Paper Economic and Environmental Basis - Carbon Neutral Growth - Jose Fernandes

Frankfurt University of Applied

Sciences

University of Petroleum and Energy

Studies, Dehradun

Masters of Business Administration in Aviation Management

Economic and Environmental Basis

Carbon Neutral Growth

Professor Dr. Karl-Heinz Haag and Professor Dr. Andreas Papatheodorou

José Joaquim Fernandes - 1034431

10th October 2014

Page i

Table of Contents

List of Appendices ....................................................................................... ii

List of Figures ............................................................................................ iii

List of Tables .............................................................................................. iv

Abbreviations ............................................................................................. v

Abstract ...................................................................................................... vi

1 Introduction .......................................................................................... 1

2 Problem Statement .............................................................................. 2

2.1 Scope ............................................................................................ 2

2.2 Selection of literature .................................................................... 3

3 Carbon Neutral Growth and Sectoral Approach .................................. 3

3.1 Carbon Neutral Growth ................................................................. 3

3.2 Global Sectoral Approach ............................................................. 4

3.3 Requirements to make sectoral approaches work ........................ 6

3.4 Challenges to global sectoral approach ........................................ 6

3.5 Aviation and climate change ......................................................... 7

4 Industry and ICAO approaches ........................................................... 7

4.1 Industry Carbon Neutral Growth ................................................... 7

4.2 ICAO approach for Carbon Neutral Growth ................................ 10

5 Discussion ......................................................................................... 12

6 Criticism ............................................................................................. 16

7 Conclusions ....................................................................................... 17

8 References ........................................................................................ 20

Appendices .............................................................................................. 24

Page ii

List of Appendices

Appendix A Selection of literature ...................................................... 24

Page iii

List of Figures

This paper has not figures.

Page iv

List of Tables

This paper has no tables.

Page v

Abbreviations

ACI: Airports Council International

APU: Auxiliary Power Unit

CANSO: Civil Air Navigation Services Organisation

CER: Certified Emissions Reductions

CO: Carbon Monoxide

CO2: Carbon Dioxide

ETS: Emissions Trading System

HAPS: Hazardous air pollutants

H2O: water vapour

IATA: International Air Transport Association

IBAC: International Business Aviation Council (IBAC)

ICAO: International Civil Aviation Organisation

ICCAIA: International Coordinating Council of Aerospace Industries

Associations

NOx: Nitrogen Oxides

NOY: Other trace elements including the extended family of nitrogen

compounds

PM: Volatile and non-volatile particulate matter

SESAR: Single European Sky ATM Research

SOX: Sulfur Oxides

UHC: Unburned hydrocarbons, such as formaldehyde and benzene

Page vi

Abstract

This paper performs a theoretical analysis of Carbon Neutral Growth.

It set out by establishing the concept of Carbon Neutral Growth and the

concept of sectoral approach, and also elaborates the challenges that

academics see to a global sectoral approach. It then continues by linking

aviation with climate change and global sectoral approach.

The paper then set out by establishing the IATA Carbon Neutral Growth

and the ICAO approach for carbon Neutral growth.

The paper subsequently discusses various aspects of aviation, climate

change and global sectoral approach, and highlights some of the current

political as well as technical challenges. The paper also finds that

interdependencies among various policy, technological and operational

options and the full economic consequence might not be entirely clear.

The paper ends with self criticism and concludes that despite the

obstacles ahead, the aviation industry, the policy makers and the

international community will have to resolve the monumental task of

reducing aviation’s influences on climate change if we are all to live in a

healthier planet by 2050.

1 Introduction

Business related travel accounts for around 40% of all air trips (Doganis

2005).

Global airlines consume over 5 million of barrels of oil per day, and the

resulting carbon dioxide (CO2) emitted by aircraft engines is of concern

(Grote et al. 2014).

Aviation alters the composition of the atmosphere globally and can thus

drive climate change and ozone depletion (Lee et al. 2010).

Aviation emissions contribute to radiative forcing of climate. Of importance

are emissions of carbon dioxide (CO2), nitrogen oxides (NOx), aerosols

and their precursors, soot and sulphate, and increased cloudiness in the

form of persistent linear condensation trails, formed when relatively warm

and humid air in an aircraft’s engine plume mixes with colder and less

humid ambient air in the atmosphere (Marais and Waitz 2009), and

induced-cirrus cloudiness (Lee et al. 2009).

Technological advancement has significantly reduced aircraft engine fuel

consumption and emissions – fuel consumption per passenger kilometer

has decreased by 70% over the past four decades (Marais and Waitz

2009), nevertheless greenhouse gas emission from international aviation

and shipping are growing at an alarming rate (Zetterberg 2008).

Emissions from the transport sector have been estimated to contribute to

23% of the total emissions in EU-27. Emissions from the transport sector

are expected to grow in the future, while emissions from other sectors are

expected to remain stable at below levels in the 1990’s. Civil aviation

contributes to 2% of the emissions from the transport sector (Chin and

Zhang 2013).

It is evident that international transport poses a serious threat to the

world’s climate system(Åhman 2008) as it affects the environment at the

local, regional and global level (Marais and Waitz 2009).

2 Problem Statement

This paper performs a theoretical analysis of Carbon Neutral Growth.

Chapter 3, set out by establishing the concept of Carbon Neutral Growth

and the concept of sectoral approach, and also elaborates the challenges

that academics see to a global sectoral approach. It then continues by

linking aviation with climate change and global sectoral approach.

In Chapter 4, the paper set out by establishing the IATA Carbon Neutral

Growth and the ICAO approach for carbon Neutral growth.

Chapter 5 discusses various aspects of aviation, climate change and

global sectoral approach, and highlights some of the current political as

well as technical challenges. This chapter concludes that



The paper ends with self criticism and concludes that despite the

obstacles ahead, the aviation industry, the policy makers and the




2.1 Scope

The scope of this analysis is carbon neutral growth from an airline and a

government perspective.

By using the term Global Sectoral approach I mean a global sectoral

industry approach, which is similar to what the International Energy

Agency calls a sector wide transnational approach. These are

transnational industry focused initiatives that aim to engage a sector on a

broad international basis. The transnational industry-focused initiatives are

according to Egenhofer (Egenhofer et al. 2009) the principal means

through which progress in a sectoral approach is currently being made.

2.2 Selection of literature

The research articles were selected by undertaking a search through the

search engine Google Scholar and through the electronic databases

ScienceDirect and ResearchGate in addition to a general search on

Google.

For a detailed description of the selection of literature, please refer to

Appendix A.

3 Carbon Neutral Growth and Sectoral Approach

This chapter establishes the concepts of Carbon Neutral Growth and the

concept of Global Sectoral Approach for Carbon Neutral Growth. It then

elaborates the challenges that academics see to a global sectoral

approach. The chapter ends by linking aviation with climate change and

global sectoral approach.

3.1 Carbon Neutral Growth

Carbon neutrality, or having a net zero carbon footprint, refers to achieving

net zero carbon emissions by balancing a measured amount of carbon

released with an equivalent amount sequestered or offset, or buying

enough carbon credits to make up the difference. It is used in the context

of carbon dioxide releasing processes associated with transportation,

energy production, and industrial processes such as production of carbon

neutral fuel.

The carbon neutrality concept may be extended to include other

greenhouse gases measured in terms of their carbon dioxide

equivalence—the impact a green house gas has on the atmosphere

expressed in the equivalent amount of CO2. The term "climate neutral"

reflects the broader inclusiveness of other greenhouse gases in climate

change, even if CO2 is the most abundant, encompassing other

greenhouse gases regulated by the Kyoto Protocol, namely: methane

(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons

(PFC), and sulphur hexafluoride (SF6).

The best practice for organizations and individuals seeking carbon neutral

status entails reducing and/or avoiding carbon emissions first so that only

unavoidable emissions are offset. Carbon neutral status is commonly

achieved in two ways:

Balancing carbon dioxide released into the atmosphere from burning fossil

fuels, with renewable energy that creates a similar amount of useful

energy, so that the carbon emissions are compensated, or alternatively

using only renewable energies that don't produce any carbon dioxide

(Martin 2006).

Carbon offsetting by paying others to remove or sequester 100% of the

carbon dioxide emitted from the atmosphere (Revkin 2007) – for example

by planting trees – or by funding 'carbon projects' that should lead to the

prevention of future greenhouse gas emissions, or by buying carbon

credits to remove (or 'retire') them through carbon trading

3.2 Global Sectoral Approach

Some industrial sectors are concentrated to such a degree that even a

small number of companies represent a significant share of the global

green house gas emissions.

This makes these sectors a natural focus for climate change policy.

Sectoral approaches are seen as having the potential to broaden the

range of contributions by all parties, including emerging economies to

green house gas emissions reductions and to help moderate

competitiveness concerns in a trade exposed industry.

In particular sectoral aproaches may help to identify emissions on a

sector-by-sector basis building confidence that policies and measures can

be put in place to reduce emissions. They can also help identify national or

global commitments through aggregation of sectoral data in countries so

wish. Sectoral approaches therefore constitute a major opportunity to

focus on individual sectors that make major contributions to global

emissions.

The starting pointy of sectoral approaches is to target potential emitters to

reduce green house gasses emissions from big emitters.

Apparent candidates for sectoral approaches are aluminium, cement, float

glass and heavy chemical industry and electricity producers (Egenhofer et

al. 2009).

In addition to the above, climate policy can also occur through carbon

leakages.

A company that faces high cost to meet CO2 target, could either face

increased competition from companies without such constraint or decide to

relocate part of its CO2 intensive processes where climate policy is less

stringent.

Emissions would not be reduced, but simply be shifted to regions where

they are most welcome, at the expense of the economic activity in the

region that has decided to cut greenhouse gasses.

The more global markets, the more such leakages. According to Baron

(Baron et al. 2007) an often overlooked factor offering carbon leakages is

the efficiency of policy measures introduced to reduce greenhouse

gasses.

The lower the efficiency of a policy, the higher the cost imposed on

sources and the higher the distortion of competition.

A sectoral specific approach to carbon emissions would also help reduce

the competitiveness problems faced by carbon leakages.

International aviation and international maritime could also equally be

suitable for sectoral approaches because of the very nature of these

sectors is to provide their services globally or at least internationally, while

both remain outside the Kyoto Protocol.

3.3 Requirements to make sectoral approaches work

The design of global sectoral approaches can not start from scratch.

They will have to fit into existing national, regional/EU or policies and

procedures (Egenhofer et al. 2007).

Generally speaking sectoral approaches are viewed by many as the

second best policies to global and macro approaches. Such approaches

will be most relevant to industry facing global competition, such as the

aviation industry.

3.4 Challenges to global sectoral approach

In general sectoral approaches face four major challenges (Egenhofer et

al. 2009):

Technical issues related to data definition and collection

Risk of anti-competitive behaviour

Identifying workable incentives for companies and governments

from developing countries, mainly emerging economies to engage

in sectoral approaches.

Forming a suitable governance structure

For sectoral approaches to be successful, they will need to live up to a

number of requirements, in the areas of governance, incentive, practices

and compatibility with existing national, regional and international climate

change frameworks and policies.

The management and governance of global sectoral approaches pose

challenges to the industries involved.

It included agreement on type of targets, relative or absolute. The level of

ambition and stringency or the allocation of scarcity.

Irrespective of whether commitments are voluntary, self committed,

negotiated or government imposed, baseline setting, definition of sectoral

boundaries, monitoring and reporting are all crucial (Egenhofer et al.

2009).

All this raises a number of governance issues; How are targets set for

industry? Who enforces whom? Who negotiates with whom? How

governments co-operate to set cross border targets, multi jurisdiction

targets, and how they can obtain a legally binding character.

In addition global industry approaches will need to accommodate different

national regulatory traditions and preferences. Finally sectoral approaches

raise concern about confidentiality, potential collusions and anti-

competitive behaviour.

3.5 Aviation and climate change

Aviation is the first industry to suggest a global approach to the application

of a single Market based measure to manage its climate change impact.

This keeps aviation in the forefront of industries on managing carbon

emissions. It is also the first industry to agree global targets. These are:

improving fuel efficiency by 1.5% annually to 2020;

capping net emissions with CNG2020, and;

cutting emissions in half by 2050 compared to 2005.

The aviation industry is also the first industry to agree on a global strategy

to achieve the global targets.

4 Industry and ICAO approaches

This chapter establishes the concepts of the Industry Carbon Neutral

Growth and the ICAO approach for carbon Neutral growth.

4.1 Industry Carbon Neutral Growth

In 2009, IATA airlines took a landmark decision to adopt a set of ambitious

targets (International Air Transport Association 2009):

A cap on aviation CO2 emissions from 2020 (Carbon neutral

growth)

An average improvement in fuel efficiency of 1.5% per year from

2009 to 2020.

A reduction in CO2 emissions of 50% by 2050, relative to 2005

levels.

These collective goals were endorsed by the aviation industry in the joint

submission to ICAO in September 2009.

To achieve these goals, the International Air Transport Association (IATA)

has outlined a ‘‘four pillar’’ approach that includes:

Technology

Operations

Infrastructure; and

Economic measures.

Of the four pillars, the first pillar, technology is seen as the most promising

option for reducing emissions and includes improved engine technologies,

aircraft design, new composite lightweight materials, and use of biofuels

that have significantly lower lifecycle greenhouse gas emissions than

conventional fuel (International Air Transport Association 2009).

The second pillar, operations, aims at save fuel and CO2 through more

efficient aircraft operations, such as improved operations practices,

including reduced aircraft APU (Auxiliary Power Unit) usage, more efficient

flight procedures and weight reductions measures. IATA expects to

achieve 3% emissions reductions by 2020 (International Air Transport

Association 2009).

The third pillar, infrastructure improvements, are expected to present a

major opportunity for fuel and CO2 reductions in the near term. IATA

estimated in 1999, that there were 12% inefficiencies in air transport

infrastructure, of which 4% has been achieved by 2009. IATA expects that

measures such as the Single European Sky ATM Research (SESAR) and

the similar air traffic improvements in the USA, Nextgen Air traffic

management would further contribute to reduce CO2 and Green House

gasses emissions.

The fourth pillar, economic measures, is needed to “close the gap”

between achieving the targets of carbon neutral growth from 2020 and the

results from the first three pillars, technology, operations and

infrastructure.

According to IATA, a single market based measure will be critical in the

short-term as a gap-filler until technology, operations and infrastructure

solutions mature (International Air Transport Association 2009).

A global sectoral approach with a market based measure is part of the

fourth pillar of the aviation industry’s united strategy on climate change.

In 2025, the industry will need to offset 90 million tonnes of CO2 to

maintain emissions at 2020 levels and thus achieve carbon neutral growth.

By 2025 IATA expects this to cost an additional $7 billion per year to

achieve.

Air Transport Action Group is a not-for-profit organisation that represents

all sectors of the air transport industry.

In September/October 2013, the global aviation industry coordinated

through ATAG, submitted a working paper to the Assembly from the global

associations Airports Council International (ACI), Civil Air Navigation

Services Organisation (CANSO), International Air Transport Association

(IATA), the International Business Aviation Council (IBAC) and the

International Coordinating Council of Aerospace Industries Associations

(ICCAIA) for reducing emissions from aviation growth from 2020 (Air

Transport Action Group 2013).

The aviation industry recommends that as part of the comprehensive

approach to address air transport climate impacts, a single global market

based measure must be agreed. The industry advocates that the global

market measure must be seen as a part of a broader package of

measures including new technology, more efficient operations and better

use of infrastructure; the first three pillars of the four-pillar strategy. The

purpose of their paper was to promote the industry viewpoint that a simple

carbon offsetting scheme would be the quickest to implement, the easiest

to administer and the most cost effective.

4.2 ICAO approach for Carbon Neutral Growth

On 28 September 2010, ICAO was able to bring together its 190 member

states and adopted a comprehensive, robust and global policy on how to

address green house gas emissions from international aviation (United

Nations Framework Convention on Climate Change (UNFCCC) 2010).

The assembly resolution A37-19, incorporates the following key elements:

1. further endorsement of the global aspirational goal of 2 per cent

annual fuel efficiency improvement up to year 2050;

2. a medium-term global aspirational goal from 2020 that would

ensure that while the international aviation sector continues to grow,

its global CO2 emissions would be stabilized at 2020 levels;

3. further work to explore the feasibility of a long-term global

aspirational goal for international aviation;

4. development of a framework for market-based measures, including

further elaboration of the guiding principles adopted by the

Assembly, and exploration of a global scheme for international

aviation;

5. concrete steps to assist States to contribute to the global efforts;

6. de minimis provisions to ensure that States with small contributions

to the global air traffic are not burdened disproportionately; and

7. States’ action plans, covering information on CO2 emissions

reduction activities and assistance needs.

It was decided that the ICAO council should undertake further work in

order to make progress on a number of issues contained in resolution

A37-19, where states expressed concerns, such as the implementation of

the medium term global aspirational goal, and market based measures

including the de minimis provision.

It was also stressed that the international aviation sector should not be

singled out as a source of revenues for other sectors, and the assembly

also recommended that where revenues are generated from market based

measures, they should be applied in the first instance to mitigating the

environment impact of aircraft engine emissions.

The International Air Transport Association (IATA) 69th Annual General

Meeting overwhelmingly endorsed a resolution on “Implementation of the

Aviation Carbon-Neutral Growth (CNG2020) Strategy" (United Nations

Framework Convention on Climate Change (UNFCCC) 2010)

The resolution provides governments with a set of principles on how

governments could:

Establish procedures for a single market-based measure (MBM)

Integrate a single MBM as part of an overall package of measures

to achieve CNG2020

A summary of the principles of the resolution adopted by IATA and the

industry includes the following:

Setting the industry and individual carrier baselines using the

average annual total emissions over the period 2018–2020;

Agreeing to provisions/adjustments for

- Recognizing early movers, benchmarked for 2005–2020 with a

sunset by 2025

-Accommodating new market entrants for their initial years of

operation

-Fast growing carriers

Adopting an equitable balance for determining individual carrier

responsibilities that includes consideration of:

- An ‘emissions share’ element (reflecting the carrier’s share of total

industry emissions) and

- A post-2020 ‘growth’ element (reflecting the carrier’s growth above

baseline emissions)

Reporting and verification of carbon emissions that is:

- Based on a global standard to be developed by ICAO

- Simple and scalable based on the size and complexity of the

operator

Instituting a periodic CNG2020 performance review cycle that

revises individual elements and parameters as appropriate

The airline industry believes that ICAO is the appropriate United Nations

body for developing and implementing a global sectoral approach to

address aviation emissions (International Air Transport Association 2009).

Compliance must be enforcable through an appropriate legal structure.

ICAO has traditionally recognised and accomodated states with special

needs that have difficulty complying with standards or recommended

practices, either through technical and financial support or via

differenciated timelines for implementing measures (International Air

Transport Association 2009)

5 Discussion

This chapter discusses various aspects of aviation, climate change and

global sectoral approach, and highlights some of the current political as

well as technical challenges. The chapter concludes that



By proposing a four-pillar strategy for carbon neutral growth, i) technology,

ii) operations, iii) infrastructure and iv) economic measures, while at the

same time committing to very tangible goals of carbon neutral growth in

2020; and 50% reduction by 2050, the aviation industry might have given

themselves a double edged sword in the form of the fourth pillar, economic

measures.

If achievements through the first three pillars of the aviation industry’s four-

pillar approach are successful, the actions needed to be performed

through economic measures would be manageable.

If however, the combined achievements through the first three pillars of the

aviation industry’s four-pillar approach for one of another reason are not

achieved to the extent expected, the economic measures needed to offset

tonnes of CO2 in order to maintain emissions at 2020 levels and achieve

carbon neutral growth would increase accordingly. The worst case

scenario could very well be that we have to rely on the fourth pillar,

economic measures, as the main instrument for achieving 50% reduction

by 2050.

In the academic field, scholars also do not seem to have, or have had, a

unified view on the best developments or on the best way forward.

A business a usual scenario could put emissions from international

aviation and maritime shipping, or so-called bunker fuels at 15% of global

emissions by 2050 (Egenhofer 2008).

This development, coupled with the growing political popularity of

emissions trading, has put the spotlight on the option of an integrated

international trading system, including international aviation and shipping.

The idea would be to address emissions from international aviation and

shipping and capture the cost savings that a broad emissions trading

system offers. However, the characteristics of bunker fuel emissions, with

close links to international trade and competition, the difficulties of

allocating emissions on a country level and the complexities in estimating

climate impact from emissions, make the feasibility and effectiveness of a

conventional emissions trading system questionable (Egenhofer 2008).

Furthermore, a full integration of international transport and industry could

cause significant negative effects for industry, without achieving

substantial cuts in bunker fuel emissions. In the medium term at least,

these negative effects seem to offset the advantages of an integrated

system.

Åhman (Åhman 2008) considers a sectoral approach as a more promising

option for bunker fuels than incorporating them into an integrated

emissions trading system. Even though this would, in theory, raise the total

cost of reaching a global emissions target as compared to an integrated

emissions trading system, it offers several advantages. Most importantly, it

seems feasible from a technical and political point of view and would allow

the negative effects on industry to be managed, without compromising an

effective control of emissions from international aviation and shipping.

In his article Zetterberg (Zetterberg 2008) proposes a separate emissions

trading system (ETS) for international transport alone in which transport

emissions could effectively be controlled. The impact on the industrial

allowance price can be reduced, at least to some extent. But even with

separate systems, the transport sector will indirectly influence the

allowance price in industry. Both sectors will compete for the same

emissions reductions such as bio energy, clean electricity and CERs

(certified emissions reductions) or other offsets. The transport sector is

likely to increase the demand for these solutions and thus indirectly

increase the allowance price in the industrial ETS.

In her paper, Dray (Dray 2013) has discussed the different stages of the

aircraft lifecycle and the reductions in total aviation CO2 emissions that

may be possible in each stage from measures aimed at targeting the

purchase, retirement and adaptation of aircraft, using simple models

estimated from historical data. Although aircraft retrofits can be carried out

over a short timescale and can strongly reduce the fuel burn of specific

individual aircraft, the retrofits examined in their article have historically

offered a low potential for reductions in total fuel burn and emissions from

the global fleet (for example, the effect of all historical re-engining projects

from 1960 to 2005 has been around a 0.1% decrease in present-day total

aviation CO2 emissions). Influencing the aircraft retirement and/or freighter

conversion processes offers slightly greater scope for emissions

reductions, but in most scenarios these reductions would still be below 1%

of total aviation CO2. Their models also suggest that policies aimed at

influencing fuel prices will have relatively little effect on their own on airline

purchasing or retirement decisions, unless they raise fuel prices to levels

significantly higher than those seen historically. However, the greatest

scope for reducing the emissions of the global aircraft fleet, particularly if

global demand growth follows predicted trajectories, is likely to come from

policies aimed at influencing the rate of technology development.

In addition to emissions, aircraft noise also affects the environment

(Marais and Waitz 2009). The reduction of noise and the reduction of

emissions are goals that also pose interesting policy questions. Noise and

emissions impacts result from an interdependent set of technologies and

operations, so that action to address impacts in one domain can have

negative impacts in other domains. For example, both operational and

technological measures to reduce noise can result in greater fuel burn,

thus increasing aviation’s impact on climate change and local air quality.

Interdependencies among emissions make it difficult to reduce

environmental impacts by modifying engine design, because they force a

trade-off among individual pollutants as well as between emissions and

noise(Federal Aviation Administration Office of Environment and Energy

2005).

Even disregarding the noise aspect, on a technical level, like most fossil

fuel combustion sources, aircraft engines emit several different chemical

species that have an impact on health and ecosystems, including carbon

dioxide (CO2), water vapour (H2O), nitrogen oxides (NOx), unburned

hydrocarbons, such as formaldehyde and benzene (UHC), carbon

monoxide (CO), sulfur oxides (SOx), other trace elements including the

extended family of nitrogen compounds (NOy) and hazardous air pollutants

(HAPS), and both volatile and non-volatile particulate matter (PM),

primarily PM2.5 (particulate matter smaller than 2.5 micrometers). Primary

PM includes dust, dirt, soot, smoke and liquid droplets directly emitted into

the air. Particles formed in the atmosphere by the condensation or

transformation of emitted gases such as NOx, SO2 and UHCs are also

considered particulate matter, and are referred to as secondary PM

(Marais and Waitz 2009).

The relative proportion of each emission is influenced by different factors.

CO2 and H2O are products of hydrocarbon combustion and the amount of

these gases emitted is therefore directly related to the amount of fuel

consumed, which is in turn a function of aircraft and engine fuel efficiency,

as well as the length of time that an aircraft’s engines or auxiliary power

unit (APU) are running. The total amount of sulfur species emitted is

related to the concentration of sulfur in the fuel (controlled by a fuel

specification) and to the amount of fuel burned. Emissions of NOx, NOy,

non-volatile and volatile PM (Particle Matter), CO and UHC (Unburned

Hydro carbons) are related to the manner in which fuel is combusted and

to post-combustion chemical reactions occurring in the engine. These

emissions are therefore a function of engine design in addition to overall

fuel burn.

NOx emissions can be difficult to reduce because of the high temperatures

and pressures used to increase efficiency and thrust per unit mass flow.

Thus, some trade-offs exist between NOx emissions and CO2 and H2O

emissions. In terms of the combined effects of aviation emissions on

climate and air quality, it is not obvious whether increased NOx should be

traded in return for decreased CO2 and H2O, or vice versa (Marais and

Waitz 2009).

At the end of the day it would seem that interdependencies among various

policy, technological and operational options and the full economic

consequences of these options might not be entirely clear.

6 Criticism

Very few academic references seem to deal directly with South Asia. The

academic literature which I have found seems to discuss mostly aviation

and climate change form a predominantly western and developed country

point of view.

Huge differences as well as significant stages of maturity of the concept

and awareness of aviations influence on climate change seem to have

been experienced by the author when travelling in India and when

travelling abroad; and a concepts or awareness of climate change that

works well in, say Scandinavia may not at all be applicable across the

globe, or in places like India without significant modification or adaptation

to very local circumstances.

7 Conclusions

This paper has performed a theoretical analysis of Carbon Neutral growth

in the aviation industry and elaborated on the role of the aviation industry,

the governments and the international organisations.

The paper concludes that the aviation industry, the policy makers and the



healthier planet by 2050

Industry sectoral approaches that identify emissions on a sector-by-sector

basis is likely to see increased rigour in measurement and analysis,

already with realistic and viable implementation, as they are drawn to a

large extent by the specific industry sectors themselves.

The process of developing sectoral approaches implies that business must

be fully integrated in decisions with national and regional governments to

ensure both innovative and workable solutions.

It is precisely this form of cooperation that is highly valuable in facilitating

mutual understanding of issues and agreement on the way forward for

sectoral approaches (Egenhofer et al. 2009).

Generally, work on the proof-of-concept of sectoral approaches in

developing countries has identified significant limitations in data

availability, a wide range in the energy efficiencies of firms in the same

sector in some countries, substantial administrative and policy barriers to

the implementation of some mitigation activities, weaknesses in financial

infrastructure, and considerable needs for capacity building. Because of

significant differences among countries, sectoral programs need to be

tailored to the circumstances of individual countries. Indeed, because of

location, resource availability, and other idiosyncratic circumstances of

individual facilities, plant -level investigations are essential to specify the

emission mitigation targets needed for actual implementation of sector

programs in developing countries.

Developing countries need considerable help in the building the capacities

needed to implement sectoral programs. These include assistance in

establishing low –carbon development strategies, systems for data

collection and verification, institutions and procedures for developing and

implementing nationally appropriate mitigation actions, and market

systems and associated regulatory institutions.

Sector boundary issues can potentially give rise to product mix responses

that represent emission leakages. In the chemical and steel industries, for

example, the products have widely differing emission intensities.

Imposition of a sector program on some facilities in a sector, but not

others, could lead to low emission outputs at covered facilities only

because production of higher-emission items is shifted to non-covered

facilities in or outside the country.

Recent trends suggest that economic lifestyle and cultural changes will be

insufficient to mitigate global increases in transport emissions without

stringent policy instruments, incentives or other interventions being

needed (Air Transport Action Group 2014).

Airlines are through IATA committed to working with governments on

building a solid platform for the future sustainable development of aviation.

Airlines have come together to recommend to governments the adoption

of a single market based measure for aviation and provide suggestions on

how it might be applied to individual carriers.

ICAO has a tradition of uniting governments to focus on the global

standards that underpin global connectivity

The aviation industry is looking to ICAO as the body safeguarding the

harmonised global system of standards that enable the aviation industry to

provide air services in a safe, secure and reliable manner.

The aviation industry has been working towards the development of a

single global market-based mechanism. A mechanism that preserves

equal opportunities, fair competition, and respects the Special

Circumstances and Respective Capabilities of States

The ICAO resolution commits governments to develop a global market-

based measure for aviation emissions from 2020, to be decided at the next

ICAO assembly, scheduled for 2016. The next three years will be spent on

technical discussions as states work on the design elements of such a

scheme, including standards for the monitoring, reporting and verification

of emissions and the type of scheme to be implemented.

On their side the aviation industry stands united in urging States to make a

clear and unequivocal commitment to ask the ICAO Council to develop a

global market based measurement scheme for international aviation to be

brought back to the next ICAO Assembly in 2016.

In the short run the final synthesis report from working group III of the

Intergovermental Panel on Climate Change will be released in October

2014 (Air Transport Action Group 2014).

ICAO will have to rely on the goodwill and cooperation of governments and

industry in order to succeed in their role as the overarching institution to

oversee the work on climate change and aviation.

Despite the obstacles ahead, the aviation industry, the policy makers and

the international community will have to resolve the monumental task of



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Appendix A Selection of literature

The research articles were selected by undertaking a search through the

electronic databases ScienceDirect and ResearchGate in addition to a

general search on Google.

Following the recommendations of Tranfield (Tranfield et al. 2003) that

searches should not be restricted to bibliographic databases I also used

Google Scholar to identify unpublished studies, conference proceedings

industry trials and similar publications.

In addition to this, research also involved studying Economic and

Environmental basis textbooks and articles recommended for use of the

MBA in Aviation Management at Frankfurt University of Applied Sciences

by Doganis (Doganis 2005) and Lee (Lee et al. 2010) as well as

professional aviation text books by De Neufville (De-Neufville and Odoni

2003), Daley (Daley 2010), Deshpande (Deshpande 2001), Horonjeff

(Horonjeff et al. 2010) Graham (Graham 2008), Kazda (Kazda and Caves

2007), Marais (Marais and Waitz 2009) and Wells (Wells and Young

2004).

For the search engines and databases a number of searching keywords

related to Passenger Handling Processes (such as “Carbon Neutral

Growth”, “IATA”, “ICAO”, as well as words related to a geographical region

(such as “USA”, “Asia”, “South Asia”, “India”). This produced an extensive

range of diverse articles which had to be narrowed down by considering

their significance to this paper.

One of the major difficulties in determining their relevance was that the

articles varied from highly technical documents, to overarching high level

political documents; such as Climate-neutrality versus carbon neutrality for

aviation biofuel policy, or The potential of liquid hydrogen for the future

‘carbon-neutral’ air transport system.

Consequently a subjective judgement had to be made as to whether there

was different coverage of focus for the relevance of this paper.

Whilst the database search ensured that international papers that

conventionally tend to be written in English were identified, a potential

limitation was that papers written in other languages, such as the

scandinavian Languages, Danish, Swedish or Norwegian or such as any

of the Indian languages, may have been omitted, which in turn may have

influenced the geographical perspective of the articles.

The majority of the bibliography and references came from specialist

Aviation sciences journals (Journal of Air Transport Management) and

from specialist transport and environment journals (Journal Transportation

Research Part D - Transport and Environment, and Journal Transportation

Research Part A - Policy and Practice) but some also appeared in other

journals, such as Atmospheric Environment.

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