ICAO 2013 Environmental Report - page 143

143
chapter 4
global emissions
icao environmental report
2013
Profit Impact:
Profits for the international aviation sector
in 2036 would be $33.3 billion under the scenario with an
MBM. This would be $0.4 billion lower than the profit level
without the MBM.
Cost Impact:
The cost of an MBM in 2036 would
be approximately $10 per seat for a flight of 10,000
to 12,000 kilometers, and $1.50 per seat on a flight of
900 to 1,900 kilometers.
The supplementary study in 2013 confirmed the results of
the core study that an MBM could achieve the environmental
target of stabilizing CO
2
emissions at a relatively low
economic cost. With an MBM, the traffic level in 2036 would
be up to 1% lower than the traffic level without the MBM,
and the cost of an MBM as a proportion of total revenue
would be up to 1%, in the worst case scenario studied.
The quantitative assessment demonstrated that the
differences of MBM impacts on developing countries were
marginal. For example, the MBM impacts on traffic demand
for the six regions were generally consistent with the global
average of a 1.2% reduction. The change in operating
result (profit) brought about by an MBM was relatively
consistent among regions, varying from 1.0% to 1.3%. This
was generally consistent with the global average of 1.1%.
The comparison of LDCs and non-LDCs showed a similar
pattern to that of the regions in terms of consistency with
the global results. However, LDCs were not as affected as
non-LDCs by MBMs. Impacts on traffic levels and profits
were smaller in LDCs, although reductions in CO
2
were also
smaller. No differences were noted in the comparison of
groups using development parameters (per capita income
and ASK).
Qualitative ASSESSMENT
The qualitative assessment focused on the design
features of the three options for a global MBM scheme by
identifying and elaborating on the implications of different
design choices. Any MBM is designed to achieve a clear
environmental objective, which can be established with
a baseline or cap on emissions levels. The distribution
of the environmental objective among participants
establishes individual obligations, which collectively respect
the environmental objective. Both Member States and
aircraft operators would have important roles to play in
a global MBM scheme. It will be important to distinguish
between the compliance obligations placed on participants
in a scheme and on the implementation responsibilities,
such as administration and enforcement obligations, for
Member States.
GLOBAL MBM OPTIONS FOR INTERNATIONAL AVIATION
Global Mandatory Offsetting
Offsetting operates through the creation of emissions units which quantify the reductions achieved. These emissions units,
which would generally be created outside the international aviation sector, can be bought, sold or traded.
A global mandatory offsetting scheme for international aviation would require participants to acquire emissions units to
offset CO
2
above an agreed target. Emissions units would need to conform to agreed eligibility criteria to ensure adequacy
of emissions reductions. No specific aviation allowances or revenues would be created under this scheme.
Global Mandatory Offsetting With Revenue
Global mandatory offsetting complemented by a revenue generation mechanism would generally function the same way
as the mandatory offsetting scheme. A key difference would be that in addition to offsetting, revenue would be generated
by applying a fee to each tonne of carbon, for instance, through a transaction fee. The revenue would be used for agreed
purposes, such as climate change mitigation or providing support to developing States to reduce GHG emissions.
global Emissions Trading
The global emissions trading scheme (ETS) would use a cap-and-trade approach, where total international aviation emissions
are capped at an agreed level for a specified compliance period. Specific aviation allowances (one allowance is equivalent to
one tonne of CO
2
) would be created under this scheme for all the emissions under the cap within the international aviation
sector. These allowances would then be distributed for free, or auctioned, to participants using an agreed method.
At the end of each compliance period, participants would need to surrender allowances, or other emission units, equal to
the emissions generated during that period, including those above their allocation.
Extract from
Report on the Assessment of Market-based Measures
(ICAO Doc 10018)
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