carbon trading system ready by 2016, which would go into effect in 2020. 

As expected, they voted against Europe’s ability to regulate emissions of airlines beyond its airspace between now and 2020. The EU has to decide whether it will go along with this.

"Unfortunately, we have no guarantee that the system will be introduced in 2020 and that the benefit for the environment is substantial. There are too many ifs and buts," Peter Liese, a politician from Germany told Reuters.

Worldwide airline emissions are back on the agenda as the industry tries to deliver an international plan to avoid being subject to Europe’s cap-and-trade program.

Negotiators from over 190 countries are presently in Montreal at the United Nations International Civil Aviation Organization  assembly to come up with a plan. If they succeed, the world will have its first international carbon trading program.

The market-based program would place a cap in airline emissions worldwide and airlines would be able to buy and sell emission permits as in any other cap-and-trade system.

There’s agreement that that this program will go into effect in 2020, but the devil is in the details.

The US supports an international program that begins in 2020 but is concerned about what happens until then. Europe insists that until 2020, it wants its regional program to be in effect, and other countries want their own local regulations.

"Now we have the chance to agree that yes, these airline emissions should be regulated. But this scheme is not entering into force tomorrow," Connie Hedegaard, European Commissioner for Climate Action, told Reuters. "We should still have our own regional scheme until then."

The US says while it’s OK for countries and regions to have their own interim regulations, they should apply only to their airspace.

But India’s negotiator warns that would create a patchwork of regulations that would disrupt the global aviation industry, reports Reuters.

Another problem is that may poorer nations are asking to be exempt, which could end up derailing the international program.

If you remember, the EU included the airline industry in its program last year, but the industry strongly resisted it backed by legislation passed in the US and push back from China and other countries. Any airline taking off or landing in the EU would have to pay for emissions that exceed a cap under the plan.

EU said it would table the plan for a year to give the industry time to finally come up with its own.

The aviation industry has long said it prefers an international agreement that goes into effect in 2020, rather than being subject to regional emission programs. But it’s been 10 years and has so far failed to deliver. 

The aviation industry produces about 3% of world emissions, and air traffic is expected to double by 2020. The industry committed to carbon-neutral growth by 2020.

There’s lots of activity in the industry right now to increase energy efficiency and to run on electricity and biofuels.

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