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Aviation Policy Options for Not Exceeding the EU +2◦C Threshold
This essay discusses the disjuncture between EU aviation emissions growth in recent decades and the EU climate change commitment to not exceeding a 2 ◦C rise in global mean surface temperature above the pre-industrial level (EC, 2007a). We particularly discuss the roles of the EU Emissions Trading Scheme (EU ETS) and the Clean Development Mechanism (CDM). We also comment on how the current downturn in air passenger numbers in the EU compares to the reduced level of passenger demand in the EU that would be compatible with ‘safe’ climate targets.
by: Dr. Paul Upham, Dr. Alice Bows, Prof. Kevin Anderson and Mr. John Broderick
Introduction This essay discusses the disjuncture between EU aviation emissions growth in recent decades and the EU climate change commitment to not exceeding a 2 °C rise in global mean surface temperature above the pre-industrial level (EC, 2007a). We particularly discuss the roles of the EU Emissions Trading Scheme (EU ETS) and the Clean Development Mechanism (CDM). We also comment on how the current downturn in air passenger numbers in the EU compares to the reduced level of passenger demand in the EU that would be compatible with ‘safe’ climate targets. Our view is that reconciling growth in European aviation emissions with EU ETS will require that Certified Emissions Reductions from the CDM (or Emissions Reductions Units from Joint Implementation) form a substantial proportion of EU ETS trade. We consider this strategy to be politically disingenuous and likely to fail to stimulate the necessary domestic technological and systems innovations, not to mention the behavioural changes, which are needed throughout industrial economies to avoid ‘dangerous climate change’. We argue that there should be a more honest debate of the trade-offs necessary to meet the 2°C commitment. Specifically, we take the view that emissions reductions should occur wholly or primarily within the EU; that there should be an accelerated research, development and deployment programmes for aviation; that supplementary instruments are necessary to address the non-CO2 impacts of aviation emissions; and that for the next several decades, aviation growth rates will need to reduce substantially. This said, the level of demand reduction associated with the current economic down-turn (a 0.2% reduction in total passenger traffic at European airports in 2008 compared with 2007) (ACI, 2009), is greater than that required to avoid +2 °C climate warming in our scenario modelling (see below). The downturn illustrates the type of unmanaged economic contraction that climate policy analysts are trying to avoid by arguing for early action towards smooth emissions contraction profiles. The longer these calls are ignored, however, the more likely are radical economic and climate discontinuities in coming decades, with associated adverse social consequences. Climate Science and Policy Context The EC Directive that includes aviation within EU ETS (EC, 2008) is to be welcomed, but its benefits will be largely conditional on the ways in which the wider EU ETS develops, particularly the level of the cap. Taken as an initial step to build political consensus and to achieve commercial buy-in, the Directive is likely to prove successful. However, if that success is not rapidly followed by a tightly contracting EU ETS cap as described below, the EU will fail to honour its commitment to not exceeding the +2 °C threshold. In short, the Directive does not reflect the urgency of the climate problem. Although the Commission has proposed that the EU pursues - in the context of international negotiations - the objective of a 30% reduction in greenhouse gas emissions (GHG) by developed countries by 2020 (compared to 1990 levels), it also sees an expanded role for the CDM in this process (EC,
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2007a:11). It is not difficult to see why the CDM is viewed by policymakers as critical to EU climate policy. To stand a modest chance of not exceeding the +2 °C threshold, the EU now has a window of less than ten years in which to begin substantial, year-on-year reductions in greenhouse gas emissions (Bows et al., 2006a). Avoiding exceedance of +2 °C requires a maximum global atmospheric CO2 concentration of 450ppmv (parts per million by volume), preferably 400ppmv CO2. Avoiding a breach of 450ppmv CO2 in turn requires around 3% - 6% annual reductions in total EU CO2 emissions over the period 2012-2030 (Bows et al, 2007). Note that an atmospheric concentration of 450ppmv CO2 would not guarantee that we would avoid overshooting the 2 °C target. To be sure of not exceeding this level of temperature increase, atmospheric concentrations need to be below current levels (Meinshausen, 2006).
taneously retain a stringent climate target and industrial and political support. In other words, with the current weak level of support for meaningful action to reduce carbon emissions (rhetoric and good intentions aside), trade-out of EU ETS will be critical to the economic, commercial and hence political acceptability of the proposed Directive to bring aviation into EU ETS. The key question this begs is whether extensive use of Joint Implementation and CDM will undermine a genuine global transition to a low carbon future. This could happen in two main ways. First, unless trade-out is accompanied by a real commitment to strong and mandatory fuel efficiency and renewable/low carbon energy targets, the pressure for a shift to low carbon supply, more efficient technologies and behavioural changes will be limited. Phase 2 of the EU ETS allows for 13% of total emissions to be met from the CDM, more than double the 6% reduction in the cap from 2005 emissions. EU Directive 2008/101/EC limits the use of Certified Emissions Reductions (CERs, i.e. the tradable emissions credits generated via CDM projects) to 15% of the emissions liability of each aircraft operator. However, this does not alone restrict the total influx of CERs, as other industries may use their maximum CER limit whilst selling on surplus EUAs (EU Allowances, the tradable credits allocated by governments under EU ETS) to airlines.
The EC +2 °C threshold allows industrialised nations very little growth in carbon emissions prior to barely feasible contraction rates (Anderson and Bows, 2008). Whilst significant global aviation growth is possible in this context, it would seem unlikely that citizens would choose to prioritise the sector if they were faced with starker choices, as would be necessary without the CDM or adequately early action within industrialised nations. Exploring 450ppmv CO2 scenarios for the UK, Bows et al (2006) found it necessary to allocate the contracting carbon budget to those sectors with the fewest options for change, particularly aviation. Although they found that both static and A large influx of external credits will likely weaken the carbon high mobility scenarios are possible, (the latter assuming that price and hence impact of the EU ETS (already, for different UK individuals travel twice as many passenger kilometres by reasons, the price has fallen to a very low level, currently 8 road and rail euros/tonne). in 2050, and Second, even three times assuming that more passenmost CDM/JI ger kilomeprojects are tres by air by of high envi2050, relative ronmental and to 2004), both social qualscenarios reity (which has quire rapid denot always carbonisation been the case by every other for the CDM), sector. Morethere will be over, air paseconomic senger growth multiplier efrates would fects in the need to fall host countries from the rethat reduce, cent UK level and may even of 7% per aneliminate, the num to a maxidirect equivamum annual Photo 1: A NASA satellite image showing a stream of aircraft contrails between the United Kingdom and lence with EU average of just France in Europe. Source: NASA Earth Observatory at http://earthobservatory.nasa.gov emissions. over 2%, and not exceed this. In addition, the aviation indus- That is to say, investments overseas will – hopefully – raise try would need to improve fuel efficiency above current rates, standards of living. Yet this will also stimulate demand for significantly increase its load factor and would need to have consumer goods and lifestyles and it is inevitable that these switched to 50% biofuel by 2050 (ibid: 56). will be fuelled in part by carbon-based energy sources. Development benefits could be real but climate policy benefits less CDM Sleight of Hand? than expected, or even negative (i.e. the volume of CO2 offset Rather than deal with the domestic political difficulties of could be wholly negated, or worse, via economic multiplier taking full responsibility for our emissions, difficulties com- effects, even if there is improvement relative to the baseline pounded through years of ignoring the problem, there is a within a single project). Low carbon technology transfer is growing likelihood that Commissioners will opt to make sig- certainly desirable, but only if accompanied by similar donificant use of the CDM. This will enable the EU to simul- mestic change, not if used as a substitute for that change.
Recommendations Given a great deal of optimism, it remains politically possible that EU citizens will, during the next decade, come to realise that we need to quickly and substantially reduce emissions domestically. Every severe weather event (and courageous politician or innovative business leader) will add to the chances of this realisation. Currently the aviation industry is presuming that EU ETS will remain weak (i.e. open to CDM and with a lax cap) for the foreseeable future. This is not a safe or sustainable presumption. Our first recommendation is that the sector is obliged to pursue the technological and systems options for fuel efficiency in a much more pro-active way. Of all the technological possibilities, in the long term, fuel-switching is the most important, as even modest growth (of over 2%) will outstrip efficiencies. In the short term, reduced passenger growth, probably best incentivised by a rise in ticket prices, is necessary to avoid over-consumption of the contracting carbon budget. Of course, before any of this can happen, the industry (including its customers) needs to fully appreciate the problem that climate change poses. We suspect that this requires a change in wider social attitudes. The problem is that this looks likely to come too late: instead of a managed contraction to stable, lower emitting industries, we risk having to either adopt draconian measures for emissions reductions, or, more l i k e ly, having to adapt to substantially changing coastlines and weather patterns, with lower consumer surpluses available for travel and other productive and enjoyable economic activity. We have shown elsewhere (e.g. Bows et al, 2008) that although emissions from air travel are modest relative to those of other sectors (though higher in the UK), passenger growth rates in the order of 3% per year, even assuming optimistic annual fuel efficiency increases, will quickly compound to consume a large fraction of the necessary UK or EU carbon budgets. Moreover this ignores the additional, non-CO2 warming caused by aviation emissions. The EU ETS is not going to solve this without a tight cap, by which we mean substantially tighter than at present. Considering the implications for carbon prices and hence air ticket prices of a tighter cap, Bows and Anderson (2008) show that even an order of magnitude increase in EU ETS carbon prices (i.e. more than ten times higher than now) would add relatively little to air ticket prices. Given the shortcomings of EU ETS as currently instituted, how do we reduce demand and encourage a shift to lower GHG fuel for aviation? An explicit process of accelerated research, development and deployment (RD&D) in the aviation sector should be strongly encouraged, as the EU ETS in its current form, will not provide the necessary price incentive. The means by which RD&D is incentivised could, for example, consist of en-route emissions charges for CO2 and
NOx (but presumably requiring renegotiation of the Chicago Convention if extended beyond the EU), with revenue hypothecated to a fund to which the industry may bid for research and demonstration projects. Secondly, it may be that EU policy should prioritise biofuel supply for aviation use, given that alternatives (notably renewable electricity) are more readily available for surface transport and that it is not at all a straightforward matter to ensure that biofuel is produced in an environmentally and socially benign manner, and this will restrict the available supply (e.g. Upham et al, 2008). Thirdly, and least palatably for the sector, in the absence of personal carbon quotas or a tight EU ETS cap, we will need to raise ticket prices through some other means, to suppress ‘excess’ demand. The simplest, environmentally-related way of aligning this with environmental objectives is via emissions charges, given that policy-makers seem minded to allow an internationally open EU ETS (note that this would not matter if we had a globally closed emissions trading system that itself had a tight cap). As mentioned, the revenues from this could be hypothecated back to the industry to provide capital for RD&D. Conclusions In this short essay we have argued that EU ETS, as it is currently developing, will not adequately manage the high levels of growth in aviation emissions. There are indications that EU ETS will become an increasingly open system, diluting an already weak cap that does not remotely reflect the requirements of the EU’s own and repeated commitment to not exceeding the +2 °C threshold. We have argued that, in relation to aviation, EU ETS should be supplemented by an accelerated RD&D programme, funded from emissions charges, to assist long term change. The uncomfortable message, however, is that almost regardless of future low-carbon technologies and fuel, passenger growth levels also need to be reduced to a maximum of 2% p.a. (in the UK or EU) if we are to stand any chance of meeting the +2 °C threshold. It may be some consolation that this is substantially higher than the slightly negative growth (-0.2%) in the EU that is now a consequence of a (presumably temporary) economic downturn. About the Authors The authors are researchers with aviation interests at Tyndall Centre Manchester, the University of Manchester. Collectively they have affiliations to Manchester Business School; the University of Manchester’s Sustainable Consumption Institute and School of Mechanical Aerospace and Civil Engineering; and the UK’s Tyndall Centre for Climate Change Research. Dr Paul Upham is corresponding authour for this essay. He is a Research Fellow in the Tyndall Centre Manchester and Manchester Business School. He has a research background
in sustainability indication and in public/stakeholder perceptions of low carbon energy sources. To contact Paul Upham: email@example.com References ACI (2009) “European passenger traffic down -0.2% in 2008, but the worst is yet to come…”, ACI Press Release, 09 February 2009, Airports Council International, Brussels, www.aci-europe.org Anderson, K. and Bows, A. (2008) “Reframing the climate change challenge in light of post-2000 emission trends”, Phil. Trans. R. Soc, doi:10.1098/rsta.2008.0138. Bows, A., with Anderson, K. and Upham, P. (2008) Aviation and Climate Change: lessons from European Policy, Routledge, UK. Bows, A., and Anderson, K., 2008: “A bottom-up analysis of including aviation within the EU’s emissions trading scheme”, Tyndall Centre working paper 126, November 2008, http://d.scribd.com/docs/emvlodk9ezdqje6fo5s.pdf Bows, A., S. Mander, R. Starkey, M. Bleda and K. Anderson, 2006: Living within a carbon budget, Report commissioned by Friends of the Earth and the Co-operative Bank, http://www.foe.co.uk/resource/reports/living_carbon_budget. pdf Bows, A., Anderson, K. and Peeters, P, 2007: “Technology, Scenarios And Uncertainties”, working paper, Tyndall Centre Manchester, The University of Manchester,http://tyndall. web.man.ac.uk/publications/Technology%20Scenarios%20 and%20Uncertainties%202007.pdf EC, 2008: European Parliament legislative resolution of 8 July 2008 on the Council common position for adopting a directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (5058/2008 – C6-0177/2008 – 2006/0304(COD)) EC, 2007a: Communication from the commission to the council, the European parliament, the European economic and social Committee and the committee of the regions Limiting Global Climate Change to 2 degrees Celsius: The way ahead for 2020 and beyond, http://eur-lex.europa.eu/LexUriServ/ site/en/com/2007/com2007_0002en01.pdf EC, 2007b: Questions and Answers on the Commission Communication Limiting Global Climate Change to 2°C. MEMO/07/17, Brussels, 10 January 2007, http://europa.eu/ rapid/pressReleasesAction.do?reference=MEMO/07/17&for mat=PDF&aged=0&language=EN&guiLanguage=en Meinshausen, M., 2005: “On the Risk of Overshooting 2°C. Avoiding Dangerous Climate Change”, International symposium on the stabilisation of greenhouse gas concentrations, Hadley Centre, UK Meteorological Office, Exeter, February 1-3 2005, http://www.stabilisation2005.com/14_Malte_Meinshausen.pdf Upham, P., Tomei, J. and Boucher, P. (2009) “Biofuels, Aviation and Sustainability: Prospects and Limits”. In Gössling, S. and Upham, P. Climate Change and Aviation: Issues, Challenges and Solutions, Earthscan Ltd, London. Photo and illustration credits: Page1: PlaneStupid.at www. planestupid.com, page 3: Wikimedia/Commons+Du Saar Photography © 2009 (www.dusaar.nl) and Airbus (tree-plane) and page 4: Wikimedia/Commons.
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