Impact of Environmental Taxes & Charges on Aviation

Transcription

1 Impact of Environmental Taxes & Charges on Aviation Andrew Herdman Director General Association of Asia Pacific Airlines 19th ASEAN Airlines Meeting (AAM) Singapore 22 March 2011 Aviation: moving the world Air travel delivers global mobility 2,500 million passengers Carries 35% by value of global trade Outstanding safety record Wider social and economic benefits Supports 8% of world GDP & 32 million jobs Source: ATAG 1

2 Sources of emissions by industry sector Air Travel 1.7% Transportation Energy & Heat CO2 Industry Land Use Change CH4 NOx Agriculture Source: WRI, Stern Report 2006 Emissions growth Aviation is only a minor contributor to global CO2 emissions, but our relative share will grow Global CO2 emissions business as usual Global CO2 emissions reducing to 550ppm Airline CO2 emissions Source: IATA, IPCC 2

3 Projected future growth of aviation Traffic by airline domicile Source: Airbus Emissions growth will be ~ 3% p.a. Environmental & political sustainability? United aviation industry strategy Comprehensive cross-industry collaboration Manufacturers Airlines Airports Air Navigation Four Pillar Strategy Technology Operations & Infrastructure Alternative Fuels Economic Measures Aviation is the only industry which has developed a globally coordinated strategy 3

4 Aviation industry emissions targets Three Global Industry Targets Ambitious but achievable goals Aviation is already highly energy efficient Fuel represents 25%+ of total costs Committed to further emissions reductions Aviation emissions reduction roadmap Multi-pillar approach to achieve industry goals Source: IATA 4

5 Aviation: alternative fuels Evaluating multiple feedstocks Certification expected in 2011 Need clear policy framework and support from governments Proven technical feasibility Drop-in fuel using existing infrastructure Offers lifecycle CO2 reductions Challenge is to achieve commercial scale and competitive economics Source: ATAG Economic Measures Putting a price on carbon Voluntary offsets Emissions trading Carbon taxes Incentivise use of low-carbon fuels Subsidies Mandates Aviation needs a global sectoral approach Emissions accounted at global level Access to global carbon markets No double charging Requires agreement by States A patchwork of overlapping and uncoordinated national schemes is not the answer 5

6 Aviation sustainable growth Aviation delivers continuous improvements in fuel efficiency through technology, operations and infrastructure The aviation industry is united and has committed to challenging environmental performance targets As a globally competitive, energy-intensive industry, we would prefer a globally harmonised, sector-specific approach to international aviation emissions under ICAO Governments set the climate change policy framework but there is a collective failure of political leadership on this issue The politics of climate change ICAO UNFCCC International Aviation National Targets & Domestic Aviation ICAO 36th Assembly adopted fuel Political deadlock: unable to resolve efficiency goal but polarised against EU differences between Annex 1 and unilateral action on ETS Non-Annex 1 countries enshrined in Kyoto Protocol ICAO 37th Assembly Resolution 19 First ever global sectoral agreement to reduce emissions Reflects aspirational industry goal of carbon-neutral growth from 2020 Lists 15 principles for economic measures Still some unresolved differences amongst States Controversy over de minimis exceptions Proliferation of national and regional initiatives COP15 Copenhagen Dec 2009 Copenhagen Accord included US and major developing countries, offered a way out of the impasse COP16 Cancun Mexico Dec 2010 Rebuilding trust but still lacking consensus on post-2012 framework Launched Green Climate Fund Wider recognition of ICAO role and aviation industry efforts 6

7 EU ETS Applies to all flights in and out of EU from 2012 Covers round-trip emissions for entire journey Emissions capped at baseline 220 mtco2 p.a. Operators given 82% free allowances Balance of emissions and future growth must be covered by carbon credits purchased through auctions or secondary market Projected costs $1 billion+ in 2012 and rising Funds go directly to national treasuries Non-EU States unhappy with unilateral EU action Aviation is seen as a soft target Myth that aviation is under taxed Taxes hurt the economy of the state imposing tax Damage extends to wider travel and tourism sector Taxes are a blunt instrument, ineffective in addressing climate change Governments must look at the bigger picture Taxing foreign citizens may trigger retaliatory measures Some governments view airlines as convenient tax collection agencies 7

8 Uncoordinated patchwork EU ETS UK Air Passenger Duty $1-$5 billion $4.0 billion German Air Transportation Tax $1.2 billion Irish Air Travel Tax $0.2 billion Austrian Air Travel Levy $0.1 billion Other governments considering similar measures Aviation sustainable growth Aviation delivers continuous improvements in fuel efficiency through technology, operations and infrastructure Intensifying efforts to develop alternative fuels Strategic planning for the air transport industry must factor in projected increases in the cost of carbonbased fuels, inclusive of emissions charges Continued growth in air travel is not inconsistent with environmental responsibility Travel and tourism industry faces real threat of proliferation of arbitrary taxes and charges Economic measures, if properly designed and implemented, can also play a role 8

9 Association of Asia Pacific Airlines 9/F Kompleks Antarabangsa Jalan Sultan Ismail Kuala Lumpur MALAYSIA Tel: Fax: