Availability of offsets for a global market-based mechanism for international aviation
At its 37th Assembly, the International Civil Aviation Organization (ICAO) agreed a global aspirational goal of Carbon Neutral Growth by 2020 (CNG 2020). In 2013, ICAO established working groups for developing a Global Market-Based Mechanism (GMBM) to achieve this goal. According to its work program, the mechanism should be adopted in 2016 and come into force in 2020. The first period of the GMBM is planned to run from 2021 to 2035. During the development of the GMBM it has been questioned whether there will be enough offset unit supply to cover ICAO’s demand. Based on the CDM project pipeline it is therefore analysed in the following whether the CDM could provide sufficient offsets to cover the demand stemming from the GMBM for international aviation and whether this would still be the case if eligibility criteria for certain project types were introduced to address concerns towards environmental integrity.
The results of this analysis support that credits from the pipeline of existing CDM projects could cover this demand for a period of at least eight years even if eligibility requirements for certain project types and vintages are introduced. If, in addition, the four years from ICAO’s potential decision to establish the GMBM in late 2016 to its entrance into force in early 2021 are taken into account, the period amounts to 12 years, which is certainly long enough to provide CDM project developers sufficient lead time to develop and register new CDM projects. Based on this evidence, concerns that there is a scarcity of offset supply for ICAO’s GMBM would seem to be groundless even if ICAO were to deem only credits with high environmental quality standards eligible and to use only recent vintages.