More than 120 heads of state, including President Barack Obama, gathered for the Climate Summit hosted by UN Secretary-General Ban Ki-moon in New York City on September 23. Financial pledges to the Green Climate Fund and statements regarding the leaders’ commitments to reach agreement on a new international climate treaty in Paris in 2015 dominate the news. President Obama outlined the Administration’s goals under its Climate Action Plan, which among many efforts include proposed Environmental Protection Agency (EPA) rules that would require existing power plants to reduce greenhouse gas emissions. Though not specifically mentioned by the President, the EPA also recently announced that it would make a decision under Section 231 of the Clean Air Act by the spring of 2015 whether greenhouse gas emissions from the aviation sector endanger the public health. That finding will likely be followed by a rulemaking regarding aviation greenhouse gas emissions, which is expected to result in a proposed rule by 2016.
Aviation Sector Climate Commitments
While not the focus of this summit, the aviation sector and its efforts to combat climate change merit closer attention. The global aviation industry has committed to capping its net emissions at the 2020 level in an effort to preserve its “license to grow.” The sector expects to stabilize its greenhouse gas emissions while growing at record rates through a four-pillar strategy improving and establishing:
Background
The International Civil Aviation Organization (ICAO) adopted a resolution last year to develop such a global market-based measure beginning in 2020. ICAO’s action resulted in the temporary suspension of the controversial European Union Emissions Trading System (EU ETS) with respect to international flights, giving the sector breathing room until 2016 to work out a global solution.
ICAO, its member states, the aviation sector and civil society stakeholders have used that breathing room to work collaboratively with the goal of designing the architecture for a global market-based mechanism to offset aviation greenhouse gas emissions. Technical and policy work is ongoing both within task forces established under the ICAO Committee on Aviation Environmental Protection (CAEP) as well as within the Environmental Advisory Group, which is composed of various ICAO member states with industry in an observer role. To date, the work has resulted in draft documents that would establish a global offsetting mechanism applicable to all international flights.
Designing a Fair and Workable Market-Based Measure
As would be expected, some of the most controversial and difficult discussions within ICAO have taken place around the question of how to distribute the burden of having to offset emissions above the 2020 level among airlines flying internationally. Many carriers, in particular from Western countries, are well established with relatively limited growth expected beyond 2020. Carriers serving fast-growing routes to and from emerging economies such as China, Brazil, and India will see most of their growth — and thus their increased emissions — occur after 2020.
Industry representatives, ICAO member states and other stakeholders are therefore wrestling with the difficult political questions of how to define and allocate baselines to allow for continued growth of international air travel. Whether or not an agreement can be reached within ICAO that will be supported by such diverse but key members as the United States, European nations, China, India, Brazil and smaller states with fast-growing industries (e.g., Singapore, the Gulf states) will largely hinge on how these questions are resolved. The debate resembles the challenge of applying the principle of Common but Differentiated Responsibilities and Respective Capabilities (widely known as “CBDR”) embedded in the UN Framework Convention on Climate Change (UNFCCC) with respect to any binding commitments by emerging economies like China, India and Brazil.
An Aviation Global Offsetting Mechanism as a Template for Important Elements of a New Climate Agreement
However, the complex task of developing an ICAO solution holds great promise for the aviation sector as well as for the larger international climate negotiations. Not only would a successful global agreement covering the aviation sector inject much needed political momentum into the larger climate debate. More importantly, an ICAO global offsetting mechanism could serve as a template for addressing the concerns of the nations most invested in the CBDR principle in the UNFCCC negotiations.
The reason for this is simple: ICAO operates under the Convention on International Civil Aviation, commonly known as the “Chicago Convention.” The prohibition to discriminate against foreign air carriers is a core principle of the Chicago Convention. Any global offsetting mechanism designed under and implemented within the auspices of ICAO must therefore be designed to avoid discrimination amongst air carriers and market distortion. If indeed ICAO manages to develop the architecture for a global offsetting mechanism by 2016 that respects on the one side the principle of non-discrimination and non-market distortion, and on the other side incorporates fairness by providing carriers servicing fast-growing routes in emerging markets with the necessary headroom to grow, this could serve as a powerful template for important elements of a new international climate treaty.
Contacts
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Gannon-EllaThis article was originally published by Bingham McCutchen LLP.