Abstract
The Fifth Assessment Report of the Inter Governmental Panel on Climate Change advised that in 2010, 14% of all greenhouse gas emissions was from the transport sector. Aviation produces around 2% of the world’s manmade emissions of carbon dioxide (CO2) which, according to the IPCC, will rise to 3% by 2050 if not checked. The air transport sector is a rapidly growing force and measures to mitigate aircraft engine emissions continue to be the main focus of the aviation community. Substantial technological, economic, infrastructural changes would be needed to attempt reaching the target of the 2015 Paris Agreement of an increase in 2° centigrade (and ideally 1.5c) warming against pre-industrial levels. In the air transport sector, there have been two mechanisms considered under carbon pricing to reach zero carbon growth by 2020: An Emissions Trading Scheme advocated by the European Union, as an answer to which ICAO has come up with a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) (which in and of itself is and emissions trading scheme) on the one hand, and a carbon tax (proposed by many) on the other hand. This chapter analyses the pros and cons of both CORSIA and the carbon tax through the arguments of various proponents of the two mechanisms.
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- 1.
Ibid. See ICAO Doc 7300/9: 2006.
- 2.
- 3.
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
- 4.
Parry, Ian; Mylonas, Victor; and Vernon, Nate, Mitigation Activities for the Paris Agreement: An Assessment for G20 Countries, IMF Working Paper, WP/18/193, August 2018, at 6.
- 5.
More than 80 NGOs oppose aviation sector’s carbon offsetting plans. See World Rainforest Movement (2015): REDD: A Collection of Conflicts, Contradictions and Lies. One commentator has said: “In theory, carbon trading reduces emissions in one place and allows them to continue somewhere else. In practice, the clean development mechanism massively increased production of hydrofluorocarbons (HFC) coolant gases purely to profit from carbon trading and in the process making climate change worse”. See Lang, Chris, Aviation industry’s plan to ‘offset’ its emissions is crazy, The Ecologist 20160912.
- 6.
See ICAO’s Policies on Taxation in The Field of International Air Transport, Doc 8632, 3rd Edition:2000.
- 7.
Id., Council Resolution on Taxation of International Air Transport, third Preambular clause.
- 8.
The maximum permissible take-off mass of the aircraft according to the certificate of airworthiness, the flight manual or other official documents. The maximum certificated take-off mass is a limitation associated with an individual aircraft serial number.
- 9.
Annex 16 Part IV, Chapter 2.1.1.
- 10.
State aircraft are deemed by the Chicago Convention to include police, military and customs aircraft. See Chicago Convention, supra, note 1, Article 3 b).
- 11.
The conditions are set out in ICAO Environmental Technical Manual, Doc 9501, Volume IV—Procedures for demonstrating compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) First Edition; 2018, at 2.1.5. Chronologically, the exemption period for the new entrant would begin from 1 January 2026 where a new entrant may monitor its CO2 emissions in 2026; it will monitor, verify and report its CO2 emissions in 2027 and 2028. The first year for which the aircraft operator is subject to offsetting requirements is 2029 (full calendar year. If in 2027 the new entrant exceeds the exemption threshold of 0.1% of total CO2 emissions from international flights, as defined in Annex 16, Volume IV, Part II, Chapter 1, 1.1.2 and Chapter 2, 2.1, in 2020, the first calendar year for which the aircraft operator is subject to offsetting requirements would be 2028. See Doc 9501 at 2.2.2.
- 12.
Annex 16 Part IV, at 3.3.1.
- 13.
Article 38 of the Chicago Convention provides that any State which finds it impracticable to comply in all respects with any SARPs or to bring its own regulations or practices into full accord with any international standard or procedure after amendment of the latter, or which deems it necessary to adopt regulations or practices differing in any particular respect from those established by an international standard, shall give immediate notification to the International Civil Aviation Organization of the differences between its own practice and that established by the international standard. In the case of amendments to international standards, any State which does not make the appropriate amendments to its own regulations or practices shall give notice to the Council within 60 days of the adoption of the amendment to the international standard or indicate the action which it proposes to take. In any such case, the ICAO Council must make immediate notification to all other states of the difference which exists between one or more features of an international standard and the corresponding national practice of that State.
- 14.
ICSA, Understanding the CORSIA Package, https://carbonmarketwatch.org/wp-content/uploads/2018/02/ICSA-Report_A4.pdf.
- 15.
Standard 1.1.2. defines an international flight as the operation of an aircraft from take-off at an aerodrome of a State or its territories, and landing at an aerodrome of another State or its territories. In addition, a domestic flight is defined as the operation of an aircraft from take-off at an aerodrome of a State or its territories, and landing at an aerodrome of the same State or its territories.
- 16.
Matthew Lithgow, International Aviation and Climate Policy: Summarizing Current Developments, https://medium.com/@matthewtlithgow/international-aviation-and-climate-policy-summarizing-current-developments-45ed136e6f8e.
- 17.
Judicial pronouncements on a tax are that a tax is: “A ratable portion of the produce of the property and labour of the individual citizens, taken by the nation, in the exercise of its sovereign rights, for the support of government, for the administration of the laws, and as the means for continuing in operation the various legitimate functions of the State”. See New London v. Miller, 1941 Connecticut Reporter at 112. In the 1956 case of Heirs v. Mitchel, the court held that a tax was: “An enforced contribution of money or other property, assessed in accordance with some reasonable rule or apportionment by aeronautical authorities of some sovereign State on persons or property within its jurisdiction for the purpose of defraying the public expenses. Therefore, a tax came to be known as a “contribution” and was regarded in a general sense to be any contribution imposed by government upon individuals, for the use and service of the State, whether under the name of toll, tribute, tallage, gable, impost, duty, custom, excise, subsidy, supply, aid or any other name”. See 1956 Southern Reporter at 81.
- 18.
A Pigouvian tax is a specific rate tax on units of emission or damage, based on any market activity that generates negative externalities.
- 19.
The World Bank defines a carbon tax as: “A tax which directly sets a price on carbon by defining a tax rate on greenhouse gas emissions or – more commonly – on the carbon content of fossil fuels. It is different from an ETS in that the emission reduction outcome of a carbon tax is not pre-defined, but the carbon price is”. See http://www.worldbank.org/en/programs/pricing-carbon. The first instance of a carbon tax was in January 1990 in Finland. Finland’s initiative was followed by Sweden, Norway, the Netherlands, Denmark, Italy and the UK. some Canadian provinces have followed with carbon taxes (e.g., Quebec in 2007 and British Columbia in 2008), as well as a few areas in the United States (e.g., Boulder in Colorado in 2007 and Bay Area Air Quality Management District in California in 2008).
- 20.
One interpretation of environmental integrity is the sustenance of important biophysical processes which support plant and animal life, and which must be allowed to continue without significant change. The objective is to assure the continued health of essential life support systems of nature, including air, water, and soil, by protecting the resilience, diversity, and durability of the eco system. It is difficult to argue that a carbon tax, which could discourage pollution, would distort the balance of nature.
- 21.
Lang Chris, Why not put a carbon tax on aviation rather than relying on REDD offsets? Because a tax lacks “environmental integrity”, says ICAO’s Jane Hupe, R EDD, 12 April 2016, https://redd-monitor.org/2016/04/12/why-not-put-a-carbon-tax-on-aviation-rather-than-relying-on-redd-offsets-because-a-tax-lacks-environmental-integrity-says-icaos-jane-hupe/.
- 22.
Ibid.
- 23.
IMF calls for carbon tax on ships and planes, The Guardian, at https://www.theguardian.com/environment/2016/jan/13/imf-calls-for-carbon-tax-on-ships-and-planes.
- 24.
Joe Robertson, IMF call for carbon tax on aviation, shipping would spur innovation, Citizens Climate Lobby, January 29, 2016 at https://citizensclimatelobby.org/imf-call-for-carbon-tax-on-aviation-shipping-would-spur-innovation/.
- 25.
IMF Working Paper, WP/18/193, supra, note 4 at 19.
- 26.
McKibben, Bill, Why We Need a Carbon Tax, and why it won’t be Enough, Opinion, Yale Environment 360 at 3. See https://e360.yale.edu/features/why_we_need_a_carbon_tax_and_why_it_won_be_enough.
- 27.
What is a carbon price and why do we need one? https://www.theguardian.com/environment/2012/jul/16/carbon-price-tax-cap.
- 28.
Waggoner (2008), p. 34.
- 29.
Corkery (2009), Article 7, Editorial.
- 30.
Carbon Tax Policy: A Conservative Dialogue on Pro-Growth Opportunities, Alex M. Brill ed. Alliance for Market Solutions:2017 at 40. See https://allianceformarketsolutions.org/wp-content/uploads/2017/04/Carbon-Tax-Policy-A-Conservative-Dialogue-on-Pro-Growth-Opportunities.pdf.
- 31.
The richest 1% in America, Luxemburg and Saudi Arabia emit 200+ tonnes of CO2 equivalent a year, more than 25 times the global average. The poorest in Mozambique, Rwanda and Malawi are responsible for around 0.1tonnes of CO2. See Thomas Piketty proposes flight tax to raise climate funds, The Guardian, at https://www.theguardian.com/environment/2015/nov/05/thomas-piketty-proposes-flight-tax-to-raise-climate-funds.
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Abeyratne, R. (2019). The Climate Change Equation. In: Legal Priorities in Air Transport. Springer, Cham. https://doi.org/10.1007/978-3-030-18391-2_10
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DOI: https://doi.org/10.1007/978-3-030-18391-2_10
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