Aviation Envoys Restrict EU Market Terms in Carbon Pledge

The International Civil Aviation Organization declined to endorse the European Union’s stance that it may include international airlines in its carbon-trading system.

ICAO envoys from 190 nations negotiating in Montreal approved a proposal sponsored by countries from Russia to Argentina that denies the EU permission to continue a limited emissions program for airlines. The EU had earlier agreed to narrow the scope of its regulation to flights within its own airspace in exchange for a pledge by ICAO to develop a global carbon market.

The vote, 97 to 39, with 9 abstentions, is a blow to the EU, which temporarily froze carbon curbs on foreign flights to facilitate ICAO talks on emissions. Negotiators have yet to decide about the main element of the package -- a commitment to develop a global market. Then the EU will need to decide if the deal is strong enough to relax its carbon rules on flights beyond its airspace or resume full curbs, a move that may risk a trade war.

“If this were a boxing match the EU emissions-trading system sadly is down on the mat,” said said Jean Leston, transport policy manager at the U.K. branch of the environment lobby WWF. “What we need now is for a global market-based mechanism to emerge victorious. Far too many states showed too little concern about the urgency of climate change today.”

Global Pledge

ICAO has until the end of the day tomorrow at its triennial assembly to decide the fate of the first-ever pledge for the $708 billion airline industry, which emits 2 percent of greenhouse gases worldwide. A draft deal commits ICAO to agree on details for an international emissions-reduction tool for airlines in 2016 and start the program in 2020. Some countries are seeking to dampen the package further, a step that EU policy makers oppose.

The amendment approved today, supported also by China, Venezuela and Yemen, encourages member states to engage in talks to design new carbon markets and implementing existing ones. It also calls for the exemption, until a global deal is reached, for routes to and from developing states whose share of international civil aviation is less than 1 percent.

ICAO Agenda

The issue of aviation emissions made it to the top of the ICAO agenda after the 28-nation EU expanded its emissions-trading system to cover carriers starting in 2012, a step that triggered protests from China and India to Brazil. Europe, which wants to be the leader in cutting greenhouse gases, has said its goal was to encourage an international solution to address aviation pollution. Reducing carbon dioxide would help limit global warming that risks causing more heat waves, flooding and intense storms, according to UN scientists.

A failure to reach a deal in ICAO would mean the European greenhouse-gas market automatically returns to its original design, where aviation discharges were limited at the entire length of routes to and from the region’s airports. That would mean a trade war with other regions, EU Climate Commissioner Connie Hedegaard said last week.

Before Europe suspended carbon curbs on foreign flights, President Barack Obama signed a bill shielding carriers including Delta Air Lines Inc. (DAL) from the EU rules and Russia announced it was considering limits on European flights over Siberia as part of possible retaliatory measures. Airbus SAS said in June that 27 orders from China for A330 wide-body jetliners are still in limbo after the government there froze the contracts as part of a campaign against the EU plans.

To contact the reporters on this story: Ewa Krukowska in Montreal at ekrukowska@bloomberg.net

To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net;

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.