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Mr. Andreas Hardeman

Assistant Director, Aviation Environment, International Air Transportation Association, Geneva, Switzerland

Towards carbon neutral growth - implications for travel and tourism

by Andreas Hardeman, IATA for the international conference on Asia's Emerging Response to Climate Change

Friday, November 23, 2007, Bangkok

Slide 1 - IATA & The Environment

Good afternoon dear colleagues and esteemed delegates. My name is Andreas Hardeman and I am IATA's Assistant Director responsible for Environmental Issues.

By way of background, IATA represents over 240 international airlines around the world. Our members account for 94% of scheduled international air traffic.

This presentation is intended to give you a 12-minute industry perspective on the very important issue of climate change, our ambitions in this area and our "flight plan" to get us to our destination, safely, efficiently and on time.

Slide 2 - The future is bright the future is Asia

Looking at Asia, there is much to cheer about. It is young and dynamic. Many economies are booming, with some growing 2 to 3 times the global average, in spite of record high oil prices and slowing demand in Europe and the US. The number of people living below the international poverty line has dropped to an all-time low.

In aviation, the centre of gravity is also moving towards Asia. Aviation will both strengthen and be strengthened by strong growth in the Asian tourism sector. The UNWTO estimates tourism arrivals in Asia Pacific to grow by 10% this year, almost double the global average.

Slide 3 - Emerging challenges

There are however a number of emerging challenges for travel and tourism in Asia, linked to the development and environment agenda, and in particular climate change. UNWTO estimates that the travel and tourism sector is responsible for 5% of global CO2.

In spite of tourism bringing substantial benefits to local economies, there is a growing income gap that risks deepening divisions between a developed and a developing Asia.

Some of the places that rely heavily on tourism - and increasingly eco-tourism - are also most under threat from climate change consequences.

Other places, like Australia and New Zealand, see their overseas tourism and food exports coming under threat because of the perceived climate impact of long-distance flights.

Slide 4 - Aviation's carbon footprint is growing

Aviation is increasingly under attack in the climate debate. Especially in Europe, emotions are running far ahead of the facts. Unfortunately, similar scare stories are now beginning to appear in some of the Asian media too.

Let me remind you that according to the United Nations Intergovernmental Panel on Climate Change (IPCC), which recently received the Nobel Peace Prize, aviation is currently responsible for 2% of man-made CO2 emissions. It estimates that this number could rise to 3% by 2050.

Slide 5 - We must become an industry that does not pollute

However, IATA believes being responsible for just 2% of all man-made carbon emissions is not a basis for complacency. We intend to help the industry tackle this problem, especially given the speed with which aviation is expected to grow in the years to come, especially in the Asia Pacific region.

Earlier this year our Director General Giovanni Bisignani challenged the industry by sharing a vision of becoming an industry that does not pollute. In other words, no carbon emissions by the year 2050.

Slide 6 - Carbon neutral growth

Our first target is to put aviation on the path to carbon-neutral growth, stopping aviation's carbon footprint from growing in absolute terms.

With traffic expected to grow around 5% a year (top line), this means we have to double our current annual fuel efficiency improvements to achieve carbon neutral growth.

This can only be achieved by considering a wide range of different actions in the areas of technology, operations, infrastructure and economic measures.

Slide 7 - It's all about fuel

Although there is no single solution, all solutions will be somehow related to our fuel consumption, because CO2 emissions are directly proportional to fuel burn.

In terms of fuel efficiency, our industry has come a very long way. The average fuel efficiency of IATA member airlines improved by 20% between 1996 and 2005. But there's scope for further improvement.

Based on recent analysis, we project another 25% fuel efficiency improvement over the next 15 years, from 4 to 3 litres per 100 pkm.

Slide 8 - Potential building blocks

To move towards a carbon-free future, IATA has also set an ambitious goal to replace 10% of our fuel needs with alternative fuel sources within 10 years.

To achieve this, we are working closely with airlines, engine manufacturers and fuel suppliers to explore the potential use of fuel cells, solar energy, bio-fuels and synthetic fuels.

Using jet fuel made from biomass is close to becoming a reality. The main focus is on oil-rich bio-fuels that can be cultivated in a compact manner - e.g. growing and harvesting CO2 absorbing algae. Several test flights have already been announced for 2008.

Slide 9 - IATA 4 pillar strategy

IATA's members have committed themselves to an aggressive four point strategy to drive aviation towards carbon-neutral growth, and beyond:

o First, invest in new technology

o Second, operate planes more efficiently,

o Third, build and use efficient infrastructure, and

o Fourth, look at economic measures that will benefit the environment.

Slide 10 - Technology

Together with alternative fuels, technology holds the most promise for reducing or eliminating aviation emissions over the long term. The first step is to apply product enhancements and modifications to the current fleet. Focus here is on weight reduction, improved designs and advanced navigation aids and procedures.

In the medium term, the aim is to introduce the latest technologies as early and as widely as possible. In this context, the situation in Asia looks very promising. At nine years, Asia already has the lowest average fleet age amongst IATA members - and it also has the highest number of new aircraft on order.

For the longer term, IATA is proposing that joint public sector - private sector initiatives be launched to identify and develop radically new technologies and aircraft designs. Here we see opportunities for emerging industries to 'leapfrog' today's technologies.

Slide 11 - Operations

With respect to Operations, IATA has been guiding its members on how to operate in a more fuel-efficient manner.

It is crucial to keep our load factors up. It is one thing to fly the latest technology aircraft, but if they are flying half empty it makes no sense financially or environmentally.

In 2006 we identified savings of 15 million tons of CO2 by auditing our members and by sharing best practices.

Slide 12 - Infrastructure

Infrastructure is the area that presents the most frustration for airlines. The IPCC estimates that aviation emissions can be reduced by 6-12% simply by eliminating air traffic inefficiencies.

One area that must be improved is the reliance on a patchwork of old national air traffic systems using different air traffic control technologies. This problem is especially acute in Europe.

IATA is working hard to shorten air routes around the world. For example, in 2006, we worked with governments and regulators to shorten some 350 routes which will reduce CO2 emissions by some 6 million tonnes per annum.

In Asia, IATA has made great strides with straightening routes in the Pearl River Delta, opening up more trans-polar routes over Chinese/Russian airspace and reducing flight delays over the Bay of Bengal, in a project called BOBCAT.

Slide 13 - BOBCAT

BOBCAT (the Bay of Bengal Cooperative Air Traffic Flow Management Advisory System), developed with AEROTHAI, was introduced in July this year to address the traffic flow through the Bay of Bengal and in particular Afghanistan's airspace.

For the first time aircraft can now depart from Asia with a pre-arranged clearance to transit Afghanistan's airspace so they don't have to re-route, divert or wait outside the Afghan airspace for clearance to enter.

We believe that this type of flow management has the potential to bring huge benefits across the Asian region.

Slide 14 - Economic measures

We continue to argue that so-called green taxes provide no incentive whatsoever for airlines to invest in more efficient technology. There are no guarantees that the revenues from such taxes are being invested for environmental purposes.

Instead, governments should look to reward good behaviour, by providing tax breaks for investments in clean technology and clean fuels.

Much has been discussed about emissions trading, particularly the proposals in Europe to impose emissions trading rules on non-EU carriers. IATA is convinced that any serious approach to climate change must be on a global basis and therefore strongly opposes unilateral actions.

Carbon offsets programmes are spreading in response to travelers wishing to compensate for their flight emissions. Although offsetting can't be the final answer, it is one additional element in the overall response and one we support and encourage.

Slide 15 - Travel and tourism is everybody's business

To conclude, travel and tourism is everybody's business and solutions must involve all us.

On our part, IATA is committed to lead the airlines towards a low-carbon future, by adopting environmental best practices and investing in new, more fuel-efficient technology.

At the same time, airports need to green their facilities and work with regulators to implement environmental best practices for airlines, ground handlers and caterers.

Manufacturers need to invest in green technology now, with the expectation of significant returns over the longer term.

Governments need to provide positive incentives to accelerate the development of carbon free technologies and next generation fuels.

And finally, let us not forget that there is more to travel and tourism than just aviation. Travel agents, hotels, tour operators and ground transport providers all have a responsibility to reduce our collective impact on the environment.

If we all join forces, we can make Asia's future a green future.

Thank you



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