He warns that anything less than a global approach could severely distort international competition.
Herdman was speaking at the recent Greener Skies 2008 conference organised by Orient Aviation. An example of the threat to the industry is the emissions trading scheme that the European Union (EU) wants to impose unilaterally on the aviation industry by 2012 without securing international agreement.
Another speaker Tony Tyler, CEO of Cathay Pacific, said that while he supported the industry position of introducing a cap on emissions and the introduction of carbon trading, he opposed EU plans to charge airlines for their total emissions from the point of departure.
ôThe proposal simply defies logic and any sense of fair play. It is surely right that we need a global scheme to which we can all sign up, and not have the EU imposing its solutions on the rest of the world,ö he said.
Aviation emits 650 million tonnes of carbon into the air each year. At 2.2 billion passengers a year, Herdman says that amounts to 0.3 tonnes of C02 (carbon dioxide) per passenger.
At a carbon cost of $20 per tonne this works out at an additional $6 per passenger, or $13 billion a year compared to industry profits of $5.6 billion in 2007, on revenues of $490 billion.
Fares would have to rise by about 3% according to Herdman, which he said was bearable as long as any scheme was applied uniformly to all airlines and did not distort competition.
Given the $68 billion rise in annual fuel costs between 2003 and 2006, paying only a fifth as much for the right to emit carbon dioxide is clearly workable, he said.
According to the Stern Review on the Economics of Climate Change prepared for the British government in 2006, transportation accounts for 13.5% of global carbon emissions, of which road transport accounts for 9.9%, rail, ship and other transport 2.3% and aviation 1.6%.
The report notes, however, that carbon emissions from aviation are expected to grow more than three-fold between now and 2050, making it among the fastest growing sectors.
Some 16,000 new aircraft will be needed by 2020, and 40,000 additional pilots. Asia is expected to be one of the fastest developing regions, growing at 8.8% in 2008, with 427 new aircraft deliveries in 2008 and another 450 in 2009.
Herdman said the industryÆs bad boy image particularly in Europe was disproportionate to its emission levels. But he recognised the aviation industry needed to show a willingness to make a wider contribution to global efforts to address the challenge of climate change.
It had made dramatic improvements in fuel efficiency of some 2% per year for decades and expected a further 25% efficiency by 2020. Further emission reductions can be achieved by investing in modern aircraft and engine technology, operational efficiency improvements, more efficient airspace management and researching alternative fuels.
However, Herdman said improvements in these areas would not offset the growth in the aviation industry. Sustainable aviation needs to be seen to be offsetting the full cost of its emissions, he said. An equable application of carbon trading was one way of achieving this.
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