CHAPTER SIX
The Future
is Green
Environmental initiatives, including
airspace issues and the EU ETS
The case for the defence
Let me be clear. I am not a climate change expert. But for me the evidence plainly shows that aviation is not a major offender when it comes to the environment. In fact, it is by far the most proactive industry in the world in terms of environmental mitigation. And it could do even better if governments and big oil companies actually lived up to their green claims and supported the industry’s efforts rather than hinder them.
The environmental problem has always been there. The US Environmental Protection Agency first issued proposals about aircraft emissions in the early 1970s. It has really gathered pace in the last decade though, as climate change became a media headline around the world. It is a legitimate concern but many green organizations have manipulated the facts. Aviation has been an easy target. For environmentalists, airlines became the worst polluter, the antithesis of the green brigade that “cared” about the planet. Who isn’t aware of a big jet flying overhead? This simple emotive image has proved a useful tool for activists more interested in capturing votes or new members than in effective measures that would make our planet greener.
A few more facts should set the record straight. Modern aircraft are more fuel efficient than a compact car. A jet coming off the production line today is nearly 80% more fuel efficient per passenger seat kilometre than one delivered in the 1960s. And with a load factor historically averaging 76%, aircraft have far greater occupancy levels than other forms of transport. Moreover, the vast majority of aircraft emissions (around 80%) come from flights over 1,500km for which there is no practical alternative. The list could go on and on.
There is hard evidence that aviation takes the environment seriously too. Look at how the industry dealt with noise. For a long time, this was the biggest complaint against airlines. In the 1970s, the fast development of airports and residential building close to airports had an impact on local communities living in the airport neighbourhood. A lot of good work was done by airports but the real issue was producing comparable or even more power from jet engines while reducing noise.
Government regulations emerged in the 1980s. The European Commission proposed tough noise standards. A lot of aircraft wouldn’t have taken to the sky if these new laws were ruthlessly applied. There was a so-called “Hush Kit” battle (named after the hardware applied to engines to make them quieter) between European and US regulators, which was won by the United States. I was involved in these discussions because I was a member of the Advisory Board of Pratt and Whitney and the European Commission President was my former boss, Romano Prodi. The EC regulation was tough but so was the US reaction. If the legislation had passed it would have meant that a significant number of aircraft operated by the US airlines would have been banned from flying to Europe. ICAO had the mandate to handle airspace issues, and while it deemed the EC initiative illegal, it did set noise standards that all airlines had to meet. These became more stringent over time, so airlines had no choice but to ensure their aircraft became quieter. Today, the latest generation of high bypass ratio engines means aircraft are 50% quieter than they were just ten years ago.
Examples such as this show how green organizations have often distorted the truth. And they weren’t the only ones to lose touch with reality. Respected personalities, such as the Archbishop of London, Richard Chartres, also entered the debate. Referring to CO2 emissions, he actually proclaimed that “flying abroad for a foreign holiday is a sin against the planet”. Not the most well thought out sermon.
Still, statements such as this egged on the other green associations and campaigners. They understood that they could benefit from this debate. Raising money and receiving subsidies becomes much more likely when the debate becomes heated and fought in the public domain.
From the beginning of my time at IATA, the Corporate Communications Department was receiving requests regarding IATA’s position on the environment. I must admit we had no clear policy. With no future plans or any defined strategy, we had to limit our answers to a blunt, single fact: aviation is responsible for 1.8% of man-made carbon emissions. The figure came from the United Nations and it could be easily and advantageously compared with the 18% of the car transportation output or the 35% emitted by electricity and manufacturing plants. We argued this clearly demonstrated the small role of aviation in the CO2 emissions hit parade. It was all true but it was no excuse for the lack of an environmental strategy.
Despite the magic 1.8% number, the pressure on aviation was growing. Green campaigns were building momentum. They pointed at contrails in the sky as an obvious sign of airline emissions. They asked how a massive four-engined jet flying from one end of the world to the other could be doing anything other than harm.
The misinformation had to stop. I decided it was time to fight back in a more coherent and structured fashion.
Widening the focus
I took over IATA in the aftermath of 9/11. The industry had different priorities then and the environmental debate was lost in the struggle to survive. One crisis after another battered our member airlines. On the question of the environment, we simply hid behind the 1.8% figure and got on with other business. But it became increasingly clear as time went on that this lack of a strategy would no longer suffice. I had some initial conversations with a few of our Board members but the subject held little interest for most of them. The first time the Board formally discussed the environmental issue was in December 2003, but this was mainly because the industry had to present its position at the 2004 ICAO Assembly, which had the environment on its agenda. The industry position was not very strong. We said we were concerned by unilateral European environmental taxes and emphasized the need for ICAO to remain vigilant. It was logical to conclude that paying a tax in one country did nothing for global climate change. It just put fares up a bit and the money went straight into the government bank account, doing nothing for the environment. Our basic gameplan remained unchanged: prepare data on aviation’s contribution to global emissions, comparing it with other modes of transportation.
At the February 2004 Assembly, ICAO approved a resolution urging states to refrain from the unilateral imposition of taxes until the next ICAO Assembly in 2007. It didn’t excite me much at first but I came to see this as quite an important result. Stopping the introduction of carbon taxes gave me a three-year window to build consensus on a strategy that could be presented at the next ICAO Assembly. I had already become convinced that whatever the strategy was going to be, it had to generate excitement beyond the industry. I didn’t want governments picking on aviation, saying this is what the public wants.
In 2004 though, it is probably true to say that some of our customers were uncomfortable with the idea of flying because of the climate change debate. The green campaign was ramping up and aviation was firmly fixed in its sights as the chief villain. We were not in the wrong but nobody believed us. We could no longer muddle our way through. The environmental issue had to be met head-on.
The first challenge was to understand what airlines thought about the aviation environmental problem and, just as importantly, what governments thought about it. It was necessary to understand not only what we should do but also to put any proposals in a regulatory context. My efforts got off to a bad start. I went to the United States, where my meetings included a visit to the Air Transport Association of America (ATA). Try as I might I couldn’t sell the idea of an environmental strategy. In essence, I was told the United States had not signed the Kyoto Protocol, and therefore the environmental problem didn’t concern them. And the Bush Administration was right behind this position.
Shortly afterwards I met with Minister Yang Yuanyuan of the Chinese Civil Aviation (CAAC). I knew him well as we had met at a conference in Singapore a year earlier. I had made the keynote speech and ended by saying that aviation was global and that we all communicated in English, the lingua franca of the industry. As I knew the Minister was there, I highlighted the fact that the Chinese were going it alone by having their air traffic controllers communicate in Chinese with Chinese carriers. I said this was a safety risk because Western pilots in the same airspace cannot understand what is going on. The audience was shocked but not the Minister. He spoke after me and expertly put the ball back in my court, saying he was sure that IATA would help train the 5,000 or so controllers in very quick time. We talked afterwards and together with Berlitz, set up a very successful technical language school. It paved the way for greater cooperation with the Chinese and we have seen some spectacular results, especially in safety.
In fact, in 2005, safety was the number one priority for China rather than the environment. Minister Yang appreciated IATA’s role in assisting CAAC but the environment was simply not part of the package. Having drawn a blank with the United States and China, a couple of months later I went to New Delhi to meet the Indian Minister of Aviation, Praful Patel. Minister Patel was a visionary man who understood aviation’s importance to a country of over 1 billion people. But the answer here was similar to the one I received in China. The priority was putting aviation back on track after years of inaction. In Africa, I also hit a brick wall. Their biggest issue was safety. The continent had a hull loss rate that had been embarrassingly high for many years—over ten times higher than the world average in fact.
It would be fair to say the outcome of my world tour was not very encouraging.
Getting prepared
I had stalled on the global stage but in Europe the climate change debate was moving up through the gears. It wasn’t long before the European Parliament initiated a study on the environmental impact of aviation. Around this time, in the United Kingdom, the greens organized noisy demonstrations, with crowds of people camping in the Heathrow area while the third runway was under discussion in the UK Parliament.
The media kept on asking the same question: “What is the industry position?” The magic 1.8% number was not enough to feed the growing frenzy. Aviation was losing the battle.
Despite the poor answers from various corners of the globe to my environmental questioning, I was determined to convince the Board that a wait-and-see strategy was not an option. As far as I was concerned, IATA had to define a position for discussion at the Board meeting in Tokyo in December 2005. Airline CEOs listened politely but had different opinions, with some wanting us to emphasize the 20% fuel efficiency we had achieved over the last decade while others took a more aggressive stance, weighing the 1.8% contribution of aviation to carbon emissions against its 8% contribution to global GDP. Nevertheless, the discussions were very positive and in December 2005 the Board endorsed what we came to refer to as the Four Pillar Strategy: new technology, more effective operations, more efficient infrastructure and positive economic measures.
Technology is an important driver for progress. Environmentally, it has helped with the accelerated development of alternative fuels as well as with more advanced materials and systems for airframes and engines. Avionics for enhanced air traffic management systems also come under this heading. More effective operations covered fleet renewal, increasing load factors and a multitude of details such as electric towing vehicles and using airport power rather than having aircraft run their auxiliary power units. More efficient infrastructure can make a real difference. By addressing airspace and airport inefficiency, governments and infrastructure providers have the potential to eliminate up to 12% of aviation’s CO2 emissions. The implementation of a Single European Sky and the US NextGen air transport system are a top priority. Last, but not least, economic measures should be used to boost the research and the development of new technologies rather than act as a tool to limit demand. Punitive taxes do not improve environmental performance. An emission trading scheme could be a cost-efficient solution, but the system has to be implemented on a global basis under the leadership of ICAO.
For once, I had an easy time building consensus among the aviation partners. People were a bit surprised at the time, given the stormy relationships that existed between certain partners, but we all have the same commitment to enhanced performance and environmental mitigation. There was little in the way of competitive or business issues to cloud the talks. And the Four Pillar Strategy was a good one, spreading accountability so no one sector felt isolated. I took personal responsibility for having all our partners on board. Tom Enders of Airbus, Alan Mulally at Boeing, Eric Bachelet at CFM, Sir John Rose of Rolls Royce, Marion Blakey, former FAA Administrator and now Chairman of AIA, were among those with whom I talked. Northern European airlines such as SAS and Finnair were just as happy as their Southern counterparts with this unity. They felt the industry finally had a proactive approach. Lufthansa was also pleased, particularly with the technical aspect. Asian and US leaders, such as Gerard Arpey at American and Fred Smith at FedEx, also appreciated that this was a balanced solution that gave the industry time to adapt while sending a strong message. Aviation was the first sector to meet this challenge head on.
The biggest surprise for me was dealing with airports and ANSPs. For the first time, we were quick to agree with Alexander Ter Kuile, Head of the Civil Air Navigation Services Organization (CANSO), and Robert Aaronson, the ACI Chief. This strong camaraderie meant a lot to me and the entire value chain being on the same wavelength on how to approach the environment issue had to be made known to the general public. I didn’t want the strategy presented with an IATA flag even though we were responsible for mobilizing the industry. Everybody needed to be involved from first to last if this was to work, each partner responsible for a piece of the jigsaw.
Apart from the Four Pillar Strategy, we identified five key points that had to be stressed every time the environment was on the agenda:
• International aviation was excluded from Kyoto because ICAO was the most appropriate United Nations agency to find and implement a solution.
• Air transport is not a major source of greenhouse gas emissions as it contributes just 1.8% of CO2 of man-made emissions.
• Air transport is not the most polluting form of transportation and fuel efficiency had improved 20% over the last decade.
• Aviation is not paying tax on fuel as it pays $42 billion annually for its own infrastructure.
• Air transport makes the global village a reality.
The industry under pressure
While all this was going on, the 2006 Stern Report on the economics of climate change was published and the evidence gathered led to a simple conclusion: the benefit of strong and early action far outweighed the economic cost of that action.
The fact that had the biggest impact from the public perspective was an acknowledgment that aviation was a fast growing business. The report predicted we would increase our share of man-made emissions to 5% by 2050. This was the point at which the Archbishop of London piped up and declared flying a sin, in effect giving the newspaper headline writers a day off because that sort of story just writes itself.
So while we had a much improved environmental strategy, we were still some way off winning the public relations battle. I pushed aviation’s credentials every chance I got and we were certainly winning respect for our work. But for many, that big jet in the sky had to be trouble for the environment. They couldn’t see past that image of a roaring jet engine and contrails overhead—which the environmentalists exploited to the full.
By the start of 2007, I knew it was time for another leap forward. The months ahead were going to be busy ones for the environmental agenda and we had to have a response ready. The main reason for the increased activity was the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report on Climate Change in May 2007. The IPCC Chairman was Dr Rajendra Pachauri and the report upped aviation’s CO2 contribution to 2% of man-made emissions. Pachauri is a serious scientist with great personal charisma. He has the patience to listen to others and is always ready to provide reasonable and achievable counsel. After a few meetings in Geneva and New Delhi, I built up a personal relationship with him and he was among the first to hear about our Four Pillar environment strategy. His suggestions did a lot for our credibility and future success.
Under Pachauri’s guidance, the IPCC shared the 2007 Nobel Peace Prize with Al Gore. I got to meet the former US Vice President at the house of a very influential friend of mine in Geneva, Thierry Lombard of the Lombard Odier private banking. Lombard Odier has a history dating back to the 18th century and is mentioned in Jules Verne’s famous novel, Le Voyage dans La Lune, when the bank is requested to fund the expedition. Dinners at Thierry’s house are always very special. His house captures the essence of Switzerland with a wonderful countryside setting and a sophisticated interior décor. This sophistication was reflected in the menus and the erudition of the host. You need to do your homework though— conversations could flow from international affairs to the stock market, and even the value of sponsorship (Thierry sponsors the Hydroptère, the fastest hydrofoil on the sea). I remember an anecdote from our first invitation to the house, just a couple of blocks away from our own home, that neatly captures the spirit of Thierry’s world. My wife, Elena, asked him how long the house had been in the family. It was a polite question to which the answer usually varies from a few years to a few decades. Thierry answered with a shrug: “Several hundred years.”
The dinner with Al Gore was a great one. If Dr Pachauri is the scientist, Al Gore is the inspired politician who understands the public impact of the climate change challenge and puts his strong spokesman skills at the service of a world campaign. I outlined IATA’s vision to the former US Vice President and he was very impressed. His questions were incisive and very different to the usual response of politicians, which is based on why something can’t be done. His vision was countered by Thierry’s pragmatic banker skills and I learned a lot about what would be strong yet achievable targets.
All things considered, the IPCC 2% figure was a good one for aviation. Yes, it had increased slightly from our magic 1.8% number, but this was coming from a respected UN agency and so couldn’t be disputed by the greens. Try as they might, they couldn’t make 2% sound like it was a lot. Aviation was a relatively minor offender according to the statistics. Having the moral high ground was just the start, however. I wanted to hammer home this advantage and dispel the myth that airlines are an environmental disaster once and for all. We had to make the public understand aviation was serious about its environmental responsibilities.
It was another gamble. If I set a challenging target for reducing emissions, what would happen if that target slipped by? IATA and the airlines would lose their credibility and aviation might never recover the lost ground. Environmental taxes and curtailed operations would be just a few of the penalties on offer for our failure.
I had set up a small IATA team, led by Philippe Rochat, former Secretary General of ICAO, who was IATA’s Environment Director. We discussed what we should do next. I also referred to the conversations I had with the two Nobel Peace Prize winners, Rajendra Pachauri and Al Gore, as to what an environmental roadmap should look like. However, we kept our work confidential and no word leaked out beyond IATA. The only information that we chose to disclose was the fuel efficiency results and this was because they had been partly brought about by earlier campaigns and so couldn’t be ignored.
The 2007 AGM in June in Vancouver was fast approaching. Although there was a huge debate going on about electronic ticketing, I knew I had to say something strong about the environment. I started asking our members if we should step up the pace on the environment but most felt we should take things slowly and that the small CO2 savings we were making would buy us some time. To be honest, many airline CEOs were more taken with the idea of fuel efficiency saving money rather than CO2 emissions. There was nothing wrong with that. Even though their focus was on reducing fuel to save money, the environment still benefited. In any case, most of these airlines weren’t facing the same intensity of environmental pressure as Northern European airlines. I warned them, though, that this would change in time. Better to get behind an industry position now than leave themselves open to complaint in the future. I lost count of the number of times someone said to me: “Giovanni, our contribution is only 2% and we have a good track record.” True, but my problem was that very few people outside the industry had any knowledge of all the work that had been undertaken.
The idea of a tough target was a very similar problem to the one I faced with the e-ticketing initiative. Every airline was different and so had different ideas about what could, and should, be achieved. In the United States, there was no sense of urgency, the US Government not having signed the Kyoto Protocol. In Asia and the Middle East, the priority was getting ready to conquer new markets with the rapid growth of their fleets backed by large government investment. Africa’s environmental culture was virtually non-existent and desperately lacking resources. Even Europe was not as united as I had hoped. The United Kingdom and Northern Europe—particularly Mats Jansson at SAS—were eager to push the bar as high as possible, to respond to the green parties that were gaining momentum in the political arena. Southern Europeans were not so motivated, concerned more with costs and under-performing national economies.
It left me with a difficult decision. It always is difficult when you have to set a target, but the airlines were nervous because they now understood that IATA was being run as a business and it expected targets to be met. As I have mentioned, I had taken the IATA job to implement change. And I reasoned that individual airlines were understandably engaged in the tough business of making money, leaving them little time to make sensible, long-term judgments on the environmental issue. IATA’s role was “to represent, lead and serve the airline industry”. I turned again to the notion of leadership. It would have been easy to delay the announcement, to find a consensus, and it is usually the sensible decision because it limits risk.
Building a consensus would have taken too much time, however. I knew going out alone—setting a target without consultation—was a risk. But risk, properly managed, is a key component of the CEO job. To lead, you have to love challenges and you have to love risk.
“I have a dream…”
I decided I would present the industry strategy and targets directly to the Vancouver AGM, in front of a group of 600 industry stakeholders and more than 300 journalists representing various media worldwide. I was going to do this without a proper assessment by the Board. In effect, I would ask the AGM to endorse my State of the Industry report, which would include the environmental targets. This was a calculated risk because I knew going through the proper channels at the Board would at the very least slow down the process and perhaps force the abandonment of my target altogether.
I didn’t have any figures in mind, more a goal we could aspire to. In this instance, I felt any mention of specific numbers would crystallize opposition faster than it would unite the industry. And I felt talking in terms of a dream might prove more inspirational. It worked very well for JFK when he announced he wanted to put a man on the moon before the end of the decade, even though NASA at the time had no idea how to do that. But his speech allowed the United States to recover lost ground and ultimately win the space race. Neil Armstrong realized Kennedy’s dream and in 2010 IATA gave him its Global Aviation Leadership Award (GALA). Neil is no longer with us, his passing, like his life, free from any special public ceremony. He was such a down-to-Earth man considering his status as the first human to set foot on another world. But never doubt his courage, determination and leadership.
His remarkable acceptance speech for the GALA honour actually mirrored my aspirations in 2007. He recounted man’s attempts to circumnavigate the Earth, noting how the time to do so has come down from three years to just over 90 minutes. Toward the end of his speech he said: “I have had the privilege of working for and working with remarkably skilled people.” This was typical Neil.
Prior to the Vancouver AGM, I needed to capture that same kind of raw appeal to colleagues to work with me to make the world a better place. I had to appeal to the heart of the industry, not the brains of the CEOs. I called for a meeting of my IATA environmental team. We discussed what I would say at the AGM in June. Every sentence and slide was analyzed in great detail and by the end of May we had a final text. I had to touch the audience, providing not only a vision of the future but a strong foundation from which we could reach out.
As I went up to the podium, I knew that I would be putting my personal reputation on the line. If I got this wrong, airlines would become a laughing stock for the green organizations. I had only informed the Board Chairman, CS Chew of Singapore Airlines, that I would deliver a strong, forward-looking speech, but as is the tradition at IATA, I didn’t disclose anything else.
The next 40 minutes were indeed some of the most intense of my life. When delivering a big speech, I usually concentrate on a couple of people sitting in the front row. I follow their expression to get a feeling of how the message is being perceived. On this occasion two Board members were the focus of my attention, Wolfgang Mayrhuber, CEO of Lufthansa, and Jean-Cyril Spinetta, the Chairman and CEO of Air France. I started my speech with an update on the economics of the industry. We were chronically in the red as usual, and I used the environment to counteract this. Here, I stated, “Our track record is good, reducing noise by 75% and improving fuel efficiency 70%. The billions invested in new aircraft will make airlines 25% more fuelefficient by 2010…but we have been silent in our success and we have now a reputation crisis.” I explained our Four Pillar Strategy as part of the solution. I said the commitment of IATA, of our members, and of our partners was encouraging. Against this background, I further explained we had to find the courage and strength to fly higher. No other industry had the same level of sophisticated technology, was able to work in the most difficult conditions at 30,000 feet at 30 degrees centigrade below zero. “I don’t have all the answers but our industry started with a vision that we could fly,” I continued calmly. “The Wright Brothers turned that dream into a reality and look at where we are now. We can see the potential building blocks for a carbon-free future.”
That last sentence created an electric atmosphere. There was an audible buzz. When I mentioned carbon-free future, I looked at Wolfgang. I’m not sure if he was looking at me because his eyes were wide in astonishment. It was Wolfgang the engineer who couldn’t support the idea that a carbon-free future is possible, considering the current state of technology. I was careful to note that the concept was an aspiration; and to achieve the vision we had to set targets and a roadmap that would be my responsibility to bring to the next Board meeting for review. Wolfgang and Jean-Cyril relaxed a little at this and at the end a long applause concluded the presentation.
Environmentally-speaking, a lot had happened in my 40 minutes on the podium. From being in a defensive position the industry had suddenly propelled itself forward and made the most committed approach to the environment of any industry. We would have a carbon-free future. And on our way to that future we would obviously hit the milestone of being carbon-neutral. In effect, we could fly more—grow our businesses— while keeping our level of CO2 emissions constant. I knew the bigger battle of concrete targets still lay ahead but my speech received a huge round of applause. The media loved the story too. The courage of our industry was clear to see and the public perception of aviation started to improve. All we had to do now was fix a deadline and find the money and technology to make the vision possible!
A united approach
June 2007 was also notable for a significant strengthening of the IATA environmental team.
We met with the World Wildlife Fund (WWF), known worldwide for its dedication to the environmental cause. WWF is a large organization with offices all around the world and with a total staff of over 7,000 people. Tom Windmuller and I met with John Leape and Paul Steele. The discussion was productive and the WWF was quite impressed with the airlines’ achievements and commitment. They didn’t realize IATA was quite so active on behalf of its members or that we could set the standards that determine the travel experience. We ended the meeting and left our experts to discuss the way forward for an effective partnership between the two organizations. The following week, Tom came to see me and said that Paul Steele could very well be interested in coming to work for IATA. I had been impressed by Paul’s leadership and was surprised to hear of his interest in joining IATA. Being responsible for an entire workforce, was he really ready to run a small team with a handful of industry experts? Although the team was short on quantity, it was high on quality. And we had taken full page advertisements in The Economist so weren’t being shy. A couple of weeks later, I met with Paul and finalized the agreement to have him join us. I was very pleased for two reasons. One, we had the right person on board, which was very reassuring for the future of our strategy. Two, the hard work that IATA had done so far was starting to pay off. The external perception of the association was clearly changing, to the extent that someone of Paul’s calibre would think of working for IATA. I asked Paul why he wanted to join IATA. He said he appreciated my passion and that the challenge of influencing an environmental strategy for one of the top global industry sectors was just too good to ignore.
Post-AGM 2007, our environmental work changed speed and its modus operandi. Once again, I turned toward the idea of targets, a demonstrable show of commitment. IATA’s Safety, Operations and Infrastructure (SO&I) division, under the leadership of Günther Matschnigg, former COO at Austrian Airlines, pushed hard in finding new efficiencies and new ways of working. Together with the forecasts provided by IATA’s talented Chief Economist, Brian Pearce, this helped formulate the roadmap. The task was nothing less than to identify how and when we could become a carbon-free industry. As part of that goal, the environment team was told to finalize a date for when we achieve carbon-neutral growth (CNG). This would be a tough enough target in itself. We had to stabilize our emissions output even if traffic increased as expected at around 5% per year. This was an important objective because it would kill the story that aviation’s CO2 emissions would grow. The 2007 IPCC Report said we would be 3% of man-made emissions by 2050, an improvement on the 5% cited by the Stern Report but still an increase. I wanted to nip that argument in the bud. We would be carbon-neutral in the short term and carbon-free in the longer term.
Our first priority was to build a model that would allow aviation to maintain its contribution to global carbon emissions at 2% despite forecast growth. We asked McKinsey to work with us and the model suggested that 2% was doable, as long as the whole value chain committed to achieve the necessary efficiency gains. The model took into account that airlines would modernize their fleet, technology development was expected from the manufacturers, and governments would have to commit to ATM investments and finally implement the Single European Sky and NextGen. The study also acknowledged that IATA member airlines were planning test flights with biofuels and this would be an important development going forward.
The work IATA was doing was having a big impact. ICAO couldn’t ignore what was going on and Roberto Kobeh Gonzalez, Dr Assad Kotaite’s successor, drove the 36th ICAO Assembly towards a position similar to that of the industry. That was a difficult thing to achieve. IATA had trouble finding consensus among its member airlines. I can only imagine what it takes to bring 193 countries to agreement. The BRIC countries (Brazil, Russia, India and China) are a particular issue in environmental terms. The problem is ICAO and the UNFCCC have different operating rules. In a nutshell, the Chicago Convention doesn’t discriminate—all states are treated the same. This isn’t the situation with UNFCCC guidelines and many countries don’t want to lose the advantages of being a “developing” nation.
But Kobeh and his very effective Secretary General, Raymond Benjamin, found a solution with a great deal of patience and intelligent team work. Their internal restructuring of ICAO also helped. I have enjoyed a special relationship with all the ICAO leaders, Assad Kotaite, Roberto Kobeh and Raymond Benjamin. It helped that ICAO and IATA had similar histories, inaugurated in 1945 with the aim of supporting civil aviation. We both wanted the industry to be safer, more efficient and more environmentally-friendly. It’s even harder for ICAO than IATA of course, as it is confined by UN procedures. Also a lot of governments were now sending environmental specialists to ICAO meetings, stifling the process with detail.
In spring 2008, IATA held an Aviation and Environment Summit in Geneva. Speakers included Scott Carson at Boeing, who had taken on the tough job of following Alan Mulally. Alan had left a real mark in the industry and left to run Ford, where he has made a huge difference. He is still considered to be on the aviation gang. But Scott did a great job too. I flew to Seattle to meet Scott just a week after he had taken office and he embraced the environmental mission straight away. Tom Enders of Airbus has been equally strong in supporting our green strategy. At the Summit, Scott, Tom and 11 other major companies and organizations pledged to work for a carbon-free future. The “Aviation Industry Commitment to Action on Climate Change” declaration demonstrated the united industry approach and was a clear statement of intent. Without a common strategy and a precise commitment to reduce our environmental impact, our future would have been at risk.
The road to Copenhagen, Part 1
IATA was invited to present its story at a preparatory meeting to the 15th Conference of Parties (COP15), the foremost summit on climate change. The preparatory meeting was held in May 2009 in Copenhagen in anticipation of the main event in December of that year. The invitation was a surprise as it was the first time the association had been asked to participate in a relevant environment event not as a defendant but as an industry leading by example. It was a great boost to the work we were doing.
The Copenhagen meeting gathered thousands of participants as well as the global media. The United Nations Secretary General Ban Ki-moon opened the event with a constructive presentation, followed by Al Gore who delivered a vibrant and passionate speech. The next speaker was Dr Pachauri who had been kept abreast of all the latest aviation initiatives. I was then called to the podium to present IATA’s story and aviation’s commitment to environmental mitigation. I was the only representative of an industry sector to be invited to speak. In my presentation I emphasized the work that thousands of people had done on behalf of aviation and the environment. It was a great success. Many of the green agencies that had previously identified aviation as the enemy of climate change came to congratulate me. Moreover, during the evening function at a wonderful old palace in the center of the city, Secretary General Ban Ki-moon invited me to visit him at the UN New York headquarters to update him on the industry’s achievements.
By the time of the IATA AGM in Kuala Lumpur in June 2009 we had come far enough to take the next step. The timeframe for our targets had to be announced. Otherwise, we would be in danger of losing momentum. We had managed to slow the external pressure on the industry’s environmental record, but it hadn’t stopped, and there were signs that it could increase again. Some wanted aviation included in climate change agreements. These were formulated at the national level, though, and so were entirely inappropriate for an industry that operated across national boundaries.
Another group of experts were supporting the so-called Maldives Adaptation Levy, a proposal for a $6-tax per airline ticket that would generate $10 billion. This money would fill the coffers of the Kyoto Protocol’s Adaptation Fund to help finance climate adaptation projects in developing countries. Other tax proposals had a similar strategy. Repeatedly I explained how strange it was that an industry that was in deep financial trouble and had the slimmest of profit margins—if any at all—was still considered a source of revenue and the sole target of environmental taxes. On top of that, we had already presented a daring environmental strategy. We had promised to do more than any other industry sector.
A few weeks before the AGM, I went to Delhi to update Dr Pachauri on the recent developments in our carbon-free initiative. While there, I also met with Indian Transport Minister Patel and the recently appointed Indian Minister for Environment, Jairam Ramesh. Ramesh received me wearing the typical Indian kurta, but his opening gambit was anything but traditional. With a big smile on his face, he said: “I am pleased to meet the $10-billion man who will solve many of our environmental problems.” I was surprised by this unusual greeting and probably the expression on my face gave away my amazement. The Minister immediately clarified. “A meeting of environment ministers and the European Commission is currently taking place in New Delhi. The idea of a levy on passenger tickets could help a lot. And its implementation is very simple. We are simply asking IATA to add the appropriate box to a ticket, cash the amount levied and credit it to the Kyoto Adaptation Fund.”
I explained why this was not acceptable under any circumstances. Aviation, at just 2% of man-made CO2 emissions, was going to foot the bill for an entire climate change program. Moreover, IATA couldn’t raise monies for a fund that was lacking in details. The meeting was pleasant enough but I cut it short. As soon as I jumped in the car, I started fighting this crazy idea, making a number of phone calls to alert the industry of the danger coming up.
There was an upside though. I realized the emergence of these new tax ideas could be used as leverage to get the industry’s agreement on target dates for our environmental strategy at the forthcoming AGM. I needed all the help I could get. Word was out that I was pushing for target dates and just as with e-ticketing, the excuses were coming in thick and fast. The Air Transport Association (ATA) of America sent me a letter saying they could not “support having a carbon-neutral growth (CNG) commitment any time before 2020”. As soon as I arrived in KL, smaller airlines raised similar objections. The global financial crisis, which was now biting deep, had forced them to abandon fleet renewal plans. So meeting tough environmental targets would be impossible for them, they said. I explained to them all that the postponement of our goal would weaken our position considerably and that the forthcoming Copenhagen Conference (COP15) could well see a push for the Maldives Adaptation Levy or a similar initiative. I promised these airlines that they would receive technical support from IATA regarding new routes and our environmental Go Teams would visit them to provide assistance regarding their fuel efficiency.
As I always say, no target, no business. I couldn’t be swayed from a longterm goal by temporary problems. At the same time, I knew that achieving consensus among so many different airlines with so many different objectives and such different financial resources would be a very tough job indeed.
The Board of Governors Meeting was held the day before the start of the AGM as usual. Another letter from ATA arrived, this one more difficult to ignore as it contained some strong political warnings and was signed by all the US IATA member airlines. They were particularly worried that the target for carbon-neutral growth would boil down to carrier-specific dates. So, airline A would be tasked with becoming carbon-neutral by such-andsuch a date. I called up some of the signatories to the letter and explained that not only the target but also the idea of individual commitment versus a collective goal had yet to be agreed. Rumours about the US carriers not supporting us were beginning to circulate, but I made sure I kept open the lines of communication. When issues like this arise, you need to be available personally. A formal written response would not be worth the paper it was written on. I needed to speak with the people involved and so I patiently waited for the arrival of the two US Board members, Gerard Arpey of American Airlines and David Bronczek of FedEx. It was a frank exchange, mainly centred on a North European−United States divide, but we set a window for the CNG target date and also agreed that it had to be an industry goal and not carrier specific. After further discussions centred on the needs of airlines in developing countries, we set the date for CNG: 2020. Finally we had backed up our Vancouver commitment to carbonneutral growth with a real target for implementation. Coupled with the rest of our work on the roadmap, we now had three sequential goals: (1) a 1.5% average annual improvement in fuel efficiency from 2009 to 2020; (2) carbon-neutral growth from 2020; and (3) a 50% absolute reduction in carbon emissions by 2050 compared with 2005.
G8 connections
The Kuala Lumpur AGM was a great success and we again captured media headlines around the world. Many questioned our target, however. Was it Mission Impossible? Despite everything we had done, the idea that aviation simply be included in a follow-up to Kyoto was still floating around government circles.
I targeted the G8 meeting in L’Aquila in Italy in July 2009 for a response. The environment was a particularly crucial issue as L’Aquila, a wonderful medieval city, had been hit by a devastating earthquake just a couple of months before. Prior to the G8 meeting, I flew to Italy to discuss the issue with the Italian Prime Minister, Silvio Berlusconi. He was very positive and understood aviation’s position. He went so far as to congratulate us for our efforts. But we had to have consensus from the G8 heads of state. And that meant I had to react quickly to gain consensus among their advisors.
I immediately called all the Board members of the G8 countries involved. They all reacted quickly, but the fastest ones were Wolfgang Mayrhuber of Lufthansa, Robert Milton of Air Canada, Haruka Nishimatsu of Japan Airlines and Dave Bronzcek of FedEx. To be honest, the United States was an easy sell because our strategy was now perfectly aligned with the US position. Dave had a good relationship with Carol Browner, the Head of the White House Office of Energy and Climate Change Policy. We went to visit her in her oak-panelled office in the White House and were impressed by her pro-industry approach. Ambassador Massolo also played an important role as Secretary General of the Italian Foreign Affairs Ministry. He chaired various meetings of the Sherpa Groups (advisors to the heads of state) that won the consensus we required. The G8 Meeting concluded that ICAO had sole jurisdiction over aviation environment matters. ICAO alone could decide what to do. It was a clear victory for the industry.
All of this happened within four days. It just goes to show the power of the IATA strategy and what can be achieved if the relationships are right. Unfortunately, far too often, the relationship between airlines and governments is a poor one. And I worry that it is getting worse, especially in Europe.
The road to Copenhagen, Part 2
Following his invitation in May 2009, I met up with UN Secretary General Ban Ki-moon in New York. It was a great success. I had prepared well, talking through my strategy with Sergei Ordzhonikidze, Director General of the UN office in Geneva and Under-Secretary General of the United Nations. He made some important suggestions for my meeting, which brought home to me how essential it is to test the waters if at all possible.
On my visit to see Ban Ki-moon, I was accompanied by Paul Steele and Doug Lavin, IATA’s US Director. We met with the UN’s environmental experts beforehand, briefing them on our work to date and the strategy going forward. We were then ushered in to the former South Korean Foreign Minister’s head-office, on the top floor of the UN building, taking a private lift to get there. It’s a relatively small room, wooden-panelled with a large UN seal on one wall. It’s far from impressive until you stop to think about the meetings that must have taken place, the conversations that have shaped the development of the world. Our meeting lasted nearly an hour and Ban Ki-moon, in his calm, deep-thinking manner, asked a lot of well-informed questions. He must have been happy with our answers as he called aviation a role model that other industries should follow. His appreciation was posted on the UN website and gave IATA’s efforts a great boost.
Despite the upbeat mood and the Secretary General’s public support, I was very concerned that December 2009’s COP-15 at Copenhagen would end in failure. In fact, I predicted as much to my colleagues on the way out of the UN building. There were so many pictures of the Secretary General shaking hands that it became clear how exposed he was. The Secretary General of the UN’s environmental agency, the UNFCCC, Yvo de Boer, was another hindrance. He had made no attempt to broker a deal. He seemed more interested in mobilizing popular support among green organizations. It was just rabble-rousing, getting young people into crowds to shout for a green agenda without understanding the reality. I think he believed that the 120 or so heads of state in Copenhagen would be impressed and write him a blank check. I’m glad to say he couldn’t have been more wrong. Out of the 30,000 people that went to Copenhagen, 20,000 were fierce environmentalists. There wasn’t a meeting, there was a circus—and an out of control one at that. People queued for hours just to get in and debates went on until the early hours without any end result. It was a lost opportunity to progress, harming the environment, harming business. The resignation of the Summit President, Ms Connie Hedegaard, didn’t help. Yvo de Boer resigned a couple of months after the Copenhagen event and disappeared from the environmental debate.
At least, IATA and ICAO played their cards right. I was involved in the transport session with President Kobeh of ICAO. The maritime sector was also involved and the difference between the shipping and airline industry couldn’t have been more pronounced. IATA staff helped enormously. The likes of Patricio Sepulveda, Juan Carlos Villate and Adefunke Adeyemi were part of the Chile, Colombia and Nigeria delegations respectively. They were able to provide vital technical assistance and knowledgeable support at government sessions.
It was important information. We must have governments that are serious about both aviation and the environment. For example, only governments can make decisions about airspace. And the potential CO2 savings in properly managed air traffic systems is huge. It is just one of several major issues that aviation partners must resolve to help airlines achieve their environmental goals.
Improving air traffic management
One argument about the environment came easy. CO2 emissions are a result of fuel burn, and fuel is expensive. Airlines really don’t want to spend any more on fuel than they have to—I think anybody can appreciate that, even the most ardent green supporters. So airline efforts to cut fuel are directly related to improving the environment. An IATA analysis of 144 airlines showed they managed a 5% increase in fuel efficiency in 2010 compared with 2009. This is on top of the huge improvements since the advent of the jet engine. As mentioned earlier, the engines today are close to 80% more fuel efficient than their 1960s counterparts. It is an ongoing campaign. There are a number of ways to be more fuel efficient and airlines are involved with them all. They have spent money on new engines and have taken weight off the aircraft. Passengers may not have noticed it but catering trolleys are lighter, seats are lighter, even the cutlery weighs less. In keeping with the modern world, weight became an obsession. IATA was the fitness coach, constantly challenging airlines and manufacturers to work hard to lose the extra pounds. And when we hit upon some new way to shave off another ounce or two, we shared the findings with all the membership through our dedicated teams, in particular with the smaller airlines that did not have the resources to spare for this kind of work.
Sharing operational efficiency improvements became commonplace through IATA’s Go Teams, after called Green Teams. These teams were composed of pilots, flight dispatchers, engineers and air traffic controllers. They had been set up to assist airlines to improve their fuel efficiency and exchange best practices. On average, the assessments done by the Go Teams identified and validated around 10% in fuel saving opportunities. That’s millions of tons of CO2 emissions. The IATA Board of Governors didn’t comprehend the effectiveness of the Go Teams immediately. Some 60 airlines had undergone the process by the time I had to advise our Board members to support the service. Even here, among respected airlines, our Go Teams managed to make a difference, saving 2% to 12%. But the real difference was in the attitudes of the CEOs. Some accepted the Go Team visit openly, like Wolfgang Mayrhuber at Lufthansa, and talked about the numbers. Others wanted to be more discreet and there was one notable dissenter who didn’t want to undergo the analysis at all. We promised we would keep GoTeam findings confidential if that was what the airline requested, but I can only assume the European CEO in question was apprehensive about the results. Or maybe he erroneously thought his airline was still the best in the business.
On top of the Go Team visits, IATA started a campaign called “Save a Minute”, which, as its name indicates, was aimed at shortening every flight by one minute through better airspace design, procedures and management. We calculated this simple saving would reduce fuel consumption on a single flight by an average of 62 litres and CO2 emissions by 160 kilograms.
But this is small change compared with the real big ticket item in fuel savings: let airlines fly on a route that gets them directly from A to B rather than force them to zigzag along air corridors and across checkpoints that add miles, time, fuel burn and CO2 emissions to every journey. The service from Rome to Amsterdam, just as an example, is unnecessarily complicated. It sets an aircraft off across the Mediterranean heading for the South of France rather than straight up through Italy. Moreover, airlines should be able to take-off and land in a manner befitting 21st-century technology. There is no need for the levelling off, which was normal practice; climb to a certain altitude, stay there for a while and then climb some more. It’s the same coming down to land and it was intended to improve safety. It worked well but then so did the telegram and black and white TV. Times change and the industry must change with them. Green departures and continuous descent approaches (CDAs) should be the norm. Where this has been in use, over 32,000 metric tons of CO2 have been saved in a single year at a single airport.
The barriers to CDAs and other performance-based navigation ideas are usually technical and financial. These can be tricky to solve but not impossible. Reduced Vertical Separation Minima (RVSM) took a few years to implement but is now in use throughout the world. It makes better use of the airspace available by reducing the vertical separation—something that can be done safely with technology. High-level route changes or working with entire airspace blocks is more difficult. Most often the problem is political as countries seem to think that implementation of a new system would force them to relinquish their sovereignty over their airspace. This isn’t true at all. They are simply required to harmonize with neighbouring airspace blocks and update to modern avionics. So when we talk of a Seamless Asian Sky, that doesn’t mean one owner. Every country still retains control of its airspace but the blocks are harmonized. Another problem is the military/civil airspace split, with the former keen on hanging on to old territories. This is what stops an aircraft flying up through Italy on the Rome−Amsterdam route. And once in a while the problem is technical as countries desperately need to upgrade old infrastructure.
I was personally involved in a lot of IATA’s route enhancement efforts due to the political nature of the problem. The Pearl River Delta issue is a good example of how sensitive the issue could be. Mainland China has political leadership over Hong Kong and Macau and so it was difficult for the Special Administrative Regions to speed up any processes aimed at enhancing take-offs and landings in the area. But we knew that any approach to Hong Kong over Mainland China was 25 minutes longer than it needed to be. During the many meetings I had with the Civil Aviation Authority in Hong Kong and their counterparts in Beijing, I was able to make some headway and new routes were eventually opened. Informally, the two major routes were called IATA-1 and IATA-2 in appreciation for the role we played. These routes saved time, fuel and emissions for flights across Mainland China and into the Pearl River Delta, although the latter region still remained slower than we would have liked.
It was a long, tough process. One day, I was having lunch at the Ritz Hotel in Beijing with an old Chinese politician, remembering the days when I negotiated establishing an Italian pipes factory in Tianjin. I asked him why it was taking so much time to achieve results on air traffic management despite the role of the central government, which could take decisions without any consultation. Part of the answer, he said, lies in the complexity of the region and converting to international norms. Interestingly, he also pointed out that Hong Kong’s special status is something that Mainland China is very keen to respect strictly, because the Chinese Government could one day offer the same type of status to Taiwan as part of a reunification process.
I’ve no idea whether the Chinese Government was, or is, considering this but it made me realize we had achieved something special and about as much as could be expected.
There were plenty of other meetings about getting new air corridors and most of the time our efforts were successful. ICAO, through my friend Dr Kotaite and his successor, Dr Kobeh, were always very supportive.
SES and NextGen
What really needs to happen is the harmonization of airspace. That means NextGen in the United States and a Single Sky in Europe. NextGen could save over 10 million metric tons of fuel by 2030, the equivalent of nearly 34 metric tons of CO2. Estimating a fuel cost of $165 per barrel, it would save airlines $24.3 billion. Why the delay in implementation? And NextGen is moving quickly compared with the Single European Sky (SES), which is 20 years-plus in planning and counting. SES was on the agenda back in 1991. I was Chairman of the Association of European Airlines and had organized a campaign for passengers to sign a card to send to their Ministers requesting a single European sky. It was a response to the long delays the industry had experienced that summer. Colin Marshall at British Airways was at first reluctant to embarrass his Minister but he eventually realized we had to do something. Ministers across Europe received thousands of these cards. Karel Van Miert at the European Commission was very unhappy with me and showed me a document that said SES would happen within five years. I’m still waiting.
Europe has a single currency but 34 air navigation providers. By 2030, SES would save 5.6 metric tons of fuel, 17.7 metric tons of CO2 and $14.3 billion. Efforts to implement SES are painfully slow. Targets for ANSPs set by the Performance Review Board are very weak. The same governments that want to tax aviation for their environmental damage have delayed endlessly on projects that would bring about far greater environmental savings than any tax or trading scheme in existence. To be fair, this isn’t so much a problem with the European Commission, which is keen to further the program, but with individual states who are still reluctant to modernize their airspace. We need tough targets and we need strong penalties for failure to meet these targets. Otherwise we will still be talking about SES in another 20 years. It is a joke—but not a very funny one for the environment.
Fuelling the future
Rivalling harmonized airspace management as a major development in environmental mitigation efforts are biofuels. If aviation is to halve its CO2 emissions by 2050 compared to 2005, then biofuels will have a massive role to play. They have the potential to reduce the carbon footprint 80% compared with jet fuel.
Biofuels are simply fuels made from biomass such as camelina, jatropha and algae. The first two are hardy nuts adaptable to most environments and the third just needs a good dose of salty water. They are known as second generation biofuels and have put paid to the green contention that biofuels will make food prices soar because biofuel crops will take over arable land. Actually, rather than damage the world economy, biofuels offer potential employment to thousands of farmers in developing countries. And biofuels made from urban waste offer equally appealing benefits. Several airlines are now exploring this possibility with expert companies.
Technically, biofuels have been a challenge. Airlines certainly couldn’t afford to replace all their engines so biofuels have to be “drop-in”. That is, they have to work with existing technology and blend with normal fuel. We’ve managed to do just that and there are now commercial flights operating with biofuel. The other issue is financial. Biofuels have to be comparable in price to Jet A1 if we are to have widespread use. That hasn’t yet happened. At the moment, airlines would double or triple their fuel bill if they operated on biofuels. Doubling the production capacity—easy enough in a young industry—would reduce unit costs 5–20%. But the commercialization process needs help. Big Oil has been terribly disappointing in this respect. They colour their advertising campaigns green but they have never focused on aviation biofuels, preferring the margins in other lines of business. Only Exxon has shown any interest. The industry environment strategy targets 4% biofuels by 2020, but this will be tough due to the lack of support from the oil suppliers. There are many small entrepreneurs that already make biofuels, but only Big Oil can guarantee distribution to the thousands of airports around the world. Naturally enough, an airline has to have reliable and extensive supplies and realistically the major players have to step in. More research also needs to be done. The main biofuel of the future may still be in a laboratory somewhere.
The Secretary General of the UNFCCC, Christina Figueras, who has brought a completely new approach to the sector involving all the participants, welcomes the development of second generation biofuels. She makes presentations around the world outlining her support. Despite this, biofuels still receive limited government attention. One reason is the power of Big Oil behind the scenes. At $100 or so a barrel, aviation pays the oil companies around $160 billion a year, with refinery margins of around $15 billion. That’s big business that they would like to keep. Perversely, airlines are not seen as a major client though. So airlines pay big money for little attention.
Governments need to work with both carrots and sticks to give the fledgling biofuels industry the support it so richly deserves. The United States has passed legislation in support of the development of biofuels with programs led by the Air Force, the FAA, and the Department of Agriculture. The Obama administration has announced that the US Navy will provide the market with biofuels to support this new, alternative sector. The Navy and Marine Corps will partner with the Energy and Agriculture Departments and will share a $510 million investment over three years for the production of drop-in biofuels. Mexico has been an active player and Aeromexico, under the excellent leadership of Andres Conesa, is the first airline that followed up on my call to paint a plane in green and operate one flight on a specific route (in this case Mexico–Costa Rica) always powered with biofuel. This weekly service is as green as it can be. Lufthansa has also conducted a 1,200-flight test program using biofuels. The Hamburg−Frankfurt service used a 50% blend in one of its engines and saves about one ton of CO2 per flight. Results from all of these flights have so far returned normal data, underlining the fact that there are no operational issues.
The European Commission (namely Vice President Kallas and Commissioner Oettinger) has initiated discussions on how to fund research and motivate companies to be more active in the development of biofuels. The economic situation doesn’t help but unfortunately, the Environment Commissioner is really interested in the Emissions Trading Scheme (EU ETS), a program not supported by ICAO and which many have asserted violates the terms of the Chicago Convention and other generally accepted principles of international law.
EU Emissions Trading Scheme
The EC has finally bowed to rising international pressure to defer implementation of the ETS outside of Europe and give ICAO one more opportunity to coordinate an international solution to the carbon emissions of global aviation at its next triennial session in September 2013.
This is the correct decision and is part of a solution I have been proposing for some time. I started the battle against the EU ETS in February 2011. I met with John Mica, Chairman of the Transportation and Infrastructure Committee in the US House of Representatives, and we discussed passing a bill that would force US airlines to ignore the EU ETS. This stance has been backed up by the US Senate. I also met with Ministers of Transport in Russia, China and India. I told them that while many countries and organizations are working for a greener future, Europe was intent on keeping bankers happy.
I did not have to work hard to generate opposition to the EU ETS. The basic idea of the scheme was that any airline flying to or from Europe had to pay for their CO2 emissions. Effectively, they had to buy carbon allowances. No problem there if the idea was implemented on a global basis. Achieving CNG will need positive economic measures; it is the fourth pillar of IATA’s Four Pillar Strategy. But bizarrely, Europe insisted that airlines paid for their entire journey. So if Qantas flew in to London from Sydney, it had to pay Europe for all its CO2 emissions—even those that they emitted over Australia, over Asia, over the Bay of Bengal and so on. Why Europe thought this was fair is beyond me. It’s against the Chicago Convention, ICAO principles and, I would imagine, quite a few other clauses in international law. Clearly, it challenges the notion of sovereignty. Not surprisingly, there were some strong opposition comments, most notably from the United States, China and India. The Court of Justice of the European Union came down in favour of the EU ETS after a legal challenge involving Airlines for America, The National Airlines Council for Canada, IATA and some US airlines. It said that the EU isn’t a signatory to the Chicago Convention. Furthermore, the scheme only applied to aircraft taking off or landing in Europe, so it wasn’t overreaching. Europe has similar laws, on safety for example, that aren’t being questioned.
Not surprisingly, this interpretation did not satisfy other countries. Talks of a trade war intensified and those countries fighting against the EU ETS met together to announce their dissatisfaction. We could actually have got to a stage where US carriers could not fly into Europe. That would have been a complete nonsense in this day and age.
I started working on a solution after talking with EC Vice President Siim Kallas. After I left IATA, he offered me the job as President of ACARE (the Advisory Council for Aviation Research and Innovation in Europe). I appreciated the offer but I could not accept because Brussels is not the right environment for me. But I did promise to help find a way out of the emissions trading mess.
I presented my solution while I was receiving the Public Service Award from the President of the Republic in Singapore, Tony Tan Keng Yam, in February 2012. The idea is quite straightforward:
• First, all the countries fighting against the scheme must recognize that Europe’s intentions are good—that they have raised the bar on aviation and the environment.
• Second, Europe should limit the ETS to a regional scheme in 2013, suspend airline payments that are due in April 2013, and accept that ICAO is the right place to facilitate a global agreement.
• Third, Europe and ICAO must ensure that a global agreement is in place by the time of the ICAO Assembly in September 2013.
A couple of months later, at the Aviation and Environment Summit in Geneva, my good friend, South Africa Tourism Minister Marthinus van Schalkwyk, also called for the Commission to suspend the international scope of the EU ETS.
I am very pleased that the European Commission listened. I believe my solution means there will be no losers, only winners. And the biggest winner of all would be the environment. I am strongly in favour of what ICAO has done so far and I am confident it will find a way to broker a global agreement. Most importantly, if airlines can buy permits from other sectors, then we won’t have an explosion in prices that might result if airlines have to operate within aviation alone. ICAO could even add in IATA’s targets on fuel efficiency so we are sure to get to carbon-neutral growth by 2020.
Europe has said all along that EU ETS was born out of frustration with the slow pace of ICAO’s work. They have never denied that a global solution is preferable. Indeed, at the February 2011 Singapore Aviation Leadership Summit, Vice President Kallas said quite clearly that the issue “must be tackled, and solved, in ICAO. Of course, Europe wants to see a multilateral solution. And we are ready to battle for that outcome.”
Let’s hope that is true. If the EU could just spend as much political energy on the Single European Sky and supporting global schemes as it did on the EU ETS, we might actually get somewhere.