Press Release

EU’s ‘imperfect’ emissions trading system still outperforms draft UN aviation deal – report

September 20, 2016

Despite being in need of reform, the EU’s aviation ETS is functioning, is being complied with, and has the potential to deliver real emissions reductions, a new analysis shows. Its key design features – emissions allowances instead of offsets, being binding instead of voluntary, and full instead of partial coverage of emissions – are all superior to the draft global deal under negotiation at the UN’s aviation agency ICAO. Europe is under pressure to dismantle its regional measure even though discussions on a global measure at ICAO remain fractious.

The ETS’s use of allowances ensures greater transparency of emission reductions than the agreement taking shape at ICAO, which relies on offsets of potentially unreliable quality, the T&E report finds. Additionally, once the current surplus in the overall ETS is addressed, it will deliver greater emissions reductions. Meanwhile, the published draft of the ICAO global measure will fall well short of that organisation’s own goal of carbon neutral growth by the aviation sector in 2020 and lacks essential environmental safeguards.

Andrew Murphy, aviation policy officer at T&E, said: “The EU stopped the clock on its own ETS to give ICAO time to develop an environmentally meaningful measure, not a voluntary scheme which postpones serious action for a decade or more. Europe should be proud of setting the global benchmark, and never replace it with something inferior that is open to bogus offset programmes.”

To realise greater emissions reductions, the EU should reduce the cap of its ETS by 2.6% annually and introduce a similar declining cap for aviation allowances, the report recommends. Phasing out the free allocation of allowances to aircraft operators would require airlines to purchase more general ETS allowances and start to reflect the true cost of their climate impact.

Andrew Murphy said: “Not only has the EU’s ETS disproved sceptics from both within and beyond Europe, but it has served as a model for nascent trading systems in such countries as China and Mexico. Replacing the ETS with the promise of something to take effect in 2021 which is far less than global, which sets a weaker target and lacks environmental safeguards, is not the way to strengthen Europe or the world’s climate ambition.”

ICAO has been working for almost two decades on aviation’s climate impact and its latest  deadline to produce a result is at its 2016 assembly this month. International aviation and shipping were not explicitly mentioned in the Paris agreement, leaving it unclear how their rapidly growing emissions were to be addressed. Aviation is currently responsible for an estimated 5% of global warming. Without a change in the current projections, emissions will increase by more than four times, potentially to account for 22% of global emissions in 2050.

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