1 / 14

Aviation Emissions ETG submission to DEFRA

Aviation Emissions ETG submission to DEFRA. Presentation of Draft Submission WG5/6 – 12 June 2007. Aviation. Advisory. Incumbents. Aviation Sub Group. Terms of Reference. Implications of an EU versus a national level approach Establishing the cap Coverage Exclusions Start date

mhelms
Télécharger la présentation

Aviation Emissions ETG submission to DEFRA

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Aviation EmissionsETG submission to DEFRA Presentation of Draft Submission WG5/6 – 12 June 2007

  2. Aviation Advisory Incumbents Aviation Sub Group

  3. Terms of Reference • Implications of an EU versus a national level approach • Establishing the cap • Coverage • Exclusions • Start date • Baseline reference years • Cap setting 3 Baseline methodology • Installation allocation options • The role of auctioning 4 Implications of introducing aviation as a major new (Non Kyoto) sector into ETS Phase 2 and Phase 3

  4. Criteria and issues • Evaluation criteria • Environmental effectiveness • Economic efficiency • Administrative efficiency • Competitively neutral • Market accessibility • Impact on incumbent members • Issues • The combination and interaction of alternative policy options • Selection of policy options for Phase 2 and 3 • Aviation sub-sector structure

  5. 1 EU versus a national level approach • Unanimous agreement - harmonised and administered at an EU level on: • setting caps • installation allocations • both Phase 2 and Phase 3. • Minimises the potential for national variation and competitive distortions • In line with EU ETS policy trends in other sectors for Phase 3

  6. Establishing the cap 1 • Coverage • Important competitive impacts however the scheme is designed • Phase 2 – agreed - limit scheme to intra EU only (1) to: • reduce uncertainty and administrative complexity • reduce impact and uncertainty on incumbent sectors • Phase 3 – consider broader inclusion reflecting post Kyoto policy framework

  7. Establishing the cap • Exclusions • Include all commercial air traffic • Very limited exclusions allowed • Address regional issues via relevant policies • Start date • Aviation sector – agreed early Phase 2 start (2010 or 2011) • Incumbents – prefer start in Phase 3 to avoid uncertainty and potential market volatility

  8. Establishing the cap • Baseline reference years • 1990 rejected due to sector growth, structural changes, data quality and availability • 2008 rejected – potential for gaming, impact on market/incumbents of continued uncertainty • 2004-2006 preferred by incumbents – transparency ofdata; multiple years; close to start date • 2005 – 2007 preferred by aviation – most recent emissions data; limited (if any) potential for gaming; multiple years

  9. Establishing the cap • PHASE 2 sector cap setting • All options are a reduction to BAU but (3) delivers greatest environmental benefit • Rules for aviation in Phase 2 should follow other sectors • Phase 2 – contentious areas: • Acceptable level of “effort” • Ability of aviation to pass through opportunity costs • Ability of aviation sector to pass through marginal compliance costs • Competitive impacts between regulated/non regulated airlines and aviation/incumbents increases with stringency • PHASE 3 – aviation should be treated as per incumbents

  10. Installation allocationsPolicy option: Grandfathering • Though administratively efficient, rejected due to: • Potential for gaming if future years included • Early action not rewarded • Sector structural and operational changes since the benchmark period would not be reflected, reducing economic efficiency • Longer term administrative drawback - Phase 3 is unlikely to be grandfathering • Grandfathering is not well suited to sectors with dynamic growth and structural change such as aviation

  11. Installation allocationsPolicy option - Benchmarking • Benchmarking is the preferred allocation methodology • No agreementon metric due to significantly different impacts across aviation sub-sectors. Three policy options reviewed: • Aviation sector agreement on following policy design criteria: • Incentivise CO2 reduction • Not discriminate/ favour operator or business model • Reflect CO2 emitted by aircraft operators • Administratively simple and sustainable • Reflect recent investment • Recommend additional work on competitive and distributional impacts

  12. Installation allocationsAuctioning • Propose single harmonised EU approach to avoid competitive impacts • Level of auctioning • Phase 2 - auction levels as per incumbent equivalent sectors (economic/competitive impacts); higher auction frequency • Phase 3 – Post Kyoto - reflect treatment of other sectors • Use of revenues • Impact on sector investment capacity depends on ability to pass through costs • Revenues raised should be used to improve environmental improvements • Revenue as general taxation is environmentally ineffective

  13. Implications of a major new (non Kyoto) sector • Open or closed EU ETS system • Phase 2 – agreed mechanism is needed to protect EU Kyoto environmental commitment • Phase 3 – Post Kyoto framework will determine but aviation objective is full integration • Access to project mechanisms • Phase 2 and 3 • aviation proposes full access to Kyoto mechanisms • Incumbents concern at Phase 2 impact • Rules on supplementarity as per other sectors • reflect economic impacts • level of effort

  14. Feedback and comments to draft charles.eyre@eyreconsulting.co.uk 01264 356 900

More Related