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Emissions Trading &
Sustainability
Sam Barone, President & CEO
Air Transport Association of Canada
September 16, 2007
ICAO-McGill University Institute of Air and Space Law
Aviation Safety, Security & The Environment: The Way Forward
Conference
Montreal, Quebec
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Presentation Outline
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Aviation and the environment: Clearing the Air
Operational Measures to consider before ETS
ETS & Sustainability: The need for Balance
ETS: Considerations for Public Policy makers
Conclusions
Aviation and the Environment:
Clearing the Air
The air transport industry is under attack by
environmentalists.
Exaggerations of our industry’s role in climate change
abound – Bishop of London has said flying is a sin.
Aviation’s environmental impact is small, but
increasingly in the spotlight.
Response is to tax and ground aviation, with no regard to
financial, social and economic impacts or sustainability!
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Aviation and the Environment:
Clearing the Air (2)
• Fuel has become airlines’ largest operational cost,
creating a strong incentive to:
• Operate modern aircraft and accelerate technological progress.
• Shorten air routes, open new ones i.e. polar direct tracks.
• Aviation needs international standards and global
policies, not unilateral, piecemeal short sighted fixes.
• In Canada, Transport Canada and ATAC have a
voluntary agreement for fuel efficiency gains and
Greenhouse Gas reductions.
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Operational Measures Before
ETS
• Aviation industry committed to reduce
environmental impacts by improving operational
efficiency and harnessing future technologies.
• Before considering ETS, need to harness the
scope in better ATC management at national,
regional and local levels to generate efficiencies.
• Better routings, result in better aircraft utilization
and less fuel burn and emissions.
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Operational Measures Before
ETS (2)
• Aviation needs better infrastructure enhancements – fuel
is wasted on the ground.
• Congestion and capacity shortages hamper
environmental improvements
• Flying greener approaches i.e. Continuous Decent
approaches
• Continue R&D in aircraft technologies – power plants
and materials.
• Alternative fuel development – PROSENE; Synthetics,
Hydrogen based fuels.
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Sustainability A Need for Balance
• Sustainable development calls for a balance and
is linked to economic, social and environmental
sustainability.
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Sustainability A Need for Balance (2)
• Sustainable development calls upon aviation to
meet the growing demands of our customers in a
sustainable manner, balancing economic
progress, with social development while being
environmentally responsible.
• Policy makers need to recognize the role of
aviation in a sustainable economy.
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Sustainability Juggling Impacts
NOx
Emissions
Airlines
Noise
Fuel Cost
GHG
Emissions
Airports
Local
Communities
Economic, Social,
Environmental
Transport
Canada
Canada
and the
World
ANS
Providers
ETS: Public Policy
Considerations
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• ETS impact assessments may not reflect market realities.
• Airlines are already treated as cash cows. Assumption
that airlines can pass on costs to its customers without
affecting demand is not accurate.
• Cannot compare ETS economics of aviation with other
regulated or unregulated sectors of the economy.
• Airline profitability will also be impacted because of
reduced demand and increased costs of ETS.
ETS: Public Policy
Considerations (2)
• In general, consumers will also be impacted.
• Less choice, service limitations, frequency
reductions, reduced range of services.
• Service to northern and remote airports may be
compromised.
• ETS could lead to market distortions.
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ETS: Public Policy
Considerations (3)
• For Canada with its vast territory service to northern and
remote points is essential.
• Cannot transplant EU solution to Canada, with small
population and vast territory. Inter-modal substitution is
not an option as in EU.
• Economies require connectivity, ETS could reduce or
even eliminate connectivity and positive economic
impacts.
• Puts sustainability at risk from economic and social
perspective i.e. Tourism and regional development
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The Way Forward
• Many Policy Options being considered
• Options include Economic instruments to tackle
climate change impacts of aviation: Fuel taxes,
emissions trading, emission charges, air
passenger duties.
• Canadian industry view is that we should exhaust
other avenues before we undertake another cash
grab from an industry treated as a cash cow.
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The Way Forward (2)
• Industry advocates technological solutions to
develop more fuel efficient aircraft and engines
with lower emissions.
• Operational measures such as better routings and
ANS.
• Carbon offsetting where Passenger decides to
mitigate the environmental footprint of their
travel. WestJet and Air Canada have implemented
different forms of this.
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The Way Forward (3)
• All aviation industry players must work together
to :
• Agree on a global approach to further improve
environmental performance;
• Better communicate their environmental
achievements and commitments;
• Improve public acceptance; and
• Drive proactive, voluntary and innovative solutions.