The European Parliament this week overwhelmingly voted to adopt a Green Party report calling for a series of climate-control measures covering commercial aviation, including carbon emissions trading programs, new taxes and other proposals. That several European carriers objected suggests a long road before the sector reaches a consensus on the best methods for curbing emissions, first in Europe and then on a global scale.
EP's action, while not actual legislation, could help set the tone for aviation's role in environmental protection policies. "Emissions trading has the potential to play a role in reducing the climate change impact of aviation, but only if it is accompanied by other measures to tackle the fact that aircraft emissions are two to four times more potent than those from other industries ... and, crucially, only if it doesn't allow airlines to carry on business as usual by gobbling up the emission rights of other sectors," said Dr. Caroline Lucas, Member of the European Parliament from South-East England and principal speaker of the Green Party. "We simply have no choice but to clip the airlines' wings and force them to reduce their impact on the climate."
Such language unsurprisingly drew rebuke from some airlines. "EasyJet regrets that such a large number of MEPs followed the Green's simple but destructive strategy of 'clipping the airlines' wings' by ending affordable air travel," said EasyJet CEO Andy Harrision, who characterized EP's proposals as "a package of punitive measures which would do nothing to encourage better environmental performance of airlines."
Like other low-fare carriers, EasyJet particularly objected to EP's proposal for "the immediate introduction of kerosene taxes" on all domestic and intra-European Union flights (with possible exemptions on routes served by non-EU carriers). EP also suggested an end to value-added tax (VAT) exemptions for airlines "to level the playing field" with other transport sectors.
"Any approach to aviation and the environment which calls for the simultaneous introduction of taxes on aviation fuel, VAT on airline tickets, environmental charges at airports and emissions trading schemes totally ignores economic realities," said Sylviane Lust, director general of the International Air Carrier Association, a group of generally smaller European airlines.
In addition to new taxes, EP advocated the inclusion of the air transport sector in the European Union Emissions Trading Scheme (ETS) but also recommended a separate airline-specific emissions trading program that could serve as a first step.
British Airways favors the ETS concept, which could then be expanded to other regions. "We now have a real opportunity in Europe to establish an emissions trading scheme involving airlines which could become a template for the world," said CEO Wilie Walsh. "It would give all industries a financial incentive to be as carbon-conscious and fuel-efficient as possible."
Other European carriers said any emissions trading program must start on a global scale--perhaps coordinated by the International Civil Aviation Organization. Otherwise, it would represent only a partial solution to what clearly is a worldwide problem while placing them at a disadvantage versus airlines operating from countries with less stringent regulations.
"We must avoid distortion of competition," said Stefan Schaffrath, Lufthansa manager of corporate, finance and sustainability.
Lufthansa insists that a global airline emissions trading program should be developed only after the industry exhausts other methods of reducing greenhouse emissions. "We think there are more fruitful ways to explore before we get into more regulations," Schaffrath said.
Specifically, the German carrier advocates continuous fleet modernization, such operational improvements as negotiating "short cuts" through Chinese airspace and a more efficient air traffic control infrastructure. On an average day, Schaffrath explained, Lufthansa burns as much fuel while in holding patterns above airports as it does in operating 11 flights between Frankfurt and New York. "There are lots of bottlenecks," he said, "and the Single European Sky initiative has already been on the agenda for 10 years."
"Government regulation is thus not necessary for efficient reductions of emissions," according to a draft of the latest Lufthansa policy brief. "On the contrary: Wrong-headed policies might counteract the airlines’ existing commitment."
That commitment varies by airline, further complicating efforts to reach industrywide agreements. According to a report issued this spring by Ceres--a coalition of investors, environmental groups and public-interest organizations--air transport ranked last among the 10 most carbon-intensive sectors in proactive corporate governance on climate change. Among passenger carriers, British Airways garnered a score of 27 (out of 100), followed by Air France (23). U.S. carriers placed farther down the list, including American Airlines parent AMR Corp. (9), Southwest Airlines (6) and United Airlines parent UAL Corp. (3). According to the Ceres report, none of the three U.S. carriers had addressed climate change as a governance issue.
While the airlines debate amongst themselves and with regulators the most effective policies, such multinational clients as ABB, H&M, Ikea and the World Bank, at least, increasingly are trying to understand their own carbon footprints.
Based on feedback from its European clients, Sabre Travel Network recently announced the availability of emissions reports, allowing subscribing travel management companies to detail the environmental impact of corporate customers' air travel. STN said the reports include number of booked segments, distance flown, fuel consumption, carbon dioxide emissions calculations and other greenhouse gas information. The reports can be compiled by department, cost center, segment type or date.