Cathay warns of patchwork quilt of environmental charges

Cathay Pacific Airways Head of Environmental Affairs Mark Watson warns that an emerging patchwork of regional environmental schemes to tax carbon and aviation will cause major market distortions and a nightmare of paperwork.

Speaking with ATW’s Eco-Aviation Today, Watson said a number of countries such as Australia are moving to tax aviation carbon and warned that in the absence of a global scheme there could be “a plethora of competing schemes with significant overlap.”

The proposed schemes "are not being designed in a coordinated pathway approach,” he said. “The ETS is distorting the market and it is a huge burden, and if we have the same thing for other parts of the world it will be onerous and regional schemes will be very, very difficult.”

Australiais close to announcing a price on carbon, Watson noted, although the proposed cost of A$20 ($20)-A$30 a tonne is not as hefty as first thought, according to Qantas and Virgin Blue. However, both carriers state that the devil could be in the detail and it is not clear if the price will apply to international as well as domestic flights. New Zealand already has a pricing scheme on domestic flights.

At Cathay, consensus exists that the airline industry and its passengers and forwarders must pay but it “must be fair and equitable.” Watson’s view is that there was a “clear mandate from Cancun that put the emphasis back on ICAO to come up with a solution which gives IATA legitimacy to…help and contribute to the process.”

He said the challenge for IATA is to outline how the industry will achieve its aspirational emissions targets. “We have these targets, we have these goals but how do we achieve them? IATA is working on filling the gaps and these are the big questions that have not been answered yet.”

His current brief is to “future-proof” the airline and develop a blueprint that aligns environmental, operational and business goals. “It’s all about how we can put Cathay on a more sustainable path,” he told this website.