The International Air Transport Association (IATA) has set an ambitious target to halve net 2005 emissions levels by 2050. Given expected traffic growth, this implies a carbon budget in line with our Low Carbon Economy Index - and the 2-degrees target for global warming.
Reaching these targets won’t be easy, and will require improvements in carbon intensity of 5.1% every year. Ultimately, it will require accelerating advances in fuel efficiency and scaling-up biofuel production.
In the interim, the aviation sector could purchase around €1.1 billion of carbon offsets annually by 2030 to reach these targets. IATA has suggested these purchases could be even higher.
The international climate negotiations in Doha did little to address the fundamental problems of oversupply of CDM credits. In this environment an injection of demand from the aviation sector - equivalent at its peak in 2025 to 170Mt CO2 - would help to resuscitate the market.
Industry will be evaluating the implications of the three market-based measures, which are on the negotiating table for 2013. If the industry can rally decisively around a single proposal by the UN aviation body, International Civil Aviation Organization (ICAO), we could see progress towards an international framework in October 2013. If not, continued diplomatic spats at the international level will further increase uncertainty for the industry.
The next 12 months present an opportunity to forge a global consensus and secure a sustainable future for aviation - fasten your seat belts.