Climate action in the Aviation Sector Overview Climate

Climate action in the Aviation Sector:

Overview • Climate action in two fronts – ICAO/IATA • Aviation sector as potential demand trigger – for Pre-2020 and Post-2020 • Potential role of the CDM 2

Potential contribution from the aviation sector. • GHG emissions from the aviation sector is huge ◦ Efforts to tackle emission reductions in this sector are critical for the realisation of the goal of staying under 2 degrees Celsius temperature rise • Positive recent developments and trends towards the operationalization of the goal to cap net emissions from 2020 – recent ICAO Assembly’s decision • Market-based measure (MBM) is integral part – ICAO hopes to finalize an agreement for MBM by 2016 • Linkage between MBM agreement and Paris agreement that are both slated to be operational from 2020 onwards. 3

Role of offsets • One of the two important things in Christiana’s video message: ◦ Offsetting is a reality that would be with us for many years to come as economies address climate change and find their way to the deep decarbonization of the global economy • Yes, the aviation sector must make real emissions reductions, but there will for some time be some emissions that cannot be addressed so easily • It is estimated that civil aviation would require approximately 1. 5 billion tons of offsets in the 2020 -2030 period • The sector could be a potential demand trigger for the ailing carbon markets 4

CDM potential for generating offsets 8 billion tons of CO 2 emissions could be avoided at full potential 1. 5 billion tons of CO 2 emissions already avoided until 2013 3 billion tons of CO 2 projected to be avoided until 2020 Civil aviation would require 1 -2 billion tons of offsets in the 20202030 period, according to estimations. 5

Potential of the CDM In addition: Ø It is a mature instrument: CDM has overcome the difficulties that all new mechanisms must endure. Ø Lower transaction costs: CDM has taken on wide standardization and simplification. It has continuously evolved and improved, and can be adapted further. Ø Credibility and transparency: CDM is a multilateral mechanism with the systems required to ensure that reductions are real, additional, verifiable and permanent. Ø Co-benefits: CDM projects contribute to sustainable development, including environmental, social, and economic co-benefits. A mature, tested, and credible mechanism ready to deliver cost-efficient mitigation in large and diverse supply. 6

Carbon markets and Aviation – in conclusion • Potential for the aviation sector to help define the shape and effectiveness of carbon markets and contributing to global carbon pricing efforts • Why voluntary action in the pre-2020 period? ◦ Responsible self regulation ◦ Encourage early movers and build experience ◦ Ensure a considered role for markets that is based on experience gained THE AVIATION SECTOR MUST FLY THE FLAG OF CLIMATE ACTION INTO THE HIGH BLUE SKIES 7

Thank you Latin American and Caribbean Carbon Forum Bogota, 5 September 2014