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**This morning Sandbag presented at the Westminster Energy and Environment and Transport Forum Keynote Seminar: Aviation in the 21st Century. The following is a transcript of our presentation.
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Sandbag is a relative newcomer to the Climate Change campaigning space, and have not specifically campaigned on emissions from the aviation sector, so it was very diplomatic of the Westminster Forum to invite us to speak! We are, however, the main NGO campaigning on the EU ETS, which hopefully makes our contribution equally pertinent.

Our reason for entering the campaigning space was not merely to proliferate the NGO voices calling for climate action, but to pursue what we felt was a neglected strategy and focus, emerging from our particular perspective on greenhouse gas pollution.

**In short: our perspective on CO2 emissions is that it is a quantity problem**…This may seem like stating the obvious to many of you, but this framing differs from many perspectives in the climate change space, where CO2 is seen as a developmental equity issue, or a personal moral problem associated with conspicuous consumption.

Our quantity framing has important effects on the kind of policies and sectors we focus on. We concentrate on the real titans: sectors, like electricity, which are most immediately amenable to decarbonisation, and to the single policies controlling the largest volumes of emissions, such as the the EU ETS.

To revisit the competing perspectives, my personal suspicion is that neither the development frame nor the ethical consumption frame have been very useful in driving practical solutions forward at the scale needed to surmount the climate problem. The development frame tends to divert responsibility away from some of the world’s most polluting states while the ethical consumption frame impossibly burdens individuals with global responsibilities. I’m reminded here of the Ancient Greek myth in which Atlas, the massive Titan responsible for holding up the firmament, seeks to relegate his responsibilities to the Human hero, Hercules.

At over 200Mt annually, European aviation emissions are nothing to sneeze at, but they are nothing compared to the annual emissions of, say, the combustion sector which at 1.4 billion tonnes is almost 7 times larger. The salience of aviation emissions has stemmed from this ethical consumption framing, and when conscientious consumers explore their personal carbon footprint, aviation emissions stand out.

But the publicity over aviation emissions, the guilt over flying, the acts or personal sacrifice have done little to stem the rise of emissions from the sector…even an Icelandic volcano only had temporary success.

For that reason, we see the inclusion of aviation under the ETS, as a huge step forward in the environmental regulation of the sector. We also see it a tremendous opportunity to shift public discussion away from personal guilt and back on to CO2 quantity issues by deepening public engagement with the policy controlling half of Europe’s emissions and feel it will be in the interest of the aviation industry to seize this opportunity with us.

We’re very pleased to see that aviation will be the first sector apart from the combustion sector, to face a shortage of permits against its emissions in Phase 2, and hope this shortfall will drive low carbon innovation both within the sector and elsewhere across the trading scheme.

To add a few important caveats, though, as an organisation fundamentally focussed on the inflated ETS budgets, we would have preferred the aviation sector to have been required to fight more for a slice of the existing carbon pie, rather than getting a special slice of carbon permits of its own (even if no-one is allowed to eat it).

A smaller allocation to the aviation sector, would have helped absorb some of the billion excess permits that are currently washing around the scheme in Phase 2, and helped to keep the Phase 3 budget in line with carbon savings delivered by the renewable and Energy Efficiency target (which the Commission seems to predict will free permits in the order of 800 million tonnes).

Separate to the scope adjustment of the overall cap, we would have preferred to see more permits purchased at auction or in the general market. Now admittedly, we’ve not yet looked at specific carbon leakage risks to the sector, but we have seen research by CE Delft and others to suggest that opportunity costs for freely awarded carbon permits tend to get past through to customers even in industries which are competitively exposed. It’s a pretty poor situation when consumers are forced to pay for carbon assets their governments gave away free on their behalf.

We welcome the unidirectional flow of permits from other sectors to prevent aviation companies from dumping surplus credits on the market, but are still wary about the level of access to compliance offsets the Commission will provide over Phase 3. If the 2012 level of allowing offset as far as 15% beyond the cap is allowed to persist, this will risk encouraging some companies to maximise their use of offsets for cheap compliance, leaving the sector awash with carbon allowances and creating minimal demand across the rest of the scheme where it is desperately needed.

We are also concerned about which credits the aviation sector will make use of in its first year under the ETS and feel it would reflect poorly on this newcomer to to indiscriminately absorb the industrial gas credits due for ban from April 2013. Offsets surrendered by companies under the scheme can now readily be traced to their project source, and Sandbag’s offsetting reports routinely spotlight companies who are using low quality offsets. There are now carbon exchanges like Blue Next which differentiate between offset credits, so companies no longer have any excuse for purchasing environmentally dubious credits.