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Carbon emissions trading are emissions trading specifically for carbon dioxide released into the atmosphere by large scale polluters including sectors such as power generators, steel, cement and ceramics manufacturers etc and currently make up the bulk of emissions trading. It is one of the ways countries can meet their obligations under the Kyoto Protocol  to reduce carbon emissions in an attempt to reduce the greenhouse effect  and negative changes on the climate. An emission trading scheme (ETS) sets companies an upper limit on their emissions based on either past performance or an industry average. In some cases, this figure is reduced over time. Companies can buy and sell emission 'allowances' to meet their emissions targets. If a company produces less than its allowance, it can sell the surplus to other companies who cannot meet their targets. ETS schemes have requirements for monitoring, reporting and verification and can either voluntary or mandatory. Mandatory schemes can be found in USA, where emissions trading are used to reduce sulphur dioxide from electric utilities and in the EU where an emission trading scheme aims to reduce CO2 emissions from industrial installations.
Currently aircraft emissions are omitted from the Kyoto Protocol targets with the only requirements being that Annex 1 nations should work through the International Civil Aviation Organisation (ICAO) to reduce emissions from aviation bunker  fuels.
Despite the fact that aviation contributes only two percent of the total green house gases, the industry has been highlighted as one of its chief culprits-partly due to the fact that the Stern Review predicted that aviation would be the fastest growing sector over the next 40 years, expanding threefold in size up to 2050 . In the UK, government figures state that aviation accounts for 6.3% of the UK's carbon dioxide emissions and thirteen percent of all greenhouse gas emissions (GHG)- a figure which is projected to rise as high as fifteen percent by 2030 . As a result of its high profile and visibility and associations with the affluent members of society, aviation has been subject of much criticism from environmental campaigners protesting against noise, pollution, low cost travel and airport expansions. No one is denying the fact that aircraft produce GHG. Aviation has a range of activities that generate greenhouse gases of which the largest is passenger flight operations. Other activities include transport to and from airports, manufacturing, maintenance, ground handling and airport operations.
However, far from dragging its feet, as some critics imply, the aviation industry is in the fore-front of efforts and the global air transport industry--airlines, aircraft manufacturers and airport operators--has pledged to reduce carbon emissions and participation to the Copenhagen Climate Conference  and future meetings shows the commitment to the cause. National and international legislators have begun work on ways to restrict emissions. The European Union (EU) recently published its '20/20/20 by' 2020 plan calling for a twenty percent reduction in 1990 emission levels by 2020 together with a twenty percent gain in energy efficiency and twenty percent of energy to be produced from renewable sources.  There is evidence that the new US administration may have shed its reluctance to impose environmental laws, with the possible future introduction of carbon emissions regulations as they demonstrated when they pulled back in the Kyoto agreement.
Aviation was again at the frontline of the new regulations when the EU threatened that if aviation does not put its own house in order, matters will be taken out of its hands. In December 2009 Copenhagen Conference on climate change at which the International Civil Aviation Organisation explained the measures that aviation has been taking. ICAO's Group on International Aviation and Climate Change (GIACC) is currently working on a standard target for fuel efficiency and how that target can be realised. However there were still some uncertainties looming about the governing body which would introduce the cap and police over the amount when allowing carbon trading. In parallel with the trade in emission allowances, there has also been growth in carbon 'offsets' which can be purchased by countries, companies or individuals. A carbon offsets estimates the amount of carbon used for a particular activity and then calculates the cost of restoring that carbon through other activities- usually environmental projects in developing countries. Many international businesses now publicise the fact that they are 'carbon neutral' because they pay for their carbon emissions through the carbon offset schemes.
Airlines are becoming increasingly involved in such schemes. In December 2006, the European Commission (EC) proposed the expansion of its current emissions trading to cover co2 emissions from the aviation industry. Flights inside the EU would be included from 2011 and all flights to and from the EU from the EU from 2012. In December 2007 IATA gave the go ahead to produce a set of best practice guidelines for offsets and to develop an industry carbon offset programme for future use by airlines. Part of the IATA scheme includes options for passengers to pay for carbon offsets as part of their tickets-an option that has been seized eagerly by a number of airlines; quite understandably as this would allow relieve any sort of taxation duty since everything is being passed on to passengers. The company involved included: Air France-KLM, Austrian Airlines, British Airways, BWIA, Cathay Pacific, Continental, Delta, Easyjet, First Choice, Flybe, Icelanair, Lufthansa, Malaysian Airlines, Monarch, SAS, Swiss and Virgin Atlantic . The price of a voluntary offset rises depending on the distance travelled but is subject to a wide amount of variation. This is partly due to the different ways that airlines can calculate their carbon emissions . These include:
The amount of fuel used from starting up to shutting down the engines including the fuel used to power auxiliary power units and for taxiing.
All fuel purchased by an airline for use in aircraft covering all commercial flight operations as well as maintenance activities and non commercial flights.
A figure calculated from the manufacturer's estimate of fuel consumption per flight kilometre multiplied by the distance flown.
The money raised from offsets is used in projects which use renewable energy and energy efficiency technology to replace more polluting fuels or to plant trees which will absorb carbon dioxide from the atmosphere. Qantas uses offsets to fund energy efficiency projects, waste diversion and recycling, generation of renewable energy and the avoidance of deforestation projects. Virgin Atlantic's gold standard carbon offset scheme goes to projects in India and Indonesia including supporting a power plant that runs on farming waste, and a hydropower plant. British Airways' carbon offset scheme gives money to climate care to invest in sustainable energy projects such as distributing 50,000 energy efficient lamps in South Africa or buying stoves for Indian schools which run on crop waste rather than liquid petroleum gas. Offset schemes are not limited to airlines. Business jet specialists Netjet has a Comprehensive Climate Initiative (CCI) which finances offset projects, research into new fuels, recycling and solar power. Manchester airport has also set itself a carbon neutral target. These do not include emissions from aircraft as these are the responsibility of the airlines but covers airport operational and infrastructure developments.
However, while the aim of offsets is laudable in theory, their effect in practice is less certain. No complete figures on the take up of offsets by airline passengers are available but a recent survey by Manchester Metropolitan University (MMU) estimated that only 10% were contributing . Passengers were unclear of how the offset money was used and how schemes delivered benefits in terms of climate change mitigation. Some were sceptical that the environmental impacts of aviation are significant, while others viewed offsetting as simply another tax. Some airlines are also sceptical as voluntary offsets are not always recognised under emission trading schemes and will provide no carbon credits to the company involved. Carbon offset schemes have also come under attack from environmental campaigners who claim that they have little or if any environmental benefit and failed to tackle the real cause of carbon emissions. Carbon neutral schemes do not lower emissions but maintain them at their present level. Some carbon emission projects rely on not taking action which would increase carbon emissions (such as not felling rainforests) rather than doing anything positive.
The problems associated with carbon trading and offset schemes have led to some call for drastic action. Green campaigners claim that the only way to achieve the reduction targets in carbon emissions proposed by the stern review is for the richer developed countries to make radical cuts in their emissions by at least eighty-five percent by 2050 in parallel with funds for low carbon development in poor countries . Airlines have been singled out for that particular criticism because under the Chicago convention, international air services are exempt from fuel taxes. In the UK, this tax break has been equated by some commentators to a £9bn subsidy for domestic airlines. However the Chicago convention  has no tax restrictions on domestic air services or on tickets or passengers. The UK government which levies an Air Passenger Duty (APD) tax to individual air passengers increased it in 2006, claiming that it was a green tax designed to reduce carbon emissions. In October 2007, British Chancellor Allistair Darling announced a decision to replace APD from November 2009 with a new Aviation Duty levied on aircraft flights which would tackle the problem of emissions more directly . UK airlines opposed the decision and have called for APD to be removed once carriers join the EU Emissions Trading Scheme in 2012, a move endorsed by the EU in April 2008. The new tax has also come under criticism because it does not apply to private jets. The concept of green taxes is not popular among airlines. While supporting the idea of emission trading, carriers are opposed to fuel taxes and emission charges claiming that they provide no incentive to invest in more efficient aircraft or fuels. Carriers claim that green taxes have a negative effect on efforts to reduce climate change as they take away money that could be used for environmental research and development, they price passengers out of the market and there is no guarantee of tax revenues will be directed towards environmental objectives. They also argue that unilateral taxes levied by one country or region will put airline at a competitive disadvantage.
Critics of the aviation industry on the other hand welcome environmental taxes on aircraft. The WDM claims that by reducing demand for air travel green taxes will have a direct effect on carbon dioxide emissions. Environmental campaigners argue that emissions trading are not effective, pollution needs to be paid for and the benefits of reducing global warming will outweigh economic hardships .
Then of course, there exists a completely different picture of lowering carbon emissions caused by the airline industry; in the long term, the industry is looking largely to technological solutions to meet its carbon targets.
First and foremost on the agenda would be to improve the environmental efficiency of aircraft including a new generation of airliners, such as the Airbus A380 and the Boeing 787. The former will carry more passengers with less overall emissions per head; the latter promises a 30% overall cut in carbon use. However, this will not start to have a significant impact on airline fleets before 2015. More importantly, with no narrow-bodied equivalent due to be launched before 2020, the effects will be limited to long-haul flights, leaving the bulk of air travel reliant on current technologies until 2030. Also those researches will be complemented with new engine designs, lighter-more fuel efficient aircraft cleaner fuels such as bio fuels and recycling in aircraft production and disposal .
Secondly having Government backing by implementing policies will contribute to the development of greener aviation technology. For example, in the US, NASA's 2010 budget, allocates $60 million per year to an environmentally responsible aviation program. In the E.U similar projects is well in place since it has recently committed $2.2 billion to the seven-year 'Clean Sky' initiative 
A third option would be to rationalise air traffic management-The air transport industry is also putting pressure on governments, especially in Europe, to reform airspace management. Current air traffic control procedures and military-restricted airspace add substantially to fuel burn by forcing aircraft to take detours and create delays. The rapid adoption of the 'Single European Sky' proposal would cut current carbon usage by twelve percent. Similar efficiencies would come from global systems using precision-approach technology--satellite-based technology that feeds positional data directly into aircraft navigation systems. However, governments remain reluctant to concede control over airspace and to accept civil-military integration .
There is no doubt that if carbon emissions are to be reduced, and then radical measures need to be taken. However, to be effective, they must apply to all countries and all industries. Emission trading is a step in the right direction but is not an end in itself and should be considered as a complement to technological, operational and infrastructural developments. Similarly, green taxes area blunt instrument which may only result in economic hardship without any environmental benefits. Whatever action is taken needs to be done at an international level and must encompass all activities which generate carbon. Rather than being highlighted as the villain of the green movement the aviation industry should be encouraged and imitated for the work it has done and is doing towards making air travel more efficient and more environmental friendly.