Could aviation loopholes swallow climate progress?

Letting CDM credits into the aviation climate agreement could cut CORSIA’s effective participation from about three quarters down to less than 20 percent, negating its climate impact.

Airplane taking off from San Francisco. Flickr/ dsleeter_2000

As bleary-eyed negotiators at the UN Framework Convention on Climate Change Conference of the Parties (COP) in Katowice, Poland, struggle through late nights of haggling over rules for implementing the 2015 Paris Agreement, one challenge they face is how to energize a global competitive market for cutting climate pollution, while ensuring the integrity of that market.

Technical talks in the far recesses of the giant conference center are focused on two key issues: carbon credit quality, and accurate book-keeping.

On carbon credit quality: Investigations found that the so-called “Clean Development Mechanism” (CDM) of the 1997 Kyoto Protocol issued hundreds of millions of putative carbon credits that didn’t cut emissions beyond what would have happened anyway, or came from projects rife with corruption.

A few CDM projects have helped cut emissions and boost sustainable development in local communities. But it seems the vast majority have little or no environmental value.

That’s why more and more countries are banning the use of these credits to meet climate targets.

On accurate book-keeping: If a carbon reduction project sells credits from one country to another, the originating country must subtract that credit from its store of carbon reductions. That book-keeping entry is important. Without it, the project’s reductions could be counted twice – once by the buying country to offset an increase in its emissions, and again by the selling country when reporting to the Paris Agreement how well it’s done in cutting climate pollution.

That kind of double counting would cheat the atmosphere. It would undermine the integrity of carbon markets. That’s why hundreds of companies from all over the world, including airlines, issued declarations during the first week of the climate talks, warning countries to make sure they adopt rules that are super-clear on the book-keeping issue.

How does aviation come into the picture?

In Katowice, a few governments that have accumulated huge overhangs of putative carbon credits are quietly pressing the COP for loopholes that would let them dump dubious, double-counted pollution credits on unsuspecting buyers – like airlines. Why airlines?

In 2016, the UN’s International Civil Aviation Organization (ICAO), which sets environmental and safety standards for flights between countries, adopted a resolution capping the carbon emissions from international flights at 2020 levels. That’s important. For many people, aviation is the largest part of their carbon footprint. And with more people flying, aviation’s emissions are forecasted to skyrocket. Without limits, aviation’s carbon pollution could make it impossible to achieve Paris climate goals.

The ICAO program takes a first step. Its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) would let airlines meet the pollution cap using their own reductions or reductions earned elsewhere. Aviation doesn’t have a lot of near-term options for cutting emissions, so putting a cap on aviation carbon today and letting airlines generate their own reductions or buy from others can provide a powerful stimulus for aviation to get on a flight path to deep decarbonization.

To date, governments whose airlines represent about three quarters of the emissions that could be covered by CORSIA have signaled their intent to join.

But at Katowice, a tiny group of countries wants to dump their huge CDM credit backlog onto unsuspecting airlines. This group argues that the COP doesn’t have the legal right to set the carbon credit quality and book-keeping rules for the carbon credits that flow into CORSIA – only ICAO can.

That’s hogwash. The climate agreements give the COP responsibility to protect the global climate – no exceptions. While ICAO struggles to adopt a dozen or so CORSIA emissions unit eligibility criteria, it’s the COP that has the legal obligation to determine the book-keeping rules. It’s up to the COP to make sure that CORSIA doesn’t become a climate shell game.

The tiny group also argues that even if the COP can set the rules, its bookkeeping should only apply to credits originating in sectors covered by Paris countries’ nationally determined contributions (NDCs). Credits originating outside those sectors, the group reasons, can be treated differently, because countries didn’t pledge to make those reductions in the first place.

But as we have analyzed for the larger Paris Agreement, giving special treatment to “outside of NDC” reductions could nullify the effect of all the NDCs in the world. UNFCCC and Paris Parties have a legal obligation to assess how well all mitigation efforts in the world are doing in meeting the climate protection objectives of those agreements. That obligation doesn’t depend on whether reductions happen to come from a sector covered by an NDC. But giving special treatment to emissions reductions from sectors outside NDCs will create an incentive for countries to keep those sectors outside of the NDCs – undermining the goal, expressed in Article 4 of the Paris Agreement, that countries increase ambition over time including by moving toward economy-wide targets. What’s more, since industrialized countries under Paris have economy-wide NDCs, such a rule could even resurrect bifurcation by opening a loophole that only developing countries could take.

The bottom line

Dumping bogus credits into CORSIA, and giving special treatment to emissions reductions that originate from outside NDCs and are used in CORSIA, would punch a big hole in the climate benefit of the aviation agreement – and a big hole in the climate credibility of ICAO and the airlines. It would undercut the Paris Parties’ efforts to limit the global temperature increase to well below 2 degrees. If, as various analyses indicate, only about 15% of the credits issued under the CDM represent real reductions, letting them into CORSIA would cut CORSIA’s effective participation from about 78% global coverage, down to about 17%. That would give passengers whose tickets in the future might include an embedded CORSIA carbon fee a solid basis to demand their money back. And to demand that their airlines stop cheating on the goals of the Paris Agreement.