Market-Based Measures

  • Market-based measures are instruments designed to address the climate impact of aviation, beyond what operational and technological measures or sustainable aviation fuels can achieve.
  • Between 2013 and 2020, an estimated net saving of 193.4 Mt CO2 (twice Belgium’s annual emissions) will be achieved by aviation via the EU ETS through funding of emissions reduction in other sectors.
  • In 2016, an agreement was reached at ICAO to set up the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). As of November 2018, 76 States intend to volunteer to offset their emissions from 2021, representing 76% of the international aviation activity.
  • Emissions trading systems (e.g. ETS) and offsetting schemes (e.g. CORSIA) both address aviation emissions but differ in how they function. ETSs generally work towards economy-wide emission reduction targets, while offsetting schemes also compensate for emissions by reductions in other sectors but without the associated cap.
  • The environmental effectiveness of offsets depends on robust implementation to ensure that the emission reductions delivered would not have occurred in the absence of the scheme.

 

Market-based measures are part of the comprehensive approach needed to reduce aviation’s emissions, as technological and operational measures alone are currently not sufficient to tackle the growing impact of the aviation sector on climate change. Market-based measures, comprising both cap and trading as well as offsetting schemes are designed to mitigate climate change through in sector emission reductions or through incentivizing efforts outside of the aviation sector. This section provides an overview of the EU Emissions Trading System and ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation, as well as a brief comparison of the two approaches.