President Obama’s signature on a law authorizing the Secretary of Transportation to bar U.S. airlines from participating in the European Union’s emissions trading system underscores the urgent need for a global approach to reducing greenhouse gas emissions from the fast-growing aviation sector.

The new law is the latest salvo in an international brouhaha triggered by the EU’s attempt to regulate greenhouse gas emissions from flights to or from Europe.  Dozens of countries, including the United States, protested the move as an affront to national sovereignty and a violation of international aviation agreements. The EU acted after years of talks within the International Civil Aviation Organization (ICAO) failed to result in a global agreement to reduce aviation emissions.

The bill is the only climate change-related legislation to emerge from the current Congress, which has not acted on any proposals to reduce greenhouse gases.  The bill, with strong backing from U.S. airlines, passed both houses with strong bipartisan support.

The president’s action yesterday closely follows two related developments:

• On November 9, the ICAO Council set in motion a series of actions that could help pave the way for adoption of a global approach for addressing greenhouse gas emissions from aviation at the ICAO Assembly scheduled for September/October 2013.
• On November 12, the European Union announced that it would “stop the clock” on incorporating international aviation emissions into its emissions trading system to allow ICAO the time to reach agreement on “meaningful international action” at its Assembly next year.  The EU requirements were set to take effect this year.

ICAO is the multilateral body through which governments manage international aviation.  It is clear from ICAO’s action that it wants to maintain its supremacy over all issues related to international civil aviation.  The EU’s last-minute decision signals its desire to avoid the trade battles that were stacking up if it moved forward to implement its trading system on international flights.

All eyes are now on ICAO, and the substantial challenges it faces. This effort should be helped by a newly created High-Level Group of senior government officials from 15 countries.  It will also be able to draw on the 15 years of technical work by various ICAO working groups analyzing market-based measures for curbing greenhouse gas emissions.  The three options on the table are an international emissions trading regime, mandatory emissions offset, and offsets with a revenue-raising mechanism.  (See background on past ICAO efforts.)

For a successful agreement to be reached, two critical issues must be resolved.  First, the Assembly will have to decide what level of emissions is acceptable.  At its last meeting in 2010, it set a goal of stabilizing carbon dioxide emissions from this sector at 2020 levels (Resolution A37-19).  Whether this satisfies the EU’s demand that ICAO agree to “meaningful international action” may become an important point of contention.

A second critical issue relates to the equitable treatment of airlines from developing countries.  Emissions from developing countries’ airlines are growing substantially, at a much higher rate than those from developed country airlines.  How to deal equitably with all countries remains a critical issue in ICAO just as it does in the broader discussions of action to limit global greenhouse gas emissions under the UN Framework Convention on Climate Change.

The United States and its airlines played a critical role in the original Kyoto Protocol negotiations in getting agreement that ICAO would be assigned the role of addressing emissions from this sector.  After 15 years of discussion, with greenhouse gas levels reaching new heights, it is critical that the United States and its airlines now do their best to ensure that ICAO finally delivers.