The aviation industry plays an important role in global economic prosperity, communications and social interaction. However, a major challenge for our industry is to ensure that these benefits can be sustained and shared more widely without serious damage to the environment. 

Aviation’s overall contribution to carbon dioxide emissions is small in absolute numbers – around 2-3 per cent of the global total. But industry growth has the potential to create a significant increase in the longer term. British Airways is committed to finding effective and proportionate measures to limit aviation’s climate impacts – and this has been a key part of our environmental policy for many years.

Like other energy-intensive industries, the airline industry has a big incentive to improve fuel efficiency. Since 1990 BA’s aircraft fuel efficiency has improved by 27 per cent, saving the equivalent of 55 million tonnes of carbon dioxide. 

But on current projections, improvements in the design of aircraft, aero-engines and air traffic control systems can only take us so far. The airline industry will continue to strive for reductions in its carbon emissions. We will explore all options available – including the use of bio-fuels to produce jet kerosene. But we have to recognise that may still not be enough technological ‘fixes’ to prevent our emissions growing, in a world where emissions reductions are needed.

To square this circle, British Airways has for many years now supported the inclusion of aviation in an emissions-trading system. Emissions-trading allows airlines in effect to ‘buy’ some of the carbon reductions achieved by companies in industries with greater practical potential for cutting their CO2 output, such as power-generation, oil-refining and steelmaking.

This is not a painless option for airlines. If we increase our emissions, we will have to pick up the bill. Airlines and their customers will pay for the emissions cuts achieved elsewhere, giving all industries a financial incentive to be as carbon-conscious and fuel-efficient as possible. And over time, the total level of emissions allowed will fall.

The European Commission is expected to produce draft legislation in late 2006 aimed at including aviation in the EU emissions-trading scheme. At British Airways, we would like the scheme to be extended to airlines as soon as the technical details can be resolved and political agreement reached.

However, it is important that the approach taken is workable. For example, the scheme should apply – initially at least – to flights that start and end within the EU. Other countries could be included where there is agreement with their governments to do so.

To apply emissions-trading unilaterally to all aircraft departures from the European Union would require the participation of non-EU airlines, many based in countries which are not party to the Kyoto protocol and who are likely to dispute the legitimacy of this approach. We should continue to work within the International Civil Aviation Organisation (ICAO) to secure broader international agreement – but we should not risk international disputes and enforcement problems, which could delay the scheme for years.

Similarly, we believe an emissions-trading scheme for aviation should focus on the greenhouse gases covered by the Kyoto Protocol. For aviation, this means carbon dioxide emissions. We also believe that the initial carbon allocations to airlines should be based on their emissions performance, as in other industries, rather than an auction system that would boost the coffers of EU governments for no environmental gain.

In summary, the European Commission should go for simplicity. Over-complication of a scheme that has to apply to 25 member countries will only cause delay or inconsistent implementation.

Over the last two years, a workable emissions-trading scheme for aviation in Europe has become a genuine possibility. We should grasp the opportunity now and not be diverted to pursue other approaches – such as taxes on fuel, aircraft movements or passengers. These measures would be just as hard to agree internationally, would be less environmentally effective and are likely to be more costly for the travelling public.

As Winston Churchill once commented about democracy, it is not a perfect system but all the alternatives are worse. The same could be said about emissions trading. Europe is pressing ahead with emissions trading more generally despite its imperfections, and we should do the same within aviation.