Airline Carbon Plan Takes a Step Forward While Carriers Suffer
Airline Carbon Plan Takes a Step Forward While Carriers Suffer
(Bloomberg) -- In the rapid push by business to go green, airlines are pretty well stuck.
Data centers can switch to solar power, restaurants can swap out gas ranges for electric and homebuilders can drop concrete in favor of cross-laminated timber. These industries can change the way they work at the source. But airlines don’t have that many sustainable options. They burn massive amounts of fossil fuel and will continue to do so for the foreseeable future.
So they buy carbon credits instead. But it’s an expensive proposition, one that could cost them billions of dollars annually. Commercial airlines accounted for 2.4% of global carbon dioxide emissions in 2018, according to the International Council on Clean Transportation, a figure that could triple by 2050. European plane manufacturer Airbus forecast that commercial aviation traffic will double in the next 15 years, as will the size of the commercial fleet—going from 14,200 aircraft to 38,360 aircraft.
Even if those new planes are more fuel-efficient than their predecessors, or built to run on bio-fuels, it will still be a big increase in greenhouse gas emissions. And if you’re wondering about alternative power sources, well, electric aircraft engines are just getting off the ground. Airbus, for instance, hopes to fly a 100-passenger aircraft based on electric and hybrid-electric technology by the 2030s. But making this feat scalable may take much longer.
Airlines have been working with the United Nations, diplomats and researchers for years to address the industry’s carbon footprint through an offset framework. The onslaught of “flight shaming” by climate-aware consumers has provided additional lift to their efforts.
As the airline industry contends with the grim financial implications of Covid-19, the International Civil Aviation Organization (ICAO) on March 13 announced a critical step forward when it comes to using carbon offsets, selecting six programs for airline use when purchasing credits.
“At a time of extreme stress for the industry, aviation has stood by its commitment to grapple with the climate crisis,” Annie Petsonk, international counsel at the Environmental Defense Fund, said on Friday. “The council’s decision today sends a signal that when we get to the other side of the gut-punch that Covid-19 is delivering to families, communities and the whole travel sector, nations will move forward to meet the climate challenge.
But offfsets are by definition complex. How do you calculate the CO2 offset by say, planting a new forest? How much jet fuel burned at 40,000 feet equals one CO2-breathing maple tree? What happens to the claimed offsets if someone clear cuts all the trees a decade later—or just some of them?
“The fundamental concept of an offset is that a reduction in CO2 in one place in the world is in principle equal to that in another,” said Petsonk. Put simply, for every ton of carbon you burn, you pay for the equivalent reduction somewhere else.
The Carbon Offsetting and Reduction Scheme for International Aviation, or Corsia, aims to provide sufficient transparency so the flying public can determine if a particular airline is actually living up to its promises. There of course needs to be a strong watchdog component, and carriers must submit reports on both their emissions and purchased offsets, with national governments empowered to enforce the agreement.
The latest step by the ICAO, council President Salvatore Sciacchitano said, “represents an important environmental milestone.”
One might expect the airline lobbyists to be howling at the prospect of such regulations, but they aren’t. Nancy Young, vice president for environmental affairs at the industry group Airlines for America, said a global framework makes a lot more sense than a patchwork of nation-by-nation rules.
There have been a flurry of corporate announcements of late, telegraphing the industry’s participation: Jet Blue announced in January that it will offset its emissions from jet fuel for all domestic flights beginning in July. Delta followed suit in February, announcing its intention to spend $1 billion over the next 10 years to become “the first carbon neutral airline.”
The European Union first designed a set of rules in 2012. Originally meant to apply to emissions from flights to, from and within the European Economic Area, the group decided to limit its rules to flights within the EU until a global set of rules could be adopted by the ICAO. The Corsia framework caps CO2 emissions at 2020 levels from 2021 through 2035. To stay under this limit, airlines have the choice of flying more efficient aircraft, using cleaner fuels or purchasing carbon offsets.
Last summer, the ICAO invited proposals for carbon offset programs. The guidelines require offset programs ensure the credits issued to airlines are quantified, monitored, reported and verified. Most importantly, the credits must do no net harm to the planet.
Among the six programs approved last week is the American Carbon Registry (ACR), a project by Winrock International, a nonprofit which is already approved under California’s cap-and-trade market. The ACR has offered credits through a variety of programs. One offers households access to safe drinking water and efficient cookstoves. Another provides private forest owners with resources on sustainable forest management. Another, the Redd.plus program, focuses on reducing deforestation in developing countries.
Carbon Action Reserve, which also received Corsia certification, lists hundreds of projects, ranging from organic waste composting in Tennessee to livestock gas capture and combustion in Wisconsin and “avoided grassland conversion” in Montana.
Airlines give a certain amount of money to fund a program, and the organization overseeing it records the transaction in a public registry, describing the project name, location and quantity of offsets issued. Under Corsia, each program must function to reduce greenhouse gas emissions beyond that already required by law or existing agreements, and “exceed any greenhouse gas reductions or removals that would otherwise occur in a conservative, business-as-usual scenario.”
While no precise dollar amount exists yet, some 2.5 billion tons of CO2 must be offset from 2021 to 2035 under the framework. The low end assumption of cost for the airline industry is $6-12 per ton of carbon ($15 billion to $30 billion). The high end assumption is $20-40 per ton ($50 billion to $100 billion).
Sophia Mendelsohn, JetBlue Airways Corp.’s head of sustainability, said non-profits and non-governmental organizations have been critical to cleaning up the carbon offset market. “The carbon credit market was the wild west. In previous decades there was a lot of fraud, but we’ve largely wiped that out with third-party systems and audits,” she said. “It’s not environmental NGO vs business—it’s how do you make sure you’re buying quality credits...and achieving what we want to do, which is immediately incentivize less CO2 going into the air.”
Environmentalists are torn on the issue of carbon credits. On the one hand, they’re glad the industry is—at the bare minimum—paying to offset its continuing role in worsening the climate crisis. On the other hand, many would like to see more effort go into fixing its own behavior, rather than paying to clean it up.
If a goal of policy is to encourage environmental health without bankrupting companies, then offsets provide a middle ground. They fund emissions-reductions that wouldn’t have happened anyway, and give companies a middle ground where they can continue operations and contribute to lower CO2 pollution rates.
“Offsetting is not a silver bullet, it is a bridge to other structural, institutional solutions,” said Mendelsohn, one of which is “don’t burn fossil fuels if you don’t have to.”
--With assistance from Eric Roston.
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net
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