Revising the EU ETS and CORSIA in times of the COVID-19 pandemic: challenges for reducing global aviation emissions

Abstract

ABSTRACT Since fast-growing emissions from the aviation sector have become a major contributor to climate change, global efforts have been undertaken to reduce them effectively. The European Union Emissions Trading System (EU ETS) and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) are two existing market-based measures (MBMs) for addressing aviation emissions, whose implementation has been affected by the Coronavirus 2019 (COVID-19) pandemic. This article aims to examine challenges that the pandemic has posed on both systems by assessing the policy options for revising the EU ETS provisions on aviation, as well as the political debates regarding amendment to the CORSIA design in June 2020. Key policy insights From the environmental, economic and international perspectives, none of the six policy options proposed in the Inception Impact Assessment regarding future implementation of CORSIA alongside the EU ETS is optimal to achieving the EU’s multiple goals in revising its ETS. This article recommends the adoption of a hybrid option, which would help maintain international intra-EU/European Free Trade Association (EFTA) flights under the EU ETS scope to achieve EU climate targets and at the same time still integrate some features of CORSIA’s design in implementation. Concerning the reduction of free allowances for aviation, the swift phase-out option should be considered in conjunction with plans to develop sustainable aviation fuels (SAFs). While long-term effects of the pandemic on the effectiveness of CORSIA remain to be seen, its immediate impacts can be noticed in the weakening of this scheme’s credibility and stability in implementation.