For Airlines, Climate Change Goes Global

Posted by: Justin Bachman on September 22

As some 100 world leaders gathered Tuesday in New York to discuss climate change, the world’s airlines sought to make a bit of a splash by reiterating the carbon-reduction goals they presented in June.

The headline grabber is the International Air Transport Assn’s stated goal of cutting emissions in half by 2050 over 2005 levels. This 50% reduction would come from a four-part approach of technology, operational improvements, infrastructure upgrades and “economic measures,” a catchall term for various carbon-trading schemes and tax-incentives the association hopes to gain to encourage investments in newer planes, fuel research, etc.

The airlines also say they will present plans by November 2010 to begin trading carbon credits on a global market as part of a global approach to the issue and not by state. This would supplant the industry’s participation in the European Union’s carbon-trading market and would cost some $4.8 billion (3 billion pounds), according to the Guardian newspaper.

Additionally, IATA aims to improve carbon efficiency by 1.5% annually through 2020, and show carbon-neutral growth from 2020 onwards. The 1.5% yearly improvement – predominantly a measure of fuel conservation – is eminently achievable, and indeed the industry is on pace to produce 1.8% this year, says Quentin Browell, assistant director of aviation and environment for IATA, which is based in Geneva. Of course, it is worth noting that carriers have a clear and immediate incentive to pursue such gains: fuel is among the largest expenses at an airline (and the largest for many U.S. airlines). That which one can reduce on jet fuel spending flows directly to the balance sheet. Critics also contend that choosing 2005 carbon levels as the baseline from which to cut is not nearly as strict a measure as if airlines had looked to their carbon emissions in the 1990s.

Far less clear is what may happen with the longer-term fidelity to this cutting if governments were to impose new taxes on air travel as a way to incentivize these reductions. The industry and individual airlines are fiercely opposed to new taxation and point to almost certain failure in terms of climate repair if officials were to follow such a path. In a working paper for an aviation-climate meeting next month in Montreal, four trade groups, including IATA, stress that “taxes, levies, and charges targeted at air transport are environmentally ineffective and not cost efficient” and undermine the industry’s ability to invest in new measures to reduce emissions. “Taxes do nothing for the environment. They’re just punitive,” Browell says.

Aviation, however, remains a favorite taxation target both in Europe and the United States. Will airlines pursue carbon reduction with the same vigor if they feel onerously burdened by taxes or other financial duties? Browell says yes. “We obviously have to follow the laws… if we get taxed we get taxed.”

There’s a cogent argument today from Greenpeace in the Guardian that airlines cannot face up to the reality of what truly needs be done to avert climate disaster – namely, less flying. Likely true, but I’d say the same applies to every other industry and Westernized consumer. (Simply put: less.) However, even if you consider the industry’s approach less stringent than what may be required for adequate remedy, it is true that airline executives realize the need for action. There's no talk of "junk science" or grousing that airlines are insignificant in terms of carbon output. Government officials will help to decide whether the bar needs to be raised higher. Let the skirmishes commence.