1. (U) Portions of this message are sensitive but
unclassified. Please handle accordingly. Summary: The 36th

SIPDIS
ICAO Assembly reached agreement on a set of actions to
address an array of aviation environmental issues, including
aircraft noise, local aircraft emissions, and greenhouse gas
(GHG) emissions. On the most contentious issue, GHG
emissions, the U.S., with the support of a majority of ICAO
contracting states, was successful in including language in
the Assembly Resolution that urged States not to implement
either greenhouse gas emission charges or an emissions
trading scheme on other states, aircraft except on the basis
of mutual agreement with that state. In response to the U.S.
proposal for a comprehensive approach to GHG emissions and
European desires to address the issue on a fast track and at
an appropriately high level, the Assembly also agreed to
develop a comprehensive plan on international aviation and
climate change. The plan includes formation by the ICAO
Council of a senior-level &Group on International Aviation
and Climate Change8 (supported by the Committee on Aviation
Environmental Protection (CAEP)), which will develop a
framework to achieve emissions reductions based on voluntary
measures, technological advances, operational measures,
positive economic incentives and market-based measures. The
Council will convene a high level meeting in advance of the
next Assembly in 2010 to present the program and
recommendations for ICAO review.



2. (U) Despite the clear majority in favor of &mutual
consent8, Europe would not cede its position. Portugal,
speaking on behalf of the member states of the European
Community and the other states of the European Civil Aviation
Conference (ECAC) (42 States in all) entered a formal
&reservation8 on the Appendix dealing with emissions
trading, reserving its view that it has the right to apply
market-based measures on all operators of all states
operating to, from or within their territories. Otherwise,
the Europeans supported the environmental Consolidated
Resolution, including Appendices A-K. End Summary.



3. (SBU) COMMENT: The Assembly outcome represents the
beginning of what are likely to be difficult dealings with
Europe on aviation emissions measures over the next few
years. In addition, a much more assertive developing world,
threatened by the EU,s unilateral actions, is seeking
additional protection from other international treaties such
as the UN Framework Convention on Climate Change (UNFCCC), a
step that may further complicate efforts to preserve the
uniform standard-setting activities in ICAO. End Comment.

NOISE


--------------------------





4. (U) The ICAO Council submitted a report on progress made
by ICAO since the 35th session of the Assembly on aircraft
noise. Material had been developed for inclusion in the ICAO
Guidance on the Balanced Approach to Noise Management.
During the Executive Committee presentation of papers on this
issue, both India and Nigeria proposed a review of night
curfew restrictions imposed on some states/airports. Both
argued that because of improvements in aircraft performance,
and reductions in noise, such curfews were no longer needed.




5. (U) In further discussion, it was noted that reductions
in aircraft noise were being offset by traffic growth, and
there was a need to continue efforts to reduce noise at
source. Noise management/reduction should therefore continue
to be addressed through the balanced approach. On night
curfews, a majority of speakers indicated that the subject
was already being addressed as part of the balanced approach,
and this approach should be continued.



6. (U) This issue was addressed in Appendix C (Policies and
Programmes Based on a &Balanced Approach8 to Aircraft Noise
Management) of the draft forwarded to the Assembly for
approval. The U.S. joined consensus approving the language
in this appendix, which supports continued adherence by
States to the balanced approach to noise management.

AVIATION EMISSIONS


--------------------------





7. (U) Because there was general support for continued ICAO
leadership in taking a comprehensive approach to aviation GHG
emissions relative to the role of other UN entities, the

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Executive Committee discussion of aviation greenhouse gas
emissions focused on two issues: 1) the unilateral imposition
of market-based measures (such as the EU,s emissions trading
proposal) on airlines without consent of governments; and, 2)
the need to take into account the concept of &common but
differentiated responsibilities8 (CBDR) when imposing any
obligations on developing States to address climate change.



8. (U) Australia, Chile, China, Egypt (representing the Arab
Civil Aviation Conference), India, Indonesia, Nigeria
(representing the African Civil Aviation Commission AFCAC),
Japan (on behalf of a group of countries including the United
States), Portugal (representing the European Civil Aviation
Conference (ECAC), the EU and Eurocontrol), Brazil, and the
World Tourism Organization all presented papers. A number of
States also made separate interventions. There was strong
verbal support for mutual consent from states outside Europe.
Developing countries were focused on the impact any
market-based measures would have on their economies and
aviation industries, and spoke out strongly in favor of
inclusion of explicit language referencing CBDR in any
Assembly resolution.



9. (U) Since the text on market-based measures in the draft
Assembly Resolution was heavily bracketed going into the
Assembly, the Chairman of the Executive Committee (President
of the Assembly, DOT Under Secretary Jeff Shane) convened an
informal drafting group to focus on the outstanding issues.
The group was made up of 14 countries representing the
various regions of the world (Argentina, Australia, Brazil,
Canada, China, India, Japan, Nigeria, Portugal, Russia, Saudi
Arabia, South Africa, United States, and the United Kingdom).
The U.S. team was led by DOT Assistant Secretary Andy
Steinberg.



10. (U) Australia, Brazil, Argentina, Canada, China, Japan,
Nigeria, Saudi Arabia, South Africa and the United States all
favored language on mutual consent in the resolution. The
wild card issue was CBDR, and how that would influence each
state's (particularly developing states) position as the
negotiations on a text moved forward.

COMMON BUT DIFFERENTIATED RESPONSIBILITIES


--------------------------





11. (SBU) The concept of CBDR is enshrined in the UNFCCC and
the Kyoto Protocol. While, on its face, it calls for
responsibilities on the part of all countries, developing
countries have interpreted CBDR as freeing them from having
to take on any emissions reductions; they cite CBDR as
dividing the world into only two categories ) so-called
Annex I countries (based on a list in the UNFCCC) and
non-Annex I countries. Developing countries have
successfully introduced this principle in a variety of other
international environmental fora. However, as CBDR is not
consistent with the Chicago Convention principle of
non-discrimination, ICAO has thus far satisfied developing
country concerns by simply acknowledging the differing
circumstances of developing countries. At this Assembly,
however, developing countries were asking for explicit
application/relevance in the ICAO context of CBDR commitments
under the Kyoto Protocol and the UNFCCC. The U.S. has
supported CBDR in the climate context, but was concerned
about the implications it would have for ICAO,s
standard-setting role in other areas.



12. (SBU) In the Friends group, China, - with sometime
support from Nigeria, Brazil and Argentina - pushed for
explicit language &operationalizing8 the concept of CBDR in
the ICAO context. Despite earlier arguments that their
emissions trading proposal was based on the principle of
non-discrimination, and thus must be applied equally to all
carriers, the European states had seized on developing
country interest in CBDR as a way to persuade developing
countries to support the EU emissions trading scheme, and to
move away from mutual consent. Expressing their support for
CBDR, EU states argued that the EU ETS was consistent with
the concept, noting that the bulk of the financial and
economic burden would be borne by developed countries anyway.
(Comment: By making this declaration, the EU clearly tried
to drive a wedge between the U.S. and developing countries on
support for the USG position on mutual consent. By opening
discussion on CBDR, the EU has allowed for CBDR to become
part of the ICAO rhetoric. End Comment.) Behind the scenes
in meetings with various delegations and regional groups, the
U.S. negotiating team countered these arguments by pointing
out that mutual consent offered better legal protection than
&de facto8 CBDR under the EU ETS, especially as major
developing countries would already be included (Argentina,
Brazil, China, India, etc.) and the EU could offer no
guarantees that developing countries would not be affected at
some future point in time, regardless of whether they were

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now. This argument appeared to gain significant traction in
the Friends group.



13. (U) The Friends group ultimately agreed to include
preambular (not operational) language in sections of the
draft Resolution dealing with cooperation with the United
Nations, ICAO,s program of action on international aviation
and climate change, and market-based measures. The language
acknowledges both ICAO,s principle of non-discrimination,
and the provisions on CBDR under the UNFCCC and the Kyoto
Protocol. The Council, in conducting further studies and
evaluating emissions trading, is requested to take into
account potential implications for developed as well as
developing countries.



14. (SBU) NOTE: Future U.S. negotiators at ICAO should be
aware that we read the preambular paragraph as referring to
the relevance of CBDR under FCCC/Kyoto, not to the relevance
of CBDR under ICAO. On the contrary, the inclusion of the
non-discrimination principle under the Chicago Convention
right next to CBDR, was intended (1) to preserve our argument
that CBDR applies under Kyoto/UNFCCC but is not consistent
with the Chicago Convention if interpreted to require
different standards for different states and (2) barring that
argument, to isolate CBDR from being applied in other ICAO
standard-setting areas such as safety and security. U.S.
negotiators should resist attempts to include any language in
ICAO documentation that could be interpreted as confirming
that CBDR is necessarily consistent with the Chicago
Convention and should also resist calls for CBDR to be
introduced in contexts other than the environment. END NOTE



15. (U) In a nod to the European delegates, the Friends group
also agreed to a proposal to request the ICAO Council to form
a high level group (the &Group on International Aviation and
Climate Change8) supported by ICAO,s Committee on Aviation
Environmental Protection (CAEP), to develop a comprehensive
plan on international aviation and climate change. The plan
includes a framework to achieve emissions reductions based on
voluntary measures, technological advances, operational
measures, positive economic incentives and market-based
measures; and, the Council will convene a high level group in
advance of the next Assembly (2010) to consider the findings.
The group will consider many issues, including the possible
establishment of a global aspirational goal for energy
efficiency in the aviation sector.

EXECUTIVE COMMITTEE SUPPORTS MUTUAL CONSENT BUT EU RESERVES


--------------------------



--------------------------





16. (U) Despite significant progress on the rest of the
texts, the Friends group was forced to forward the drafts
back to the Executive Committee with bracketed language on
GHG emission charges and emissions trading in Appendix L.
During the Executive Committee discussion of draft Appendix
L, numerous states from around the world including Barbados,
Mauritius, Egypt, Nigeria, Brazil, China, Mexico, Canada, and
Australia spoke up in support of removing the brackets around
the language urging contracting states not to implement
either GHG emission charges or an emissions trading system on
other contracting states, aircraft except on the basis of
mutual consent. European delegations including Germany,
France, Norway, the United Kingdom and the Netherlands
expressed support for the opposite view. Ultimately, the
Chair of the Executive Committee concluded that a majority of
states supported implementation of either GHG emission
charges or emissions trading for aviation only on the basis
of mutual agreement, and approved adoption of Appendix L on
that basis.



17. (U) The Portuguese delegation, representing the 27 states
of the European Community, and other states of the European
Civil Aviation Conference (ECAC) ) 42 states in total )
entered its formal reservation on the text of Appendix L,
stating their view that the resolving clauses lacked legal
foundation in the Chicago Convention and could not be used to
diminish their rights. They reserved the right to apply
market-based measures such as those described in Appendix L
to all operators of all states operating, to, from or within
their territories.



18. (U) Given the relatively tight ICAO budget passed by the
Assembly for the triennium 2008-2010, the Secretary General
addressed the Plenary with an appeal for the establishment of
a new voluntary fund to support the environmental tasks being
proposed. Instead, the Assembly added text (clause 7) to the
environmental resolution,s Appendix A which appeals in
general terms for additional resources. Clause 7
specifically, "Invites States to continue their active
support for ICAO's environment-related activities, and urges
Contracting States to support activities not foreseen in the
budget by providing a reasonable level of voluntary

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contributions."



19. (U) The full Plenary adopted the texts of the Assembly
Resolution on Environmental Protection with minor editorial
changes.



20. (SBU) COMMENT: The end result represents a clear
statement from the global aviation community that unilateral
imposition of environmental measures on other states is
contrary to the fundamental principles of ICAO, and that ICAO
should retain its leadership role in developing standards and
recommended practices for international civil aviation,
including with respect to the environment. It is
disappointing that Europe remained unwilling to join
consensus on this issue, especially as ICAO States had agreed
to take up large parts of their proposal in the development
of a solid plan to develop actions to address the issue of
aviation and climate change.



21. (SBU) The issues surrounding the use of market-based
measures to deal with aviation GHG emissions are far from
resolved. They will resurface in the context of political
discussions in the &high level group8 to be formed by the
ICAO Council, and will likely be the subject of further
negotiations within the air services context. Given the
strong political pressure within the EU to address aviation
GHG emissions, we will need to continue to urge the European
Union to engage with their aviation partners around the world
to address aviation environmental challenges in a
collaborative and concrete fashion. END COMMENT.
RICE