Role of carbon markets with the new Carbon Offsetting Scheme for International Aviation program
The Carbon Offsetting Scheme for International Aviation (CORSIA) is soon to become a major player in carbon markets. The airline industry is one of the biggest emitters of greenhouse gasses with limited options to internally reduce their emissions. That is at least until fuel technologies and biofuels advance. A surge in air travel demand has greatly increased emissions in the past 15 years with estimates expecting this increase to be as large as 70 percent. The goal of CORSIA is to stabilize net CO2 emissions from international travel at 2020 levels, even as flight demand increases. After stabilizing emissions, CORSIA’s emission reduction target is 50 percent below what emissions were in 2005, by 2050. While long term emission reductions will need to come from advances in jet fuel efficiency, investing in carbon projects and purchasing offsets provides a near term solution to begin reducing emissions.
Regardless of the current United States stance on climate change, all major United States airlines have agreed to participate in the CORSIA program which is slated to become mandatory in 2027. On January 1st of this year, airlines began to monitor and record their emissions. Emissions from 2019 and 2020 will need to be verified by an accredited body. The average emissions from these year will set the baseline. Compliance periods will be every 3 years, after which airlines will need to prove they have offset and reduced enough emissions to return to the baseline. The overall impact of the program between 2021 and 2035 is significant, with estimates that the program will mitigate 2.5 billion tonnes of CO2 emissions and raise $35 billion for carbon reduction initiatives.
As with any program associated with carbon offsets, there has been expressed concern over offset integrity. In response, a technical advisory board will review carbon offset projects to ensure high quality projects, similar to requirements of other registries. This includes proving additionality, implementing rigorous scientifically sound protocols, a method to track emission reduction units to avoid double counting, and safeguards against environmental and social risks. What this means is an expanding international carbon offset market. The program, if successful can demonstrate the impact of large industry uniting in goals to reduce carbon emissions. The financial and environmental impacts of CORSIA can be instrumental in proving the success of what is to become one of the largest international environmentally driven agreements.