Paper Economic and Environmental Basis - Carbon Neutral Growth - Jose Fernandes

Frankfurt University of Applied
Sciences
University of Petroleum and Energy
Studies, Dehradun
Masters of Business Administration in Aviation Management
Economic and Environmental Basis
Carbon Neutral Growth
Professor Dr. Karl-Heinz Haag and Professor Dr. Andreas Papatheodorou
José Joaquim Fernandes - 1034431
10th
October 2014

Page i
Table of Contents
List of Appendices.......................................................................................ii
List of Figures ............................................................................................iii
List of Tables..............................................................................................iv
Abbreviations ............................................................................................. v
Abstract......................................................................................................vi
1 Introduction.......................................................................................... 1
2 Problem Statement.............................................................................. 2
2.1 Scope............................................................................................ 2
2.2 Selection of literature .................................................................... 3
3 Carbon Neutral Growth and Sectoral Approach .................................. 3
3.1 Carbon Neutral Growth................................................................. 3
3.2 Global Sectoral Approach............................................................. 4
3.3 Requirements to make sectoral approaches work ........................ 6
3.4 Challenges to global sectoral approach........................................ 6
3.5 Aviation and climate change......................................................... 7
4 Industry and ICAO approaches ........................................................... 7
4.1 Industry Carbon Neutral Growth ................................................... 7
4.2 ICAO approach for Carbon Neutral Growth ................................ 10
5 Discussion......................................................................................... 12
6 Criticism............................................................................................. 16
7 Conclusions....................................................................................... 17
8 References........................................................................................ 20
Appendices .............................................................................................. 24

Page ii
List of Appendices
Appendix A Selection of literature ...................................................... 24

Page iii
List of Figures
This paper has not figures.

Page iv
List of Tables
This paper has no tables.

Page v
Abbreviations
ACI: Airports Council International
APU: Auxiliary Power Unit
CANSO: Civil Air Navigation Services Organisation
CER: Certified Emissions Reductions
CO: Carbon Monoxide
CO2: Carbon Dioxide
ETS: Emissions Trading System
HAPS: Hazardous air pollutants
H2O: water vapour
IATA: International Air Transport Association
IBAC: International Business Aviation Council (IBAC)
ICAO: International Civil Aviation Organisation
ICCAIA: International Coordinating Council of Aerospace Industries
Associations
NOx: Nitrogen Oxides
NOY: Other trace elements including the extended family of nitrogen
compounds
PM: Volatile and non-volatile particulate matter
SESAR: Single European Sky ATM Research
SOX: Sulfur Oxides
UHC: Unburned hydrocarbons, such as formaldehyde and benzene

Page vi
Abstract
This paper performs a theoretical analysis of Carbon Neutral Growth.
It set out by establishing the concept of Carbon Neutral Growth and the
concept of sectoral approach, and also elaborates the challenges that
academics see to a global sectoral approach. It then continues by linking
aviation with climate change and global sectoral approach.
The paper then set out by establishing the IATA Carbon Neutral Growth
and the ICAO approach for carbon Neutral growth.
The paper subsequently discusses various aspects of aviation, climate
change and global sectoral approach, and highlights some of the current
political as well as technical challenges. The paper also finds that
interdependencies among various policy, technological and operational
options and the full economic consequence might not be entirely clear.
The paper ends with self criticism and concludes that despite the
obstacles ahead, the aviation industry, the policy makers and the
international community will have to resolve the monumental task of
reducing aviation’s influences on climate change if we are all to live in a
healthier planet by 2050.

1 Introduction
Business related travel accounts for around 40% of all air trips (Doganis
2005).
Global airlines consume over 5 million of barrels of oil per day, and the
resulting carbon dioxide (CO2) emitted by aircraft engines is of concern
(Grote et al. 2014).
Aviation alters the composition of the atmosphere globally and can thus
drive climate change and ozone depletion (Lee et al. 2010).
Aviation emissions contribute to radiative forcing of climate. Of importance
are emissions of carbon dioxide (CO2), nitrogen oxides (NOx), aerosols
and their precursors, soot and sulphate, and increased cloudiness in the
form of persistent linear condensation trails, formed when relatively warm
and humid air in an aircraft’s engine plume mixes with colder and less
humid ambient air in the atmosphere (Marais and Waitz 2009), and
induced-cirrus cloudiness (Lee et al. 2009).
Technological advancement has significantly reduced aircraft engine fuel
consumption and emissions – fuel consumption per passenger kilometer
has decreased by 70% over the past four decades (Marais and Waitz
2009), nevertheless greenhouse gas emission from international aviation
and shipping are growing at an alarming rate (Zetterberg 2008).
Emissions from the transport sector have been estimated to contribute to
23% of the total emissions in EU-27. Emissions from the transport sector
are expected to grow in the future, while emissions from other sectors are
expected to remain stable at below levels in the 1990’s. Civil aviation
contributes to 2% of the emissions from the transport sector (Chin and
Zhang 2013).
It is evident that international transport poses a serious threat to the
world’s climate system(Åhman 2008) as it affects the environment at the
local, regional and global level (Marais and Waitz 2009).

2 Problem Statement
This paper performs a theoretical analysis of Carbon Neutral Growth.
Chapter 3, set out by establishing the concept of Carbon Neutral Growth
and the concept of sectoral approach, and also elaborates the challenges
that academics see to a global sectoral approach. It then continues by
linking aviation with climate change and global sectoral approach.
In Chapter 4, the paper set out by establishing the IATA Carbon Neutral
Growth and the ICAO approach for carbon Neutral growth.
Chapter 5 discusses various aspects of aviation, climate change and
global sectoral approach, and highlights some of the current political as
well as technical challenges. This chapter concludes that
The paper ends with self criticism and concludes that despite the
obstacles ahead, the aviation industry, the policy makers and the
2.1 Scope
The scope of this analysis is carbon neutral growth from an airline and a
government perspective.
By using the term Global Sectoral approach I mean a global sectoral
industry approach, which is similar to what the International Energy
Agency calls a sector wide transnational approach. These are
transnational industry focused initiatives that aim to engage a sector on a
broad international basis. The transnational industry-focused initiatives are
according to Egenhofer (Egenhofer et al. 2009) the principal means
through which progress in a sectoral approach is currently being made.

2.2 Selection of literature
The research articles were selected by undertaking a search through the
search engine Google Scholar and through the electronic databases
ScienceDirect and ResearchGate in addition to a general search on
Google.
For a detailed description of the selection of literature, please refer to
Appendix A.
3 Carbon Neutral Growth and Sectoral Approach
This chapter establishes the concepts of Carbon Neutral Growth and the
concept of Global Sectoral Approach for Carbon Neutral Growth. It then
elaborates the challenges that academics see to a global sectoral
approach. The chapter ends by linking aviation with climate change and
global sectoral approach.
3.1 Carbon Neutral Growth
Carbon neutrality, or having a net zero carbon footprint, refers to achieving
net zero carbon emissions by balancing a measured amount of carbon
released with an equivalent amount sequestered or offset, or buying
enough carbon credits to make up the difference. It is used in the context
of carbon dioxide releasing processes associated with transportation,
energy production, and industrial processes such as production of carbon
neutral fuel.
The carbon neutrality concept may be extended to include other
greenhouse gases measured in terms of their carbon dioxide
equivalence—the impact a green house gas has on the atmosphere
expressed in the equivalent amount of CO2. The term "climate neutral"
reflects the broader inclusiveness of other greenhouse gases in climate
change, even if CO2 is the most abundant, encompassing other
greenhouse gases regulated by the Kyoto Protocol, namely: methane

(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons
(PFC), and sulphur hexafluoride (SF6).
The best practice for organizations and individuals seeking carbon neutral
status entails reducing and/or avoiding carbon emissions first so that only
unavoidable emissions are offset. Carbon neutral status is commonly
achieved in two ways:
Balancing carbon dioxide released into the atmosphere from burning fossil
fuels, with renewable energy that creates a similar amount of useful
energy, so that the carbon emissions are compensated, or alternatively
using only renewable energies that don't produce any carbon dioxide
(Martin 2006).
Carbon offsetting by paying others to remove or sequester 100% of the
carbon dioxide emitted from the atmosphere (Revkin 2007) – for example
by planting trees – or by funding 'carbon projects' that should lead to the
prevention of future greenhouse gas emissions, or by buying carbon
credits to remove (or 'retire') them through carbon trading
3.2 Global Sectoral Approach
Some industrial sectors are concentrated to such a degree that even a
small number of companies represent a significant share of the global
green house gas emissions.
This makes these sectors a natural focus for climate change policy.
Sectoral approaches are seen as having the potential to broaden the
range of contributions by all parties, including emerging economies to
green house gas emissions reductions and to help moderate
competitiveness concerns in a trade exposed industry.
In particular sectoral aproaches may help to identify emissions on a
sector-by-sector basis building confidence that policies and measures can
be put in place to reduce emissions. They can also help identify national or
global commitments through aggregation of sectoral data in countries so
wish. Sectoral approaches therefore constitute a major opportunity to

focus on individual sectors that make major contributions to global
emissions.
The starting pointy of sectoral approaches is to target potential emitters to
reduce green house gasses emissions from big emitters.
Apparent candidates for sectoral approaches are aluminium, cement, float
glass and heavy chemical industry and electricity producers (Egenhofer et
al. 2009).
In addition to the above, climate policy can also occur through carbon
leakages.
A company that faces high cost to meet CO2 target, could either face
increased competition from companies without such constraint or decide to
relocate part of its CO2 intensive processes where climate policy is less
stringent.
Emissions would not be reduced, but simply be shifted to regions where
they are most welcome, at the expense of the economic activity in the
region that has decided to cut greenhouse gasses.
The more global markets, the more such leakages. According to Baron
(Baron et al. 2007) an often overlooked factor offering carbon leakages is
the efficiency of policy measures introduced to reduce greenhouse
gasses.
The lower the efficiency of a policy, the higher the cost imposed on
sources and the higher the distortion of competition.
A sectoral specific approach to carbon emissions would also help reduce
the competitiveness problems faced by carbon leakages.
International aviation and international maritime could also equally be
suitable for sectoral approaches because of the very nature of these
sectors is to provide their services globally or at least internationally, while
both remain outside the Kyoto Protocol.

3.3 Requirements to make sectoral approaches work
The design of global sectoral approaches can not start from scratch.
They will have to fit into existing national, regional/EU or policies and
procedures (Egenhofer et al. 2007).
Generally speaking sectoral approaches are viewed by many as the
second best policies to global and macro approaches. Such approaches
will be most relevant to industry facing global competition, such as the
aviation industry.
3.4 Challenges to global sectoral approach
In general sectoral approaches face four major challenges (Egenhofer et
al. 2009):
Technical issues related to data definition and collection
Risk of anti-competitive behaviour
Identifying workable incentives for companies and governments
from developing countries, mainly emerging economies to engage
in sectoral approaches.
Forming a suitable governance structure
For sectoral approaches to be successful, they will need to live up to a
number of requirements, in the areas of governance, incentive, practices
and compatibility with existing national, regional and international climate
change frameworks and policies.
The management and governance of global sectoral approaches pose
challenges to the industries involved.
It included agreement on type of targets, relative or absolute. The level of
ambition and stringency or the allocation of scarcity.
Irrespective of whether commitments are voluntary, self committed,
negotiated or government imposed, baseline setting, definition of sectoral
boundaries, monitoring and reporting are all crucial (Egenhofer et al.
2009).

All this raises a number of governance issues; How are targets set for
industry? Who enforces whom? Who negotiates with whom? How
governments co-operate to set cross border targets, multi jurisdiction
targets, and how they can obtain a legally binding character.
In addition global industry approaches will need to accommodate different
national regulatory traditions and preferences. Finally sectoral approaches
raise concern about confidentiality, potential collusions and anti-
competitive behaviour.
3.5 Aviation and climate change
Aviation is the first industry to suggest a global approach to the application
of a single Market based measure to manage its climate change impact.
This keeps aviation in the forefront of industries on managing carbon
emissions. It is also the first industry to agree global targets. These are:
improving fuel efficiency by 1.5% annually to 2020;
capping net emissions with CNG2020, and;
cutting emissions in half by 2050 compared to 2005.
The aviation industry is also the first industry to agree on a global strategy
to achieve the global targets.
4 Industry and ICAO approaches
This chapter establishes the concepts of the Industry Carbon Neutral
Growth and the ICAO approach for carbon Neutral growth.
4.1 Industry Carbon Neutral Growth
In 2009, IATA airlines took a landmark decision to adopt a set of ambitious
targets (International Air Transport Association 2009):
A cap on aviation CO2 emissions from 2020 (Carbon neutral
growth)
An average improvement in fuel efficiency of 1.5% per year from
2009 to 2020.

A reduction in CO2 emissions of 50% by 2050, relative to 2005
levels.
These collective goals were endorsed by the aviation industry in the joint
submission to ICAO in September 2009.
To achieve these goals, the International Air Transport Association (IATA)
has outlined a ‘‘four pillar’’ approach that includes:
Technology
Operations
Infrastructure; and
Economic measures.
Of the four pillars, the first pillar, technology is seen as the most promising
option for reducing emissions and includes improved engine technologies,
aircraft design, new composite lightweight materials, and use of biofuels
that have significantly lower lifecycle greenhouse gas emissions than
conventional fuel (International Air Transport Association 2009).
The second pillar, operations, aims at save fuel and CO2 through more
efficient aircraft operations, such as improved operations practices,
including reduced aircraft APU (Auxiliary Power Unit) usage, more efficient
flight procedures and weight reductions measures. IATA expects to
achieve 3% emissions reductions by 2020 (International Air Transport
Association 2009).
The third pillar, infrastructure improvements, are expected to present a
major opportunity for fuel and CO2 reductions in the near term. IATA
estimated in 1999, that there were 12% inefficiencies in air transport
infrastructure, of which 4% has been achieved by 2009. IATA expects that
measures such as the Single European Sky ATM Research (SESAR) and
the similar air traffic improvements in the USA, Nextgen Air traffic
management would further contribute to reduce CO2 and Green House
gasses emissions.

The fourth pillar, economic measures, is needed to “close the gap”
between achieving the targets of carbon neutral growth from 2020 and the
results from the first three pillars, technology, operations and
infrastructure.
According to IATA, a single market based measure will be critical in the
short-term as a gap-filler until technology, operations and infrastructure
solutions mature (International Air Transport Association 2009).
A global sectoral approach with a market based measure is part of the
fourth pillar of the aviation industry’s united strategy on climate change.
In 2025, the industry will need to offset 90 million tonnes of CO2 to
maintain emissions at 2020 levels and thus achieve carbon neutral growth.
By 2025 IATA expects this to cost an additional $7 billion per year to
achieve.
Air Transport Action Group is a not-for-profit organisation that represents
all sectors of the air transport industry.
In September/October 2013, the global aviation industry coordinated
through ATAG, submitted a working paper to the Assembly from the global
associations Airports Council International (ACI), Civil Air Navigation
Services Organisation (CANSO), International Air Transport Association
(IATA), the International Business Aviation Council (IBAC) and the
International Coordinating Council of Aerospace Industries Associations
(ICCAIA) for reducing emissions from aviation growth from 2020 (Air
Transport Action Group 2013).
The aviation industry recommends that as part of the comprehensive
approach to address air transport climate impacts, a single global market
based measure must be agreed. The industry advocates that the global
market measure must be seen as a part of a broader package of
measures including new technology, more efficient operations and better
use of infrastructure; the first three pillars of the four-pillar strategy. The
purpose of their paper was to promote the industry viewpoint that a simple

carbon offsetting scheme would be the quickest to implement, the easiest
to administer and the most cost effective.
4.2 ICAO approach for Carbon Neutral Growth
On 28 September 2010, ICAO was able to bring together its 190 member
states and adopted a comprehensive, robust and global policy on how to
address green house gas emissions from international aviation (United
Nations Framework Convention on Climate Change (UNFCCC) 2010).
The assembly resolution A37-19, incorporates the following key elements:
1. further endorsement of the global aspirational goal of 2 per cent
annual fuel efficiency improvement up to year 2050;
2. a medium-term global aspirational goal from 2020 that would
ensure that while the international aviation sector continues to grow,
its global CO2 emissions would be stabilized at 2020 levels;
3. further work to explore the feasibility of a long-term global
aspirational goal for international aviation;
4. development of a framework for market-based measures, including
further elaboration of the guiding principles adopted by the
Assembly, and exploration of a global scheme for international
aviation;
5. concrete steps to assist States to contribute to the global efforts;
6. de minimis provisions to ensure that States with small contributions
to the global air traffic are not burdened disproportionately; and
7. States’ action plans, covering information on CO2 emissions
reduction activities and assistance needs.
It was decided that the ICAO council should undertake further work in
order to make progress on a number of issues contained in resolution
A37-19, where states expressed concerns, such as the implementation of
the medium term global aspirational goal, and market based measures
including the de minimis provision.

It was also stressed that the international aviation sector should not be
singled out as a source of revenues for other sectors, and the assembly
also recommended that where revenues are generated from market based
measures, they should be applied in the first instance to mitigating the
environment impact of aircraft engine emissions.
The International Air Transport Association (IATA) 69th Annual General
Meeting overwhelmingly endorsed a resolution on “Implementation of the
Aviation Carbon-Neutral Growth (CNG2020) Strategy" (United Nations
Framework Convention on Climate Change (UNFCCC) 2010)
The resolution provides governments with a set of principles on how
governments could:
Establish procedures for a single market-based measure (MBM)
Integrate a single MBM as part of an overall package of measures
to achieve CNG2020
A summary of the principles of the resolution adopted by IATA and the
industry includes the following:
Setting the industry and individual carrier baselines using the
average annual total emissions over the period 2018–2020;
Agreeing to provisions/adjustments for
- Recognizing early movers, benchmarked for 2005–2020 with a
sunset by 2025
-Accommodating new market entrants for their initial years of
operation
-Fast growing carriers
Adopting an equitable balance for determining individual carrier
responsibilities that includes consideration of:
- An ‘emissions share’ element (reflecting the carrier’s share of total
industry emissions) and
- A post-2020 ‘growth’ element (reflecting the carrier’s growth above
baseline emissions)

Reporting and verification of carbon emissions that is:
- Based on a global standard to be developed by ICAO
- Simple and scalable based on the size and complexity of the
operator
Instituting a periodic CNG2020 performance review cycle that
revises individual elements and parameters as appropriate
The airline industry believes that ICAO is the appropriate United Nations
body for developing and implementing a global sectoral approach to
address aviation emissions (International Air Transport Association 2009).
Compliance must be enforcable through an appropriate legal structure.
ICAO has traditionally recognised and accomodated states with special
needs that have difficulty complying with standards or recommended
practices, either through technical and financial support or via
differenciated timelines for implementing measures (International Air
Transport Association 2009)
5 Discussion
This chapter discusses various aspects of aviation, climate change and
global sectoral approach, and highlights some of the current political as
well as technical challenges. The chapter concludes that
By proposing a four-pillar strategy for carbon neutral growth, i) technology,
ii) operations, iii) infrastructure and iv) economic measures, while at the
same time committing to very tangible goals of carbon neutral growth in
2020; and 50% reduction by 2050, the aviation industry might have given
themselves a double edged sword in the form of the fourth pillar, economic
measures.
If achievements through the first three pillars of the aviation industry’s four-
pillar approach are successful, the actions needed to be performed
through economic measures would be manageable.

If however, the combined achievements through the first three pillars of the
aviation industry’s four-pillar approach for one of another reason are not
achieved to the extent expected, the economic measures needed to offset
tonnes of CO2 in order to maintain emissions at 2020 levels and achieve
carbon neutral growth would increase accordingly. The worst case
scenario could very well be that we have to rely on the fourth pillar,
economic measures, as the main instrument for achieving 50% reduction
by 2050.
In the academic field, scholars also do not seem to have, or have had, a
unified view on the best developments or on the best way forward.
A business a usual scenario could put emissions from international
aviation and maritime shipping, or so-called bunker fuels at 15% of global
emissions by 2050 (Egenhofer 2008).
This development, coupled with the growing political popularity of
emissions trading, has put the spotlight on the option of an integrated
international trading system, including international aviation and shipping.
The idea would be to address emissions from international aviation and
shipping and capture the cost savings that a broad emissions trading
system offers. However, the characteristics of bunker fuel emissions, with
close links to international trade and competition, the difficulties of
allocating emissions on a country level and the complexities in estimating
climate impact from emissions, make the feasibility and effectiveness of a
conventional emissions trading system questionable (Egenhofer 2008).
Furthermore, a full integration of international transport and industry could
cause significant negative effects for industry, without achieving
substantial cuts in bunker fuel emissions. In the medium term at least,
these negative effects seem to offset the advantages of an integrated
system.
Åhman (Åhman 2008) considers a sectoral approach as a more promising
option for bunker fuels than incorporating them into an integrated
emissions trading system. Even though this would, in theory, raise the total

cost of reaching a global emissions target as compared to an integrated
emissions trading system, it offers several advantages. Most importantly, it
seems feasible from a technical and political point of view and would allow
the negative effects on industry to be managed, without compromising an
effective control of emissions from international aviation and shipping.
In his article Zetterberg (Zetterberg 2008) proposes a separate emissions
trading system (ETS) for international transport alone in which transport
emissions could effectively be controlled. The impact on the industrial
allowance price can be reduced, at least to some extent. But even with
separate systems, the transport sector will indirectly influence the
allowance price in industry. Both sectors will compete for the same
emissions reductions such as bio energy, clean electricity and CERs
(certified emissions reductions) or other offsets. The transport sector is
likely to increase the demand for these solutions and thus indirectly
increase the allowance price in the industrial ETS.
In her paper, Dray (Dray 2013) has discussed the different stages of the
aircraft lifecycle and the reductions in total aviation CO2 emissions that
may be possible in each stage from measures aimed at targeting the
purchase, retirement and adaptation of aircraft, using simple models
estimated from historical data. Although aircraft retrofits can be carried out
over a short timescale and can strongly reduce the fuel burn of specific
individual aircraft, the retrofits examined in their article have historically
offered a low potential for reductions in total fuel burn and emissions from
the global fleet (for example, the effect of all historical re-engining projects
from 1960 to 2005 has been around a 0.1% decrease in present-day total
aviation CO2 emissions). Influencing the aircraft retirement and/or freighter
conversion processes offers slightly greater scope for emissions
reductions, but in most scenarios these reductions would still be below 1%
of total aviation CO2. Their models also suggest that policies aimed at
influencing fuel prices will have relatively little effect on their own on airline
purchasing or retirement decisions, unless they raise fuel prices to levels
significantly higher than those seen historically. However, the greatest

scope for reducing the emissions of the global aircraft fleet, particularly if
global demand growth follows predicted trajectories, is likely to come from
policies aimed at influencing the rate of technology development.
In addition to emissions, aircraft noise also affects the environment
(Marais and Waitz 2009). The reduction of noise and the reduction of
emissions are goals that also pose interesting policy questions. Noise and
emissions impacts result from an interdependent set of technologies and
operations, so that action to address impacts in one domain can have
negative impacts in other domains. For example, both operational and
technological measures to reduce noise can result in greater fuel burn,
thus increasing aviation’s impact on climate change and local air quality.
Interdependencies among emissions make it difficult to reduce
environmental impacts by modifying engine design, because they force a
trade-off among individual pollutants as well as between emissions and
noise(Federal Aviation Administration Office of Environment and Energy
2005).
Even disregarding the noise aspect, on a technical level, like most fossil
fuel combustion sources, aircraft engines emit several different chemical
species that have an impact on health and ecosystems, including carbon
dioxide (CO2), water vapour (H2O), nitrogen oxides (NOx), unburned
hydrocarbons, such as formaldehyde and benzene (UHC), carbon
monoxide (CO), sulfur oxides (SOx), other trace elements including the
extended family of nitrogen compounds (NOy) and hazardous air pollutants
(HAPS), and both volatile and non-volatile particulate matter (PM),
primarily PM2.5 (particulate matter smaller than 2.5 micrometers). Primary
PM includes dust, dirt, soot, smoke and liquid droplets directly emitted into
the air. Particles formed in the atmosphere by the condensation or
transformation of emitted gases such as NOx, SO2 and UHCs are also
considered particulate matter, and are referred to as secondary PM
(Marais and Waitz 2009).

The relative proportion of each emission is influenced by different factors.
CO2 and H2O are products of hydrocarbon combustion and the amount of
these gases emitted is therefore directly related to the amount of fuel
consumed, which is in turn a function of aircraft and engine fuel efficiency,
as well as the length of time that an aircraft’s engines or auxiliary power
unit (APU) are running. The total amount of sulfur species emitted is
related to the concentration of sulfur in the fuel (controlled by a fuel
specification) and to the amount of fuel burned. Emissions of NOx, NOy,
non-volatile and volatile PM (Particle Matter), CO and UHC (Unburned
Hydro carbons) are related to the manner in which fuel is combusted and
to post-combustion chemical reactions occurring in the engine. These
emissions are therefore a function of engine design in addition to overall
fuel burn.
NOx emissions can be difficult to reduce because of the high temperatures
and pressures used to increase efficiency and thrust per unit mass flow.
Thus, some trade-offs exist between NOx emissions and CO2 and H2O
emissions. In terms of the combined effects of aviation emissions on
climate and air quality, it is not obvious whether increased NOx should be
traded in return for decreased CO2 and H2O, or vice versa (Marais and
Waitz 2009).
At the end of the day it would seem that interdependencies among various
policy, technological and operational options and the full economic
consequences of these options might not be entirely clear.
6 Criticism
Very few academic references seem to deal directly with South Asia. The
academic literature which I have found seems to discuss mostly aviation
and climate change form a predominantly western and developed country
point of view.
Huge differences as well as significant stages of maturity of the concept
and awareness of aviations influence on climate change seem to have

been experienced by the author when travelling in India and when
travelling abroad; and a concepts or awareness of climate change that
works well in, say Scandinavia may not at all be applicable across the
globe, or in places like India without significant modification or adaptation
to very local circumstances.
7 Conclusions
This paper has performed a theoretical analysis of Carbon Neutral growth
in the aviation industry and elaborated on the role of the aviation industry,
the governments and the international organisations.
The paper concludes that the aviation industry, the policy makers and the
healthier planet by 2050
Industry sectoral approaches that identify emissions on a sector-by-sector
basis is likely to see increased rigour in measurement and analysis,
already with realistic and viable implementation, as they are drawn to a
large extent by the specific industry sectors themselves.
The process of developing sectoral approaches implies that business must
be fully integrated in decisions with national and regional governments to
ensure both innovative and workable solutions.
It is precisely this form of cooperation that is highly valuable in facilitating
mutual understanding of issues and agreement on the way forward for
sectoral approaches (Egenhofer et al. 2009).
Generally, work on the proof-of-concept of sectoral approaches in
developing countries has identified significant limitations in data
availability, a wide range in the energy efficiencies of firms in the same
sector in some countries, substantial administrative and policy barriers to
the implementation of some mitigation activities, weaknesses in financial
infrastructure, and considerable needs for capacity building. Because of
significant differences among countries, sectoral programs need to be

tailored to the circumstances of individual countries. Indeed, because of
location, resource availability, and other idiosyncratic circumstances of
individual facilities, plant -level investigations are essential to specify the
emission mitigation targets needed for actual implementation of sector
programs in developing countries.
Developing countries need considerable help in the building the capacities
needed to implement sectoral programs. These include assistance in
establishing low –carbon development strategies, systems for data
collection and verification, institutions and procedures for developing and
implementing nationally appropriate mitigation actions, and market
systems and associated regulatory institutions.
Sector boundary issues can potentially give rise to product mix responses
that represent emission leakages. In the chemical and steel industries, for
example, the products have widely differing emission intensities.
Imposition of a sector program on some facilities in a sector, but not
others, could lead to low emission outputs at covered facilities only
because production of higher-emission items is shifted to non-covered
facilities in or outside the country.
Recent trends suggest that economic lifestyle and cultural changes will be
insufficient to mitigate global increases in transport emissions without
stringent policy instruments, incentives or other interventions being
needed (Air Transport Action Group 2014).
Airlines are through IATA committed to working with governments on
building a solid platform for the future sustainable development of aviation.
Airlines have come together to recommend to governments the adoption
of a single market based measure for aviation and provide suggestions on
how it might be applied to individual carriers.
ICAO has a tradition of uniting governments to focus on the global
standards that underpin global connectivity

The aviation industry is looking to ICAO as the body safeguarding the
harmonised global system of standards that enable the aviation industry to
provide air services in a safe, secure and reliable manner.
The aviation industry has been working towards the development of a
single global market-based mechanism. A mechanism that preserves
equal opportunities, fair competition, and respects the Special
Circumstances and Respective Capabilities of States
The ICAO resolution commits governments to develop a global market-
based measure for aviation emissions from 2020, to be decided at the next
ICAO assembly, scheduled for 2016. The next three years will be spent on
technical discussions as states work on the design elements of such a
scheme, including standards for the monitoring, reporting and verification
of emissions and the type of scheme to be implemented.
On their side the aviation industry stands united in urging States to make a
clear and unequivocal commitment to ask the ICAO Council to develop a
global market based measurement scheme for international aviation to be
brought back to the next ICAO Assembly in 2016.
In the short run the final synthesis report from working group III of the
Intergovermental Panel on Climate Change will be released in October
2014 (Air Transport Action Group 2014).
ICAO will have to rely on the goodwill and cooperation of governments and
industry in order to succeed in their role as the overarching institution to
oversee the work on climate change and aviation.
Despite the obstacles ahead, the aviation industry, the policy makers and
the international community will have to resolve the monumental task of

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Appendix A Selection of literature
The research articles were selected by undertaking a search through the
electronic databases ScienceDirect and ResearchGate in addition to a
general search on Google.
Following the recommendations of Tranfield (Tranfield et al. 2003) that
searches should not be restricted to bibliographic databases I also used
Google Scholar to identify unpublished studies, conference proceedings
industry trials and similar publications.
In addition to this, research also involved studying Economic and
Environmental basis textbooks and articles recommended for use of the
MBA in Aviation Management at Frankfurt University of Applied Sciences
by Doganis (Doganis 2005) and Lee (Lee et al. 2010) as well as
professional aviation text books by De Neufville (De-Neufville and Odoni
2003), Daley (Daley 2010), Deshpande (Deshpande 2001), Horonjeff
(Horonjeff et al. 2010) Graham (Graham 2008), Kazda (Kazda and Caves
2007), Marais (Marais and Waitz 2009) and Wells (Wells and Young
2004).
For the search engines and databases a number of searching keywords
related to Passenger Handling Processes (such as “Carbon Neutral
Growth”, “IATA”, “ICAO”, as well as words related to a geographical region
(such as “USA”, “Asia”, “South Asia”, “India”). This produced an extensive
range of diverse articles which had to be narrowed down by considering
their significance to this paper.
One of the major difficulties in determining their relevance was that the
articles varied from highly technical documents, to overarching high level
political documents; such as Climate-neutrality versus carbon neutrality for
aviation biofuel policy, or The potential of liquid hydrogen for the future
‘carbon-neutral’ air transport system.
Consequently a subjective judgement had to be made as to whether there
was different coverage of focus for the relevance of this paper.

Whilst the database search ensured that international papers that
conventionally tend to be written in English were identified, a potential
limitation was that papers written in other languages, such as the
scandinavian Languages, Danish, Swedish or Norwegian or such as any
of the Indian languages, may have been omitted, which in turn may have
influenced the geographical perspective of the articles.
The majority of the bibliography and references came from specialist
Aviation sciences journals (Journal of Air Transport Management) and
from specialist transport and environment journals (Journal Transportation
Research Part D - Transport and Environment, and Journal Transportation
Research Part A - Policy and Practice) but some also appeared in other
journals, such as Atmospheric Environment.

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