Airline Carbon Costs Take Off As EU Emissions Regulations Reach For The Skies

Airlines worldwide are bracing themselves for the start, in 2012, of a new phase of Europe's greenhouse gas (GHG) emissions trading scheme (the EU ETS). Besides curbing the industry's projected growth in emissions, the scheme will likely increase costs. Furthermore, in Standard & Poor's Ratings Services opinion, these costs could, if not passed through to passengers or mitigated in other ways, impact the carriers' credit quality over time.

Can capital markets bridge the climate change financing gap?

It’s generally accepted that there is an urgent need for large-scale financing to allow developing countries to mitigate and adapt to climate change. However, there is a yawning gap between the current level of climate change finance (approximately $8 billion per year) and even the conservative estimates by the World Bank for the amount required by developing countries ($90 billion-$210 billion; see footnote 1 at the end of this article).