fNew themes annoy green activists as much as air travel. Airplanes are responsible for a fraction of total carbon emissions – around 2.5% – but unlike heating, other modes of transport and electricity, traveling on them is often a luxury and not essential. Air travel has also largely escaped carbon pricing, which covers a quarter of all emissions.
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However, change is in the air. Since the beginning of last year a U.N-backed scheme has required airlines to offset emissions above a baseline by purchasing credits. On December 6th the EU decided to involve airlines more deeply in its carbon trading scheme. These are steps in the right direction, although unlikely to lead to decarbonization fast enough for Europe to achieve its goal of a net-zero aviation industry by 2050.
The ideal carbon pricing system would apply across the economy and allow trade-offs to be made between different activities. If society decided that flying was particularly important, there would be fewer permits for steelmaking. The carbon price would reflect both the ease of substituting a less polluting energy source and the value of the activity that powers it. The flawed logic behind excluding airlines from the EU‘s scheme was that there was no viable alternative to jet fuel yet. It was believed that carbon pricing on flights would simply annoy flyers and push airlines elsewhere.
But there are ways to reduce the carbon intensity of a flight. More efficient aircraft will help, as will smarter pricing to ensure every seat is used. Even without a CO2 price, the CO2 intensity of one passenger kilometer has fallen from around 1.4 kg of carbon dioxide in 1960 to 0.1 kg in 2018. Carbon pricing can also change consumer behavior, encouraging them to opt for rail, bus or boat where available. Giving airlines free licenses was tantamount to an implicit subsidization of flying.
That EUThe new plan sees airlines losing more of those permits each year until the industry’s dedicated carbon credits fully expire in 2026, a year earlier than intended. The UK and Switzerland are included, but flights to other countries outside the bloc are excluded. This is largely the result of a standoff in 2012 when China threatened to stop buying planes from Airbus, a European company, and America threatened non-compliance if it did EU requires all flights to participate.
International airlines have yet to comply U.N-based scheme known as the Carbon Offsetting and Reduction Scheme for International Aviation (corsia) and applies to the entire industry. Under corsia An airline must offset emissions in excess of a baseline by purchasing credits, with the apportionment based on the airline’s share of total industrial emissions. The basis for the pilot phase, which runs until the end of 2023, are the industrial emissions in 2019.
As airlines have not yet fully recovered from the Covid-19 pandemic, there is currently no obligation to offset emissions. From 2024, the baseline will be reduced to 85% of 2019 emissions. But even that won’t do much. Credit is cheap, costing about $3 per ton compared to about €90 ($96) per ton in the US EU. And airlines may be able to avoid buying it altogether by using a little sustainable aviation fuel made from used cooking oil, which is heavily subsidized in America.
So far, no one has opted for a carbon pricing system that applies across the economy. Europe is at least moving in the right direction by including airlines in its carbon trading scheme. But with the limitations of the program and the rest of the world lagging behind, the road to a net-zero aviation industry will be a slower one. ■
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