Despite a bumpy 2020, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is finally poised to take off in 2021. But will it actually reach its destination? Worse yet, given the impetus for a green recovery from the pandemic, is it sending the wrong signal? And what role can Small Island nations play in helping CORSIA get back on track?
High aspirations, short runway
Before COVID-19, the world was on a very different trajectory. Our appetite for flying was at an all-time high, and greenhouse gas emissions from international aviation were set to only keep growing. According to the International Civil Aviation Organization (ICAO), emissions in 2018 reached just over 900 million metric tons and were forecast to double by 2035 and triple by 2050. This puts the industry squarely in the same league as the entire output of whole, industrialised countries, i.e. somewhere between Japan (5th) and Germany (6th) in the world rankings.
In response, ICAO, the UN body responsible for determining standards for international flights, set a goal of ‘carbon neutral growth from 2020’, meaning that the yearly net emissions output from the sector was to be capped at their current levels in spite of the enormous growth that was then projected for the industry.
Until technological advancements could make this scientifically possible however, ICAO Member States decided that in the interim, a reputable market mechanism had to be set up to allow airlines to purchase emissions reductions in other countries and sectors.
The Carbon Offsetting and Reduction Scheme for International Aviation or CORSIA adopted by ICAO in October 2016 under Resolution A39-3 carried high hopes of bringing to bear that essential market based measure.
Then 2020 happened. The pandemic, by virtually obliterating flight demand for such an unprecedented period, flat-lined emissions temporarily. A short term win for the environment maybe, however this aberration could possibly be a dagger for the long-term effectiveness of CORSIA.
At a time when most of the core elements for CORSIA implementation were very close to finalisation, panicked, financially strapped airlines, suddenly developed cold feet regarding what they had already committed to. Climate Action Tracker has since rated the scheme as critically insufficient.
What were the decisions made since then, and what are the implications for CORSIA’s actual potential to reduce emissions, when the market begins its pilot phase in 2021? More importantly, what can Small Island Developing States do to help CORSIA get back on track? As they have done within the Paris Agreement negotiation process, can they be the moral voice for ICAO to heed?
Charting the CORSIA
But first, how is CORSIA expected to work exactly? What are the core components needed to ensure that the market mechanism operates effectively?
- Most critically, you need to establish a credible baseline, against which to measure future increases or decreases in industry emissions. Originally, the agreed baseline was intended to be an average between emissions in 2019 and 2020. In order to comply with this, airlines needed the right technical guidance and training. These rules come in the form of the Standards and Recommended Practices (SARPs), developed by ICAO technical committees over two years.
- The second crucial component of CORSIA is the establishment of a Technical Advisory Body (TAB) to decide on the eligibility of the emission reduction units that airlines can purchase to meet their offsetting requirements. This is critical for the integrity of the entire system, as potential offset programmes are measured against a robust emissions units criteria (EUCs). The TAB officially forged ahead with this work in 2019 and their initial recommendations have since been accepted by the ICAO Council. They are currently evaluating another round of applications.
- A final core component of CORSIA is that for the sake of fairness, the system must be less punitive to emerging airlines compared to the larger, more established airlines with greater historical emissions. To achieve this, for the first decade or so, the number of offsets each airline will need to buy will depend more on the entire industry’s emissions growth since 2020, rather than any change in that individual airline’s CO2
Core systems are practically in place and working to be ready in time for 2021. So why then the pessimism that CORSIA will fail to deliver?
Due to the COVID-19 pandemic, emissions from 2020 are now significantly lower than what airlines would have ever previously contemplated. Consequently, the International Air Transport Association (IATA), which represents over 80% of all airlines, formally requested that the ICAO Council shift the CORSIA baseline to a solely 2019 emissions baseline instead.
This backtracking flies directly in the face of rhetoric from world leaders pledging a green recovery from the pandemic, particularly in Europe. However despite this lip service, France, Germany, Italy, the UK, Finland, the Netherlands, Spain and Greece all lobbied the ICAO Council to adopt the adjusted baseline, in keeping with the general trend of carte blanche bailouts for airlines without green strings attached.
The ICAO Council subsequently folded to the pressure, agreeing to the new requested baseline for the duration of the pilot phase (2021 – 2023). The repercussions of this decision on the overall credibility of CORSIA is not immediately clear; it is largely dependent on the shape of recovery from the pandemic that the airline industry makes.
However aside from the bad precedent set by the 36 member Council unilaterally changing a decision adopted previously by all of ICAO’s 193 Member States, it is very likely that airlines will avoid having to buy any emission credits for the next three years under this new baseline. This is a particularly tone deaf position for such a high polluting sector at the start of a decade globally designated for ramped up climate action.
Another fundamental issue that can derail CORSIA is that of double counting. You see, governments are required to bring forward new climate plans every five years, representing their highest possible ambition in climate action. Accordingly, offsets purchased by airlines under CORSIA, cannot also be reflected on the emissions ledger of the host country when demonstrating the achievement of its climate plan. If that happens, both the ICAO and the UNFCCC will record the emissions reduction when in fact the atmosphere actually only benefits once.
Like CORSIA, Article 6 of the Paris Agreement also governs the functioning of a market mechanism for the trading of emissions reductions units. However at the last two major global climate conferences governments failed to agree on the specific guidelines that will operationalise Article 6. If the eventually agreed guidelines do not allow for robust accounting and/or are incompatible with CORSIA, countries could exploit the loopholes of one system and effectively render the other meaningless.
Another avenue for double-counting may be via the carbon credit programmes that CORSIA approves. Take the Clean Development Mechanism (CDM) for example, a relic of the Kyoto Protocol. As noble as the intentions of the mechanism were originally, it has resulted in a proliferation of carbon credits of dubious quality, reflected by low market prices. However the ICAO’s Technical Advisory Body (TAB), in their assessment of the mechanism, has concluded that its goals are consistent with its emissions unit criteria and therefore recommended its inclusion in CORSIA.
Now, independent studies have shown that many of these CDM credits are non-additional, meaning they are derived from carbon reduction projects that would have occurred or continued even without financing from the sale of the credits. Moreover, there have been longstanding concerns of double counting of carbon reductions from CDM projects if the reductions have already been counted toward mitigation obligations made under the Kyoto Protocol.
It should be noted that the TAB’s report does acknowledge the CDM’s inconsistent history, particularly in complying with the two key issues of additionality and avoidance of double counting. However, the justification given is that going forward, CORSIA will be able to more stringently enforce these criteria and will be granted the duration of the pilot phase to prove this ability.
Small Island Developing States have always strongly insisted on a zero tolerance approach to double counting under the Paris Agreement, and have been actively working to ensure that the rules being developed under Article 6 actually achieve this. It is in their best interest therefore, to bring this brand of advocacy to the CORSIA process as well. By taking a more active role in ICAO’s technical expert groups, small islands can ensure compatibility with the rules to be eventually developed for Article 6. More crucially, it will grant them closer access to monitor the performance of the CORSIA approved carbon credit programmes. Given the difficulties ICAO has had so far in holding entities to their commitments, this extra layer of oversight in the negotiations process may prove critical.