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Policy Brief

Can India’s Developmental Flight Take Off?What the ICAO Global Market Based Scheme means for India

Manu Aggarwal, Karthik Ganesan, Kanika Chawla, Shikha Bhasin
August 2016 | Low-Carbon Pathways

Suggested Citation: Aggarwal, Manu, Karthik Ganesan, Kanika Chawla, and Shikha Bhasin. 2016. Can India’s Developmental Flight Take-Off? - What the ICAO Global Market Based Scheme means for India. New Delhi: CEEW

Overview

The brief highlights important aspects of global market-based measures (GMBM) to offset international civil aviation emissions. It examines how GMBM would shape international aviation for those intending to travel to or from India. The potential effect of the GMBM on the implementation of the recently announced National Civil Aviation Policy in India and the Regional Connectivity Scheme is also analysed. Further, it provides recommendations that would become the cornerstone of India’s negotiating position.

Aviation is one of the fastest growing sources of greenhouse gas (GHG) emissions, with its CO2 and non-CO2 impacts responsible for between 4 and 9 percent of anthropogenic global warming. This report emphasises on the need to focus on non-market-based measures such as access to sustainable fuels, operational improvements, and improved aircraft CO2 standards.

Gradual improvement in the market share of Indian operators in the passengers’ segment of international aviation

Standard share of Indian operators in the freight segment of international aviation

Key Findings

  • The total revenue tonne-kilometres (RTKs) attributed to arrivals and departures to and from India is 6.5 billion. This is 1.2% of overall global RTKs.
  • In most middle-income group countries, the propensity of outbound international travel indicated by the ratio of departures to population ranges from 5 to 8 percent. This ratio currently stands at a mere 1.2 percent for India.
  • Assuming that India were to hit the lower threshold of this ratio in the years ahead, the overall outbound departures could rise to a level above 40 million in the medium term.
  • India hopes to increase its share of the overall global tourist base to 1 percent. A tourist footfall of 20 million a year is well within the realm of possibility in the near future.
  • It can be safely assumed that India will not serve as an aviation hub in the short to medium-short term.
  • It is likely that India’s RTKs would grow from the current level of 6.5 billion to a level of 19.3 billion in the medium-term. While the time period over which this increase is likely is not estimated, at the current rate, India would only be at 10 billion RTKs by 2020.
  • International Civil Aviation Organisation’s (ICAO) GMBM proposal does not require technology upgradation. However, the principle of differentiated responsibility, on which India is laying emphasis in the Montreal Protocol amendment negotiations, should be upheld in the ICAO proposal negotiations as well.
  • There seems to be unanimous support for RTK as a criterion for identification of states in the phased implementation of the GMBM scheme. However, RTK is directly proportional to emissions is contentious.
  • The National Civil Aviation Policy targets an annual growth of 13.82 percent and 19.64 percent in passenger and freight segments respectively for the next 11 years.
  • The GMBM can affect implementation of the NCAP in two ways. First, it can reduce the demand of international air travel in India. Second, it can hurt the fleet expansion plans of India carriers.

Key Recommendations

  • Push for a more comprehensive criterion beyond Revenue tonne-kilometres (RTK) as a basis for phased implementation. Actual emissions would be the most efficient metric that would allocate responsibility for mitigation across carriers and countries.
  • Emphasise more on stringent global CO2 standards through inclusion of a two-part accounting system where departures are taxed based on the equipment/fleet that is used for a particular scheduled flight.
  • Stress on the need for differentiation between developing and developed countries as an additional criterion for inclusion of countries. This provision would ensure that countries such as Belgium, Finland etc. are participants in the first phase, which would otherwise have been excluded.
  • Reduce burden on routes between India and the rest of the world to ensure that the cost of travel does not rise significantly for travellers to and from India.

Given the medium-term expectation of 20 billion RTKs, India will have to bear the burden of offsetting nearly 10 billion RTKs annually (by 2030) should the GMBM scheme be implemented as envisaged.

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