Coronavirus deflated aviation emissions

Policy Pulse - George Anjaparidze - 25 March 2020

As of March 24th COVID-19 has killed over 16 thousand people and brought the global economy to a crawl. Aviation has been one of the worst hit sectors. IATA`s latest forecast, published on March 24, expects airlines to see a 38% fall in passenger demand in 2020 compared to 2019. As a result, aviation CO2 emissions will experience the largest annual decrease in recent history.

2020 is a special year in the context of the climate agreement on international aviation - the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The scheme is designed to use the average of 2019 and 2020 CO2 emissions to determine the level (baseline) above which the airline industry needs to offset emissions. A lower baseline implies a larger offset responsibility in the future.

Industry advocacy efforts have been exceptionally successful in securing positive outcomes in dealing with the COVID-19 crisis. Airlines have secured suspension of airport slot rules, special treatment for air cargo operations and direct financial support from governments. Therefore, if deemed an industry priority, airlines would likely also succeed in introducing adjustments to the baseline under the CORSIA scheme. However, there is more at stake for airlines than minimizing their offsetting liability. There is an urgent need to strengthen the sustainability credentials of the sector.

Before the outbreak of coronavirus, surveys suggested that 2020 would usher in a paradigm shift in consumer sentiment. Across all geographic regions majority of survey participants expressed their intention to fly less for holidays to fight climate change.

In recognition of these threats, some airlines took action. Perhaps most notably on 14 February 2020, Delta Air Lines announced a commitment to go completely carbon neutral starting from March 2020. This kind of bold leadership should be admired. However, an airline by airline approach will not change consumer perceptions on flying nor will it deliver the level of action needed to address the climate challenge.

Sustaining growth after the coronavirus requires an immediate scale up in industry-wide action to strengthen sustainability credentials.

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About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economics and infrastructure.

#Airports #Airlines #aviation #climatechange #sustainability #CORSIA #coronavirus #covid19

Change of CORSIA

Policy Pulse - 16 December 2019 - George Anjaparidze

The latest policy brief from the Harvard Project on Climate Agreements provides rare insight into the inner workings of the airline industry. The extraordinary agreement on international aviation explains the key role played by the airline industry in the design of the Carbon Offset and Reduction Scheme for International Aviation (CORSIA). The scheme addresses the growth in total CO2 emissions from international aviation above 2020 levels. CORSIA will save the aviation industry tens of billions of US dollars each year by avoiding a costly patchwork of overlapping and distortive measures.

In the short-to-medium term, carbon offsets sourced from other sectors and sustainable aviation fuels will make the largest contributions to achieve carbon neutral growth from 2020 (CNG 2020). However, it is wrong to think that the climate issue has somehow been outsourced through the use of offsets or sustainable aviation fuels.

Measures within the sector can also make an important contribution. Beyond fleet renewal and load factor performance, improvements in infrastructure and airline operations can deliver about 20 per cent of the cost-effective CO2 emission reductions needed to achieve the CNG2020 target over the next decade. About 60 per cent of the within sector abatement opportunities can be realised from undertaking infrastructure improvements (mostly at air navigation system providers). Airline operations, in the air and on the ground, make up the remaining share (see chart).

Chart: Cost-effective CO2 reductions within aviation in 2030

Source: Veritas Global using data from IATA March 2016 presentation (McKinsey & Company, IATA); Note: Jet fuel price assumption $90 per barrel, the size of each rectangle is in proportion to the share of CO2 abatement potential of the labeled measure.

Cost-effective CO2 emission reduction opportunities within aviation are not being realised because of “non-price barriers.” Meaning there are non-financial factors that prevent the realisation of these opportunities. One example is a restriction on the use of airspace leading to longer flights. Another example is a corporate culture that ignores unneeded extra weight to be carried on flights leading to more fuel burn. These issues can be overcome only through additional interventions that target the specific barriers.

If the within sector abatement measures (see chart) are fully implemented, annual cost saving of US$37 billion in 2030 will be achieved by the aviation industry. For comparison, IATA forecasts global airline profits in 2019 at $28 billion. In contrast to generating cost savings, purchasing offsets will impose additional costs to industry. To meet CNG2020, industry will spend over $7 billion in 2030 on offsets (assuming a global carbon price of $20). Given the options, the priority needs to be to target the cost-effective abatement opportunities within the sector.

To deliver on the opportunities within the sector, the industry needs to introduce interventions that target the barriers that are preventing the implementation of these measures. For infrastructure, a new advocacy initiative needs to be launched that mobilises industry stakeholders and the climate community to get governments to prioritize reforms at air navigation system providers. For airline operations, a targeted capacity building initiative is needed that will first diagnose problematic practices and subsequently offer trainings on how to implement solutions. A broader focus on addressing barriers is also warranted, for example helping remove political barriers in markets where access to the latest environmentally friendly aviation technologies is hindered.

Crucially, these initiatives would need to complement and go well beyond existing efforts.

In addition, the industry needs to become more proactive on the climate issue. Just as consumers have placed new demands on airlines, airlines as consumers need to also be more vigilant of their supply chain performance. In many cases, the on the ground supply chain CO2 emissions will fall outside the scope of CORSIA. Nevertheless, as stakeholders in addressing the climate crisis, airlines need to demand better performance of their supply chain. By developing a globally harmonized set of performance metrics for its supply chain, in a way that incorporates climate issues, can help benchmark performance and drive better business outcomes in the aviation industry.

It is shareholders, not Greta Thunberg, that should be most demanding of the aviation industry on performance against climate metrics. Realising cost-effective opportunities within the sector and taking a proactive stance on the climate issue is good for business. Collective industry leadership is needed to propel this change and address the climate crisis.

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This article was first published by Airline Routes & Ground Service magazine for the Winter 2019 edition.

About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economics and infrastructure. 

#climatechange #aviation #CORSIA #climateaction #infrastructure #airlines #airlineoperations #innovation #technology #ANSP #airport #Gretathunberg

The extraordinary climate agreement on international aviation

Policy Pulse - 14 November 2019 - George Anjaparidze

The Harvard Project on Climate Agreements published a Veritas Global policy brief providing rare insight into the inner workings of the airline industry. The brief, The Extraordinary Agreement on International Aviation, explains the key role played by the airline industry in the design of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

The scheme addresses the growth in total CO2 emissions from international aviation above 2020 levels. CORSIA will save the aviation industry tens of billions of US dollars each year by avoiding a costly patchwork of overlapping and distortive measures. The worst-case patchwork scenario estimated that climate-policy costs would be equivalent of about 10% of industry revenues in 2030. In comparison, carbon neutral growth from 2020 would cost the industry less than 1% of industry revenues in 2030.

For CORSIA to function effectively, there is an urgent need to secure a credible source of carbon offsets. ICAO is currently working towards an agreement on emission unit criteria. Offsets used by aviation need to be consistent with the broader climate-policy framework under the UNFCCC Paris Agreement and ensure no unintended double-counting of emission reduction efforts. In the medium term, it may be necessary to introduce adjustments to CORSIA.

Although challenges remain, CORSIA represents an extraordinary achievement. A key focus of industry and policy makers needs to be on ensuring that CORSIA is fully implemented with the broadest possible participation. This will enable international aviation to address its CO2 emissions while continuing to deliver a critical service for the modern economy.

Full text of "The Extraordinary Climate Agreement on International Aviation: An Airline Industry Perspective"

#climatechange #aviation #corsia #economics #ICAO #IATA #Harvard