Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I'm Andy Stone. The global air travel industry is growing rapidly, with the number of airline passengers projected to double in less than 20 years. Yet strong growth may not be entirely good news for the industry, which has come under scrutiny for its outsized carbon footprint in an age when concern over climate change is on the rise. On today's podcast, I'll be talking with an air industry expert about industry plans to contain greenhouse emissions, even as ridership grows. We'll look at the uniquely difficult challenge airlines face in reducing emissions and whether industry efforts to hold emissions in check will, in fact, deliver. We'll also explore the role air travel might play in helping or hindering countries in their efforts to fulfill national and international climate commitments, including those under the Paris Climate Accord.
Andrew Murphy is Manager for Aviation at Transport & Environment, an organization in Brussels, Belgium that works with industry and governments to reduce transportation emissions. Andrew, welcome to the podcast.
Andrew Murphy: Hello.
Andy: To start out, I wonder if you could tell me about Transport & Environment and your work related to aviation?
Andrew: We're a Brussels-based sustainable transport NGO. We've been around for around 30 years now. Through a campaign for more sustainable transports, primarily EU-level, working also with different countries here and also working at international levels. We work in all modes of transport -- cars, trucks, fuels -- but for the last five years, I've focused on reducing the climate impact of aviation.
Andy: Airlines account for about 2-1/2% of global greenhouse gas emissions, and the United Nations forecasts that the emissions will triple by the middle of this century. What's driving emissions growth?
Andrew: Two big problems. The first is more people are flying. Every year, more and more people in rich countries, in developing countries, fly. And that increase in passenger numbers is outstripping the increase in aircraft efficiency. So every year for decades now, we've seen the climate impact of aviation grow and grow. And the other big reason is we haven't really taken big steps to try to cut aviation's climate impact. We're largely left the sector's emissions unregulated, and in large parts of the world, we leave jet fuel untaxed. And so we're seeing that steady increase year on year.
Andy: What makes it so difficult to lower airline emissions?
Andrew: There are certainly challenges which are unique to the aviation sector. Some of the technological breakthroughs that we are seeing in other parts of our economy -- so in electricity, in road transport, and buildings -- they haven't arrived yet in aviation. It's very hard to, for example, develop electric aircraft because batteries are quite heavy. So what works well for road transport isn't working so well for air transport. So we're a long way away from electric aircraft. But we shouldn't overstate how difficult it is. It's certainly challenging, but then again, every sector has its own unique challenges when it comes to cutting its emissions. I think we need to realize that the real challenge is that we haven't actually started yet. Governments haven't really begun the first steps you would expect them to have if they were serious about cutting emissions from this sector.
Andy: So awareness of airline emissions is on the rise, and one result has been the emergence of the flight-shaming movement in Europe. And I think that got a lot of publicity in August, when Greta Thunberg, the climate activist from Sweden, took a boat to a UN climate summit in New York instead of flying. Tell us a little bit more. What is flight-shaming? And is it having a measurable effect on air travel?
Andrew: Yes, so it's a big and growing movement here in Europe. Actually, at the moment, we're seeing debates in a lot of European countries around the climate impact of aviation, around what governments are doing or not doing to rein in emissions from the sector. The flight shame movement is a good example of that. It comes from a sense of frustration, I think, from a lot of the public that so little has been done to reduce the climate impact of aviation. And a good example of that is last year in France, we had what was known as "les gilets jaunes," the yellow vest protestors who took to the streets. They were angry about some of President Macron's climate measures, in particular an increase in diesel tax for road transport. And when they were protesting, they pointed out that diesel or petrol for cars is taxed, but jet fuel for aviation isn't. And they see this as unfairness in how aviation has been treated. And they also know that aviation is perhaps one of the most climate-intensive activities anyone can engage in. You can go to great lengths to adopt a vegetarian diet, not own a car, live in a very energy-efficient building. But ultimately, if you take even one long-haul flight each year, it can undo that.
So in the face of what is called "government inaction" at cutting aviation emissions, where they saw the huge climate impact that flying has, a lot of people have decided to essentially take matters into their own hands and not fly. And they're saying that they're not flying because they want to send a signal. They want to not just reduce their own climate impact, but they also want to send a signal to both industry and governments that the status quo of aviation being a huge driver of climate change is no longer tolerable. It is having an impact here in Europe. It's certainly dominating some of the public debate here. And we've been seeing some practical implications. We're seeing some airlines report falling passenger numbers, and as a result, falling emissions. We're also seeing a big boost in train numbers. We're seeing, for example, the Channel Tunnel, which crosses the English Channel, had one of its busiest years last year. We're seeing some of the night train operators in Europe, some based in Austria, for example, are increasing their lines, increasing staff numbers. So we actually are seeing people move with their feet away from aviation and towards other, more sustainable modes of transport.
And that's making industry sit up a bit. We're seeing industry come out with new environmental policies. We're seeing industry trying to rebrand themselves as much more sustainable than they actually are. They're really reacting to what is a growing consumer demand.
Andy: Well, taking that comment that you had just a moment ago about alternatives to flying -- in 2020, Germany will increase its tax on airline tickets, and at the same time reduce the tax on railway tickets. Will we see more of this type of policy in Europe or elsewhere?
Andrew: Yes, we're starting to see it in a few other countries, as well. Earlier this year, President Macron increased the tax on flying in France. It was a very small increase, only a few euros, equivalent to a few dollars. We're seeing a number of other European governments which are considering new ways to tax aviation. However, a number of European governments are looking at taxing the jet fuel. There is no country at present in the European Union which taxes jet fuel. Some governments are saying it's time for aviation to do more, and a good start would be to put a better price on jet fuel. So we may see more ticket taxes. We may see tax on jet fuel. Ultimately, flying has become too cheap, and that's driving more and more people to fly, and governments are taking steps to try to correct that imbalance.
Andy: Let's look at the business impact here on the industry specifically for a moment. The International Air Transport Association, which is the global airline industry trade group, recently noted that investors raised the issue of climate change on an average of seven times during airline company financial earnings calls in 2018. And that compares to less than one mention per call on average over the years of 2013 to 2017. So clearly, investors are growing concerned about airlines' role as major greenhouse gas emitters. To what extent do the airlines view climate change as a material threat to their businesses?
Andrew: I think a number of airlines, particularly in Europe, are seeing this as a growing risk. We're seeing it appear more in their reports to shareholders. We're seeing some of the big investor funds mentioning this in their statements to industry. So they see it as a threat. They know what's at risk if more taxation comes in, if fuels become more expensive, if airport expansion is blocked. That really puts a block on the plans some airlines have to expand their operations in the years ahead. So it's not quite an existential threat to the industry, but it's certainly one they're having to take seriously.
Andy: The airline industry has a second global body, which is called the International Civil Aviation Organization or ICAO, and it sets uniform standards for safety and security and operates under the auspices of the United Nations. In 2016, ICAO put forth a specific plan to address airline CO2 emissions. Can you describe the key points of the plan and its emissions goals?
Andrew: Yes, so that UN body, ICAO, it's one many haven't heard about, but it has been a really essential UN agency for the last 60 years. It has done fantastic work in the area of improving aviation safety and security. It has done less good work in the area of mitigating aviation's climate impact.
And one of the big reasons is it's an agency which sees its primary goal as supporting the expansion of aviation. They've taken a number of controversial positions. For example, ICAO has always campaigned against taxing aviation. They simply feel the sector should remain as tax-free as possible. In recent years, they have tried to play catch-up, and they have tried to become more active in the area of climate change. And results haven't always been impressive. They've adopted two primary policies to try to rein in emissions in the sector. The first policy adopted in 2016 was a CO2 standard for aircraft. Now, we've had CO2 standards for vehicles in Europe and the US and other parts of the world for decades now, and actually, they've been pretty important in driving down emissions in those sectors. The reason we have electric vehicles is, in large part, thanks to some of the current CO2 standards that California, that Europe have introduced.
What we see in the aviation sector is something entirely different. Not only were they quite late in introducing CO2 standards -- as I said, only a few years ago -- that standard is incredibly weak. It will only fully come into operation in 2028, and actually, the aircraft being produced today already meet the CO2 standard. So it won't actually do what a CO2 standard is supposed to do.
Andy: Is that like a fuel economy standard for the airplanes? Is that what that is?
Andrew: That's precisely it, yes. So it won't actually drive down emissions from the new aircraft. It will simply, in a way, recognize emissions savings which have already taken place. So that's one policy that they've pursued and which we don't think will be very effective. The second is what's known as the "Carbon Offsetting and Reduction Scheme for International Aviation," or CORSIA.
The basic idea behind it is that instead of having to reduce its own emissions, the airline sector will have to pay for emissions reductions from other sectors, where perhaps emissions reductions are cheaper and more available, and it will have to do so for a portion of aviation emissions, for all the emissions above 2020 levels. So it's what's known as a "carbon-neutral growth" in 2020 levels. But there are big issues with this scheme, both in terms of the types of offsets which are used, how the scheme is going to be enforced, and also how fair the scheme is between airlines in wealthy countries and airlines in developing countries.
Andy: So are all countries participating in CORSIA, or is it just a certain number?
Andrew: For the first six years, participation is voluntary. Then from 2028 onward, countries will be obliged to participate, depending on their level of wealth, or depending on their level of aviation activity.
So for the first six years, it’s voluntary. We have a lot of European countries indicating they may take part, provided a few criteria are met. In particular, the European countries are worried about the environmental integrity. We also believe the US may join, but to be honest, it's pretty unclear at the moment what exactly the US position is. So we're still in a little bit of waiting and seeing.
Andy: So there is no other framework. This framework is one that's been proposed. It obviously hasn't gone into effect yet. It sounds like the individual countries actually need to approve the plan.
Andrew: The countries, basically, and ICAO need to iron out a few more details. The big detail that remains unknown is what kinds of offsets will be used? This is an offsetting scheme, so whether you use good offsets or bad offsets would have a huge impact on whether the scheme actually delivers on what it promises, which is carbon-neutral growth in 2020. Now, what counts as a good offset? We have about 20 years experience working with offsets. They are a concept that was originally developed under the Kyoto Protocol, where cheaper emissions reductions in developing countries which didn't have a target would be sold to wealthy countries which did have a target. That's what's known as a Clean Development Mechanism. And this idea of offsetting is paying someone else, instead of producing your own emissions. So what you need to do is, you need to be absolutely certain that the emissions reductions you're paying for take place. You also need to be sure that the emissions reductions that you're paying for wouldn't have taken place unless you made that payment.
And so to give some concrete examples to illustrate this a bit, if someone says, "Look, I'm building a wind farm. Please pay me $20 a ton, and I'll build an even bigger wind farm," or "I'll build a second wind farm." That's what's known as "additionality." But you need to be certain that the wind farm would not have been built without your payment. Take, for example forestry credits. So someone says, "Look, pay us the money, and we won't cut down this part of our forest." That sounds appealing, but you also want to be super-certain that in response to this, you're not simply shifting deforestation to another country or another forest or another part of that forest.
These are huge issues of offsetting, and actually, a lot of the research we've had in the last 20 years shows that most offsetting simply doesn't work. It's impossible to tell whether that wind farm was going to be built anyway, or it's impossible to track deforestation. And so that's one of the reasons why a lot of countries, for example, the European Union has decided it's not to use offsetting for its 2030 climate targets. And a lot of companies which are adopting ambitious environmental and climate policies are saying, "We're not going to rely on offsetting. We're going to reduce our own emissions instead."
Now against that, we have the aviation industry essentially saying, "Offsetting is going to be our number one climate tool." And we find that hugely problematic. We find it hugely problematic relying on a climate tool which has such a poor record of actually delivering what it promises.
Andy: Well, it is problematic, because obviously the airline industry has no other major plan at the point if it's relying on offsets. And you're saying that the offsets are not reliable in terms of, if they're really additional, then it would call into question any of those emissions reductions or net emissions reductions that CORSIA would propose.
Let me ask you this, one other issue regarding the offsets. Which offsets would CORSIA use? Obviously there is the Clean Development Mechanism under the Kyoto Protocol. I think that's really what you've been referring to in talking about the last 20 years of history of offsets. Would CORSIA use those same offsets, or would it have its own structure for offsetting, its own projects it would approve?
Andrew: Well, we hope it won't use the CDM credits because they really have a very poor record. And we think if CORSIA relies on CDM, it's a real sign that the scheme isn't dedicated to really environmental credibility. Now, what offsets may it use? That's a big unknown question. Today, the Climate Conference at a meeting in Madrid, COP25 -- one of the big issues on their agenda this week and next is deciding how is offsetting going to work under the Paris Agreement? And actually, the Paris Agreement presents some real, difficult issues for how offsetting can be done credibly. And to explain what that's the case, Paris Agreement has targets for every country which participates in Paris. So every country has a target. So when you buy an emissions reduction, let's say from Chile, you want to make sure that one ton of emissions reduction isn't being claimed by Chile as part of its own target. Essentially, you want to make sure it's only counted once. This is sort of like climate accounting. But it gets more complex than that.
Let's say Chile sets a very weak target, and that overages use that target and then sells that overage achievement as an offset. You're essentially giving Chile a financial reward for setting a weak target. So you're disincentivizing setting ambitious targets. And remember, the whole point of Paris is that it's a bottom-up agreement. Countries set their own targets. So it's up to Chile to decide for itself how stringent its CO2 target is. But here we come along with offsetting and saying to Chile, "If you set a weak target, guess what? You can make some money out of that." That's a terrible disincentive for countries to set strong targets.
Another way it could undermine Paris is not every country is including all sectors of its economy in its climate target. So again, there's an incentive for Chile or any other country -- I'm not picking on Chile for any reason. There's an incentive there for a country to leave a chunk of its economy outside of its climate target, reduce emissions in that part of its economy, and then sell that emissions reduction as an offsetting.
So it's what's known as the Article 6 of the Paris Agreement. It's a pretty short part of the agreement, but it has proven incredibly difficult to reach agreement on how exactly offsetting can be reconciled with the Paris Agreement. And to be honest, after several years of negotiations, having looked at the difficulty of this issue, we may have to come to a conclusion that offsetting and Paris really can't be reconciled. Because ultimately, Paris isn't about moving emissions reductions around the globe, about one person paying someone else to reduce their emissions. We have to remember what Paris is ultimately about. The Paris Agreement is about everyone reducing their emissions. And the Paris Agreement is also about us no longer burning fossil fuels. That's the entire purpose of the Paris Agreement.
So if the aviation sector comes along and says, "Look, it's very difficult. I'm going to keep burning jet fuel, but don't worry. I'm going to pay someone else to reduce their emissions instead," that's not Paris-compliant. That's not what the point of the Paris Agreement is. And actually, there's an argument to be made that by the airline industry relying on offsetting, they're essentially delaying by five or ten years what they have to do inevitably. They have to stop burning fossil fuel. They have to stop burning jet fuel. And so we can spend ten years buying offsets and trying to make offsetting work, but actually we're better off spending those ten years just finding ways to not burn jet fuel in the first place.
Andy: Tell me a little bit more about that. So obviously the airline industry is dependent on fossil fuels. There are no battery-powered airplanes right now. There are some that are in the works that maybe, in a decade, might be available, but they'll be for shorter flights. So really you've got this kind of Catch-22, that the airlines need to lower their emissions. They're dependent upon fossil fuels. It looks like they are going to be relying on fossil fuels for quite some time, so what are the realistic alternatives for lowering their emissions, particularly as ridership grows dramatically?
Andrew: You say it there at the end. I think the best way to reduce emissions in the aviation sector is simply not to fly. And I think that's a conversation we need to have, particularly in wealthy countries, where they do sometimes what's known as "binge flying," where people fly for weekend breaks, for work trips that maybe aren't that essential. Look, there's always an essential reason to fly, and we'll always have flying in our economy. People need to fly for work, to see their family, but we do need to have a conversation about how much flying we do, how much indirect subsidies we provide the aviation sector, and in the future, if we should all fly as much as we do now.
You know, the rate we fly in wealthy countries, it's a pretty recent development. It has only been with us in Europe for maybe ten or fifteen years. So that needs to be the first conversation we have. How big does the aviation sector have to be in 2030, 2040, 2050 in order for us to reach our climate-ambitious goals? But after that, as I said, we're always going to fly to some extent. There are good reasons to fly, and it brings money benefits to the economy, to society.
What we have in the aviation sector is in some ways a lot of certainty. We know what aircraft are going to look like for the next few decades. They are going to be jet aircraft. And a lot of the aircraft which are rolling off the production factories in Seattle for Boeing, or Toulouse, or Airbus, they are traditional jet aircraft. They will fly for 20 or 30 years. And our options to cut their emissions are either to stop flying them entirely -- so mothball those aircraft fleets -- or put something else into the aircrafts that's not a fossil fuel. Now for alternatives to fossil fuels, you basically have two options. The first is biofuels or advanced biofuels, and that's where you take crops, and you turn them into fuels. That's what's known as biofuels. That's problematic because there's only so much land on the Earth. We need that land to store carbon. We need that land to produce food. And also our population is getting bigger. So we don't have enough land to plant enough trees that then turn into fuel.
The next option is advanced biofuels, where we take, for example, wastes, where we take leftovers from forestry, where we take used cooking oil, and we turn it into an alternative fuel. And that's a good feedstock, but there isn't a lot of it. To give one good example, if you want to fuel one flight from Paris to Amsterdam, you need for one person the average used cooking oil consumption of seven years. So that's seven years of eating fries and chips in order to fuel one flight from Paris to Amsterdam. So again, not really a very credible feedstock. So these are what's known as a more traditional alternative fuels.
Something which is getting a lot of consideration in the last year or two is something known as the synthetic kerosene. And what that is, essentially you create a new fuel in the lab. You take an immense amount of renewable electricity to split water into hydrogen, and then you combine that hydrogen with a new form of CO2, CO2 captured from the atmosphere, and you essentially create a new fuel. This is a surprisingly old concept. It actually dates back to the Second World War when the Germans had trouble getting their hands on enough oil, they actually developed this process themselves, this synthetic kerosene process. The problem is, it's enormously expensive because it requires so much renewable electricity to begin with.
What's changed in the last few years is the cost of renewable electricity has tumbled in Europe and elsewhere, so we're starting to see it become a little more cost-competitive. It's still more expensive than jet fuel, but getting closer. And a second thing is we are getting a lot more pressure on the aviation industry to do something and a lot more pressure for that something to be something other than offsetting. And so we're seeing a number of governments, we're seeing a number of airlines, we're seeing a number of organizations looking at the synthetic kerosene as the solution for aviation. Now, there are still a lot of challenges, a lot of challenges in scaling up to fuel production, a lot of challenges in going into production right. You want to make sure you use only renewable electricity. The source for the CO2 is a complicated topic, but for the first time in a while, we've actually been thinking of what is a credible way to cut emissions for aviation, and this is the most credible way that's available today.
Andy: It sounds like any path forward is going to be expensive. I just wanted to make note of this little nugget of data that I found before our call, and that is that Citibank, the bank here based in New York, in the United States, recently estimated that the cost of offsetting airline emissions -- so if we're going the offset route, and we're not even talking about the alternative fuels -- but the cost of offsetting airline emissions will be ten times greater than the estimates that ICAO has been using. What's your expectation for the cost of offsets? And again, I want to bring back this question. Are we seeing an existential threat to the airline industry or at least potentially to some of the airlines, as it sounds like air travel in the future will be more expensive?
Andrew: Yes, we need to put it into context. There are a lot of good stories about climate policy. The cost of owning an electric car is reaching the same cost as owning a traditional car. The cost of have a zero emissions building, the cost of renewable electricity -- they're all tumbling. But for the aviation sector, you're right. The climate solutions for that sector are still at the moment more expensive than doing nothing. And I think Citigroup is right to warn airlines that there is an eventual cost coming down the track, because if you're an airline, particularly in Europe, and you're basing your growth forecasts or your profit forecasts on essentially being able to burn untaxed jet fuel for decades to come, I think you're making a bad bet. You're presuming regulators aren't going to step in and do something to try to cut aviation emissions. But already across Europe, as I said, we're seeing regulators step in and say, "We need to tax jet fuel." We're also seeing regulators step in and consider what's known as "fuel mandates," which is essentially you force airlines to buy alternative fuels, even if they're more expensive.
Would I describe this as an existential risk to the aviation sector as a whole? Not in the same sense as, for example, the coal factor. The coal factor is facing something of an existential risk, particularly in the US, as it faces competition from natural gas, for example. I don't think we're quite there for the aviation sector. People are always going to want to fly to some extent, and there is no alternative to flying the way renewable electricity or natural gas has emerged as an alternative to coal. But certainly for some airlines that don't adapt, for some airlines that are more price-sensitive, yes -- they are facing serious risks.
For airports that are building new runways, they're facing a physical risk at times, in terms of exposure to rising sea levels. They're also facing a financial risk because they may not have the number of passengers in the future that they're expecting to have.
Andy: I think it's interesting. One of the budget airlines in Europe, Ryanair, has partnered with a company called Wright Airlines or Wright Manufacturing -- I forget the exact name -- but they're actually working on this electric plane for about a decade for now, when they say it will be ready. So obviously that's one of the budget airlines that really prides itself on its cheap tickets. They're obviously trying to look at some future way around that, I would guess.
Andrew: Yes, and the airlines are looking at their options. But I think it's important to remember that for any new technology to really be deployed at scale, generally voluntary initiatives by industry aren't enough. You do need regulators to step in and set targets or mandates because there is a price impact, and so no single airline is going to go ahead, if it's only that airline doing this. No airline is going to make the risk of investing in electric aircraft if others aren't doing this. No airline is really going to buy alternative fuels. No aircraft manufacturer is going to go ahead and produce electric aircraft because it needs to make sure everyone else is going to be subject to the same cost or the same burden. And that's one of the huge roles for governments to step in. And we can talk a lot about what customers can do in terms of flying or not flying. We can talk about what airlines are announcing they're doing. But until governments decide to start regulating aviation emissions the way they have increasingly successfully regulated emissions from the electricity sector or for the road transport sector, we're not going to see this change in the aviation sector.
Andy: And it's interesting to note that ICAO and its plan CORSIA to level off emissions starting in 2020, that's self-policing. There's no government body involved in that.
Andrew: Well, ICAO, the UN agency, it is made up of governments. But you're right. There's not much of an enforcement mechanism. There are no courts or no prosecutor which would enforce compliance with this. And that's a huge problem with this offsetting mechanism. As we've discussed, offsetting has a very checkered history. Given how difficult it is to make offsetting work, you do want a regulator. You do want somebody there who's monitoring and make sure this is being complied with fully.
So the action can't be at UN level. It's very difficult. ICAO is 193 countries. There are some big climate deniers in there. Saudi Arabia is a member, for example, and they're never going to agree on really ambitious climate policies. What we need is for governments -- governments that recommend a climate action -- to step in and say, "We need to do something about the soaring emissions in the aviation sector."
We're starting to see that change in Europe. The Canadian government, as well, has started to get a little more active. The Canadian government is looking a bit more at carbon pricing for aviation, fuel monitoring in aviation. We are seeing things change a little bit. It's coming along quite late, but it is a welcomed development because we can't do this just by UN-level action, and we can't do it just by industry agreements.
Andy: A couple more questions here. One, is the whole issue of airline emissions really kind of an Achilles heel in any larger effort to reduce emissions? I'm thinking specifically for example, the European Union has a goal of reducing economy-wide emissions by 40% by the year 2030. Again, will airline emissions and the CORSIA plan undermine this goal?
Andrew: There is absolutely a risk of that. Europe's -40% target, which by the way, we're in the process of revising upwards to at least -50. That goal excludes the use of international credits -- offsetting. So if we started using offsetting for aviation, yes, we're undermining that European goal. But I think we're going to undermine overall climate policy by aviation, but I think there's also a political argument to be made here.
In Europe at the moment, there is a desire by the public for there to be ambitious climate action. But people also want the climate action to be fair. They want every sector to do its part. And if governments start introducing laws which say to car manufacturers, "You've got to change how you make cars." This is a big issue in Germany. The car manufacturers are big employers in Germany, and actually, they're going through a bit of a turmoil at the moment. They're laying off employees because they're making a switch to electric vehicles, and that requires fewer employees, it requires different types of employees. I think if the German government or governments in Europe started introducing strict standards for cars that cause layoffs in the car sector, or strict standards for farmers that require farmers to change how they grow food, but then they don't do something for aviation, I think you risk a real populist backlash. And we already have a problem of populist backlashes here in Europe on some of the economic and environmental issues.
So it's important that aviation does its bit, not just because from a climate science point of view, everyone needs to reduce their emissions. Politically, every sector needs to do something. Otherwise, you're going to see other sectors resisting, pushing back, and saying, "Look, why am I having to do all these actions? Look at those guys who are flying around. They tend to be better off, people who fly -- very wealthy airlines. Why am I making all of that action as a farmer, as a car manufacturer, and these airlines are doing next to nothing?"
Andy: A final question for you here. We've been talking about Europe a lot, but the major source of growth for the airline industry is going to be in Asia, specifically in China, as well as India. How are those areas looking at this problem of airline emissions. And I also wanted to ask you, since I'm here in Philadelphia, What is the US's take on CORISIA?
Andrew: So we are certainly seeing some strong aviation growth in China. That's the number one growing market in the world. Europe is the second, actually. It's the second fastest growing passenger market in the world, and aviation emissions in Europe have grown 26% in the last five years.
And the reason I say this is sometimes industry here in Europe kind of uses the argument, "Oh, well, it's all taking place in China and India, and there's nothing we can do here in Europe. That's where all the emissions are coming from."
Actually, no. The emissions growth is coming from here in Europe, as well. But you know, where the emissions growth is coming from is interesting, but actually I think what's more important is where is the solution going to come from? And I think Europe has the opportunity to take the lead in developing those solutions and in developing those new technologies. Europe can take the lead in developing those new fuels, for example, and that would be a fantastic export in terms of technology. We're seeing an increase in climate cooperation between Europe and China, Europe and India, where we're seeing exchange of the technology, where we're seeing development of these fuels or of these technologies in different parts of the world.
So I think the solution may come from Europe, and I hope that the solution, if it does come, will spread as quickly as possible to other parts of the world.
For the US government's position on CORSIA, we understand it's still uncertain what the US government is going to do. This is so far one climate agreement that President Trump hasn't expressly withdrawn from, but certainly the US is much less engaged in ensuring the environmental integrity of offsetting. What's perhaps preventing a full pullout from CORSIA is that the US airlines remain fully committed to CORSIA. And I actually think that's quite telling. After all, the US airlines, through their industry lobbyists and through their government contacts, were actually pretty effective advising CORSIA in a way which benefits them most of all.
US carriers have a pretty low offsetting obligation because of the way the calculation is made. And also, the offsets themselves. I mean, they all have been incredibly cheap, and in comparison to some other schemes US carriers could face, CORSIA is an incredibly cheap scheme. So industry remains united behind CORSIA, and that may be what's sufficient to prevent a full withdrawal by the Trump administration from CORSIA.
Andy: Andrew, thank you very much for talking.
Andy: Today's guest has been Andrew Murphy, Manager for Aviation at Transport & Environment. You can hear more energy conversations and get the latest news from the Kleinman Center for Energy Policy by visiting our website at kleinmanenergy.upenn.edu. While there, why not sign up to receive our monthly email newsletter? We'll send you the latest research and blogs from the Kleinman Center and promise not to clog up your inbox.
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