"Carbon Restrictions Poised to Take Wing"

Monday, November 12, 2007

Carbon Restrictions Poised to Take Wing
By Kathryn A. Wolfe
Congressional Quarterly Today


Before long, the airlines of the United States may be flying in
environmentally friendlier skies - whether they like it or not.

The European Union, which has taken several steps to address climate-change
concerns, is preparing to crack down on greenhouse gas emissions by all
airlines that do business in Europe, imposing cap-and-trade rules designed
to encourage emissions reductions for commercial aircraft that serve the
region. The European Parliament is scheduled to take its first vote on the
plan this week.

U.S. carriers and the Bush administration don't like the proposal - the
White House has already called it a violation of postwar aviation agreements
- but they're unlikely to do anything that might jeopardize access to the
lucrative European market.

The upshot is that airlines, which have been overlooked in much of the
debate over climate change, will probably become one of the first test beds
for a broader system of carbon restrictions in the United States. That's
because Europe is likely to impose rules on them before Congress acts on any
climate-change legislation that would affect the United States in a broad
fashion.

"If airlines had to do it and it ended up not being a huge burden, that
would be a very valuable lesson," said an economist with ties to the
aviation industry who for that reason asked not to be identified. "We're
already moving down that pathway."

The Federal Aviation Administration, in fact, is in partnership with
airlines, aircraft manufacturers, airports, oil companies and universities
on a Commercial Aviation Alternative Fuels Initiative. Representatives met
in Washington last week to see how they might accelerate the development of
fuels that would produce fewer emissions.

The aviation industry is responsible for about 3.5 percent of the greenhouse
gas emissions and other agents, such as water vapor from hot exhausts, that
can trap solar heat and contribute to global warming, according to the
U.N.'s Intergovernmental Panel on Climate Change. That amount is small
compared with automobile emissions but still substantial.

"That's about the same size of emissions as a medium-sized country, say
Canada or the U.K.," said Annie Petsonk, international counsel for the
advocacy group Environmental Defense. "If aviation were its own country, we
would look to it and expect it to step up to the plate, to participate in
capping and cutting emissions."

But airline travel is increasing, as is its effect on climate. World
airports recorded 4.4 billion passengers in 2006 and expect the total to
reach nine billion by 2025, according to the trade group Airports Council
International.

"The concern is more, not what the impact is right now but what will the
impact be 20 years from now, after many countries have put into place
policies to try to reduce greenhouse gas emissions" for other industries,
said Donald J. Wuebbles, director of the University of Illinois' School of
Earth, Society and Environment. "At that point, aviation's percentage may
have risen dramatically."

The U.N. panel estimates that by 2050, aviation could contribute up to 15
percent of the factors that lead to global climate change. The industry
contends that its contribution would be about 5 percent. 

Governments in several countries concerned about global warming have begun
to assess aviation's impact. The European Union has been considering whether
and how to add airlines to its existing cap-and-trade system, under which
companies must meet emissions limits or buy carbon credits from those that
do more than meet the standards.

The European Commission - the EU's executive body - proposed that European
air carriers be brought under the plan by 2011, and international carriers
by 2012. 

The United States, Australia and China have balked at the EU plan and are
girding for a trade fight, but the proposal expected to emerge from the
European Parliament is even stricter and would extend the restrictions to
foreign airlines at the same time as European carriers.

Market Response 

The airline industry, long concerned with fuel costs, says the market
already provides all the motivation it needs to be environmentally friendly,
because more efficient engines require less fuel. The industry also argues
that the EU's plan could impose significant costs on companies that are
struggling.

An analysis by the investment firm Lehman Brothers said the EU plan could
increase the cost of fuel and might force airlines to fly less overall. But
Lehman also noted that the plan could spur fuel-saving technologies and more
efficient operating procedures.

With the public becoming more attuned to climate change and, perhaps,
aviation's role in it, some airlines, like their cousins in the automotive
industry, have already made moves to show that they are paying attention.
Delta Air Lines, for instance, has started a carbon offset program: In
exchange for a few extra dollars on a passenger's ticket price, Delta will
plant trees along the Gulf Coast. 

And this summer the Air Transport Association, the group that lobbies for
the largest U.S. airlines, created a new position: vice president for
environmental affairs, filled by aviation lawyer Nancy Young.

"We have huge market incentives to minimize our greenhouse gas emissions.
They're directly related to fuel burn," she said. "We're not embarrassed
that our economic interests and our environmental interests line up."

Young said the industry is focused on reducing pollutants by using more
efficient engines. She said that since 1978 the industry as a whole has
improved its fuel efficiency by 103 percent and that all the major U.S.
airlines have committed to an additional 30 percent improvement by 2025.

Technical Challenges

Historically, fuel efficiency in aircraft has been achieved primarily by
building lighter airframes with new metals and composite materials and by
tweaking engines to burn hotter and as a result use less fuel.

But there are questions about whether jet engines, basically refinements of
50-year-old designs, can be made much more fuel efficient than they are
already, or efficient enough to keep up with aviation's projected rate of
growth and new emissions standards. Improvements now are mostly incremental,
with no big breakthroughs.

"There are technological limits, yes," Young said. "That's part of our
concern, we're so fuel efficient already. We're going to get better, but we
have to invest a lot of money to buy new aircraft."

Young said the industry probably would not be able to reduce its emissions
quickly enough to comply with the proposed EU caps. Instead, companies would
have to spend money on carbon credits that would otherwise be used to
purchase more efficient technology. 

Aircraft manufacturers, spurred by airlines' intense desire to be more
efficient, have rolled out new designs such as the Boeing 787, which uses 20
percent less fuel than planes of comparable size, mostly because of the use
of lightweight composite materials in its fuselage. 

But new planes are expensive, and engine improvements can take a long time
to show up in an airline's fleet. According to Lehman Brothers, it takes 10
to 15 years at minimum for an aircraft to be replaced.

Also, pressure to save money on fuel doesn't always yield the most
environmental benefits, said a Senate Democratic aide knowledgeable on the
issue. The addition of biofuels to kerosene jet fuel, for instance, would
make it much cleaner-burning but no cheaper.

"Biofuels could have a real emissions benefit, but . . . there's no cost
advantage," the aide said. "So there's very little driving airlines to go
into biofuels right now."

Some are, however. Virgin Atlantic and Air New Zealand have expressed
interest in using biofuels. And the Air Transport Association participates
in the Commercial Aviation Alternative Fuels Initiative, a
government-industry partnership spearheaded by the Massachusetts Institute
of Technology.

But there are no large-scale research efforts under way, said Wuebbles. The
Air Force is interested in fuel supplements, but mainly to reduce dependence
on foreign oil rather than to cut emissions. The Air Force has said it wants
its fleet to fly on just 50 percent petroleum by 2010. Also, its primary
focus is on synthetic additives that could emit as much carbon dioxide as
regular jet fuel. 

The biggest hurdle in developing alternative fuels might be weight. Ethanol
is heavier than kerosene and contains less energy per gallon, so a plane
would have to carry more.

The U.N. panel acknowledged such challenges in its 2007 report, saying,
"There would not appear to be any practical alternatives to kerosene-based
fuels for commercial jet aircraft for the next several decades."

Traffic Congestion

One way for airlines and government agencies to pare both fuel consumption
and emissions would be to reduce traffic congestion in the air and on
airport runways. The industry says such steps should be taken before
imposing cap-and-trade restrictions.

Modern-day air traffic control is based on 1950s technology that requires
aircraft to fly between radar beacons. The FAA is in the early stages of
moving to a satellite-based air traffic control system that would allow
aircraft to fly in a straighter line, saving time and fuel. 

Then there are tarmac delays that leave planes idling at terminal gates or
on taxiways, burning fuel. According to the International Air Transport
Association, global carbon dioxide emissions could be cut by 12 percent if
air traffic control systems were more efficient.

Although Europe is moving forward on greenhouse gas emission controls, no
congressional action affecting aircraft or emissions generally is expected
during the remaining year of the Bush administration. 

Still, Sen. Frank J. Lautenberg, a New Jersey Democrat, is developing a
proposal that would place aviation under a cap-and-trade system, although it
has not been introduced. On Nov. 1, a Senate subcommittee approved a bill
that would require electric utilities, transportation companies and
manufacturers to reduce their greenhouse gas emissions, but that would
affect aviation only indirectly, mainly through fuel costs. 

Subcommittee approval was hard-won, however, and the bill's future is
uncertain. 

Ken Button, director of George Mason University's Center for Transportation
Policy, Operations and Logistics and an expert in international aviation,
said cap-and-trade proposals such as the one the EU wants to institute are a
good idea and that such a system is largely the reason why tetraethyl lead
was forced out of gasoline in the 1970s. He suggested that cap and trade, if
implemented properly, could work the same way with greenhouse gases.

"Markets certainly do work, providing that everything is included in the
market. The problem of course is that damage from greenhouse gases is not
something in the market," Button said. "The cap-and-trade system tries to
bring it into the market. Cap and trade is going to have less impact on a
good airline than a bad airline."


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