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What are the most promising MBM options?

Ghreenhouse gases (GHG) can be offset through the reduction, removal or avoidance of emissions. An offset “cancels out” or “neutralizes” emissions from one sector through the reduction of emissions in a different sector or location. The standard measurement used is one tonne of CO2, or CO2 equivalent, which in this report is referred to as an "emissions unit". Offsetting operates through the creation of emissions units, which quantify the reductions achieved. These emissions units, which would generally be created outside the international aviation sector, can be bought, sold or traded. 
A global mandatory offsetting scheme for international aviation would require participants to acquire emissions units to offset CO2 above an agreed target. Emissions units would need to conform to agreed eligibility criteria to ensure adequacy of emissions reductions. 
A global mandatory offsetting complemented by a revenue generation mechanism would generally function the same way as the mandatory offsetting scheme. A key difference would be that in addition to offsetting, revenue would be generated by applying a fee to each tonne of CO2, for instance, through a transaction fee. The revenue would be used for agreed purposes, such as climate change mitigation or providing support to developing States to reduce GHG emissions. 
A global emissions trading scheme would use a cap-and-trade approach, where total international aviation emissions are capped at an agreed level for a specified compliance period. Specific aviation allowances (one allowance is equivalent to one tonne of CO2) would be created under this scheme for all the emissions under the cap within the 
international aviation sector. These allowances would then be distributed for free, or auctioned, to participants using an agreed method. Revenues can be generated by auctioning aviation allowances rather than providing them to participants free of charge. 

At the end of each compliance period, participants would need to surrender allowances, or other emissions units, equal to the emissions they generated during that period. For participants with emissions above their initial allocation, allowances can be acquired from those who reduced emissions below their allocated amount and have surplus allowances available for sale or trade. Alternatively, other emissions units, such as offset credits can be used in combination with allowances. The participants' abilities to acquire and use these credits to meet their obligations under the scheme are established in the rules of the scheme. 

Source: Report of the Assessment of Market-based Measures (ICAO) Back to all F.A.Q.