Technological advancements, operational measures, infrastructure and air traffic management enhancements can all improve fuel efficiency and emissions. Market-based and voluntary measures are also being considered. They offer more flexible and less expensive emissions reductions than traditional regulatory measures.
Taxes and Charges: Uncertain Environmental Benefit
The environmental benefit from taxes and charges is very uncertain. Furthermore, they increase industry costs and undermine aviation's socio-economic benefits, as well as taking funds away from airlines, that could be invested in newer, cleaner equipment.
Although international air services are exempt from fuel taxes under the Chicago Convention, air transport more than pays its way by entirely financing its own infrastructure. See common misconceptions about aviation fuel taxes (pdf, 53kb).
The International Civil Aviation Organization (ICAO) has urged its Member States not to unilaterally introduce carbon dioxide emissions charges, pending further discussion at the ICAO Assembly in 2007.
Emissions Trading Preferable to Taxes and Charges
Emissions trading (pdf, 760kb) (and similar mechanisms such as Joint Implementation and Clean Development Mechanisms) allow pre-determined greenhouse gas reduction targets to be met in the most cost-effective manner.
Emissions trading allows those with the greatest potential to reduce their emissions to trade their surplus allowances with companies requiring more. The overall emissions reduction is guaranteed, regardless of who makes the reduction, due to a limitation on the total emissions.
Any emissions trading schemes applied to aviation must incorporate a number of fundamental elements, including preserving ICAO's global leadership, minimising competitive distortions and having open access to trading markets. See IATA's climate change strategy (pdf, 196kb).
ICAO is currently developing guidelines on open emissions trading for aviation. IATA is co-chairing the group that is in charge of this work.
Voluntary Initiatives are Encouraged
Voluntary initiatives can be tailored to the specific needs of governments, industry and other stakeholders. They can provide more flexibility and cost savings than market-based measures, including emissions trading. They are often adopted in situations where they offer both environmental and economic benefits.
IATA encourages the use of voluntary initiatives to address greenhouse gases from aviation. IATA airlines have their own voluntary fuel efficiency goal.
See also:
Environmental Review 2004, part 3, "Confronting climate change".
Climate Change
Local Air Quality