Observations about COP 26 and aviation

The aviation industry should be disappointed about the outcome of COP26 and also in Australia's lack of ambition to reduce emissions.  It is in the interests of aviation that all sectors share in responsibility to reduce emissions. The difficulty for aviation is that a significant proportion of its revenue is sourced from personal discretionary income. For a growing proportion of the population with a concern about climate change and the lack of meaningful short-term 2030 emissions reduction targets in Australia, people may feel that they can only make a difference through reducing air travel. The reality is that there are more effective economy wide measures that should be taken.

The delay in reducing Australia's reliance on coal power, a sector where the most significant and rapid reductions can be made, means that more of the emissions reduction task is implicitly transferred to sectors like aviation (that still have some time to wait for the next generation of technology). Without a price on carbon, there is no rational way to direct capital to the least-cost opportunities to reduce greenhouse gas emissions. In other words, it will continue to rely on government 'picking winners' and doing it poorly, like carbon capture and storage. This is the problem that has beset the electricity generation sector for some decades and the lack of any meaningful policy in Australia means that these issues are destined to occur in other sectors like aviation.

Similarly, the reluctance of the Australian Government to introduce current emissions standards for vehicles in Australia will continue to delay the introduction of cleaner and more efficient vehicle technology; so the overall contribution of transport to emissions in Australia will remain higher and can be expected to grow. We should recall that Tesla had its origins in regulations in California that required a proportion of the vehicle fleet to be electric. The National Party has also demanded that the entire agriculture sector be excluded from targets. The flip side of excluding a sector is that it may miss out on investment.

The other significant challenge for aviation is that because so much of the Australia's emissions reduction plan relies on the purchase of emissions reduction offsets, many of which will be from overseas, the price of these permits is expected to rise significantly. Aviation will continue to be reliant on these permits for some time until major technological change such as green hydrogen can be introduced. So it may find itself being not only a price-taker when it come to aviation fuel but also a price taker when it comes to the purchase of emissions permits. There is a very practical problem with offsets at this scale: the planet isn't large enough - there is simply insufficient suitable land to offset emissions in the volume suggested by the Australian Government. 

Aviation emissions are not referred to explicitly in the COP 26 Conference Decision. The decision refers only to...'Expressing appreciation to the Heads of State and Government who participated in the World Leaders Summit in Glasgow and for the increased targets and actions announced and the commitments made to work together and with non-Party stakeholders to accelerate sectoral action by 2030...'As one of those sectors, aviation is expected to take accelerated action. How it will do this is a mystery in the absence of meaningful policy framework.

Some nations came together prior to COP 26 to promote aviation decarbonisation. Twenty countries launched the International Aviation Climate Ambition Coalition (IACAC) at COP26 on 10 November. New Zealand and the USA are signatories but Australia is not. Another initiative is CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), which is a worldwide market-based scheme for the aviation sector to address CO2 emissions. This scheme has been criticised as being unlikely to make any material difference to aviation decarbonisation (see EU airline credits program comes under renewed scrutiny).

A final observation is that the National Greenhouse Inventory for Australia is too coarse to be allow trends and changes in domestic aviation to be identified. Unlike the road transport sector, domestic aviation is grouped, so it is impossible to identify trends and changes in general aviation, recreational aviation or commercial airline emissions. For an update on trends and developments in low emissions technology, there is this article on the ABC News.

Stephen

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