Commenting on the report, Sally Howes, Director General SBAC said: “The Stern Review provides a valuable and important contribution to developing appropriate responses to global climate change. The aviation industry recognises the importance of this challenge and is making steady progress. The aerospace industry believes the Government must ensure that domestic policy initiatives encourage greater investment in cleaner technology, incentivise carbon emission reductions and maintain the international competitiveness of the aviation industry”.
Key Messages from the Report
* Very strong reductions in carbon emissions are required to reduce the risks of climate change. The benefits would be well in excess of the costs. Moreover, the costs of not acting are likely to be very high.
* Urgent action is required to address current levels of greenhouse gases. It will take time to develop technologies that deliver zero emissions at low cost.
* Without a clear perspective on the long-term goals for stabilisation of greenhouse gas concentrations in the atmosphere, it is unlikely that action will be sufficient to meet the objective.
* Action must include mitigation, innovation and adaptation.
* Countries should agree a broad set of mutual responsibilities to contribute to the overall goal of reducing the risks of climate change. These responsibilities should take account of costs and the ability to bear them, as well as starting points, prospects for growth and past histories.
* The challenge now is to broaden and deepen participation across all the relevant dimensions of action – including co-operation to create carbon prices and markets, to accelerate innovation and deployment of low-carbon technologies, to reverse emissions from land-use change and to help poor countries adapt to the worst impacts of climate change.
- Aviation CO 2 emissions currently account for 0.7 Gt CO 2 (1.6% of global greenhouse gas emissions) (WRI, 2005). However, the impact of aviation on climate change is greater than these figures suggest because of other gases released by aircraft and their effects at high altitude (e.g. water vapour emitted at altitude leads to contrail formation which may warm the earth's surface). The extent to which the global warming effect of cirrus cloud formation by aircraft is understood and quantifiable is “highly uncertain”.
- Demand for transport will have a profound effect on climate change. Aviation will account for the second highest increase in emissions, which are expected to rise three-fold between 2004 and 2030.
- CO2 emissions from aviation are expected to grow by over three-fold in the period to 2050, making it among the fastest growing sectors. Stern's ‘business as usual' projections suggest that, by 2050, aviation emissions would account for 2.5% of global emissions. However, a fter taking account of the additional global warming effects of aviation emissions, aviation is expected to account for 5% of the total warming effect (radiative forcing) in 2050.
- Transport is still likely to be oil-dependent by 2050. In aviation, technology breakthroughs (e.g. biofuels) are unlikely to have an impact, but there may be potential for efficiency savings.
- CO2 improvements in aircraft can be realised by increasing combustion temperatures in engines, but this increases levels of NOx. Other measures to improve fuel efficiency and CO2 performance, such as reducing aircraft weight, have benefits for local air pollution.
- The relationships between gases emitted at altitude are complex. (e.g. more modern engines have a greater tendency to produce contrails). Further technological advances in aircraft construction will be important in meeting both climate change and air pollution objectives simultaneously.
- Aviation faces difficult challenges in respect of emissions trading . Whilst there is potential for incremental improvements in efficiency to continue, more radical options for emissions cuts are very limited. The international nature of aviation also makes the choice of carbon pricing instrument complex. Internationally co-ordinated taxes are difficult to implement, since International Civil Aviation Organisation (ICAO) rules prohibit the levying of fuel tax on fuel carried on international services.
- While either tax or trading would, in principle, be effective ways to price emissions from aviation, the choice of tax, trading or other instruments is likely to be driven as much by political viability as by the economics. A lack of international co-ordination could lead to serious ‘carbon leakage' issues, as aircraft would have incentives to fuel-up in countries without a carbon price in place. Air carriers could also change their routes, or engage in practices such as ‘tankering' (i.e. carrying excess fuel on planes to avoid refuelling at airports where fuel taxes are levied).
- Carbon pricing should be extended to aviation. This will become increasingly important over time. The level of the carbon price faced by aviation should reflect the full contribution of emissions from aviation to climate change. The impact of aviation is two to four times higher than the impact of the CO 2 emissions alone. This should be taken into account, either through the design of a tax or trading scheme, through both in tandem, or by using additional complementary measures.
- Globally, international aviation emissions – defined as emissions from any aircraft leaving one country and landing in another – are about twice as great as domestic aviation emissions. Aviation has negative local impacts on noise, local air quality, biodiversity, and local climate impacts, for which local policy interventions (such as regulation on noise levels) can be used.
- There is currently no incentive to reduce international aviation emissions, as only emissions from domestic flights are currently allocated to any country within national emissions inventories. Many large international markets are outside the current
Kyoto obligations framework.
- The issue of aviation causing higher climate change impacts than simply that from its CO 2 emissions could be tackled by setting high carbon taxes on aviation. The EU Emissions Trading Scheme (ETS) model could be replicated worldwide. Within the EU model, there is a need to ensure clear coverage, to identify air air carriers/aircraft operators as trading entities and the allocation methodology should be harmonised at EU level. Auctioning allowances would also raise revenue and increase the speed of adjustment to carbon markets.
- National policy measures such as landing charges tend to be blunt instruments for cutting carbon emissions . However, differentiating them, for example, by length of flight or distance travelled , could improve their effects on reducing emissions.
- To account for the complete impacts of aviation within an ETS, some form of discounting could be used, analogous to the global warming potential factors that are used to convert greenhouse gas emissions to CO 2 equivalent emissions.
- Alternatively, combining emissions trading with a tax could provide extra revenue. This could provide strong incentives to innovate to reduce emissions within the sector, including in airframe efficiency, engine manufacture, airport operations, and air traffic management.
- The international co-ordination of standards, including through voluntary approaches, is an important measure. Existing international co-operation under ACARE requires new aircraft produced in 2020 to be 50% more fuel efficient per seat kilometre relative to their equivalents in 2000. But, it will take time to improve the fuel efficiency of an entire fleet.
- However, the ACARE targets do provide some degree of challenge – in order to meet it, some technological breakthroughs will have to be achieved. The industry is broadly on track to meet the ACARE targets.
SBAC Position
- SBAC is encouraged by the Stern review of the economics of climate change.
- The report provides an accurate description of the current and likely future impact of aviation on climate change. (1.6 per cent of global green house gas emissions, rising up to 5 per cent by 2050).
- It supports both the need to increase the levels of investment in cleaner technology and the need to establish international mechanisms for emission trading.
Commenting on the report, Sally Howes, Director General SBAC said: “The Stern Review provides a valuable and important contribution to developing appropriate responses to global climate change. The aviation industry recognises the importance of this challenge and is making steady progress. The aerospace industry believes the Government must ensure that domestic policy initiatives encourage greater investment in cleaner technology, incentivise carbon emission reductions and maintain the international competitiveness of the aviation industry”.
For more information contact SBAC's communications team.
Click here to go to HM Treasury website, Stern Review page
 SBAC summary Stern Report.pdf
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