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Reducing aviation’s impact on climate change in Europe

Authors: Martin Nesbit, Thorfinn Stainforth

Aviation’s impact on climate has come under increased scrutiny lately.

France has just announced a new aviation tax, Germany is considering increasing its own, and the new European Commission President-elect has proposed to reduce the free allowances allocated to airlines.

But how big is the problem, and what is being done about it at the EU level?

Aviation accounts for about 3.6% of the EU’s total greenhouse gas emissions – 96% more than it did in 1990, despite significant improvements in aeroplanes’ energy efficiency.

Fundamentally, this growth is a result of high growth in passenger-kilometres flown – meaning the transport of one passenger over one kilometre. On average, global passenger-kilometres have grown 6.3% annually since 2010.

Why are GHG emissions on the rise in the aviation industry in Europe?In the EU, passenger-kilometres grew by 20% between 2014 and 2017, and by 60% from 2005. At the same time, full-flight CO2 emissions grew 10% and 16% respectively.Interestingly, the role of air transport for freight is less important and makes up a relatively small percentage of air transport, although this is also a growing sector.

As a result, even if the aviation sector meets its target to cap emissions at 2020 levels – as is the global aim – it will still have consumed 12% of the 1.5C global carbon budget by 2050, according to a Carbon Brief analysis. If the sector fails to reach that target, its share of the budget could be as much as 27%.

What is being done in the EU?

While aviation is not among the largest contributors to greenhouse gas emissions in absolute terms, its impact is growing and needs to be tackled if the EU and the rest of the world are to meet the climate targets under the Paris Agreement.

Having backed down and exempted international flights from the Emissions Trading System in 2012 (more on this later), EU politicians have until recently shown little appetite to directly address aviation emissions.

Although all domestic EU flights are covered under the Emissions Trading System, airlines still receive a large number of free emission permits. According to Carbon Market Watch, the price signal of these permits has been far too low to have a significant impact, even with the recent increases in their cost.

There is growing momentum, however. A number of European parties highlighted aviation tax reform in their manifestos ahead of the elections in May, and many Member States already levy a patchwork of different ticket taxes on flights from their territory – including Austria, Hungary, Ireland, Sweden and the UK.

Nevertheless, with few exceptions, airline tickets in Europe are exempt from VAT and there is no excise duty or VAT levied on fuels. Purchases of aerocrafts for international routes are also non-taxable.

Aviation tax breaks put other travel options at a significant competitive disadvantage

Combined, these tax breaks put other passenger travel options like rail and bus services at a significant competitive disadvantage, as shown byTransport & Environment.

Member states are taking steps to change that. The Netherlands – with support from Belgium, France, Luxembourg, and Sweden – has been particularly vocal in pushing for enhanced aviation pricing at EU level.

In June, the country hosted a conference on carbon pricing and aviation taxes to “encourage a new European Commission to work on proposals for a European aviation tax, tax on kerosene and carbon pricing”.

Just this month, another member state, France, announced a new eco-tax on air tickets, with higher rates for business class and international flights. Transport & Environment welcomed the decision, adding that much more needs to be done.

The new taxes in Germany and France might mean that the free carbon lunch that aviation has long benefited from is now over

Germany is considering increasing its existing aviation taxes later this year. The push from both Member States is a welcome development, said IEEP’s executive director, Céline Charveriat.

“The new taxes in Germany and France might mean that the free carbon lunch that aviation has long benefited from is now over,” she said.

What is being done globally?

Part of the reason behind the recent action at EU level is the frustration with a lack of ambition globally – where regulation is governed by the International Civil Aviation Organisation (ICAO).

Since 2012, the EU has held back on including international flights in its Emissions Trading System in anticipation of ICAO’s multilateral agreement on curbing air emissions.

The resulting CORSIA agreement – adopted in 2016 – is not ambitious in terms of its targets, however, and aims to meet them by relying primarily on offsetting emissions growth after 2020. The specific rules governing these offsets are still being developed, but in any case, the European Parliament has already expressed scepticism over the effectiveness of a system that relies on offsets rather than reducing real emissions.

Over the last year, growing public concern about climate change – and the public understanding of the urgency of tackling the issue – have marked the beginnings of a cultural shift that could help pave the ground for government action.

Flying is one of the areas under increased public scrutiny, with movements like the Swedish flygskam (flight shame), in which people from all walks of life have publicly proclaimed their refusal to fly.

Who pays the true cost?

Still, with air travel constantly increasing, only between 5 to 20% of the world’s population has ever actually travelled on an aeroplane[1].

70% of all international flights are taken by just 15% of the population

Within that, an even smaller minority accounts for most of the trips, with one estimate from the UK finding that 70% of all international flights are taken by just 15% of the population.

Aviation – and its rising impact on the environment – could, therefore, be seen as an elite phenomenon – heavily subsidised by the broader population but only used by select few.

As a result, reducing aviation emissions is challenging not only from the technical perspective.

As their economies continue to grow, developing countries have been fiercely resistant to the idea that their access to air travel should be limited. Economist Thomas Piketty has proposed a tax to incite those countries to join the cause.

At the same time, increasing the costs of air travel in more developed countries could make it even less accessible to poorer households, without putting a significant dent in business travel or the number of flights taken by the richer segments of the population.

What steps are needed at policy level?

The scale of the climate challenge requires that all sectors make major mitigation efforts. This applies particularly to the sectors where emissions are currently growing.

Urgent action is clearly needed, so it will be interesting to see how the incoming European Commission responds to pressure from some member states and segments of the European Parliament.

One key decision in the near future will be on whether the CORSIA offsetting agreement is sufficiently demanding to justify a continued exemption from the EU Emissions Trading System for international flights.

Ensuring that aviation faces a real carbon price is important; but it is just one element in a wider range of required actions.

To effectively lower aviation emissions, we also need:

  • Real investment in improving the aviation sector’s emissions efficiency – and not only through the use of biofuels.
  • Wider public debate on what volume of air travel can be consistent with the 1.5C Paris target; and how it should be shared between and within countries. 
  • Infrastructure decisions that are consistent with the Paris target – which in turn means avoiding increases in airport capacity, and investment in alternative lower carbon travel options, as well as an understanding that in a world of finite resources, ever-increasing international travel is not an option.

Finally, the international community needs to demonstrate serious commitment.

ICAO – like the 1944 Chicago Convention from which it stems – was a relevant response to the challenges of the growth in international air travel after the Second World War. But today’s ICAO system is dominated by airline interests, and is clearly inadequate for regulating the question of what share the aviation industry should have of a finite global emissions budget.

One – controversial – option would be for the EU and other world leaders to take control of the aviation emissions issue away from ICAO. This would almost certainly lead to significant disruption, but if it were to succeed, it would allow the world to start experimenting with ways of moving beyond the unsustainable consumption of air travel.

[1] Lobby group atmosfair has cited 5%. Other media cite 18%. Atmosfair numbers appear to be based on 2002 estimate.

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