ICAO 2013 Environmental Report - page 148

icao environmental report
2013
Possible ICAO Scheme
Should ICAO decide to develop its own aviation scheme,
there are three important issues in particular that need to
be considered: credit eligibility criteria, scheme governance
and management, and how costs are transferred.
Eligible Credits
Credit schemes and measures need to be flexible in defining
what types of credits could be accepted, in order to avoid
uncertainty in the availability and cost of credits in the future
market. Therefore, it is better to allow the use of several
different types of credits and to construct offset credits
which utilize undeveloped reduction space such as: CCS,
REDD+ and HCFC/CFC. However, quality control is crucial
for contributing positively to global emission reductions
and safeguarding ICAO’s reputation. Eligibility criteria for
offset credits need to be agreed upon and fully disclosed.
Following are some guidelines that should be applied:
• Emissions reductions should be confirmed objectively
and practically.
• Heavy administration burden should not impede
reliable implementation.
• Double counting should be avoided.
• Credits should come from socially acceptable projects.
Carbon Capture and Storage (CCS) and Reduction of
Emission from Deforestation and forest Degradation (REDD+)
have significant reduction potential. Destruction of HCFC
(Hydro Chlorofluorocarbons)and CFC (Chlorofluorocarbons)
also have plenty of reduction potential. These gases are
regulated to phase out under the Montreal Protocol (adopted
in 1987) but are not eligible for CDM. It is estimated that 
8.7 billion tonnes of emissions will be released from
refrigerated or insulated buildings by the year 2020. The
reduction potential from this source alone is more than
10 times what the estimated emissions will be from
international aviation by 2020, and its cost is estimated
around US$ 5 per ton CO
2
equivalent. Clearly the reduction
potential is significant.
The price of credits is determined by demand and supply,
and also influenced by emission regulations and economic
activities. Currently, the price is very low due to the low
demand for credits caused by the sluggish economy,
coupled with the uncertainty of future carbon regulation.
The current CER price is €0.3-0.5 and the EU allowance is
€4-5. Based on a market survey conducted by IETA, 67%
of market players think that the CER price in 2020 will be
less than € 5, while 56% believe that the EU allowance
in 2020 will be between € 5 and 10. So, the belief is that
the price is going to increase but not as high as the peak
price reached in 2008. Also, it is important to note that the
price of credits varies from system to system.
chapter 4
global emissions
148
Figure 2:
Proposed ICAO Offset Credit Scheme.
Eligibility criteria
1/ Reduction should be confirmed objectively and practically.
2/ Heavy administration burden should not impede
reliable implementation.
3/ "Double counting" should be avoided.
4/ Credits should come from socially accepted projects.
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