The value of Carbon Trading

Ruwantissa ABEYRATNE

The Fourth Assessment report released in 2007 by the Inter Governmental Panel on Climate Change (IPCC), which is a scientific intergovernmental body set up by the World Meteorological Organization (WMO) and by the United Nations Environment Programme (UNEP), bears strong evidence of continuing global warming.

The Report states that warming of the climate is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising average sea level.

The IPCC also states that global atmospheric concentrations of CO2, CH4 and N2O have increased markedly as a result of human activities since 1750 and now far exceed pre-industrial values determined from ice cores spanning many thousands of years. The atmospheric concentrations of CO2 and CH4 in 2005 exceed by far the natural range over the last 650,000 years.

Global increases in CO2 concentrations are due primarily to fossil fuel use, with land-use change providing another significant but smaller contribution. he Report further states that it is very likely that the observed increase in CH4 concentration is predominantly due to agriculture and fossil fuel use.

The increase in N2O concentration is primarily due to agriculture. One of the more ominous statements of the Report is that continued greenhouse gas emissions (which are Carbon dioxide, methane, nitrous oxide, hydro fluorocarbons, per fluorocarbons and sulphur hexafluoride) at or above current rates would cause further warming and induce many changes in the global climate system during the 21st century that would very likely be larger than those observed during the 20th century.

Warmer surface temperatures and warmer oceans give rise to increased evaporating water, resulting in increases in moisture in the atmosphere.

Experts have attributed these increases in moisture and humidity in the recent past to the frequency and intensity of hurricanes and cyclones which occurred in the recent past, particular in reference to the strength and duration of the storms.

Although the effects of climate change are not so prominent in the human sphere as in the natural world, there is palpable evidence that problems related to the supply of water will increasingly appear as a result of shrinking glaziers, drought, snow pack, evaporation and the infiltration of salt water in areas below sea level.

The contribution of aircraft engine emissions to the depletion of the ozone layer was initially identified as being through the oxides of nitrogen which are emitted by supersonic aircraft in flight. However, later on, it was discovered that sulphur in the fuel of any aircraft resulted in the emission of sulphur compounds into the air, which could affect the ozone layer adversely.

The sulphuric process of aircraft engine emissions can be equated to the chemical process taking place in polar stratospheric clouds.

The sulphur trioxide in the exhaust gases rapidly converts itself into sulphate particles, which in turn attach themselves to chlorinated substances in the atmosphere to form a powerful chemical combination which is capable of attacking the ozone layer.

The good news is that, usually, at a non-supersonic height of around 10 kilometres, these chemical compounds do not pose a significant threat to the ozone layer.

Although the clear offender is the supersonic aircraft, large sub-sonic aircraft which fly at high altitudes on long-haul flights traversing the stratosphere can emit significant quantities of sulphur trioxide which may well compare with the emissions of the supersonic Concorde.

In 1995, a joint Swiss project called NOXAR, in which one of the participants - Swissair - which dedicated a Boeing 737 aircraft for the project, was carried out where a large part of the Northern Hemisphere was covered by the jumbo covering the most frequented North Atlantic routes such as Zurich to New York, Washington, Boston, Toronto, Chicago and Atlanta and also routes covering the Far East to Bombay, Hong Kong, Beijing and Shanghai.

The emissions of the jumbo jet were calibrated whilst in flight and the results revealed that the results of earlier studies conducted based on particular measurements and calculations which showed concentrations of oxides of nitrogen (NOx) between 0, 2 and 0,3 ppb in the upper troposphere of the Northern Hemisphere were consistent with the findings of the NOXAR study.

In addition, the NOXAR study revealed that there could be higher concentrations of gases over a short period of time.

The International Air Transport Association (IATA) has recorded that aviation is responsible for 2% of global CO2 emissions and by 2050 will represent 3%. Aviation is a small part of a major problem - that of climate change. However the carbon footprint of the air transport industry is growing.

Both ICAO and IATA have the common goal of ensuring the sustainable development of air transport. The most critical consideration in this regard is to seek a balance between the exponential growth of air transport and the vast improvements in energy efficiency achieved by aircraft and engine manufacturers.

The subject of emissions-trading falls within the purview of the IPCC. The IPCC’s first scientific report was published in 1990 and recommended the negotiation of a framework convention to combat global warming. The United Nations Framework Convention on Climate Change (UNFCCC) was adopted on 9 May 1992 and the treaty entered into force on 21 March 1994.

The essential philosophy of emissions-trading in environmental protection is based on a certain flexibility allowed to market forces to reach the lowest cost involved in an operation whilst at the same time achieving an environmental target which has been already set.

The word “trading” correctly denotes an exchange, and when applied to the aviation context means a certain trade-off between airlines whose fleets pollute more than others and low polluting airlines. The trade-off could take the form of a “purchase” by the high polluting airline of the reduction level of a low polluting airline.

Emissions-trading would encourage airlines to seek innovation in technology and to reduce their emission levels. The Kyoto Protocol to the United Nations Framework Convention on Climate Change is an amendment to the international treaty on climate change, assigning mandatory emission limitations for the reduction of greenhouse gas emissions to the signatory nations.

Article 1 (a) (v) of the Protocol calls each State Party to achieve progressive or phasing out of market imperfections, fiscal incentives, tax and duty exemptions and subsidies in all greenhouse gas emitting sectors that run counter to the objective of the Convention and application of market instruments.

The subject of emissions-trading is explicitly addressed in Article 6 of the Kyoto Protocol which states that for the purpose of meeting its commitments under Article 3, any Party included in Annex 1 may transfer to or acquire from, any other such Party emission reduction units resulting from projects aimed at reducing anthropogenic emissions by sources or enhancing anthropogenic removals by sinks of greenhouse gases in any sector of the economy provided the parties concerned approve of such trading; and, inter alia, such trading actually results in a reduction in emission by sources.

When airlines would trade emission levels, the rates at which their aircraft pollute the atmosphere will be taken as a whole and applicable to a whole fleet, so that an airline which is over and above its permitted pollution level could join with another airline which is below the standard level of pollution required of it, thus making the average pollution between the two more acceptable than if taken individually.

All these factors pose a daunting challenge to one of the most intriguing corollaries to modern day aviation. It is hoped that, like in other difficult circumstances, the world aviation community is able to overcome the many obstacles in this regard.